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Jeffrey W. Shopoff (Bar No. 46278) Gregory S. Cavallo (Bar No. 173270) Paul F. Kirsch (Bar No. 127446) James M. Robinson (Bar No. 238063) SHOPOFF CAVALLO & KIRSCH LLP 100 Pine Street, Suite 750 San Francisco, CA 94111 Telephone: (415) 984-1975 Facsimile: (415) 984-1978 Attorneys for Plaintiff California Natural Products UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA

CALIFORNIA NATURAL PRODUCTS (d/b/a POWER AUTOMATION SYSTEMS), a California corporation, Plaintiff, vs. ILLINOIS TOOL WORKS, INC. (d/b/a HARTNESS INTERNATIONAL, INC.), a Delaware corporation, Defendant.

CASE NO. COMPLAINT FOR PERMANENT INJUNCTION, DAMAGES, AND OTHER EQUITABLE RELIEF Causes of Action: (1) (2) (3) (4) (5) (6) (7) (8) False Advertising (Lanham Act, 15 U.S.C. 1125(a)); Unfair Competition (Lanham Act); False Advertising (State Law); Unfair Competition (State Law); Statutory Unfair Competition (State Law); Breach of Contract; Unjust Enrichment; Patent Infringement.

DEMAND FOR JURY TRIAL Plaintiff California Natural Products brings this Complaint against Defendant Illinois Tool Works, Inc., and alleges as follows: -1CALIFORNIA NATURAL PRODUCTS, INC.S COMPLAINT AGAINST ILLINOIS TOOL WORKS, INC.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 3. 1.

PARTIES Plaintiff California Natural Products, doing business as Power Automation Systems

(PAS), is a California corporation with its sole and principal place of business in Lathrop, San Joaquin County, California. Power Automation Systems (PAS) is a division of California Natural Products that develops and sells its homegrown proprietary automated warehousing system known as PowerStor. PAS employs 27 people. 2. Illinois Tool Works, Inc., d/b/a Hartness International, Inc. (ITW) is a Delaware

corporation with its principal place of business in Glenview, Illinois. ITW is an industrial manufacturer of products and services sold throughout the United States and the world, including in the Eastern District of California. ITW is a publicly traded company made up of more than 840 businesses, and employs approximately 65,000 people. ITW reported revenue of $17.787 billion in fiscal 2011 and a market capitalization of $27.3 billion. JURISDICTION AND VENUE This action arises under the Lanham Act, 15 U.S.C. 1051, et seq., for false advertising

and unfair competition, under the patent laws of the United States, 35 U.S.C. Section 1, et seq., for patent infringement related to U.S. Patent Nos. 6,652,213 for Automated Warehousing System and Method (the 213 Patent) and U. S. Patent No. 7,073, 634 for Automated Warehouse Row Cart and Lift (the 634 Patent), as well as California statutory and common law. This Court also has subject matter jurisdiction pursuant to 28 U.S.C. 1331, 1338 and 1367(a). 4. Venue in this judicial district is proper under 28 U.S.C. 1391 because the events giving

rise to this action occurred in this district, including that ITW has committed acts of false marketing within this district and/or marketed and offered to sell products or methods that are covered by and/or whose use induces or contributes to the infringement of the 213 and 634 patents owned by PAS in this district. /// /// /// -2CALIFORNIA NATURAL PRODUCTS, INC.S COMPLAINT AGAINST ILLINOIS TOOL WORKS, INC.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 5.

