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Case 1:10-cv-00113-DB-PMW Document 38 Filed 04/26/12 Page 1 of 60

Greg S. Ericksen (1002) Attorney at Law 1065 South 500 West P.O. Box 609 Bountiful, UT 84011 Telephone: (801) 299-5519 Facsimile: (801) 299-9799 Mark M. Bettilyon (4798) Liesel B. Stevens (10431) RAY QUINNEY & NEBEKER PC 36 South State Street, Suite 1400 Salt Lake City, Utah 84111 Telephone: (801) 532-1500 Facsimile: (801) 532-7543 Attorneys for Plaintiff
IN THE UNITED STATES DISTRICT COURT DISTRICT OF UTAH, CENTRAL DIVISION ORBIT IRRIGATION PRODUCTS, INC., a Utah Corporation, Plaintiff, vs. SUNHILLS INTERNATIONAL, LLC, a California limited liability company; and DOES 1-10, Defendants. ORBIT IRRIGATION PRODUCTS, INC., a Utah Corporation, Plaintiff, vs. TAIZHOU DONGFANG LIGHT DECORATIONS CO., LTD., a Chinese company ZHEJIANG HONGCHEN IRRIGATION EQUIPMENTCO., ltd, a Chinese corporation; [Case No. 1:11-cv-0012-DB] Consolidated Case No. 1:10-cv-00113 DB Honorable D. Benson SECOND AMENDED COMPLAINT

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LUO JUN, an individual; CHINA EXPORT & CREDIT INSURANCE CORPORATION a/k/a SINOSURE, a Chinese corporation; JANICE

CAPENER, an individual; DAN CAPENER, an individual; SUNHILLS INTERNATIONAL, LLC., a California limited liability company; RONG PENG, an individual; TIM MIKA, an individual;
MEGAN DOE, an individual; MANDY DOE, an individual; and DOES 3-10, Defendants.

Plaintiff ORBIT IRRIGATION PRODUCTS, INC. (ORBIT), brings this action against defendants TAIZHOU DONGFANG LIGHT DECORATIONS CO., LTD., ZHEJIANG HONGCHEN IRRIGATION EQUIPMENTCO., ltd., LUO JUN, CHINA EXPORT & CREDIT INSURANCE CORPORATION (CHINA EXPORT), JANICE CAPENER, DAN CAPENER, SUNHILLS INTERNATIONAL, LLC., RONG PENG, TIM MIKA, MEGAN DOE, MANDY DOE, and DOES 3-10, and alleges as follows: THE PARTIES 1. ORBIT designs, manufactures and distributes sprinkler and irrigation products to

various customers around the world with its principal place of operation at 845 North Overland Road, North Salt Lake, Davis County, State of Utah. Orbit and its predecessor companies have been in business for over 40 years. During that time, Orbit has put in place the infrastructure and resources needed to service retailers across the world, including large chain stores such as Walmart, Home Depot and Lowes. Orbit has also built up significant brand recognition and has developed a reputation for innovation and excellence. 2. TAIZHOU DONGFANG LIGHT DECORATION CO., LTD, and ZHEJIANG

HONG CHEN IRRIGATION EQUIPMENTCO., ltd., are all companies that manufacture

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various products including sprinkler and irrigation components in a factory located at No. 888-10 Maizhiqiao Road East, Luqiao, Taizhou, Zhejiang, China. 3. For many years ORBIT conducted business with TAIZHOU DONGFANG

LIGHT DECORATION CO., LTD. (DONG FANG). When DONG FANG move to a new location it informed ORBIT that it had changed its name to ZHEJIANG HONG CHEN IRRIGATION EQUIPMENTCO., ltd. 4. On information and belief, TAIZHOU DONGFANG LIGHT DECORATION

CO., and ZHEJIANG HONG CHEN IRRIGATION EQUIPMENTCO., ltd., are the same company, alter egos of each other, and/or in conspiracy with one another. These companies have alternatively called themselves Hong Chen, Dong Fang and HCI. ORBIT is informed and believes they may also use other names, to hide and obscure their true identity. Hereinafter these three companies shall be referred to as HONG CHEN. 5. On information and belief, LUO JUN owns the majority of shares of HONG

CHEN and controls and manages HONG CHEN, acting as its Vice General Manager. 6. On information and belief, LUO JUN was at all times mentioned an agent, owner

and/or employee of HONG CHEN, acting within the scope of such agency or employment. 7. 8. On information and belief, LUO JUN is a citizen of China. On information and belief, CHINA EXPORT, also known or operating as

SINOSURE, is a Chinese corporation. 9. JANICE CAPENER and DAN CAPENER are former residents of Davis County,

State of Utah, and currently reside in China. Both are former employees of ORBIT. 10. On information and belief, SUNHILLS INTERNATIONAL, LLC

(SUNHILLS) was created in the State of California on approximately November 30, 2009, for 3

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the purpose of selling and distributing consumer lawn and garden equipment and products to various wholesale and retail outlets in the United States. 11. 12. SUNHILLS. 13. 14. On information and belief, SUNHILLS is owned by JANICE CAPENER. TIM MIKA works as an agent and manufacturers representative for HONG On information and belief, SUNHILLS conducts business in this judicial district. RONG PENG is a friend and associate of JANICE CAPENER and an agent of

CHEN and markets and sells HONG CHENs products to HONG CHENs customers, including Walmart. 15. On information and belief, MEGAN DOE is either a name used by JANICE

CAPENER, or alternatively, an agent of HONG CHEN. 16. On information and belief, MANDY DOE is either a name used by JANICE

CAPENER, or alternatively, an agent of HONG CHEN. 17. On information and belief, Does 3-10 are (a) subsidiaries, divisions, affiliates,

partners, joint venturers or distributors of or for HONG CHEN and/or SUNHILLS; and/or (b) individuals and/or corporate entities who, directly or indirectly, have knowingly or otherwise participated in, benefited from, solicited, assisted, or aided in the activities complained of herein, and/or had the right or ability to control the activities complained of herein and/or (c) persons and entities in conspiracy with Defendants, including companies who are competitors of ORBIT. The identities and capacities of Doe Defendants 3-10 are not presently known to ORBIT. ORBIT will amend this Complaint to include such information when it is ascertained.

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JURISDICTION AND VENUE 18. This is an action for patent infringement arising under the provisions of the Patent

Laws of the United States of America, Title 35 of the United States Code. 19. This is an action for trademark and tradedress infringement and false advertising

arising under the provisions of the Lanham Act, Title 15, Chapter 22 of the United States Code. 20. This is an action for violation of the Computer Fraud & Abuse Act, Title 18,

Section 1030 of the United States Code. 21. This is an action for breach of contract and specific performance under the Utah

Uniform Commercial Code (Title 70A, chapter 2) and other provisions of Utah law, for misappropriation of trade secrets under the Utah Uniform Trade Secrets Act, and violation of the Utah Truth in Advertising Act. 22. This is also an action for intentional interference with economic relations,

defamation and injurious falsehood, unfair competition, breach of fiduciary duty, unjust enrichment, and conspiracy arising under the common law of Utah. 23. 24. In addition, this is an action for declaratory judgment. Subject-matter jurisdiction over ORBITs claims is conferred upon this Court by

28 U.S.C. 1331, 1332, and 1338(a). 25. On information and belief, Defendants have contracted to provide goods in the

State of Utah, solicited business in the State of Utah, transacted business within the State of Utah, conspired with residents of the State of Utah, committed tortious acts causing injury in the State of Utah and attempted to derive financial benefit from residents of the State of Utah, including benefits directly related to the instant patent infringement, misappropriation of trade

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secrets, breach of contract, breach of duty of fair dealing, intentional interference, defamation and injurious falsehood, false advertising, and conspiracy causes of action set forth herein. 26. HONG CHEN and LUO JUN have also agreed that the state and federal courts of

the State of Utah have exclusive jurisdiction over any dispute arising from such contracts or relating to the goods identified in the contract. 27. On information and belief, Defendants have placed their infringing products into

the stream of commerce and/or advertised or offered to sell their products, throughout the United States, which products have been offered for sale, sold and/or used in the State of Utah and/or in the District of Utah. 28. Defendants have committed acts of infringement in this judicial district, are

subject to personal jurisdiction in this judicial district, and/or are doing business in this judicial district. 29. this state. 30. Venue is proper in this judicial district under 28 U.S.C. 1391(b) and/or 1400. GENERAL ALLEGATIONS Supplier Agreement 31. In November 2004, ORBIT entered into a contract with HONG CHEN and LUO Defendants have caused tortious injury in this state with intent to harm ORBIT in

JUN pursuant to which HONG CHEN agreed to manufacture a limited number of ORBITs products (the Supplier Agreement), attached hereto as Exhibit A and hereafter incorporated by this reference. 32. Under the Agreement HONG CHEN agreed to manufacture for ORBIT sprinkler

irrigation components as identified by ORBIT in purchase orders. 6

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33.

The Supplier Agreement incorporates ORBITs Purchase Order Terms and

Conditions and ORBITs Standards for Suppliers. 34. To facilitate the supplier relationship, ORBIT provided HONG CHEN with

ORBITs proprietary drawings, designs, specifications, technical information, trademarks, logos and trade dress. 35. Under the Supplier Agreement, HONG CHEN and its agents, including LUO

JUN agreed to keep all such information confidential: Supplier shall not at any time, during or after the term of this Agreement, disclose to others and will not take for its own purposes or the purpose of others any trade secrets, confidential information, knowledge, designs, data, knowhow, or any other information considered confidential by the Purchaser. Supplier recognizes that this obligation applies not only to technical information, designs and marketing, but also to any business information that the Purchaser treats as confidential. . . . Any information that is not readily available to the public shall be considered to be a trade secret and confidential. Ex. A at 8. 36. The Supplier Agreement also makes clear that once HONG CHEN has accepted a

purchase order its ACCEPTANCE IS EXPRESSLY LIMITED TO ALL OF THE TERMS AND CONDITIONS OF THIS ORDER, INCLUDING ANY AND ALL ATTACHMENTS. Ex. A at 4. HONG CHEN further agreed that Suppliers failure to comply with each and every term of this order shall constitute an event of default and shall be grounds for the exercise by Purchaser of any of the remedies provided for in these Terms and Conditions. Id. 37. Such Terms and Conditions include the following: a. All payments were due TT60, which means that payments are not due until sixty (60) days after the products have been shipped. Id. at 2. 7

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b.

[A]ll goods shall be subject to inspection and test by the purchaser and its agents or employees and any governmental agency to the extent practicable at any and all times and places including the period of manufacture and prior to final acceptance by the customer. Id. at 5.

c.

THE TIME SPECIFIED HEREIN FOR SHIPMENT OF GOODS IS OF THE ESSENCE OF THIS AGREEMENT AND FAILURE TO SHIP WITHIN SUCH TIME SHALL BE CONSIDERED A MATERIAL BREACH OF THE AGREEMENT. Id. Such breaches are also subject to the contractual remedies provided in the Supplier Agreement. Id.

d.

