Crye Precision v. Duro - Complaint

8/10/2019 Crye Precision v. Duro - Complaint

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Case 1:14-cv-09012-DLC Document 2 Filed 11/12/14 Page 1 of 14


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substrates. It is significantly more effective than the universal camouflage pattern also available

on the market.

3. The MultiCam camouflage pattern and technology is the subject of a United

States design patent, and the MultiCam trademark is registered with the United States Patent

and Trademark Office (USPTO), both of which are owned by LineWeight. Crye Precision is

the sister company of LineWeight and has the exclusive rights to sublicense the MultiCam

design patent and trademark.

4. MultiCam brand camouflage has been the camouflage of choice for United

States Special Forces for nearly a decade, and since 2010 every United States soldier deployed toAfghanistan wears MultiCam garments. MultiCam brand camouflage currently is also being

applied onto hundreds of different substrates marketed commercially to the general population.

5. From 2008 until April 11, 2014, Duro was licensed by Crye to print MultiCam

camouflage on fabrics (i) in fulfillment of contracts issued by the United States Department of

Defense (Government Sales) and (ii) for commercial sales.

6. Notwithstanding the expiration of its license in April 2014, Duro has continued,

and is continuing, to reproduce, sell and transfer MultiCam camouflage without Plaintiffs

authorization and in breach of Duros continuing obligations under its expired license agreement.

7. Duro has infringed, and continues to infringe, Plaintiffs intellectual property

rights in the Multicam camouflage pattern and technology and the MultiCam trademark.

Parties and Jurisdiction

8. Plaintiff Crye Precision LLC is a New York limited liability company with its

principal place of business in Brooklyn, New York.



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9. Plaintiff LineWeight LLC is a New York limited liability company with its

principal place of business in Brooklyn, New York.

10. Defendant Duro Textiles, LLC is a Delaware limited liability company with its

principal place of business in Falls River, Massachusetts.

11. This Court has subject matter jurisdiction pursuant to 28 U.S.C. 1331 and 28

U.S.C. 1338 inasmuch as the claims arise under federal patent and trademark laws. This Court

also has subject matter jurisdiction pursuant to 28 U.S.C. 1332 inasmuch as there is complete

diversity of citizenship between the parties and the amount in controversy exceeds $75,000,

exclusive of costs. Finally, this Court has supplemental jurisdiction over the state claims pursuant to 28 U.S.C. 1367.

12. Venue is proper in this Court because in the license agreement at issue, the parties

agreed that any suit hereunder will be brought in the federal or state courts in the Southern

District of New York and [Duro] hereby submits to the personal jurisdiction thereof.

Factual Background

13. On April 25, 2006, the USPTO issued to LineWeight U.S. Trademark

Registration No. 3,084,726 for the MultiCam mark.

14. On November 30, 2012, U.S. Trademark Registration No. 3,084,726 inadvertently

lapsed due to an oversight.

15. LineWeight thereafter reapplied for registration of the MultiCam mark. On

December 3, 2013, the US PTO issued to LineWeight U.S. Trademark Registration No.

4,443,275 for the MultiCam mark in International Class 16 for printed camouflage patterns

for use on fabrics and hard surfaces. The said registration is based on LineWeights first use in

commerce of the MultiCam mark in connection with the listed goods as early as September 30,



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2003. A true and correct copy of the Certificate of Registration for the MultiCam mark is

attached hereto as Exhibit A .

16. On May 29, 2009 the USPTO issued to LineWeight Design Patent No. 592,861

(the 861 Patent), which embodies the MultiCam camouflage pattern. A true and correct

copy of the 861 Patent is attached hereto as Exhibit B .

17. In 2008, Crye entered into an exclusive license agreement with Duro which

permitted Duro to print and sell MultiCam fabrics in the United States in connection with

Government Sales and commercial sales. This license agreement expired in 2010.

18.

In 2010, at the request of the United States Department of Defense, and to helpensure that the Department of Defense would have access to an uninterrupted supply of fabric

with the MultiCam design, Crye appointed several United States-based printers, including

Duro, as non-exclusive licensees authorized to print and sell MultiCam fabrics in connection

with Government Sales. These license agreements had two-year terms and were replaced with

new license agreements in 2012.

19. In 2014, upon expiration of the 2012 license agreements, Crye entered into new

non-exclusive agreements with various printers. Pursuant to these new license agreements, Crye

authorized the printers to print and sell MultiCam fabrics in connection with both Government

Sales and commercial sales.

20. Duro rejected the new license agreement that was tendered to and accepted by the

other printers.

21. The Non-Exclusive License Agreement dated April 11, 2012, (Duro License

Agreement), was the last non-exclusive license agreement between Crye and Duro. A true and

correct copy of the Duro License Agreement is attached hereto as Exhibit C .



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22. The Duro License Agreement had a term of two years and expired by its terms on

April 10, 2014. Neither Crye nor Duro was required to renew or extend the Duro License

Agreement. Ex. A, 9(a).

23. After efforts to negotiate a new license agreement with Duro failed, by letter

dated June 5, 2014 (June 5 Letter), a true and correct copy of which is attached hereto as

Exhibit D , Crye formally notified Duro that the Duro License Agreement had expired as of April

10, 2014.

24. In the June 5 Letter, Crye also advised Duro that it is no longer authorized to

print or sell any MultiCam fabrics, that it may not hold itself out as being an authorized printerof MultiCam fabrics, and that any rights to use Cryes various trademarks and logos have

expired.