FACTS PAS Developed Its Valuable Proprietary Automated Warehousing System Known as PowerStor PAS is a division of California Natural Products (CNP), a food manufacturer founded in

1980. PASs primary product is PowerStor an innovative warehouse automation system that was developed in-house at California Natural Products. PowerStor was first created for use in CNPs own warehouse facility, where CNP stores packaged food on pallets. Later CNP saw the opportunity to enter the ASRS (automatic storage and retrieval service) market with the PowerStor, and CNP has invested approximately $30 million in bringing the product to market. 6. Bringing the PowerStor to market has been a long, difficult, and expensive venture for

PAS. But over the last few years, PAS has gained credibility in the marketplace, and is competing for major warehousing automation projects around the world. Recently, PAS completed a PowerStor installation for a Pepsi bottler in North Carolina. PAS is in contract with Coca-Cola bottlers in Mexico, Ralcorp Company in California and Texas, and United Therapeutics in North Carolina. But just when PAS is hitting its stride, it finds itself the victim of an all-out attempt by defendant ITW to copy PASs products, technology, and marketing plans, and even take credit for PASs successful track record over the past three years. 7. PowerStor is pallet handling technology that provides the capability for the rapid storage

and staging of large quantities of any size pallet in a small space. The PowerStor cart and lift system is divided into modules. Each module is essentially one set of racking, made up of a given number of levels and rows, and an aisle running down the middle of the rows. Each aisle has its own cart, from which a smaller row cart emerges to slide down the individual rows to store or retrieve a pallet. The lift at the end of the aisle transports the pallets to and from each level and to and from the conveyor system, and the conveyor system takes pallets to the truck loading area. After PowerStor is synched with its software, all of its actions are automatic and require no repeated human direction. /// /// /// -3CALIFORNIA NATURAL PRODUCTS, INC.S COMPLAINT AGAINST ILLINOIS TOOL WORKS, INC.

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8.

The PowerStor system is comprised of components that provide the highest density

storage and highest throughput capability in the world. The PowerStor is highly flexible in its configuration options and can simultaneously handle multiple pallet sizes. 9. The PowerStor system is unique because it is the only automated warehousing system that

utilizes an automated system of lifts and carts, and because it can be installed in pre-existing warehouses, rather than in custom built warehouses like the warehouse systems of PASs competitors. 10. In order for PAS to develop the unique PowerStor system, it invested over $30 million

into research and development, from its inception to its first commercial installation for a client. PAS did everything possible to support this significant capital investment, including protecting its intellectual property rights in PowerStor. For example, PAS has filed for and received two patents, the 213 Patent and the 634 Patent, reflecting PowerStors products and methods. PAS Installed Its First Commercial Installation In Lugo, Spain 11. The biggest hurdle faced by PAS in marketing PowerStor to large warehouse clients was

successfully proving its technology with its first commercial implementation. Because PAS is a relatively small company, PAS had no choice but to contract with third-party distributors and installers to conduct world-wide sales efforts. In 2005, PAS invested in and helped form a new entity in order to sell PAS products and services in Europe. Because this entity was to serve as PASs exclusive European sales unit, it was named PAS-Europe. PAS-Europe was granted the right to use the PAS name and market and service the PowerStor and other PAS products, but PAS-Europe had no ownership or other rights in PAS products, including intellectual property rights. 12. In 2007, PAS contracted to implement its first commercial installation of the PowerStor

system. This was a critical project, as PAS desperately needed a working example of a successful client installation in order to have credibility in the marketplace. Without a flagship installation, it had been difficult for PAS to convince prospective clients to purchase its system over other well-established competitors with different systems. Such successful past installations are essential precursors to obtaining warehousing systems contracts, since many companies will not allow a company to bid unless it can demonstrate past successes. -4CALIFORNIA NATURAL PRODUCTS, INC.S COMPLAINT AGAINST ILLINOIS TOOL WORKS, INC.

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13.

PAS contracted with PAS-Europe, and PAS-Europe contracted with Corporacion

Alimentaria Pensanta (CAPSA), to build an automated warehousing system in CAPSAs existing warehouse at its manufacturing facility in Lugo, Spain (hereinafter the Lugo Installation). CAPSA is a major Spanish dairy cooperative with several manufacturing and storage facilities. In Lugo, CAPSA collected, processed, aseptically packaged, stored, and shipped its milk. CAPSA shut down its pre-existing warehouse, and agreed to use off-site storage, while PAS installed the PowerStor inside the existing building, which, due to various delays associated with a first commercial installation, took approximately one year. 14. The amount CAPSA paid for the Lugo Installation did not provide PAS with any profit