Price Guarantees . . . In the event that prior to final shipment under this order, Supplier sells or offers to sell to others goods substantially of the same kind as ordered herein at lower prices and/or terms more favorable to a third party than those stated in this order, the prices and/or terms herein shall be deemed automatically revised to equal the lowest prices and/or most favorable terms at which Supplier shall have sold or shall have offered such goods and payments shall be made accordingly. Id.

e.

With respect to merchandise which was the subject of purchase orders HONG CHEN agreed that Supplier shall warrant to ORBIT that no merchandise sold to ORBIT infringes the patents, trademarks or copyrights of others and shall provide to ORBIT all necessary licenses for selling merchandise sold to ORBIT which is under license from a third party. Id. at 7.

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f.

HONG CHEN further agreed Indemnification: Supplier shall protect, defend, hold harmless and indemnify Purchaser from and against any and all claims, actions, liabilities, losses, costs and expenses, including reasonable attorney fees and costs, even is such claims groundless, fraudulent or false, arising out of any actual or alleged infringement of nay [sic] patent, trademark, tradedress or copyright by any merchandise sold to the Purchaser hereunder. Id. at 5.

g.

HONG CHEN further agreed that the goods do not infringe upon or violate any patent, copyright, trademark, trade name, trade dress or, without limitation, any other rights belonging to others. Id. at 4.

h.

Supplier shall protect, defend, hold harmless and indemnify Purchaser from and against any and all claims, actions, liabilities, losses, costs and expenses, including attorneys fees and court costs, even if such claims are groundless, fraudulent or false, arising out of any actual or alleged infringement of any patent, trademark, or copyright by any merchandise sold to the purchaser hereunder. Id. at 3.

38.

HONG CHEN further agreed that any failure to comply with any of the Supplier

Agreements Terms and Conditions would constitute a breach: failure to comply with each and every term of [an] order shall constitute an event of default and shall be grounds for the exercise by Purchaser of any of the remedies provided for in these Terms and Conditions. Id. at 4. 39. Pursuant to the Supplier Agreement, HONG CHEN was also required to provide

ORBIT with 30-days notice before assigning, factoring, or otherwise transferring the right to receive payment under the Supplier Agreement. Id. at 1. 9

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40.

In the event of a breach of this term, Purchaser shall have the right to take

deductions or other set offs against any payment assigned, transferred or factored by the Supplier and Supplier shall defend and indemnify Purchaser against and hold Purchaser harmless from any and all lawsuits, claims, actions, damages (including reasonable attorneys fees, court costs, obligations, liabilities, or liens) arising or imposed in connection with the assignment or transfer or factoring of any account or right arising thereunder. Id. JANICE CAPENERS Employment with ORBIT 41. JANICE CAPENER was first hired by ORBIT in 2003 as an Administrative

Assistant/Operations Coordinator. On June 16, 2003 JANICE CAPENER signed an employment agreement with ORBIT (The 2003 Agreement). 42. The 2003 Agreement provided that JANICE CAPENER (a) recognized that

ORBIT had proprietary information and trade secrets that were to be protected, safeguarded and not disclosed; (b) recognized that ORBIT had other proprietary information concerning vendors, customers and manufacturers that she would hold in strict confidence; (c) that upon her termination she would return all trade secret and proprietary information in written form to ORBIT; (d) that her duty to not disclose and to protect confidential information survived the termination of her employment; (e) that she would not compete or assist others in competing against ORBIT for a period of 18 months after she ended her employment with ORBIT for any reason; (f) that on her termination of employment, she would not solicit persons working for ORBIT to work for or with her; (g) understood that the non-competition, non-disclosure and non-solicitation obligations contained in the agreement shall be extended for the length of time that she was in breach of any provisions contained in the agreement; (h) that if she violated an

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material provision of the agreement, ORBIT shall be entitled to all other remedies including injunctive and equitable relief to prevent a breach of the agreement. 43. In 2005, after ORBIT had invested substantial time and resources in training

JANICE CAPENER, she was given an increase in salary and promoted to General Manager of ORBITs new factory in Ningbo, Peoples Republic of China. 44. As General Manager, JANICE CAPENER was in charge of the production of

Orbit brand products in both the Ningbo factory and in other key third-party factories in various geographic locations in China. 45. As a result of this change in employment status, on or about May 2, 2005, ORBIT

and JANICE CAPENER entered into an agreement (The 2005 Agreement). 46. The 2005 Agreement provided that JANICE CAPENER (a) recognized that

ORBIT had proprietary information and trade secrets that were to be protected, safeguarded and not disclosed; (b) recognized that ORBIT had other proprietary information concerning vendors, customers and manufacturers that she would hold in strict confidence; (c) that upon her termination she would return all trade secret and proprietary information in written form to ORBIT; (d) that her duty to not disclose and to protect confidential information survived the termination of her employment; (e) that she would not compete or assist others in competing against ORBIT for a period of 18 months after she ended her employment with ORBIT for any reason; (f) that on her termination of employment, she would not solicit persons working for ORBIT to work for or with her; (g) understood that the non-competition, non-disclosure and non-solicitation obligations contained in the agreement shall be extended for the length of time that she was in breach of any provisions contained in the agreement; (h) that if she violated an

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material provision of the agreement, ORBIT shall be entitled to all other remedies including injunctive and equitable relief to prevent a breach of the agreement. 47. As General Manager of the Ningbo facility and employee and agent of ORBIT,

JANICE CAPENER owed ORBIT a fiduciary duty and a covenant of good faith and fair dealing. ORBITs Intellectual Property 48. ORBIT owns U.S. Patent No. 6,874,696 (the 696 Patent) entitled Adjustable

Sprinkler Riser with Offset Joint, owns U.S. Patent No. 6,619,570 (the 570 Patent) entitled Telescoping Watering Wand, owns U.S. Patent No. 6,109,546 entitled Lawn Sprinkler and bearing therefore (the 546 Patent), owns U.S. Design Patent No. 495,026 (the 026 Patent) entitled Hose Nozzle, owns U.S. Design Patent No. 482,428 (the 428 Patent) entitled Hose Nozzle, owns U.S. Patent No. 399,916 (the 916 Patent) entitled Missing Apparatus. The aforementioned patents are referred to herein as the Patents. 49. ORBIT is also the original innovator and designer of several other irrigation-

related products and the originator of certain trademarks, trade dress and logos, including, but not limited to, the trademark HARD TOP with Trademark Registration No. 2,575,043. Orbit has also sold sprinkler and irrigation products which have a distinctive look and feel, which consumers and customers of ORBIT have come to associate with ORBIT. ORBIT has further used distinctive brands, logos and packaging in connection with its sales of sprinkler and irrigation products. ORBIT has also used distinctive coloring and distinctive product presentations in catalogs, in trade magazines, on the internet and in retail establishments across the country. Consumers and customers have come to associate these trademarks and this trade dress with ORBIT.

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DEFENDANTS UNLAWFUL ACTS Conspiracy 50. ORBIT is informed and believes that starting approximately in 2007, HONG

CHEN and LUO JUN entered into a conspiracy with others to harm ORBITs business relationships with its customers, suppliers and other third parties. The unlawful acts taken in furtherance of the conspiracy are set forth below. 51. At the same time or subsequently, the conspiracy was joined by JANICE

CAPENER, aka KJ, KJ Peng, Jie Kuang, Janice J. Kuang, and other aliases not yet known to ORBIT. On information and belief, JANICE CAPENER also uses the names Megan and Mandy in emails and otherwise when acting as part of the conspiracy in order to conceal her identity. Alternatively, Megan and Mandy are other conspirators whose identity is not yet known to ORBIT, and are identified as MEGAN DOE and MANDY DOE herein. 52. The conspiracy also includes DAN CAPENER, a former employee of ORBIT,

SUNHILLS, an entity created for the purposes of furthering the conspiracy, and RONG PENG, an agent of SUNHILLS. 53. ORBIT is informed and believes that Defendant TIM MIKA joined the

conspiracy once he started working with HONG CHEN in October 2010. 54. ORBIT is further informed and believes that other currently unknown parties,

including potentially other competitors of ORBIT, also participated in the conspiracy. 55. Hereinafter those participating in the conspiracy, including but not limited to

HONG CHEN, LUO JUN, JANICE CAPENER, DAN CAPENER, SUNHILLS, RONG PENG, TIM MIKA, MEGAN DOE, MANDY DOE, Charlie Crump, Mike Wisdom, and other parties

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not yet known to ORBIT shall be referred to as the Conspirators and the actions undertaken by the Conspirators to harm ORBIT shall be referred to as the Conspiracy. HONG CHENS Improper Patents 56. As part of the Conspiracy, commencing in 2007, without ORBITs knowledge

and in purposeful violation of ORBITs rights, HONG CHEN took ORBITs designs, technical data and physical products and applied for and was granted patents in China on ORBITs designs and products. 57. In applying for these patents, HONG CHEN not only misrepresented itself as the

innovator and creator of the product designs, but it also misrepresented that there were not any prior disclosures of these designs, even though ORBIT had, prior to the wrongful filing of these patent applications, advertised, sold, offered to sell and tested these products or slight variations of these products, both in the United States and in China. 58. Because ORBIT has sold and offered these products for sale and publicly

displayed these products for years prior to the wrongful filing of these patent applications, the patents are invalid. 59. When the Chinese patents were issued, HONG CHEN did not notify ORBIT of

the patents or otherwise inform ORBIT that it had usurped ORBITs rights in these products by filing these applications. 60. Instead, HONG CHEN continued to solicit more business from ORBIT and

worked to expand the line of products that it manufactured for ORBIT. 61. ORBIT is further informed and believes that commencing in approximately 2009,

HONG CHEN, without ORBITs consent or authorization, commenced utilizing ORBITs proprietary names, trademarks, trade dress and confidential information to manufacture products 14

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which ORBIT had developed. HONG CHEN further created tooling for such products without ORBITs consent. ORBIT is informed and believes that such efforts were undertaken so that HONG CHEN could force ORBIT to purchase patented products from HONG CHEN even though HONG CHEN knew that the patents it had filed were invalid. 62. ORBIT is informed and believes that HONG CHEN and LUO JUN filed for these

patents in connection with the Conspiracy and with the aid of one or more Conspirators, and failed to inform appropriate government officials regarding facts which would have prevented the patents from issuing, if such facts had been appropriately disclosed to these officials. JANICE CAPENERs Access to and Theft of ORBIT Trade Secrets 63. Throughout her employment with ORBIT, JANICE CAPENER was given

increased access to strategic information, trade secrets, names and contacts of ORBITS suppliers, raw material providers, manufacturers, customers, and contacts. 64. While working in management at the Ningbo factory, JANICE CAPENER had

unlimited access to proprietary information relating to that factory, including the exact labor and material costs of ORBITs products, including profit margins, costs of manufacture and overhead. 65. JANICE CAPENER also had access to information stored on ORBITS intranet,

which required the use of a password to gain access to such information. 66. JANICE CAPENER also had access to other financial databases including

databases which ORBIT refers to as its Customer Master database, its Product Master database and its ABCD Sales database. Access to these files was limited to those employees given appropriate passwords. Those employees with access to this information knew that the

