IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF NORTH CAROLINA ARMACELL LLC, Plaintiff, v.

AEROFLEX USA, INC., Defendant. ) ) Civil Action No.: 1:13-00896 ) ) COMPLAINT ) (Jury Trial Demanded) ) ) ) )

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Through counsel, Plaintiff Armacell LLC (Armacell) brings this lawsuit against Defendant Aeroflex USA, Inc. (Defendant), and alleges as follows: THE PARTIES 1. Armacell is a Delaware company with a principal place of business in

Mebane, North Carolina. 2. Armacell is a global leader in the market of insulation materials and foam

plastics used in a wide variety of applications. 3. Upon information and belief, Defendant was incorporated under the laws of

the State of Tennessee, and has a principal place of business in Sweetwater, Tennessee. Upon information and belief, Defendant is also in the business of insulation materials and foam plastics, and competes directly with Armacell in that market.

JURISDICTION AND VENUE

1.

This action arises under the Patent Act, 35 U.S.C. 101 et seq., as well as

the Lanham Act, 15 U.S.C. 1501, et seq. 4. This Court has jurisdiction over Armacells claims under at least 28

U.S.C. 1331 and 1338. 5. This Court has personal jurisdiction over Defendant under at least N.C.

GEN. STAT. 1-75.4, as Defendant has engaged in acts of infringement complained of herein in North Carolina and in this judicial district, including sales and/or distribution of infringing product to customers in this judicial district. Further, upon information and belief, Defendant does systematic and continuous business in North Carolina and in this judicial district by, among other things, routinely selling and distributing its products in North Carolina to North Carolina consumers in this judicial district. Further, upon

information and belief, Defendant has purposefully advertised, sold and distributed infringing products into the stream of commerce in the United States with the reasonable belief and expectation that such products would periodically flow into North Carolina and into this judicial district. 6. The United States District Court for the Middle District of North Carolina

is the appropriate venue for this action, pursuant to at least 28 U.S.C. 1391 and 1400(b). FACTS 7. Armacell is the owner by assignment of all right, title and interest to United

States Patent No. 6,902,784 (the 784 Patent), including all rights to bring actions and
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recover damages for infringement thereof. The 784 Patent issued on June 7, 2005, is entitled Composite Pressure Sensitive Insulation Joining Construction, and is directed to an adhesive insulation structure used for joining two adjacent insulation structures. (Exhibit A, 784 Patent). 8. On August 16, 2010, Armacell informed Defendant that marketing

materials for its Cel-Link product appear to disclose both a structure and a method for installation of a connector between the ends of thermal insulation tubing sections that infringes the 784 Patent. (Exhibit B, August 16, 2010 Notice Letter from Armacell). Armacell further noted that the marketing materials included with Defendants Cel-Link product claim that the product is covered by a pending patent application, that the reference presumably related to U.S. Patent Application, Publication

No. US 2010/0151171 A1 (the 171 Application), and that the embodiments of the invention recited in the 171 Application expressly teach a construction and method of installation of a connector for thermal insulation tubing which embodies the construction and methods of manufacture and use of the insulation tubing connector taught by the claims of the 784 Patent. 9. Defendant responded on August 25, 2010, by: (a) representing that it had

suspended all activities related to the testing, marketing, sales, or distribution of the CelLink product and will continue with that suspension of all such activities until the issues are sorted out by the U.S. Patent Office; and (b) suggesting that Defendant had no interest in or relation to the 171 patent application. (Exhibit C, August 25, 2010

Response from Defendant). Armacell subsequently learned, however, that Defendant and
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its agents continued to actively market and sell the infringing Cel-Link product, and apprised Defendant of same in a letter dated October 29, 2010. (Exhibit D, October 29, 2010 Letter from Armacell). 10. Defendant responded on November 11, 2010, representing that it had only

sold $756.18 worth of Cel-Link product, and that Defendant would suspend all activities relating to the Cel-Link product pending further actions by the U.S. Patent Office. (Exhibit E, November 11, 2010 Letter from Defendant). 11. Upon information and belief, Defendants reference to further actions by

the U.S. Patent office related to the then-pending 171 patent application, which was owned by Defendants parent or affiliate company, Eastern Polymer Industry LTD. The 171 patent application was subsequently abandoned after it was rejected by the United States Patent Office in view of Armacells 784 Patent. 12. Notwithstanding the above, Armacell recently learned that Defendant has

been actively marketing and selling a new Cel-Link product (Cel- Link II) that infringes at least Claim 1 of the 784 Patent. Examples of marketing materials recently distributed by Defendant for the Cel-Link products are attached as Exhibit F. Those marketing materials claim that the Cel-Link products are patent pending, which, upon information and belief, misleadingly refers to the now-abandoned 171 Application. 13. Furthermore, on information and belief, Defendant has actively and

knowingly aided, abetted and induced others to directly infringe the 784 Patent through use and installation of the Cel-Link products. Defendants marketing materials for the products instruct customers of a method of installing the Cel-Link products that involves
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opening the split of the Cel-Link products so that they may be slipped over piping that has already been installed. By doing so, Defendant has actively induced its customers to directly infringe at least claim 3 of the 784 Patent. 14. On August 5, 2013, Armacell provided renewed notice to Defendant of