on that installed system. PAS invested in the Lugo installation so that it would have the flagship installation necessary to exemplify its system to other prospective customers. The Lugo Installation was up-and-running in or around August 2008. Following the flagship Lugo installation, business picked up and PAS installed six other PowerStor systems in five Spanish cities, including Madrid, Toledo, Gerona, Navarra, and Leon. 15. Since its Lugo installation, PAS has bid on, been awarded, and installed warehousing

automation jobs in the United States and internationally. PAS has developed significant and very positive business recognition and goodwill based in part on its successful, well-known Spanish installations of its warehousing system. In its advertising and marketing, including at trade shows, on its website, in brochures and conversations during the bidding process, PAS emphasizes its past successful warehouse installations in Spain. ITW And PAS Discuss Business Arrangement 16. In early 2010, ITW became interested in entering the warehousing systems marketplace.

ITW (via its division Hartness) and PAS entered into negotiations concerning a potential business agreement whereby both companies might work cooperatively in connection with PASs PowerStor system. PAS and ITW entered into a Mutual Confidentiality Agreement, a true and correct copy of which is attached as Exhibit A. On that basis, PAS disclosed to ITW certain information about its PowerStor system. The information included, but was not limited to, the following categories: details of PASs -5CALIFORNIA NATURAL PRODUCTS, INC.S COMPLAINT AGAINST ILLINOIS TOOL WORKS, INC.

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manufacturing/fabrication shop through a tour of PASs Lathrop facility; tours of customer sites, including the Lugo Installation; slides outlining PAS PowerStor advantages over existing solutions; estimates of market potential for the PowerStor in the US and internationally; and, PASs efforts, financial and otherwise, in product development and marketing. 17. Following these disclosures, PAS and ITW did not reach a business arrangement in

connection with PowerStor or any other PAS product. Unable To Reach A Deal With PAS, ITW Copies PASs PowerStor System 18. Unable to reach a business arrangement with PAS, and in order to avoid the expense of

research and development of its own system, on information and belief, ITW used the information it learned from PAS during negotiations and copied PowerStors patented innovative warehouse systems and products. 19. In late 2010 and 2011, PAS ended its relationship with PAS-Europe. In January 2011,

PAS entered into a termination agreement with PAS-Europe, in which PAS-Europe repaid loans to PAS and purchased PASs ownership of PAS-Europe. PAS agreed that PAS-Europe could continue to service existing PAS clients and follow through with identified planned projects. PAS-Europe agreed to change its name to something not including the name PAS or the name of PAS products, such as PowerStor. PAS subsequently learned that PAS-Europe had changed its name to Warehouse Automation Iberia. 20. In mid-2011, PAS learned that ITW had purchased Warehouse Automation Iberia. The

legal nature of the purchase is unknown to PAS. 21. Therefore, in order to unlawfully obtain access to PASs proprietary intellectual property

rights in PowerStor as well as unlawfully steal PASs hard-earned goodwill and favorable business reputation, ITW purchased a company that had formerly been associated with PAS, and whose employees had knowledge of PASs proprietary technology and the successful implementation of PASs innovative warehousing systems and methods. PAS-Europe employees had been involved in all installations of PAS products in Spain. PAS-Europe also held the contract to service those Spanish PAS installations after their completion. Through those activities, PAS-Europe became highly familiar with the complex, /// -6CALIFORNIA NATURAL PRODUCTS, INC.S COMPLAINT AGAINST ILLINOIS TOOL WORKS, INC.