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information was only to be used for purposes of Orbits business and that this data could not be used for any other purpose. 67. Also in the course of her employment with ORBIT and ORBITS contractual

relationship with HONG CHEN, JANICE CAPENER became acquainted with LUO JUN. 68. ORBIT is informed and believes that LUO JUN and JANICE CAPENER became

co-conspirators for the purpose of damaging ORBIT. 69. In April 2009, while JANICE CAPENER was working in management at

ORBITs Ningbo facility, JANICE CAPENER formed a company called Augusta Products LLC (Augusta). 70. On information and belief, JANICE CAPENER formed Augusta for the purpose

of competing with ORBIT in violation of her contractual obligations and fiduciary duty. 71. JANICE CAPENER conspired with LUO JUN and HONG CHEN to use Augusta

to compete with ORBIT. 72. Thereafter, JANICE CAPENER rented office space in Centerville, Utah for

Augusta, and she obtained samples of irrigation and hose-end products from HONG CHEN. 73. On May 12, 2009, ORBIT informed JANICE CAPENER that her employment

would be terminated, but that she would remain on ORBITs payroll for six months (until November 15, 2009) during which she would continue to work for ORBIT in a consulting role. 74. On May 13, 2009, from her office in China, JANICE CAPENER, unbeknownst to

ORBIT and without ORBITs authorization, intentionally and secretly downloaded highly confidential financial information and trade secrets from ORBITs computer database in Utah. 75. Among other things, ORBIT is informed and believes that JANICE CAPENER

downloaded from ORBITS intranet Level 1 financial data relating to most, if not all, of 16

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ORBITS top 25 customer. JANICE CAPENER also downloaded selected entries from the Customer Master, Product Master and ABCD Sales Report databases. 76. On information and belief, CAPENER downloaded this trade secret data in

conspiracy with LUO JUN and HONG CHEN. 77. On information and belief, DAN CAPENER assisted in stealing these trade

secrets from ORBIT and assisted the conspiracy by processing the data. 78. The information misappropriated by JANICE CAPENER, LUO JUN and HONG

CHEN includes the names, addresses, phone numbers and other detailed information for ORBITs customers; the identification of the factory that manufactured each of the products sold by ORBIT; ORBITs manufacturing costs; ORBITs sales prices to retailers in the United States; ORBITs identification of its best-selling products; and data which could be used to calculate ORBITs profit margins. 79. JANICE CAPENERs theft of its trade secret data and confidential information

from ORBITs computers was confirmed when JANICE CAPENER produced the downloaded information on or about July 15, 2011, in the course of discovery in related litigation before the Second District Court for the State of Utah. 80. ORBIT, on information and belief, alleges that JANICE CAPENER has also

misappropriated other trade secrets from ORBIT. 81. On information and belief, JANICE CAPENER has provided ORBITs trade

secrets to LUO JUN and HONG CHEN and these parties, in combination, have used this data to gain a competitive advantage in their dealings with U.S. retailers such as Walmart and Home Depot.

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82.

On information and belief, ORBITs trade secrets have been provided to others,

including Charlie Crump, TIM MIKA, Mike Wisdom, Walmart, Home Depot, Lowes and possibly others. 83. In October 2009, while still employed by ORBIT, JANICE CAPENER took

additional steps in preparation for competing with ORBIT, including making plans to start her own company called SUNHILLS, and preparing a PowerPoint presentation to show to an individual named Charlie Crump (Crump), who she intended to recruit as a sales manager for SUNHILLS. The PowerPoint presentation contained trade secret data that JANICE CAPENER had stolen from ORBIT. 84. On or about November 15, 2009, JANICE CAPENER was terminated and left the

employ of ORBIT. Formation of SUNHILLS 85. Within a couple weeks after leaving ORBIT, JANICE CAPENER had her friend

RONG PENG register SUNHILLS as a limited liability company in the State of California. JANICE CAPENER had RONG PENG register the company, instead of doing it herself, in a fraudulent attempt to circumvent her contractual obligations with ORBIT. 86. SUNHILLS sells and distributes consumer lawn and garden equipment and

products, including sprinkler irrigation products, to various wholesale and retail outlets in the United States, in direct competition with ORBIT. 87. On information and belief, SUNHILLS makes, sells and/or offers for sale or

allows others to make, use, sell, and/or offer for sale infringing products, including, but not limited to, various sprinkler irrigation products that infringe ORBITs Patents and trademarks described above. 18

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88.

ORBIT is informed and believes that SUNHILLS was formed to act and has acted

as an arm of HONG CHENs sales operations in the United States. 89. ORBIT is informed and believes that JANICE CAPENER is an owner of

SUNHILLS and that LUO JUN is either a part owner or partner of SUNHILLS. 90. In November 2009, JANICE CAPENER disclosed ORBITS confidential

proprietary information and trade secrets to Crump at Augustas office in Centerville, Utah. JANICE CAPENER met with Crump for the purpose of recruiting him as National Sales Manager of SUNHILLS, so that she could further hide her activities from ORBIT. 91. During this meeting, Capener showed Crump the PowerPoint presentation she had

prepared which included ORBIT sales data for Home Depot, Lowes, Walmart and Target. The presentation also provided information concerning the top 20 products Orbit sold to The Home Depot, specific products Orbit sold to Walmart, the top 15 products Orbit sold to Lowes and the top 4 products Orbit sold to Target. 92. ORBIT is informed and believes this information was derived from the data

JANICE CAPENER stole from ORBIT. 93. Crump accepted employment with SUNHILLS and immediately started soliciting

business from ORBITs customers, including Home Depot, with the use of ORBITs trade secret data stolen by JANICE CAPENER. 94. Thereafter, ORBIT is informed and believes that JANICE CAPENER,

SUNHILLS and LUO JUN utilized the trade secret data stolen by JANICE CAPENER to identify customers and to identify specific products which were ORBITS best selling products with that specific customer.

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95.

ORBIT is further informed and believes that these co-conspirators also utilized

the stolen data to identify factories which were manufacturing some of these ORBIT products and that the conspirators have contacted these factories to inquire as to whether they would sell the products to the co-conspirators. 96. In short, by utilizing ORBITS stolen data, the co-conspirators have gained a

competitive advantage which allowed them to determine not only which customers they should contact but the specific products they should offer to that customer. The co-conspirators have also used Orbits confidential data to undercut pricing offered by ORBIT and obtain sourcing information, so they could offer the exact product sold by Orbit to that customer. 97. 98. The information stolen by the co-conspirators is not available publicly. In early 2010 JANICE CAPENER inquired as to whether ORBIT would let her

out of her obligations including but not limited to her non-compete agreement with ORBIT. 99. On or about February 24, 2010, ORBIT advised JANICE CAPENER in no

uncertain terms by written letter that it would not let her out of her obligations including a noncompete agreement. 100. Thereafter JANICE CAPENER continued to breach her covenants with ORBIT

by concealing her identity, affiliation with SUNHILLS, and her continued contacts with ORBITS factories, suppliers, customers, employees, third party factories and incidental suppliers. 101. JANICE CAPENER provided the Conspirators with descriptions and photographs

of ORBIT products, confidential and strategic information and pricing to enable Conspirators to move forward with its plot to take business away from Plaintiff ORBIT through fraud, deceit and other improper and illegal conduct. 20

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102.

In furtherance of the Conspiracy, HONG CHEN, LUO JUN, SUNHILLS, and

other Conspirators also induced JANICE CAPENER to breach non-compete agreements JANICE CAPENER has with ORBIT and further induced her to misappropriate trade secret information from ORBIT. 103. On information and belief and in furtherance of the Conspiracy, JANICE

CAPENER and Charlie Crump used email addresses provided by HONG CHEN and acted as agents of HONG CHEN. JANICE CAPENERs Violation of a TRO Issued in Related State Court Action 104. On July 13, 2010, the Second District Court for the State of Utah in Davis County

issued a Temporary Restraining Order (TRO) against JANICE CAPENER, which enjoined her from competing against ORBIT. 105. JANICE CAPENER received a copy of the TRO on July 15, 2010, while she and

Charlie Crump were in China visiting HONG CHEN, which intended to manufacture the products SUNHILLS planned to sell in the United States. 106. With full knowledge of the TRO, JANICE CAPENER and Crump continued to

prepare for and attend meetings scheduled with ORBITs customers. Thereafter, JANICE CAPENER used aliases in her communications with Home Depot and other ORBIT customers. 107. With full knowledge, and in blatant disregard, of the TRO, JANICE CAPENER,

HONG CHEN, and LUO JUN have continued to seek business from ORBITs customers and otherwise compete with ORBIT. 108. ORBIT is informed and believes that HONG CHEN induced Crump to act as its

agent and/or employee to engage in conduct on behalf of SUNHILLS and/or HONG CHEN in violation of the TRO. 21

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109.

While in the process of transferring from SUNHILLS to join HONG CHEN as an

employee and/or agent, Crump had second thoughts about his involvement in the conspiracy and broke off his relationship with SUNHILLS and HONG CHEN. 110. In October 2010, MEGAN DOE recruited TIM MIKA on behalf of HONG

CHEN and TIM MIKA was hired as a manufacturers representative for HONG CHEN to replace Crump. TIM MIKA represents HONG CHEN in its dealings with U.S. retailers, including Walmart. 111. ORBIT is informed and believes that individual Mike Wisdom works with TIM

MIKA as an agent of HONG CHEN in furtherance of the Conspiracy. 112. MEGAN DOEs email communications with TIM MIKA on behalf of HONG

CHEN do not include a last name and her identity is unclear. ORBIT is informed and believes that MEGAN DOE is acting on behalf of HONG CHEN as a member of the conspiracy to harm ORBITS business. Alternatively, MEGAN DOE is JANICE CAPENER. 113. The name Mandy has also appeared in email correspondence on behalf of

HONG CHEN, without any last name or other identification. ORBIT is informed and believes that MANDY DOE is acting on behalf of HONG CHEN as a member of the conspiracy to harm ORBITS business. Alternatively, MANDY DOE is JANICE CAPENER. 114. ORBIT is informed and believes that other individuals have been hired by HONG

CHEN to take Crumps prior role and engage in the conspiracy for the purpose of unlawfully competing with ORBIT and violating court orders. 115. ORBIT is further informed and believes that HONG CHEN has provided TIM

MIKA and others with the proprietary trade secret data stolen from ORBIT by JANICE CAPENER for the purpose of enabling him to unfairly compete with ORBIT. 22

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HONG CHENS Price Increases and Failure to Ship Products 116. In 2009 and 2010, as anticipated by and pursuant to the terms of the Supplier

Agreement, HONG CHEN accepted purchase orders from ORBIT and agreed to ship products to ORBIT. Despite HONG CHENs acceptance of these purchase orders, commencing in the summer and fall of 2010, HONG CHEN began demanding increased prices for the products it had agreed to ship, claiming that it was facing price increases from its own vendors and suppliers of raw materials. In fact, as part of its course of dealing with HONG CHEN, ORBIT would provide HONG CHEN with initial selling season forecasts and other data, to allow HONG CHEN to lock in prices with raw material suppliers. Such information was provided so that HONG CHEN could meet prices provided in ORBITs advanced forecasts and in its purchase orders. 117. Even though the Supplier Agreement and related terms of ORBIT purchase orders

prevented HONG CHEN from raising prices on items subject to accepted purchase orders, ORBIT agreed to pay higher prices, due in part to the pressures associated with ORBITs seasonal business and ORBITs need to satisfy customer demands. 118. Still, as shipping deadlines approached, HONG CHEN and/or LUO JUN refused

to ship products by the accepted purchase orders deadlines unless ORBIT agreed to pay for the ordered products in full before they were shipped and to accept all products without inspection. 119. HONG CHENs and/or LUO JUNs demands were contrary to the terms of the

Supplier Agreement, which provided that payments were due TT60, which means that payments are not due on purchase order until sixty (60) days after the products have been shipped.