Armacells concerns relating to the Cel-Link products and marketing materials. (Exhibit G, August 5, 2013 Letter from Armacell). Rather than responding to Armacells notice letter in good faith, Defendant filed an improper anticipatory declaratory judgment lawsuit against Armacell in United States District Court for the Eastern District of Tennesse on August 9, 2013. 15. Defendants actions outlined above have been with full knowledge of the Defendants

784 Patent and Armacells claims since at least August 16, 2010.

infringement has therefore been willful and with reckless disregard of the 784 Patent. COUNT ONE (Direct Infringement of the 784 Patent) 16. Armacell incorporates by reference the allegations in the foregoing

paragraphs, as if stated fully herein. 17. Armacell is the owner by assignment of all right, title and interest to the

784 Patent, including all rights to bring actions and recover damages for infringement thereof. 18. Defendant has directly infringed and continues to infringe the 784 Patent

by making, importing, using, offering for sale, and/or selling the Cel-Link products that

infringe at least claim 1 of the 784 Patent, in interstate commerce, without authorization or consent. 19. Armacell notified Defendant of the 784 Patent and Defendants infringing Defendants

conduct on numerous occasions prior to institution of this lawsuit.

continued infringement has thus been willful and with reckless disregard of Plaintiffs rights in the 784 Patent. 20. Defendants infringement has caused and will continue to cause irreparable

harm to Armacell unless Defendants infringing activities are preliminarily and permanently enjoined by this Court. 21. Defendants infringement has also caused monetary damages to Armacell Further, as a result of its willful misconduct,

in an amount to be determined at trial.

Defendant should be held liable to Armacell for enhanced damages and attorneys fees pursuant to 35 U.S.C. 285. COUNT TWO (Indirect Infringement of the 784 Patent) 22. Armacell incorporates by reference the allegations in the foregoing

paragraphs, as if stated fully herein. 23. On information and belief, Defendant has actively and knowingly aided,

abetted and induced others to directly infringe the 784 Patent through use and installation of their Cel-Link products. 24. Defendants marketing materials for the products instruct its customers of a

method of installing the Cel-Link products that involves opening the split of the Cel-Link

products so that they may be slipped over piping that has already been installed, and then adhering insulation support structures to both sides of the products. By doing so,

Defendant has actively induced its customers to directly infringe at least claim 3 of the 784 Patent. 25. Defendant has taken such actions despite having been notified of the 784

Patent and Defendants infringement thereof on numerous occasions beginning on August 16, 2010. Defendant therefore had full knowledge of the 784 Patent and

Armacell claims of Defendants infringement and how Defendant was inducing its customers to infringe the 784 Patent. Defendant tacitly acknowledged such infringement back in 2010. Nevertheless, Defendant has continued to take actions designed to induce its customers to infringe the 784 Patent. Upon information and belief, Defendants actions in this regard have been willful, with reckless disregard of the 784 Patent, and with the intent to cause customers of the Cel-Link products to infringe the 784 Patent. 26. Defendants indirect infringement has caused and will continue to cause

irreparable harm to Armacell unless Defendants infringing activities are preliminarily and permanently enjoined by this Court. 27. Defendants indirect infringement has also caused monetary damages to

Armacell in an amount to be determined at trial. Further, as a result of its willful misconduct, Defendant should be held liable to Armacell for enhanced damages and attorneys fees pursuant to 35 U.S.C. 285.

COUNT THREE (False Marking Under 35 U.S.C. 292) 28. Armacell incorporates by reference the allegations in the foregoing

paragraphs, as if stated fully herein. 29. On August 16, 2010, Armacell informed Defendant that marketing and

installation materials for its Cel-Link product claimed that the product covered by a pending patent application (referring to U.S. Patent Application, Publication No. US 2010/0151171 A1 the 171 Application), and that the embodiments of the invention recited in the 171 Application expressly teach a construction and method of installation of a connector for thermal insulation tubing which embodies the construction and methods of manufacture and use of the insulation tubing connector taught by the claims of the 784 Patent. 30. Defendant responded on August 25, 2010, by: (a) representing that it had

suspended all activities related to the testing, marketing, sales, or distribution of the CelLink product and will continue with that suspension of all such activities until the issues are sorted out by the U.S. Patent Office; and (b) claiming that it had no interest in or relation to the 171 patent application. In reality, on information and belief the 171 patent application was in fact owned by Defendants parent or affliate company, Eastern Polymer Industry LTD. 31. Armacell subsequently learned that Defendant and its agents continued to

actively market and sell the infringing Cel-Link product as detailed above, and apprised Defendant of same in a letter dated October 29, 2010.

32.