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proprietary, and confidential hardware and software components of PAS, as well as the complex, proprietary, and confidential installation process. ITW Claims Credit For PASs Spanish Installations of PowerStor, And Falsely Markets The PowerStor System As Its Own 22. In attempting to enter the warehousing systems market, ITW faced the same initial

problem that PAS had faced before the Lugo Installation it had no flagship installation of its own to demonstrate to potential clients that its system could be successfully installed, that the system worked as represented, and that it was reliable enough to not disrupt business operations. At the end of January 2012, PAS first learned that ITW had been marketing a warehouse automation system identical to that of PASs PowerStor, including PASs unique lift and cart process. ITWs system is called StorFast. 23. Indeed, at the end of January 2012, PAS first learned that ITW was misrepresenting to its

prospective customers that ITW, not PAS, had developed and installed the Lugo Installation. PAS and ITW had both been invited to bid on a warehouse automation job for a company called SIBCO in Dubai, UAE. The consultant handing the bidding process for SIBCO, Eric Tverberg of Precision Distribution Consulting Inc., in York, Pennsylvania, informed PAS that ITW had told him that the Spanish PowerStor installations were actually ITWs. PAS understood from Mr. Tverberg that ITWs statements taking credit for PASs Spanish installations were creating actual confusion for SIBCO, in that SIBCO could not determine who, between PAS and ITW, could rightfully take credit for the Spanish installations. PAS later learned that ITW had moved to the next round of the bidding process with SIBCO following their false marketing of PAS warehouse system as its own, while PAS had been dropped from contention for this contract. 24. Around this same time, PAS also learned that ITW had falsely told a Coca-Cola bottler

that PASs successful Spanish installations were ITWs successes, and that ITW was bidding against PAS for a Coca-Cola bottling project in Malaysia. Cory Hypes, the Vice President of Sales & Marketing with PAS, learned during his meeting with Coca-Cola in Malaysia that ITW had scheduled the team from CocaCola to visit the sites of PASs Spanish installations. This Coca-Cola contract is expected to be awarded in the next couple of months. -7CALIFORNIA NATURAL PRODUCTS, INC.S COMPLAINT AGAINST ILLINOIS TOOL WORKS, INC.

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25.

On February 6-9, 2012, a large material handling conference called MODEX was held in

Atlanta, Georgia. ITW also had a booth at that conference, and was marketing their competing StorFast system. Following that conference, PAS made efforts to gather more information about the StorFast product, as well as ITWs marketing efforts, to confirm that ITW was indeed passing off PASs Spanish installations as their own. 26. On February 15, 2012, PAS received that exact confirmation. PAS was forwarded a

document that showed that ITW was taking credit for all of PASs installations of PowerStor and other PAS products in Spain, and was misrepresenting that all of PASs installations in Spain were actually StorFast installations. Attached as Exhibit B is a true and correct copy of an ITW marketing document, which it sent to a potential customer showing a StorFast label on each and every one of PASs installations in Spain, including CAPSA in Lugo, as well as PASs installations in Madrid, Toledo, Gerona, Navarra, and Leon. 27. Only a limited number of jobs come up for bid every year in this niche industry, many of

them worth many millions of dollars, including the Coca-Cola bottling contract in Malasia. If PAS loses the opportunity to bid or compete on even one major job because of ITWs false marketing tactics, it will have a significant negative impact on PAS. Without a court order barring ITW from taking credit for PowerStor installations, PAS will suffer immediate irreparable harm. Despite PASs recent successes, PAS is still a relatively small company. ITW is a massive international conglomerate with business connections all over the world. One of PASs main advantages over ITW is PASs successful track record. If ITW is allowed to misappropriate that track record by claiming it as its own, ITW will be at a distinct and unfair advantage. PAS spent years and tens of millions of dollars to develop and market its PowerStor technology. ITWs improper shortcuts should be stopped so that PAS and ITW can fairly compete in the marketplace. FIRST CLAIM FOR RELIEF (False Advertising Under The Lanham Act, 15 U.S.C. 1125(a)) 28. PAS incorporates by reference the allegations contained in paragraphs 1-27 above. -8CALIFORNIA NATURAL PRODUCTS, INC.S COMPLAINT AGAINST ILLINOIS TOOL WORKS, INC.

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29.