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120.

The Supplier Agreement also provides that all ordered goods must be provided in

good and undamaged condition and fit for their intended use. 121. To this end, the Agreement requires that [a]ll goods shall be subject to inspection

and test by the purchaser and its agents or employees and any governmental agency to the extent practicable at any and all times and places including the period of manufacture and prior to final acceptance by the customer. 122. Critical for ORBITs seasonal and time-sensitive business, the Supplier

Agreement also requires HONG CHEN and LUO JUN to ship ordered product during shipment windows identified in accepted purchase orders. 123. The Supplier Agreement provides that THE TIME SPECIFIED HEREIN FOR

SHIPMENT OF GOODS IS OF THE ESSENCE OF THIS AGREEMENT AND FAILURE TO SHIP WITHIN SUCH TIME SHALL BE CONSIDERED A MATERIAL BREACH OF THE AGREEMENT AND SUBJECT TO the contractual remedies provided in the Supplier Agreement. 124. As noted in greater detail below, ORBIT is informed and believes that HONG

CHEN and LUO JUN took the actions of raising prices and refusing to ship products as part of the Conspiracy, to cause ORBIT to look bad in the eyes of its customers so that HONG CHEN, LUO JUN, SUNHILLS and the other Conspirators could take business away from ORBIT by supplying products at lower pricing directly to ORBIT customers. Defendants Use of Trade Secrets, Misrepresentations, Bribery 125. The Conspirators have falsely informed ORBIT customers, including but not

limited to Walmart, Home Depot and Lowes, that ORBIT is nothing more than a middleman and that the Conspirators in fact manufacture all or most of the products sold by ORBIT in the 24

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United States. The Conspirators also falsely claim that they are the innovators of ORBIT products when in fact Conspirators did not innovate, but instead usurped the innovations of ORBIT. 126. In truth, HONG CHEN has manufactured only a limited number of items for

ORBIT and the vast majority of the products ORBIT sells to its customers in the United States are manufactured by ORBIT and/or by other suppliers based on designs provided by ORBIT. Thus, when HONG CHEN tells ORBIT customers that HONG CHEN is ORBITs main supplier or that ORBIT is merely a trading company, or otherwise suggests that HONG CHEN is the primary manufacturer, supplier and innovator of ORBIT products, such statements are false, misleading and deceptive and are made to harm ORBIT and to make ORBITs customers believe that others, including the Conspirators, are in fact the innovators and the primary persons behind ORBITs success, when in fact ORBIT is the innovator and the company providing successful products in the market. 127. SUNHILLS has also falsely told customers that ORBIT was merely a middle

man. SUNHILLS did not manufacture any of the products it was offering to retailers and instead offered products manufactured by HONG CHEN and, on information and belief, other manufacturers in China. SUNHILLS also often used actual ORBIT products and pictures of ORBIT products in sales presentations made to retailers and falsely represented that those products were SUNHILLS products. In such instances, SUNHILLS removed ORBITs logo from photos and products so customers would not know they were being deceived. In performing these acts and the other acts described herein, ORBIT is informed and believes SUNHILLS acted as HONG CHENS agent and in conspiracy with HONG CHEN.

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128.

ORBIT is further informed and believes the Conspirators have also utilized

financial data, customer lists, product lists and other data stolen from ORBIT, including data stolen by JANICE CAPENER and similar data in the possession of HONG CHEN, LUO JUN, and SUNHILLS, but subject to the confidentiality restrictions in the Supplier Agreement. Such information has been used to legitimize claims made to ORBIT customers that ORBIT is nothing more than a middleman. Such data has also been used to determine, as noted above, which of ORBITs products were the most profitable, so that Defendants could focus their sales efforts on Orbits most profitable products. 129. ORBIT is also informed and believes that Defendants provided ORBIT customers

with data concerning which products were that customers top selling products. This information was provided to ORBIT customers to help establish, in the customers mind, that SUNHILLS and HONG CHEN were the manufacturers of all products and to re-enforce that ORBIT was merely a middle man. 130. Because such information should be known only to ORBIT and the specific

retailer, the unlawful possession and use of this information created assurances, in the minds of these retailers, that the false claims made by the Conspirators were in fact true. 131. ORBIT is further informed and believes the Conspirators have used ORBITs

stolen data to locate other factories in China and have used this data to further circumvent and harm ORBITs business relationships in China. 132. ORBIT is further informed and believes the Conspirators have offered bribes,

both in China and in the United States, to gain market share and further the objectives of the Conspiracy.

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HONG CHEN Sold Products to Competitors at Lower Prices 133. In addition, under the Supplier Agreement, HONG CHEN and LUO JUN

guaranteed the prices of the products ordered by ORBIT against HONG CHENs own price decline and against legitimate competition until the date of shipment. 134. Specifically, the Supplier Agreement provides that [i]n the event that prior to

final shipment under this order, Supplier sells or offers to sell to others goods substantially of the same kind as ordered herein at lower prices and/or terms more favorable to a third party than those stated in this order, the prices and/or terms herein shall be deemed automatically revised to equal the lowest prices and/or most favorable terms at which Supplier shall have sold or shall have offered such goods and payments shall be made accordingly. 135. During the second half of 2010, when HONG CHEN and/or LUO JUN were

raising ORBITs prices and then refusing to ship accepted purchase orders, ORBIT is informed and believes HONG CHEN and/or LUO JUN sold and offered to sell products to SUNHILLS, at prices lower than the prices HONG CHEN was then offering to ORBIT. ORBIT is further informed and believes that contrary to the terms of the Supplier Agreement, HONG CHEN offered such products to other competitors of ORBIT including John Doe competitors that are not yet known to ORBIT, at prices lower than those offered to ORBIT. ORBIT is further informed and believes that contrary to the terms of the Supplier Agreement, HONG CHEN, LUO JUN and SUNHILLS have offered ORBIT products to ORBIT customers, including Walmart, Home Depot and Lowes at prices lower than those HONG CHEN offered to ORBIT. ORBIT is further informed and believes that Defendants offered these products to SUNHILLS, ORBIT customers and competitors at lower prices, during the time frame when Defendants were raising prices to ORBIT. Many of the products offered to SUNHILLS and ORBITs customers were 27

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products based on or which utilized ORBITs proprietary designs, logos, patents, trademarks and trade dress. ORBIT is further informed and believes HONG CHEN has offered to sell ORBIT proprietary products on the Internet, without authorization or consent from ORBIT. Orbit is further informed and believes that HONG CHEN has represented, on the internet and elsewhere that it is ORBIT, that ORBIT is a subsidiary of HONG CHEN and otherwise claimed to be associated with ORBIT. 136. ORBIT is further informed and believes that the actions described in this section

were part of the Conspiracy and that one or more Conspirators, including JANICE CAPENER, SUNHILLS, LUO JUN, TIM MIKA, MEGAN DOE, MANDY DOE and other John Doe Defendants as yet not yet known, encouraged HONG CHEN to breach its agreement with ORBIT, to offer prices lower then those offered to ORBIT, and, in fact, to increase prices to ORBIT while lowering prices to others, and that all such activities were part of the Conspiracy to damage ORBIT, take business away from ORBIT and unlawfully compete with ORBIT. As an additional part of the Conspiracy, ORBIT is also further informed and believes that HONG CHEN purposefully sold certain products to ORBIT using inferior materials which did not comply with ORBITs specifications. 137. After HONG CHEN and LUO JUN refused to ship several accepted purchase

orders, ORBIT notified HONG CHEN and/or LUO JUN that they were in breach of the Supplier Agreement and demanded that HONG CHEN and LUO JUN comply with the parties contract and ship the products ordered in the accepted purchase orders under the terms and conditions of the parties executed contract and cease infringing on ORBITs patents and otherwise misusing ORBITs protected designs and other information.

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138.

HONG CHEN refused. Instead, ORBIT is informed and believes HONG CHEN

has manufactured and sold products to ORBIT customers and competitors that had been originally ordered by ORBIT. 139. ORBIT is further informed and believes that the Conspirators intended, as part of

the Conspiracy, to preclude ORBIT from having products to sell to its customers and then offered the products originally manufactured or ordered to be manufactured for ORBIT to ORBITs customers as part of the Conspiracy and in furtherance of the objectives of the Conspiracy. Factoring ORBITs Debt 140. Pursuant to the Supplier Agreement, HONG CHEN AND LUO JUN are required

to provide ORBIT with 30-days notice before assigning, factoring, or otherwise transferring the right to receive payment under the Supplier Agreement. 141. Contrary to this provision and in furtherance of the Conspiracy, HONG CHEN

and LUO JUN assigned certain debt owed to it by ORBIT to defendant CHINA EXPORT. 142. This debt was assigned because HONG CHEN, LUO JUN and JANICE

CAPENER and the other co-Conspirators knew that the plans described above would likely result in ORBITs refusal to pay sums otherwise owed to HONG CHEN. Breach of the Supplier Agreement and Right to Set Off 143. As provided in the Supplier Agreement failure to comply with each and every

term of [an] order shall constitute an event of default and shall be grounds for the exercise by Purchaser of any of the remedies provided for in these Terms and Conditions. 144. Upon their failure to comply with this provision, Purchaser shall have the right

to take deductions or other set offs against any payment assigned, transferred or factored by the 29

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Supplier and Supplier shall defend and indemnify Purchaser against and hold Purchaser harmless from any and all lawsuits, claims, actions, damages (including reasonable attorneys fees, court costs, obligations, liabilities, or liens) arising or imposed in connection with the assignment or transfer or factoring of any account or right arising thereunder. 145. The Supplier Agreement provides additional remedies to those provided under the