Defendant responded on November 11, 2010, representing, among other

things, that it would suspend all activities relating to the Cel-Link product pending further actions by the U.S. Patent Office. 33. Upon information and belief, Defendants reference to further actions by

the U.S. Patent office related to the then-pending 171 patent application. 34. Defendant and its agents subsequently abandoned the 171 patent

application after it was rejected by the United States Patent Office in view of Armacells 784 Patent. 35. Subsequent to that abandonment, Defendant nevertheless continued to

advertise the Cel-Link products as patent pending. By doing so, Defendant has falsely used the words patent pending in connection with advertisements for the Cel-Link products despite having knowledge that the 171 patent application has been abandoned and thus those products are not covered by a pending patent application. 36. Upon information and belief, Defendant has done so with the purpose of

deceiving potential customers to believe that the Cel-Link products are covered by a pending patent application, such that potential customers will purchase the Cel-Link products from Defendant and avoid competitive products for fear of potential infringement. 37. Defendants actions in this regard have caused actual damage to Armacell.

Armacell competes directly on projects involving the Cel-Link products, and has lost sales to Aeroflex in connection with several such projects.

38.

Armacell is entitled to recover damages caused by Defendants false patent

marking in an amount to be determined at trial, including enhanced damages and attorneys fees as applicable. COUNT FOUR (Unfair Competition and False Advertising under 15 U.S.C. 1125(a) and Common Law) 39. Armacell incorporates by reference the allegations in the foregoing

paragraphs, as if stated fully herein. 40. Upon information and belief, Defendants representations that the Cel-Link

products are patent pending in its marketing materials are false and misleading statements of material fact. 41. Upon information and belief, Defendant has made these representations and

continued to claim that the Cel-Link products are patent pending in bad faith despite having knowledge that the 171 patent application has been abandoned and that the products are not covered by a valid and viable pending patent application. 42. Upon information and belief, Defendants misrepresentations were material

in that they have influenced purchasing decisions of the target audience, as demonstrated in part by the loss of sales that Armacell has experienced on projects involving the CelLink products. 43. Upon information and belief, as a result of these false and misleading

statements, consumers have been or are likely to be deceived into thinking that Cel-Link products are covered by a pending patent application, when they are not. Upon

information and belief, Defendants actions in this regard have influenced consumers
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purchasing decisions by deceiving customers into thinking that they will infringe the alleged pending patent application if they do not purchase and use the Cel-Link products. 44. Defendants false and misleading statements have been disseminated in

interstate commerce through its marketing materials. 45. Defendants false and misleading advertisements have injured and are

likely to injure Armacell through the direct diversion of sales from Armacell to Defendant. 46. Armacell is entitled to recover damages caused by Defendants unfair

competition and false advertising in an amount to be determined at trial, including enhanced damages and attorneys fees as applicable. COUNT FIVE (Unfair and Deceptive Trade Practices under N.C.G.S. 75-1.1) 47. Armacell incorporates by reference the allegations in the foregoing

paragraphs, as if stated fully herein. 48. Defendants acts alleged above have possessed the tendency or capacity to

mislead, or have created the likelihood of deception, and thus constitute unfair or deceptive acts or practices and unfair methods of competition in violation of N.C.G.S. 75-1.1. 49. Carolina. 50. Upon information and belief, Defendants acts alleged above caused actual Defendants acts alleged above have been or affecting commerce in North

injury to Armacell in an amount to be determined at trial.

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51.

Armacell seeks such damages, including trebled damages, along with

attorneys fees pursuant to N.C.G.S. 75-16 and 75-16.1. PRAYER FOR RELIEF WHEREFORE, Armacell respectfully seeks the following relief: 1. Judgment in favor of Armacell on the claim of patent infringement,

including judgment that the 784 Patent has been directly and indirectly infringed by Defendant. 2. 3. A judgment ruling that Defendants infringement has been willful. A judgment that Defendant has violated 35 U.S.C. 292 by falsely marking

the Cel-Link products as patent pending. 4. A preliminary and permanent injunction enjoining and restraining

Defendant and its officers, agents, affiliates, servants, and employees, and all persons in active concert or participation with it from: a. b. Infringing the 784 Patent; Any importation, manufacture, assembly, advertising, promotion,

offer for sell, sell, purchase, distribution, movement or transfer, or any other involvement with products that infringe the 784 Patent, including the Cel-Link products; and c. Advertising the Cel-Link products as patent pending, or in any other

manner that suggests that they are covered by a pending patent application when they are not.

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5.

An order that Defendant pay to Armacell such damages as Armacell has

sustained as a consequence of Defendants infringement, false marking, unfair competition, and unfair trade practices including lost profits or a reasonable royalty. 6. An award of interest, attorneys fees, costs, and exemplary or enhanced

damages, as applicable. 7. proper. TRIAL BY JURY IS REQUESTED Pursuant to Rule 38(b) of the Federal Rules of Civil Procedure, Armacell requests a trial by jury of any issues so triable. This the 8th day of October, 2013. /s/John F. Morrow, Jr. John F. Morrow, Jr. (NCSB No. 23382) David R. Boaz (NCSB No. 44229) WOMBLE CARLYLE SANDRIDGE & RICE, LLP Attorneys for Plaintiff One West Fourth Street Winston-Salem, NC 27101 Telephone: 336-721-3584 Facsimile: 336-733-8429 jmorrow@wcsr.com jwharton@wcsr.com dboaz@wcsr.com An award of such other and further relief as the Court deems just and

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