As described above, ITW has made false and/or misleading statements of fact concerning

ITWs and PASs products in commercial advertising and promotion. 30. 31. 32. ITW has placed these false and/or misleading statements in interstate commerce. ITW knew that the representations made were false and misleading when made. ITWs false and/or misleading statements of fact have actually deceived a substantial

segment of the audience exposed to them, or have the capacity for such deception. 33. The deception caused by the false and/or misleading statements of fact, as described

above, have influenced, or are likely to influence, purchasing decisions. 34. The foregoing acts of ITW constitute false and/or misleading advertising and unfair trade

practices in violation of Section 43(a) of the Lanham Act, 15 U.S.C. 1125(a), and PAS seeks to enjoin ITWs false and/or misleading advertising and recover statutory money damages and the costs of this action. 35. ITWs false and misleading advertising will continue unless enjoined by this Court.

Without injunctive relief, PAS has no means by which to control ITWs false and misleading representations. No amount of money damages can adequately compensate PAS if it loses the ability to control the use of its name, reputation, and goodwill through ITWs false advertising. 36. PAS has been injured as a result of ITWs false and/or misleading statements of fact

including potential decline in sales and market share, loss of goodwill, and additional losses and damages. ITW has been unjustly enriched at the expense of PAS as a consequence of its false advertising. 37. Because ITWs actions have been committed with knowledge of the falsity, and an intent

to confuse and deceive as alleged above, PAS also is entitled to recover treble damages and reasonable attorneys fees pursuant to 15 U.S.C. 1117. SECOND CLAIM FOR RELIEF (Unfair Competition Under Lanham Act) 38. 39. PAS repeats and realleges by reference the allegations contained in paragraphs 1-37 above. PAS recently learned that ITW has taken PASs products and services, including PASs -9CALIFORNIA NATURAL PRODUCTS, INC.S COMPLAINT AGAINST ILLINOIS TOOL WORKS, INC.

unique lift and cart process, and repackaged them as their own. In fact, ITW was marketing the Spanish

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installations as its own telling prospective clients that ITW, not PAS, had developed and installed the Spanish installations. On information and belief, it is believed that ITW is taking credit for other PAS installations. 40. The activities of ITW complained of herein constitute a false designation of origin and

false description or representation as to the source of ITWs goods and services, reverse passing off, and unfair competition, in violation of the Lanham Act, 15 U.S.C. 1125(a), to the detriment of PAS and the public. 41. ITWs false and misleading designations of origin will continue unless enjoined by this

Court. Without injunctive relief, PAS has no means by which to control ITWs false and misleading representations. No amount of money damages can adequately compensate PAS if it loses the ability to control the use of its name, reputation, and goodwill through ITWs false advertising. 42. PAS also is entitled to recover all damages it has sustained by reason of ITWs false and

misleading advertising. Because ITWs actions have been committed with knowledge of the falsity, and an intent to confuse and deceive as alleged above, PAS also is entitled to recover treble damages and reasonable attorneys fees pursuant to 15 U.S.C. 1117. THIRD CLAIM FOR RELIEF (False Advertising Under State Law, Cal. Bus. & Prof. Code 17500) 43. 44. PAS incorporates by reference the allegations contained in paragraphs 1-42 hereinabove. As described above, ITW has made false and/or misleading statements of fact concerning

its, and PASs, products in commercial advertising and promotion. 45. 46. 47. ITW has placed these false and/or misleading statements in interstate commerce. ITW knew that the representations made were false and misleading when made. ITWs false and/or misleading statements of fact have actually deceived a substantial

segment of the audience exposed to them, or have the capacity for such deception. 48. The deception caused by the false and/or misleading statements of fact, as described

above, have influenced, or are likely to influence, purchasing decisions. /// - 10 CALIFORNIA NATURAL PRODUCTS, INC.S COMPLAINT AGAINST ILLINOIS TOOL WORKS, INC.

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49.

The foregoing acts of ITW constitute false and/or misleading advertising and unfair trade

practices in violation of Section 17500 of the California Business & Professions Code, and Plaintiff seeks to enjoin ITWs false and/or misleading advertising and recover statutory money damages and the costs of this action. 50. ITWs false and misleading advertising will continue unless enjoined by this Court.