Utah Uniform Commercial Code. 146. In addition to damages, the Supplier Agreement provides ORBIT with the right to

withhold payment to HONG CHEN and LUO JUN based on their failure to comply with any term, guarantee, or warranty. HONG CHEN Accuses ORBIT of Patent Infringement 147. After ORBIT learned that HONG CHEN refused to honor the terms of its

previously accepted purchase orders, ORBIT approached other suppliers in China regarding manufacturing products to replace those that HONG CHEN and LUO JUN refused to produce. Shortly before one such factory in China was set to ship such products to the United States, the factory was informed by Chinese custom officials that HONG CHEN had accused them of patent infringement and the products were held at a Chinese port. 148. At the same time, this factory was also accused of other alleged irregularities

associated with exporting products to ORBIT in the United States. ORBIT is informed and believes that the custom officials were provided with false and misleading information provided to it by HONG CHEN, LUO JUN or other Conspirators. 149. Because these products were produced by this factory to replace products that

were the subject of prior purchase orders accepted by HONG CHEN they are subject to the provisions of the Supplier Agreement and purchase orders noted above, which required HONG 30

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CHEN to indemnify ORBIT should products manufactured pursuant to the terms of purchase orders be the subject of patent infringement allegations. 150. In communications between LUO JUN and ORBIT representatives in China,

LUO JUN has informed ORBIT that he has the ability to stop ORBIT from shipping any products out of China unless ORBIT agrees to certain compensation demands requested by LUO JUN. 151. LUO JUN has further informed ORBIT that he will continue to solicit ORBITs

customers and assert his patents against other ORBIT products unless ORBIT meets his financial demands. 152. As noted above, the patents which HONG CHEN and LUO JUN have obtained in

China were obtained fraudulently. HONG CHEN and LUO JUN both knew the products which were the subject of these patents did not meet the criteria needed for patentability. For example, among other things, these products have been freely available in China and elsewhere for many years prior to the date the patent applications were filed. 153. ORBIT is further informed and believes that the actions and activities described in

this section of the Complaint, including the filing of patent applications and wrongful accusations of patent infringement are part of the Conspiracy and have been enabled by one or more Conspirators. False Claims in Asia 154. In furtherance of the Conspiracy and again in an effort to harm ORBIT by

reducing the number of suppliers willing to work for ORBIT, Conspirators have engaged in a systematic effort to inform suppliers in China of false facts concerning ORBIT, including false facts concerning ORBITs credit worthiness and its ability to pay debts when due. 31

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155.

Among other things, ORBIT is informed and believes that the Conspirators have

told other suppliers in China and CHINA EXPORT that ORBIT breaches its agreements and fails to pay its obligations when due. ORBIT suppliers and the principals of ORBIT suppliers have also been threatened with harm, if they conduct business with ORBIT. 156. In addition, ORBIT is informed and believes that the Conspirators have also

informed others in China that the Conspirators have the ability to influence government officials in China and will prevent and preclude products which are being manufactured from ORBIT from leaving China. In fact, Conspirators caused at least one container of ORBIT goods to be detained in China, forcing ORBIT to post a bond to gain the release of the container, after a delay of several weeks. 157. ORBIT is further informed and believes Defendant CHINA EXPORT has also

made false claims regarding ORBIT to factories and suppliers in China. Infringement 158. On information and belief, over the course of the parties relationship, and now

with increasing regularity, HONG CHEN, LUO JUN, TIM MIKA, MEGAN DOE, MANDY DOE, and SUNHILLS have and continue to make, sell and/or offer for sale or allow others to make, use, sell and/or offer for sale products that infringe on ORBITs patents, trademarks and trade dress. 159. Upon information and belief, HONG CHEN, LUO JUN, TIM MIKA, MEGAN

DOE, MANDY DOE, and SUNHILLS have and continue to manufacture, market, and sell over the internet and directly to ORBITs existing customers products based on ORBITs proprietary information, which they represent as their own, including the products made for ORBIT pursuant to purchase orders accepted by HONG CHEN. 32

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FIRST CLAIM FOR RELIEF PATENT INFRINGEMENT 35 U.S.C. 271 (Against Defendants HONG CHEN, LUO JUN, TIM MIKA, MEGAN DOE, MANDY DOE, SUNHILLS, JANICE CAPENER and DOES 3-10) 160. ORBIT realleges and incorporates by this reference the preceding paragraphs of

the Complaint as if fully set forth herein. 161. ORBIT. 162. On September 16, 2003, the 570 Patent was duly and legally issued to the On April 5, 2005, the 696 Patent was duly and legally issued to the assignee,

assigned, ORBIT. 163. On August 29, 2009, the 546 Patent was duly and legally issued and is now

owned by ORBIT. 164. ORBIT. 165. On November 18, 2003, the 428 Patent was duly and legally issued to the On August, 24, 2004, the 026 Patent was duly and legally issued to the assignee,

assignee, ORBIT. 166. 167. 168. On October 20, 1998, the 916 Patent was duly and legally issued. ORBIT is the exclusive licensee of the 916 Patent. Upon information and belief, HONG CHEN, LUO JUN, TIM MIKA, MEGAN

DOE, MANDY DOE, JANICE CAPENER, and SUNHILLS have infringed and continue to infringe the 696 Patent, the 570 Patent, the 546 Patent, the 026 Patent, the 428 Patent and the 916 Patent, (the Patents) by making, using, selling and/or offering to sell, or inducing or contributing to the infringement of the Patents in the United States, including the State of Utah.

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169.

HONG CHEN, LUO JUN, TIM MIKA, MEGAN DOE, MANDY DOE, JANICE

CAPENER and SUNHILLS and the Conspirators are liable for infringement of the Patents pursuant to 35 U.S.C. 271. 170. Defendants acts of infringement have caused damage to ORBIT, and ORBIT is

entitled to recover from Defendants the damages sustained by ORBIT as a result of their wrongful acts in an amount subject to proof at trial. 171. As a consequence of the infringement complained of herein, ORBIT has been

irreparably damaged to an extent not yet determined and will continue to be irreparably damaged by such acts in the future unless HONG CHEN, LUO JUN, TIM MIKA, MEGAN DOE, MANDY DOE, JANICE CAPENER, and SUNHILLS are enjoined by this Court from committing further acts of infringement. 172. Upon information and belief, one or more of Defendants acts of infringement

were made or will be made with knowledge of the Patents. Such acts constitute willful infringement and make this case exceptional pursuant to 35 U.S.C. 284 and 285 and entitle ORBIT to enhanced damages and reasonable attorneys fees. SECOND CLAIM FOR RELIEF BREACH OF CONTRACT (Against Defendants HONG CHEN AND LUO JUN) 173. ORBIT realleges and incorporates by this reference the preceding paragraphs of

this Complaint as if fully set forth herein. 174. ORBIT has performed its obligations under the Supplier Agreement and has been

ready, willing and able to receive goods purchased from HONG CHEN and LUO JUN.

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175.

As set forth herein, HONG CHEN and LUO JUN have breached one or more of

the provisions of the Supplier Agreement; these breaches constitute a material breach of the Supplier Agreement. 176. On information and belief, prior to shipment of ORBITs outstanding orders,

HONG CHEN and LUO JUN offered and/or sold to third parties goods of substantially the same kind at lower prices and more favorable terms than HONG CHEN and LUO JUN agreed to provide to ORBIT. 177. On information and belief, HONG CHEN and LUO JUN also disclosed and took

for their own purpose and the purpose of others, ORBIT designs, data, and other confidential information. 178. Moreover, HONG CHEN and LUO JUN failed to match the lower prices and

more favorable terms that they provided to ORBIT competitors and/or other third parties, including SUNHILLS; instead, HONG CHEN and LUO JUN insisted that ORBIT pay prices above those agreed to in accepted purchase orders and listed in initial selling season forecasts. 179. HONG CHEN and LUO JUN wrongfully refused to ship goods identified in

ORBIT purchase orders until ORBIT agreed to alter the price, payment terms, and inspection rights agreed to in the Supplier Agreement and purchase orders. 180. To date, HONG CHEN and LUO JUN have failed to ship at least four accepted

purchase orders within the agreed shipment windows, despite ORBITs demands that HONG CHEN and LUO JUN deliver the goods ordered. Defendants have further failed and refused to meet the selling season requirements for these products consistent with the Supplier Agreement and course of conduct between the parties.

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181.

HONG CHEN and LUO JUN have also filed patent applications and enforced

patents in China, threatened economic harm and threatened to sue other ORBIT suppliers in China, contrary to ORBITs rights at law and in the Supplier Agreement. 182. proven at trial. 183. Pursuant to the remedies provided in the Supplier Agreement and Utah law, As a direct result of these breaches, ORBIT has been damaged in an amount to be

ORBIT has withheld payments owed to HONG CHEN and LUO JUN as a set off or partial payment of the damages it has incurred as a result of HONG CHENs and LUO JUNs breaches. 184. doing so. 185. In violation of the Supplier Agreement, HONG CHEN and LUO JUN transferred ORBIT notified HONG CHEN and LUO JUN of its intention and reasons for

the right to receive payment to an insurance company without first notifying ORBIT. 186. As a consequence, ORBIT is also now without knowledge concerning who is the

proper party to receive such payments. 187. from ORBIT. 188. CHINA EXPORT advised ORBIT that HONG CHEN and LUO JUN had On January 6, 2010, CHINA EXPORT sent ORBIT a letter demanding payment

reported an unpaid balance to CHINA EXPORT as its insurer. 189. CHINA EXPORT indicated that this was a covered insurance claim and that

CHINA EXPORT was now pursuing payment of the unpaid balance. 190. Under the terms of the Supplier Agreement, ORBIT has a right of offset. Any

funds not used as an offset (if any) should be provided to such party as the Court deems is the appropriate party to receive such funds. 36

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191.