Without injunctive relief, PAS has no means by which to control ITWs false and misleading representations. No amount of money damages can adequately compensate PAS if it loses the ability to control the use of its name, reputation, and goodwill through ITWs false advertising. 51. PAS has been injured as a result of ITWs false and/or misleading statements of fact,

including potential decline in sales and market share, loss of goodwill, and additional losses and damages. ITW has been unjustly enriched at the expense of PAS as a consequence of its false advertising. 52. Because ITWs actions have been committed with knowledge of the falsity, and an intent

to confuse and deceive as alleged above, PAS also is entitled to recover treble damages and reasonable attorneys fees pursuant to Bus. & Prof. Code 17500. FOURTH CLAIM FOR RELIEF (Unfair Competition Under State Law) 53. 54. PAS repeats and realleges by reference the allegations contained in paragraphs 1-52 above. ITWs false advertising and marketing of its warehousing systems and products with a false

description of origin constitutes common law unfair competition. 55. Each of ITWs acts complained of herein constitutes deliberate and willful unfair

competition under the common law. 56. The conduct of ITW alleged herein has damaged PAS in an amount to be ascertained at

trial and will, unless restrained and enjoined, further impair, if not destroy, the value of the PAS trade name, and PASs business reputation and good will, and PAS has no adequate remedy at law. FIFTH CLAIM FOR RELIEF (Statutory Unfair Competition Under State Law) 57. PAS repeats and realleges by reference the allegations contained in paragraphs 1-56 above. - 11 CALIFORNIA NATURAL PRODUCTS, INC.S COMPLAINT AGAINST ILLINOIS TOOL WORKS, INC.

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58.

ITWs false advertising and marketing of its warehousing systems and products with a false

description of origin constitutes unlawful and unfair business acts and practices in violation of California Business and Professions Code 17200, as well as California Civil Code 1770. 59. PAS has been damaged and ITW has been unjustly enriched by ITWs improper and

unlawful false advertising and unfair competition. 60. PAS is entitled to equitable and injunctive relief, and such other remedies as may be

available under the law in accordance with the proof at trial. SIXTH CLAIM FOR RELIEF (Unjust Enrichment) 61. 62. PAS repeats and realleges by reference the allegations contained in paragraphs 1-60 above. ITW has been unjustly enriched at the expense of PAS by the conduct described herein

including, but not limited to, building an automated warehouse system with the confidential and proprietary information of PAS, and falsely advertising that ITW installed the Lugo Installation, as well as other installations. 63. PAS has been damaged and ITW has been unjustly enriched by its improper and unlawful

use of PASs confidential information and false advertising. 64. PAS is entitled to equitable and injunctive relief, and such other remedies as may be

available under the law in accordance with the proof at trial. SEVENTH CLAIM FOR RELIEF (Breach of Contract) 65. 66. PAS repeats and realleges by reference the allegations contained in paragraphs 1-64 above. In early 2010, ITW (via its division Hartness) and PAS were considering a business

arrangement in connection with PASs PowerStor. In order to facilitate these business discussions, on February 2, 2010, PAS and ITW (Hartness) entered into a Mutual Confidentiality Agreement, a true and correct copy of which is attached hereto as Exhibit A. The agreement stated, in part: IN CONSIDERATION of the Parties disclosing to each other certain trade secrets and other confidential and proprietary information, including, but not limited to, product information, processes, equipment, - 12 CALIFORNIA NATURAL PRODUCTS, INC.S COMPLAINT AGAINST ILLINOIS TOOL WORKS, INC.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 67.