ORBIT is being irreparably harmed by HONG CHENs and LUO JUNs

breaches, and ORBIT has no adequate remedy at law. ORBIT is therefore entitled to temporary, preliminary, and permanent injunctions barring HONG CHEN and LUO JUN from engaging in further acts in breach of the Supplier Agreement. THIRD CLAIM FOR RELIEF BREACH OF DUTY OF GOOD FAITH AND FAIR DEALING (Against Defendants HONG CHEN AND LUO JUN) 192. ORBIT realleges and incorporates by this reference the preceding paragraphs of

the Complaint as if fully set forth herein. 193. HONG CHEN and LUO JUN have a duty of good faith and fair dealing in

connection with the Supplier Agreement. 194. HONG CHEN and LUO JUN have breached their duty of good faith and fair

dealing by, among other things, depriving ORBIT of the fruits of its bargain under the Supplier Agreement, and by entering into a contract that they knew they did not intend to perform. 195. HONG CHEN and LUO JUN have further breached their duty of good faith and

fair dealing by engaging in the Conspiracy and conspiring with the Conspirators to damage ORBIT. 196. As a result of HONG CHENs and LUO JUNs breach of their duty of good faith

and fair dealing, ORBIT has been damaged in an amount to be proven at trial. 197. Moreover, ORBIT is being irreparably harmed by HONG CHENs and LUO

JUNs breaches, and ORBIT has no adequate remedy at law. ORBIT is therefore entitled to temporary, preliminary, and permanent injunctions barring HONG CHEN and LUO JUN from engaging in further acts in breach of the Supplier Agreement. 37

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FOURTH CLAIM FOR RELIEF SPECIFIC PERFORMANCE (Against Defendants HONG CHEN AND LUO JUN) 198. ORBIT realleges and incorporates by this reference the preceding paragraphs of

the Complaint as if fully set forth herein. 199. Between August and November of 2010, HONG CHEN and LUO JUN accepted

at least 50 ORBIT purchase orders. 200. The Supplier Agreement and accepted purchase orders are sufficiently clear,

definite, and certain to make possible an order of specific performance. 201. Notwithstanding, HONG CHEN and LUO JUN refused and continue to refuse to

deliver the ordered products. 202. ORBIT has no adequate remedy at law for HONG CHENs and LUO JUNs

failure to perform and ORBIT cannot be adequately compensated by an award of money damages. 203. The sprinkler irrigation products manufactured by HONG CHEN and LUO JUN

for ORBIT are unique. These products were manufactured by HONG CHEN and LUO JUN based on ORBITs protected designs, specifications, patents, trademarks and trade dress to meet ORBITs particular needs and specifications. 204. 205. Replacement products are not readily available in the open market. As a result of the HONG CHENs and LUO JUNs refusal to perform the

contract, ORBIT has been damaged in an amount to be proven at trial. 206. Moreover, ORBIT is being irreparably harmed by HONG CHENs and LUO

JUNs breaches, and ORBIT has no adequate remedy at law. ORBIT is therefore entitled to 38

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temporary, preliminary, and permanent injunctions ordering HONG CHEN and LUO JUN to specifically perform their obligations under the Supplier Agreement. FIFTH CLAIM FOR RELIEF DECLARATORY JUDGMENT (Against Defendants HONG CHEN, LUO JUN and CHINA EXPORT) 207. ORBIT realleges and incorporates by this reference the preceding paragraphs of

the Complaint as if fully set forth herein. 208. In light of HONG CHENs and LUO JUNs improper transfer of the right to

payment in violation of the Supplier Agreement, ORBIT is operating under a legal cloud such that a justiciable controversy actually exists between ORBIT and the Defendants. 209. ORBIT is entitled to a declaration of the parties rights as follows:

a. Defendants HONG CHEN and LUO JUN breached the Supplier Agreement by transferring their right to payment without first notifying ORBIT. b. In light of this breach, as well as the breaches plead above, ORBIT is entitled to withhold payment as a deduction or setoff against the payment. c. CHINA EXPORT is barred from bringing any action or proceeding whatsoever, or making any threat, against ORBIT or ORBIT suppliers concerning allegations that ORBIT owes payment to CHINA EXPORT or ORBIT fails to pay claims when due. d. HONG CHEN and LUO JUN wrongfully patented ORBIT products in China and such patents should be transferred to the control of ORBIT. 210. ORBIT is further entitled to an injunction requiring Conspirators to stop their

unlawful activities. 39

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SIXTH CLAIM FOR RELIEF INTENTIONAL INTERFERENCE WITH ECONOMIC RELATIONS (Against Defendants HONG CHEN, LUO JUN, CHINA EXPORT, TIM MIKA, MEGAN DOE, MANDY DOE, JANICE CAPENER, DAN CAPENER, SUNHILLS, RONG PENG, and DOES 3-10) 211. ORBIT realleges and incorporates by this reference the preceding paragraphs of

the Complaint as if fully set forth herein. 212. This is a cause of action for intentional and willful interference with ORBITs

existing and prospective economic and contractual relationships. 213. At all material times ORBIT had economic and contractual relationships with

retail customers, third-party factories, vendors, employees and managers at various facilities around the world, as well as suppliers of incidental services including packaging and freight services. 214. At all material times Defendants above named or each of them knew or should

have known that ORBIT had patents, trademarks, trade dress and copyrights in and to their products and the depiction of their products. 215. That at all material times, conspiring Defendants offered the proprietary products

of ORBIT to its major customers as if they were their own. 216. That at all material times, conspiring Defendants offered the proprietary products

of ORBIT on web sites, in catalogues and sales brochures, holding themselves out as owners of these proprietary products. 217. Upon information and belief, Defendants have made false or misleading

statements and representations to third parties, including statements to ORBITs customers and

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ORBIT suppliers, regarding ORBITs products and designs, as well as the nature of its business model. 218. ORBIT is also informed and believes HONG CHEN, LUO JUN and CHINA

EXPORT have made false claims regarding ORBITs ability to pay its debts and has otherwise discouraged such suppliers from working with ORBIT. 219. Defendants have made additional false and damaging representations as described

in this Complaint. 220. ORBIT is further informed and believes Defendants have attempted to purchase

products from ORBITs vendors in China, using the data stolen by JANICE CAPENER and otherwise disrupted ORBITs relationship with these vendors. 221. Without access to ORBITs trade secrets, Defendants would not have access to or

knowledge of the specific vendors supplying ORBIT with its products. 222. ORBIT is further informed and believes that Defendants and others have

encouraged JANICE CAPENER to violate court orders and to compete against ORBIT in violation of these orders, further harming ORBITs economic interests. 223. Upon information and belief HONG CHEN also applied for patents on ORBITs

designs and specifications, with knowledge that DONFANG and/or LUO JUN did not invent or create the designs and with knowledge and belief that ORBIT created and owned the designs and that ORBIT had disclosed the products and designs to the public for many years. 224. After ORBIT insisted on enforcing the terms of its contract with HONG CHEN

and refused to pay price increases, HONG CHEN asserted infringement of its Chinese patents after manufacturing ORBITs products for several years, and after accepting purchase orders for the products and manufacturing the products that were to be shipped directly to ORBITs 41

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customers. HONG CHEN and LUO JUN have further interfered with ORBITs economic relationships by using ORBIT trade secrets in manners not authorized by the Supplier Agreement, utilizing trade secrets stolen by the Capeners and by entering into the other acts of the Conspiracy and acting with and on behalf of the Conspirators as noted above. 225. ORBIT is also informed and believes that the Conspirators either have improperly

influenced officials in China and perhaps others and/or claimed to have the ability to influence government officials and others to prevent products from being shipped outside of China and/or to gain business opportunities in the United States. 226. All of these actions constitute an intentional interference with ORBITs

customers, including Walmart, Home Depot and Lowes. 227. These actions have also interfered with ORBITs relationships with its other

suppliers in China, specifically the actions of CHINA EXPORT and HONG CHEN have created concerns among other Chinese manufacturers that ORBIT may withhold funds from them if they manufacture products for ORBIT. 228. The above actions constitute actions taken for an improper purpose and/or by

improper means. 229. Defendants have caused damage to ORBIT, its business, goodwill, and reputation,

and these actions constitute wrongful and intentional interference with ORBITs economic relations. 230. damages. Because these acts are willful and malicious ORBIT is also entitled to punitive

42

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SEVENTH CLAIM FOR RELIEF TORTIOUS INTERFERENCE (Against Defendants LUO JUN, SUNHILLS, JANICE CAPENER, and DAN CAPENER) 231. ORBIT realleges and incorporates by this reference the preceding paragraphs of

the Complaint as if fully set forth herein. 232. Upon information and belief, Defendants have intentionally induced HONG

CHEN to breach its agreement with ORBIT. As described in greater detail above, these actions have been undertaken as part of the Conspiracy and in connection with the Conspirators. 233. means. 234. As a legal consequence of this conduct, ORBIT has been damaged, in amounts to These actions were undertaken for improper purposes and by use of improper

be proven at trial. 235. damages. EIGHTH CLAIM FOR RELIEF TORTIOUS INTERFERENCE WITH JANICE CAPENERS CONTRACT (Against Defendants HONG CHEN, LUO JUN, TIM MIKA, MEGAN DOE, MANDY DOE, SUNHILLS, RONG PENG and DOES 3-10) 236. ORBIT realleges and incorporates by this reference the preceding paragraphs of Because these acts are willful and malicious ORBIT is also entitled to punitive

the Complaint as if fully set forth herein. 237. Upon information and belief, HONG CHEN, LUO JUN, TIM MIKA,

SUNHILLS, MEGAN DOE, MANDY DOE, and RONG PENG have intentionally induced JANICE CAPENER to breach her non-compete agreements with ORBIT. As described in

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greater detail above, these actions have been taken as part of the Conspiracy and in connection with the Conspirators. 238. Orbit is further informed and believes that HONG CHEN, LUO JUN, TIM

MIKA, SUNHILLS, MEGAN DOE, MANDY DOE, and RONG PENG have encouraged JANCE CAPENER to violate court orders and to compete against ORBIT in violation of these orders, further harming ORBITs economic interests. 239. means. 240. As a legal consequence of this conduct, ORBIT has been damaged, in amounts to These actions were taken for improper purposes and by the use of improper

be proven at trial. 241. damages. NINTH CLAIM FOR RELIEF DEFAMATION AND INJURIOUS FALSEHOOD (Against Defendants HONG CHEN, LUO JUN, TIM MIKA, MEGAN DOE, MANDY DOE, CHINA EXPORT, SUNHILLS, JANICE CAPENER, and DOES 3-10) 242. ORBIT realleges and incorporates by this reference the preceding paragraphs of Because these acts are willful and malicious ORBIT is also entitled to punitive

the Complaint as if fully set forth herein. 243. Upon information and belief, HONG CHEN, LUO JUN, TIM MIKA, MEGAN

DOE, MANDY DOE, SUNHILLS, JANICE CAPENER, and/or CHINA EXPORT have knowingly made false statements about ORBIT or its products and/or services. 244. Upon information and belief, recipients of statements understood the meaning of

the defamatory meaning of the statements.

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245.

Upon information and belief, Defendants conduct was intentional and has caused

economic harm to ORBIT and has harmed ORBITs reputation. 246. The actions of HONG CHEN, LUO JUN, TIM MIKA, MEGAN DOE, MANDY

DOE, JANICE CAPENER and SUNHILLS constitute business defamation. 247. The actions of HONG CHEN, LUO JUN, TIM MIKA, JANICE CAPENER,

MEGAN DOE, MANDY DOE, and SUNHILLS constitute injurious falsehood. 248. As a legal consequence of this conduct, ORBIT has been damaged, in amounts to

be proven at trial. 249. damages. TENTH CLAIM FOR RELIEF FALSE ADVERTISING 15 U.S.C. 1125 (Against Defendants HONG CHEN, LUO JUN, TIM MIKA, MEGAN DOE, MANDY DOE, SUNHILLS, JANICE CAPENER and DOES 3-10 and DOES 3-10) 250. ORBIT realleges and incorporates by this reference the preceding paragraphs of Because these acts are willful and malicious ORBIT is also entitled to punitive

the Complaint as if fully set forth herein. 251. HONG CHEN and SUNHILLS sell and offer to sell ORBIT-designed products as

their own and as the result of their own innovation. 252. The misrepresentations of HONG CHEN, LUO JUN, TIM MIKA, JANICE

CAPENER, MEGAN DOE, MANDY DOE, and SUNHILLS, in commercial advertising and/or promotion, including sales and marketing calls and appointments, that HONG CHEN and/or SUNHILLS is the innovator of the products it manufactures, that ORBIT acts as its middle man and that they manufacture most of ORBITs products are literally false and/or misleading as they

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misrepresent the nature, characteristics, and/or qualities of their products and/or commercial activities. 253. commerce. 254. Defendants misrepresentations regarding their relationship with ORBIT and their Defendants false and/or misleading representations of fact are made in interstate

role in producing ORBIT brand sprinkler irrigation products are material in that consumers rely on these misrepresentations when making purchasing decisions. 255. As a result of Defendants actions in commercial advertising and promotion, there

is actual deception or at least a tendency to deceive a substantial portion of the intended audience. 256. Defendants actions are likely to cause injury and/or a loss in goodwill, thus

violating 15 U.S.C. 1125(a). 257. 258. On information and belief, Defendants actions are willful and deliberate. Defendants false and/or misleading advertising has caused ORBIT actual

damages in an amount to be proven at trial. Such damages should be trebled as allowed by 15 U.S.C. 1117(a). 259. ORBIT is further entitled to recover Defendants profits, the amount of which is

currently unknown by ORBIT, and which amount should be trebled as allowed by 15 U.S.C. 1117(a). 260. This is an exceptional case pursuant to 15 U.S.C. 1117(a), and ORBIT is

therefore entitled to recover its attorney fees from Defendants. 261. suit. 46 Pursuant to 15 U.S.C. 1117(a), ORBIT is also entitled to recover its costs of

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262.

ORBIT is being irreparably harmed by Defendants false and/or misleading

advertising and ORBIT has no adequate remedy at law. ORBIT is therefore entitled to preliminary and permanent injunctive relief barring Defendants from engaging in further acts violative of 15 U.S.C. 1125(a). ELEVENTH CLAIM FOR RELIEF VIOLATION OF TRUTH IN ADVERTISING UTAH CODE 13-11a-3 (Against Defendants HONG CHEN, LUO JUN, TIM MIKA, MEGAN DOE, MANDY DOE, SUNHILLS, JANICE CAPENER and DOES 3-10) 263. ORBIT realleges and incorporates by this reference the preceding paragraphs of

the Complaint as if fully set forth herein. 264. HONG CHEN and SUNHILLS sell and offer to sell ORBIT-designed products as

their own and as the result of their own innovation. 265. The misrepresentations of HONG CHEN, LUO JUN, TIM MIKA, JANICE

CAPENER, MEGAN DOE, MANDY DOE, and SUNHILLS, in commercial advertising and/or promotion, including sales and marketing calls and appointments, that HONG CHEN and/or SUNHILLS is the innovator of the products it manufactures, that ORBIT acts as its middle man and that they manufacture most of ORBITs products are literally false and/or misleading as they misrepresent the nature, characteristics, and/or qualities of their products and/or commercial activities. 266. Defendants misrepresentations regarding their relationship with ORBIT and their

role in producing ORBIT brand sprinkler irrigation products cause likelihood of confusion or of misunderstanding as to, inter alia, the source, sponsorship, approval, or certification of goods. 267. On information and belief, Defendants actions are willful and deliberate.

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268.

Defendants false and/or misleading advertising has caused ORBIT actual

damages in an amount to be proven at trial. 269. Pursuant to Utah Code 13-11a-4(c), ORBIT is also entitled to recover its costs

of suit and attorneys fees. TWELFTH CAUSE OF ACTION TRADEMARK INFRINGEMENT 15 U.S.C. 1114 (Against Defendants HONG CHEN, LUO JUN, TIM MIKA, MEGAN DOE, MANDY DOE, SUNHILLS, JANICE CAPENER and DOES 3-10) 270. ORBIT realleges and incorporates by this reference the preceding paragraphs of

the Complaint as if fully set forth herein 271. Upon information and belief, the use of the trademark HARD TOP by Defendants

in connection with its sprinkler and irrigation products is identical to ORBITs federally registered mark, namely U.S. Trademark Reg. No. 2,575,043. 272. Additionally, the goods sold by Defendants in connection with the HARD TOP

mark are closely related and/or identical to and sold and marketed through the same channels and to the same consumers as the goods sold by ORBIT in connection with its federally registered mark. 273. Accordingly, the use of HARD TOP in connection with sprinkler and irrigation

products is likely to cause confusion, or cause mistake, or to deceive consumers in light of ORBITs federally registered mark. 274. Upon information and belief, the use of the trademark HARD TOP by Defendants

in connection with its sprinkler and irrigation products has infringed ORBITs rights pursuant to the Lanham Act, 15 U.S.C. 1114 and under the common law.

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275.

Upon information and belief, ORBIT has suffered actual damages as a result of

Defendants trademark infringement in an amount to be proven at trial. Additionally, the harm to ORBIT arising from Defendants acts is not fully compensable by money damages. ORBIT has suffered, and continues to suffer, irreparable harm that has no adequate remedy at law and that will continue unless Defendants conduct is preliminarily and permanently enjoined. 276. Upon information and belief, Defendants continued use of a confusingly similar

trademark is willful and intentional. As a result, ORBIT is further entitled to treble damages and an award of costs and attorneys fees. THIRTEENTH CAUSE OF ACTION TRADEMARK AND TRADE DRESS INFRINGEMENT 15 U.S.C. 1125 (Against Defendants HONG CHEN, LUO JUN, TIM MIKA, MEGAN DOE, MANDY DOE, SUNHILLS, JANICE CAPENER and DOES 3-10) 277. ORBIT realleges and incorporates by this reference the preceding paragraphs of

the Complaint as if fully set forth herein. 278. Upon information and belief, the use of the trademark HARD TOP by Defendants

in connection with its sprinkler and irrigation products as well as its marketing and sale is similar to the ORBIT federally registered mark, namely HARD TOP U.S. Trademark Reg. No. 2,575,043. 279. In addition, ORBIT has sold sprinkler and irrigation products which have a

distinctive look and feel which consumers and customers of ORBIT have come to associate with ORBIT. ORBIT has further used distinctive brands, logos and packaging in connection with its sales of sprinkler and irrigation products. ORBIT has also used distinctive coloring and a distinctive presentation of products in catalogs and trade magazines or the internet and in stores. Such distinctive trademarks and trade dress (hereinafter ORBIT Trademarks and Trade Dress) 49

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are rights belonging to ORBIT and rights which have been wrongfully misappropriated by Defendants. 280. Additionally, the sprinkler and irrigation goods sold by Defendants are closely

related to and sold and marketed through the same channels and to the same consumers as the goods sold by ORBIT in connection with ORBIT Trademarks and Trade Dress. 281. Accordingly, the use by Defendants of ORBITs Trademarks and Trade Dress in

connection with sprinkler and irrigation products is likely to cause confusion, or cause mistake, or to deceive consumers in light of ORBITs pre-existing rights. 282. Upon information and belief, the use of the ORBITs Trademarks and Trade

Dress by Defendants in connection with their sprinkler and irrigation products has infringed ORBITs rights pursuant to the Lanham Act, 15 U.S.C. 1125 and under the common law. 283. Upon information and belief, ORBIT has suffered actual damages as a result of

Defendants infringement in an amount to be proven at trial. Additionally, the harm to ORBIT arising from Defendants acts is not fully compensable by money damages. ORBIT has suffered, and continues to suffer, irreparable harm that has no adequate remedy at law and that will continue unless Defendants conduct is preliminarily and permanently enjoined. 284. Upon information and belief, Defendants continued use of confusingly similar

trademarks and trade dress is willful and intentional. As a result, ORBIT is further entitled to treble damages and an award of costs and attorneys fees.

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FOURTEENTH CAUSE OF ACTION UNFAIR COMPETITION, UTAH CODE ANN. 13-5A-102, 103 AND UTAH COMMON LAW (Against Defendants HONG CHEN, LUO JUN, TIM MIKA, MEGAN DOE, MANDY DOE, SUNHILLS, JANICE CAPENER, and DOES 3-10) 285. ORBIT realleges and incorporates by this reference the preceding paragraphs of

the Complaint as if fully set forth herein 286. ORBIT owns all right, title and interest in and to U.S. Trademark Reg. No.

2,575,043. ORBIT also has common law rights in the ORBITs Trademarks and Trade Dress for use in association with various products, including sprinkler and irrigation products, as well as the marketing and sales of such products. 287. Upon information and belief, the use of ORBITs Trademarks and Trade Dress by

Defendants in connection with the sale and offer to sell of Defendants sprinkler and irrigation products has infringed ORBITs rights, as noted above. 288. by ORBIT. 289. Accordingly, the use of ORBITs Trademarks and Trade Dress in connection with Additionally, the goods sold by Defendants are closely related to the goods sold

sprinkler and irrigation products is likely to cause confusion, or cause mistake, or to deceive consumers in light of ORBITs pre-existing rights. 290. By engaging in the above-described activities, Defendants have infringed

ORBITs Trademarks and Trade Dress thereby engaging in unfair competition under Utah Code Ann. 13-5a-102, 103 and under Utah common law. 291. ORBIT has suffered actual damages as a result of unfair business practices by

Defendants in an amount to be proven at trial. Additionally, the harm to ORBIT arising from 51

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these acts by Defendants is not fully compensable by money damages. ORBIT has suffered, and continues to suffer irreparable harm that has no adequate remedy at law and that will continue unless this unfair conduct by Defendants is preliminarily and permanently enjoined. Furthermore, ORBIT is entitled to its attorneys fees and costs. FIFTEENTH CLAIM FOR RELIEF MISAPPROPRIATION OF TRADE SECRETS (Against Defendants HONG CHEN, LUO JUN, TIM MIKA, MEGAN DOE, MANDY DOE, and DOES 3-10) 292. ORBIT realleges and incorporates by this reference the preceding paragraphs of

the Complaint as if fully set forth herein. 293. Information regarding ORBITs designs and technical data, customer lists and

data, and financial information acquired by Conspirators pursuant to an employment or contractual relationship with ORBIT are proprietary and confidential and constitute trade secrets under the Utah Uniform Trade Secrets Act, Utah Code Ann. 13-24-1 (2010) (Proprietary Information). 294. The Proprietary Information is known only to ORBIT and certain of its authorized

employees and agents, and is not generally known to or ascertainable by the public. The information thereby derives independent economic value. 295. ORBIT engages in extensive efforts to keep the Proprietary Information secret,

including restricting disclosure of such Proprietary Information only to those employees and agents who have a specific need to know such information. 296. ORBIT is informed and believes, and on that basis alleges that, by their actions

described herein, Conspirators have willfully and maliciously misappropriated and continue to misappropriate Proprietary Information of ORBIT by improper means. 52

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297.