formulas, specification, suppliers, marketing strategies, and plans in connection with Power Automation Systems PowerStor Technology (collective the Information), which Information the Parties each desire to keep secret and confidential, for the purpose of enabling the Parties to determine their respective interest in entering into a business arrangement in connection with Power Automation Systems PowerStor Technology, each of the Parties agrees as follows: 1. Information disclosed to a Party by the other Party shall be used by the receiving Party solely for the purpose set forth hereinabove and for no other purpose without the prior written consent of the disclosing Party. 2. Each Party shall accept and hold the nature and contents of the Information, and the fact that it has entered into this Agreement, in strict confidence. Except as provided in this agreement, neither Party shall disclose or reveal the Information, directly or indirectly, to any third party, or use the Information for anothers benefit, without the prior written consent of the disclosing Party. Any evaluation or analysis of the Information, and any information generated or supplied in response to the Information or otherwise revealed or discovered during the course of either Partys performance herein, shall be considered part of the Information and protected as confidential. *** 7. Each Partys obligations under this Agreement shall continue until the later of (a) three (3) years from the date of this Agreement. Pursuant to this Mutual Confidentiality Agreement, PAS disclosed to ITW certain

information about its PowerStor system. The information included, but was not limited to, the following categories: details of PASs manufacturing/fabrication shop through a tour of PASs Lathrop facility; tours of customer sites, including the Lugo Installation; slides outlining PAS PowerStor advantages over existing solutions; estimates of market potential for the PowerStor in the US and internationally; and, PASs efforts, financial and otherwise, in product development and marketing. 68. In breach of the terms of the Mutual Confidentiality Agreement, ITW has used PASs

proprietary information for its own purposes, as described herein, and not for the purposes set forth in the agreement. /// /// /// - 13 CALIFORNIA NATURAL PRODUCTS, INC.S COMPLAINT AGAINST ILLINOIS TOOL WORKS, INC.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 above. 76. 75. above. 70. 69.

EIGHTH CLAIM FOR RELIEF (Patent Infringement of 213 Patent) PAS repeats and realleges by reference the allegations contained in paragraphs 1-68

ITW is marketing goods in the Eastern District of California, and throughout the United

States, that are covered by one or more claims of the 213 Patent. 71. ITW has infringed, and is continuing to infringe, the 213 Patent by making, selling, and

offering to sell goods in the Eastern District of California, and throughout the United States, that are covered by one or more of the claims of the 213 Patent. 72. ITW is inducing and contributing to infringement by others of the 213 Patent by

causing others to make, use, sell, or offer to sell goods in the Eastern District of California, and throughout the United States, that are covered by one or more of the claims of the 213 Patent. 73. ITWs infringement of the 213 Patent is and has been willful; it continues to be willful; it

has caused and will continue to cause PAS to suffer substantial damages; and it has caused and will continue to cause PAS to suffer irreparable harm for which there is no adequate remedy at law. 74. PAS is entitled to an injunction and damages from ITW for ITWs direct infringement of

the 213 Patent and from ITW for ITWs inducing and contributing to infringement by others of the 213 Patent. NINTH CLAIM FOR RELIEF (Patent Infringement of 634 Patent) PAS repeats and realleges by reference the allegations contained in paragraphs 1-74

ITW is marketing goods in the Eastern District of California, and throughout the United

States, that are covered by one or more claims of the 634 Patent. 77. ITW has infringed, and is continuing to infringe, the 634 Patent by making, selling, and

offering to sell goods in the Eastern District of California, and throughout the United States, that are covered by one or more of the claims of the 634 Patent. - 14 CALIFORNIA NATURAL PRODUCTS, INC.S COMPLAINT AGAINST ILLINOIS TOOL WORKS, INC.

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78.