ORBIT is being irreparably harmed by the Conspirators misappropriation of

ORBITs Proprietary Information, and has no adequate remedy at law. ORBIT is therefore entitled to injunctive relief barring the Conspirators, including HONG CHEN, LUO JUN, TIM MIKA, MEGAN DOE and MANDY DOE from misappropriating ORBITs Proprietary Information. 298. Furthermore, ORBIT has been damaged by the Conspirators misappropriations

of ORBITs Proprietary Information in an amount to be determined at trial, and the Conspirators have been unjustly enriched by their misappropriations. 299. ORBIT is also entitled to recover double its damages and its attorneys fees in

light of the Conspirators willful and malicious misappropriations of ORBITs Proprietary Information. SIXTEENTH CLAIM FOR RELIEF VIOLATION OF COMPUTER FRAUD & ABUSE ACT (CFAA), 18 U.S.C. 1030 (Against Defendants JANICE CAPENER, HONG CHEN, LUO JUN, and DAN CAPENER) 300. ORBIT realleges and incorporates by this reference the preceding paragraphs of

the Complaint as if fully set forth herein. 301. ORBITs computer system, which was illegally accessed by JANICE CAPENER,

is used in interstate commerce and is a protected computer under the CFAA. 302. With the assistance of DAN CAPENER, JANICE CAPENER intentionally

accessed a protected computer at ORBIT and obtained information without authorization and through conduct that exceeded any authorized access.

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303.

Through her unauthorized and illegal conduct, JANICE CAPENER obtained

information of value. On information and belief, the value of any improper use of ORBITs computer by JANICE CAPENER was in excess of $5,000. 304. JANICE CAPENER and DAN CAPENER acted in combination and conspiracy

with and/or as the agent for HONG CHEN AND LUO JUN. HONG CHEN AND LUO JUN have knowingly and intentionally encouraged and participated in the foregoing wrongful conduct by JANICE CAPENER, to the benefit of HONG CHEN and LUO JUN, and are thereby liable or vicariously liable for such conduct. 305. By the foregoing conduct, JANICE CAPENER, DAN CAPENER, HONG CHEN

and LUO JUN violated the provisions of 18 U.S.C. 1030(a) and are liable to ORBIT under 18 U.S.C. 1030(g). SEVENTEENTH CLAIM FOR RELIEF BREACH OF FIDUCIARY DUTY (Against Defendants JANICE CAPENER and DAN CAPENER) 306. ORBIT realleges and incorporates by this reference the preceding paragraphs of

the Complaint as if fully set forth herein. 307. As an employee, manager and consultant for ORBIT, JANICE CAPENER had

fiduciary duties to ORBIT. 308. ORBIT. 309. Defendants contractual breaches, defamation, competition, interference, and As an employee and agent for ORBIT, DAN CAPENER had fiduciary duties to

other wrongful conduct violated their fiduciary duties to ORBIT.

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310.

ORBIT has been damaged by Defendants breaches of her fiduciary duties in an

amount to be proven at trial. EIGHTEENTH CLAIM FOR RELIEF UNJUST ENRICHMENT (Against Defendants HONG CHEN, LUO JUN, TIM MIKA, SUNHILLS, MEGAN DOE, MANDY DOE, RONG PENG, DAN CAPENER, JANICE CAPENER and DOES 3-10) 311. ORBIT realleges and incorporates by this reference the preceding paragraphs of

the Complaint as if fully set forth herein. 312. As a direct and proximate result of Defendants unlawful conduct, Defendants

have been unjustly enriched to ORBITs detriment. 313. By their conduct, Defendants have misappropriated the business success, contacts,

relationships, and goodwill generated by ORBIT over the past years and are thereby unjustly enriched. 314. ORBIT is entitled to judgment in an amount to be proven at trial for the unjust

enrichment conferred upon Defendants to the detriment of ORBIT. NINETEENTH CLAIM FOR RELIEF CONSPIRACY (Against All Defendants) 315. ORBIT realleges and incorporates by this reference the preceding paragraphs of

the Complaint as if fully set forth herein. 316. Defendants knowingly joined and agreed to a plan to misappropriate ORBITs

trade secrets, interfere with its existing and potential customer relationships, and other business relationships in violation of applicable law.

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317.

Defendants combined with each other and the Conspirators to make the

misrepresentations and omissions described in this Complaint. 318. Each of the misrepresentations and omissions described herein and the

transactions which led to them were overt acts undertaken in furtherance of these conspiracies. 319. 320. As a direct result, ORBIT has been damaged in an amount to be proven at trial. Based on Defendants intentional and malicious conduct, ORBIT also is entitled

to recover punitive damages from Defendants. PRAYER FOR RELIEF WHEREFORE, ORBIT respectfully prays for the following relief: 1. Judgment that HONG CHEN, LUO JUN, TIM MIKA, SUNHILLS, MEGAN

DOE, MANDY DOE, and JANICE CAPENER have each infringed the 696 Patent, the 570 Patent, the 546 Patent, the 026 Patent, the 428 Patent and the 916 Patent. 2. An order requiring HONG CHEN, LUO JUN, TIM MIKA, SUNHILLS, MEGAN

DOE, MANDY DOE, and JANICE CAPENER to account for and pay to ORBIT all damages caused by their infringement of the 696 Patent, the 570 Patent, the 546 Patent, the 026 Patent, the 428 Patent and the 916 Patent, whether lost profits or a reasonable royalty, and to enhance such damages by three times in light of Defendants willful infringement, all in accordance with 35 U.S.C. 284; 3. Judgment that Defendants use of ORBIT Trademarks and Trade Dress, or

trademarks and trade dress confusingly similar thereto, is likely to cause confusion and will result in unfair competition under Federal and State law. 4. Entry of a permanent injunction pursuant to 35 U.S.C. 283 enjoining HONG

CHEN, LUO JUN, TIM MIKA, SUNHILLS, MEGAN DOE, MANDY DOE, and JANICE 56

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CAPENER, their officers, agents, servants, employees and those persons in active concert or participation with them from further acts of patent infringement, trademark infringement and trade dress and the entry of a permanent judgment enjoining HONG CHEN,LUO JUN, TIM MIKA, SUNHILLS, MEGAN DOE, MANDY DOE, and JANICE CAPENER, and their officers, agents, servants, employees and those persons in active concert or participation with them from competing against Orbit or from engaging in any further acts violative of Federal and State law. 5. to ORBIT. 6. An order that ORBIT be granted pre-judgment and post-judgment interest on the And order requiring HONG CHEN and LUO JUN to transfer the Chinese patents

damages caused to it by reason of Defendants patent infringement; 7. A declaration by the Court that this is an exceptional case and that ORBIT be

granted its reasonable attorneys fees in accordance with 35 U.S.C. 285 and 15 U.S.C. 1117(a); 8. A judgment for punitive damages, three times ORBITs actual damages, in an

amount to be determined at trial. 9. Judgment that HONG CHEN and LUO JUN have breached their contracts and

duty of good faith and fair dealing with ORBIT, interfered with ORBITs contracts and business relations, misappropriated ORBIT trade secrets, violated the CFAA, were unjustly enriched, and engaged in false advertising, unfair competition, defamatory conduct, and conspiracy. 10. Judgment that TIM MIKA, MEGAN DOE, and MANDY DOE interfered with

ORBITs economic relations, misappropriated ORBITs trade secrets, were unjustly enriched, and engaged in defamation, false advertising, unfair competition and conspiracy. 57

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11.

An order compelling HONG CHEN, LUO JUN, TIM MIKA, MEGAN DOE, and

MANDY DOE, to account to ORBIT for their profits arising from the acts complained of herein, and that ORBIT be awarded treble HONG CHENs, LUO JUNs, TIM MIKAS, MEGAN DOEs, MANDY DOEs, profits, in accordance with the accounting demanded. 12. An order that the Supplier Agreement and accepted purchase orders for ORBIT

sprinkler irrigation parts be specifically performed. 13. A declaratory judgment barring CHINA EXPORT from pursuing payment under

the Supplier Agreement, from making defamatory statements about ORBIT, and from blacklisting ORBIT in China. 14. Judgment that JANICE CAPENER intentionally interfered with ORBITs

contracts and economic relations, breached her fiduciary duty to ORBIT, violated the CFAA, was unjustly enriched, and engaged in false advertising, defamatory conduct, unfair competition, and conspiracy. 15. An order compelling JANICE CAPENER to account to ORBIT for her profits

arising from the acts complained of herein, and that ORBIT be awarded treble JANICE CAPENERs profits, in accordance with the accounting demanded. 16. Judgment that SUNHILLS, RONG PENG, and DAN CAPENER intentionally

interfered with ORBITS contracts and economic relations, were unjustly enriched, and engaged in false advertising, defamatory conduct, unfair competition, and conspiracy. 17. enriched. 18. For an order that Defendants promulgate advertising to correct and/or prevent any Judgment awarding ORBIT the amount by which Defendants were unjustly

consumer confusion, false associations, or false representations they have created or made in the 58

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marketplace, and/or compensate ORBIT for the advertising and other expenditures necessary to dispel any such consumer confusion, false associations, or false representations. 19. For an order that Defendants cancel all pending orders for any products that were

or are the subject of false and/or misleading advertising, including, without limitation, advertising that misrepresents the nature, quality, or characteristics of their products. 20. 21. 22. fees. 23. Such other and further relief as contemplated by this Complaint and/or as the For a declaration of the parties respective rights as indicated above. An order awarding pre- and post-judgment interest. An award for ORBITs costs of suit, including reasonable expenses and attorneys

Court deems just and proper. JURY DEMAND Pursuant to Rule 38 of the Federal Rules of Civil Procedure, ORBIT demands a trial by jury of all issues so triable. DATED this 26th day of April, 2012. RAY QUINNEY & NEBEKER P.C.

By

/s/ Liesel B. Stevens Mark M. Bettilyon Liesel B. Stevens Greg S. Ericksen Attorneys for Plaintiffs

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CERTIFICATE OF SERVICE On the 26th day of April, 2012, the foregoing SECOND AMENDED COMPLAINT was filed electronically with the Clerk of the United States District, District of Utah Central Division, using the CM/ECF system which sent notification of such filing to the following: Michael G. Brady BRADY LAW CHARTERED St. Marys Crossing 2537 W. State Street, Suite 200 Boise, ID 83702 Kenneth R. Shemin SHEMIN LAW FIRM, PLLC 3333 Pinnacle Hills Parkway, Suite 603 Rogers, AR 72758 Frank J. Dykas DYKAS & SHAVER LLP P. O. Box 877 Boise, ID 83701-0877

Jean-Claude Mazzola WILSON ELSER MOSKOWITZ EDELMAN & DICKER, LLP 150 East 42nd Street New York, NY 10017-5639

/s/ Jeanette Evans


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