ITW is inducing and contributing to infringement by others of the 634 Patent by

causing others to make, use, sell, or offer to sell goods in the Eastern District of California, and throughout the United States, that are covered by one or more of the claims of the 634 Patent. 79. ITWs infringement of the 634 Patent is and has been willful; it continues to be willful; it

has caused and will continue to cause PAS to suffer substantial damages; and it has caused and will continue to cause PAS to suffer irreparable harm for which there is no adequate remedy at law. 80. PAS is entitled to an injunction and damages from ITW for ITWs direct infringement of

the 634 Patent and from ITW for ITWs inducing and contributing to infringement by others of the 634 Patent. PRAYER FOR RELIEF WHEREFORE, PAS prays that judgment be entered against ITW as follows: 1. For a preliminary and a permanent injunction as follows: a. Requiring ITW, its officers, agents, employees, servants, representatives and all persons acting under or in concert with them, to deliver up for destruction all advertisements, web sites, emails, letterhead, brochures, reports, catalogues, labels, other business and promotional materials, and all other products and related materials which falsely advertise that PASs warehouse installations, including those in Spain, are the work of ITW, and to immediately cease and desist from such wrongful conduct; b. Requiring ITW, its officers, agents, employees, servants representatives and all persons acting in concert with them, to inform the public and their customers and potential customers in advertisements, web sites, emails, letterhead, brochures, reports catalogues, labels and other business and promotional materials that PAS, not ITW, was the true and correct owner of the warehouse systems in Spain as referenced in their false advertisements; c. Entering a preliminary and permanent injunction enjoining ITW and its affiliates, subsidiaries, officers, directors, employees, agents, representatives, licensees, - 15 CALIFORNIA NATURAL PRODUCTS, INC.S COMPLAINT AGAINST ILLINOIS TOOL WORKS, INC.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 2. 3. 4. 5. 6. 7. e. d.

successors, assigns, and all those acting for either of them or on their behalf, or acting in concert with them, from further infringement of, including making, selling, or offering to sell any goods and services covered by any and all of the 634 and 213 Patents. Entering judgment that ITW has infringed, contributorily infringed, and induced infringement of the 634 and 213 Patents; Entering judgment that ITWs acts of infringement and contributory infringement, and inducing infringement have been and are willful; For compensatory damages in an amount according to proof; For restitution and disgorgement of funds acquired through unjust enrichment; For exemplary and punitive damages in an amount according to proof; For treble damages and its attorneys fees; For costs of suit herein, including prejudgment and post-judgment interest; and For such other and further relief as the Court may deem proper. SHOPOFF CAVALLO & KIRSCH LLP

DATED: March 6, 2012

By

/s/ Gregory S. Cavallo Attorneys for Plaintiff CALIFORNIA NATURAL PRODUCTS (d/b/a POWER AUTOMATION SYSTEMS)

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DEMAND FOR JURY TRIAL Pursuant to Federal Rule of Civil Procedure 38(b), plaintiff California Natural Products, Inc. (d/b/a Power Automation Systems), hereby demands a trial by jury on this Complaint as to all issues that may be so tried. DATED: March 6, 2012 SHOPOFF CAVALLO & KIRSCH LLP

/s/ _ Gregory S. Cavallo Attorneys for Plaintiff CALIFORNIA NATURAL PRODUCTS (d/b/a POWER AUTOMATION SYSTEMS

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- 17 CALIFORNIA NATURAL PRODUCTS, INC.S COMPLAINT AGAINST ILLINOIS TOOL WORKS, INC.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 stock. DATED: March 6, 2012

CORPORATE DISCLOSURE STATEMENT (Fed. R. Civ. P. 7.1) California Natural Products (d/b/a Power Automation Systems) certifies that it is a nongovernmental corporation organized and existing under the laws of the State of California, with its principal place of business in Lathrop, California. California Natural Products submits the following statement of its corporate interests and affiliations as required by Federal Rules of Civil Procedure, Rule 7.1 for the use of the judges of this Court: 1. 2. 3. California Natural Products is not a publicly-held corporation or other publicly-held entity. California Natural Products does not have any parent corporation. No publicly-held corporation owns 10 percent or more of California Natural Products

SHOPOFF CAVALLO & KIRSCH LLP

/s/ _ Gregory S. Cavallo Attorneys for Plaintiff CALIFORNIA NATURAL PRODUCTS (d/b/a POWER AUTOMATION SYSTEMS)

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- 18 CALIFORNIA NATURAL PRODUCTS, INC.S COMPLAINT AGAINST ILLINOIS TOOL WORKS, INC.