25. In the June 5 Letter, Crye reminded Duro of its post-expiration obligations under

the Duro License Agreement, including its obligation to remit a final accounting and pay all

royalties, make available its books and records, and return all MultiCam print screens. Crye

also reminded Duro of its surviving obligations under the Duro License Agreement, including

Section 3(h), which, among other things, prohibits Duro from printing patterns which are similar

to the MultiCam pattern or which are modifications to, or derivatives of, the MultiCam

pattern.

26. Duro did not comply with the demands in the June 5 Letter.

27. Duro did not comply with its obligations following expiration of the Duro License

Agreement.

28. Notwithstanding expiration of the Duro License Agreement, Duro has continued

to offer for sale and sell various MultiCam fabrics, and has continued to hold itself out both as



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an authorized distributor of MultiCam fabrics and a licensee of Crye. Website screenshots

from Duros website at www.multicamfabric.com depicting MultiCam fabrics for sale as of

November 11, 2014, are attached hereto as Exhibit E .

29. Cryes outside counsel sent Duro a cease and desist letter dated September 29,

2014, a true and correct copy of which is attached hereto as Exhibit F .

30. Duro did not respond to the cease and desist letter and did not comply with the

demands therein.

First Claim for Relief(Breach of Contract/Injunctive Relief)

31. Plaintiffs repeat and reallege each and every allegation contained in paragraphs 1

through 30 of this Complaint as if fully set forth herein.

32. The Duro License Agreement was a valid and binding contract between Plaintiffs

and Duro that expired on April 10, 2014.

33. Plaintiffs have fully performed all of their obligations pursuant to the Duro

License Agreement.

34. Under Section 9(d)(iv), upon expiration of the Duro License Agreement, Duro

was required to cease using any CRYE trademark, trade name, trade dress, service mark,

service name, logo or designation. Ex. A, 9(d)(iv).

35. As set forth in Section 9(f) of the Duro License Agreement, Section 9(d)(iv)

survived expiration of the Agreement and remains in effect.

36. Despite due demand therefore, Duro has breached, and continues to breach,

Section 9(d)(iv) by, inter alia, using Cryes trademarks, trade name, trade dress, service mark,

service name, logo, and/or designation after expiration of the Duro License Agreement in April

2014.



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37. Under Section 7(d) of the Duro License Agreement, except for fulfilling open

orders existing at the expiration under certain circumstances, upon expiration of the License

Agreement Duro was required to immediately cease all display, advertising and use of all

CRYE and MULTICAM trademarks, trade names, logos, and designations and not thereafter

use, advertise or display any trademark, trade name, logo or designation which is, or which any

part of which is, similar to or confusing with any trademark, trade name, logo or designation

associated with CRYE or its affiliates. Ex. A, 7(d).

38. As set forth in Section 9(f) of the Duro License Agreement, Section 7(d) survived

expiration of the Agreement and remains in effect.39. Despite due demand that Duro comply with Section 7(d) of the License

Agreement, Duro has breached, and continues to breach Section 7(d) by, inter alia, displaying,

advertising, and/or using Cryes trademarks, trade names, logos, and/or designation, or

trademarks, trade names, logos or designations that are similar to or confusing with any

trademark, trade name, log or designation associated with Plaintiffs or their affiliates.

40. Under Section 3(h) of the Duro License Agreement, during the term and

following expiration of the Duro License Agreement, Duro was expressly prohibited from

making products similar to the MultiCam camouflage pattern:

[Duro] acknowledges and agrees that it will not . . . during or afterthe term or expiration of this Agreement, make any products thatare similar to MULTICAM through color palette, pattern orarrangement or placement of any elements incorporated inMULTICAM. Furthermore, [Duro] agrees that its shall not makeany additions to, new renderings of, or modifications,embellishments, derivative works or other changes of or toMULTICAM or any other intellectual property rights of CRYEwithout CRYEs prior written consent and Licensee agrees that allsuch additions, renderings, modifications, embellishments,derivative works or otherwise shall be and remain the sole propertyof CRYE.



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Ex. A, 3(h).

41. As set forth in Section 9(f) of the Duro License Agreement, Section 3(h) survived

expiration of the Agreement and remains in effect.

42. Despite due demand that Duro comply with Section 3(h) of the Duro License

Agreement, Duro has breached and continues to breach the Agreement by printing and selling

products expressly prohibited by 3(h) thereof.

43. Under Section 7(c) of the Duro License Agreement, Duro agreed that it would not

assert or claim any interest in or do anything that may adversely affect the validity of any

trademark, trade name, logo, designation, or copyright belonging to or licensed to Crye(including, without limitation, any act or assistance to any act, which may infringe or lead to the

infringement of any of Cryes proprietary rights).

44. As set forth in Section 9(f) of the Duro License Agreement, Section 7(c) survived


45. Despite due demand that Duro comply with Section 7(c) of the Duro License

Agreement, Duro has breached and continues to breach the Agreement by (i) using the

MultiCam trademark following expiration of the Duro License Agreement and the termination

of Duros right to use the trademark, (ii) printing, distributing, offering for sale and sale of

counterfeit fabrics bearing the MultiCam trademark, and (iii) making, having made, using,

importing, offering for sale, selling and/or marketing MultiCam fabrics.

46. Under Section 3(p), upon expiration of the License Agreement, Duro was

required to return all print screens to Crye. Ex. A, 3(p).

47. As set forth in Section 9(f) of the Duro License Agreement, Section 3(p) survived




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48. In breach of its obligations under Section 3(p), Duro has not returned the print

screens.

49. In Section 14(g) of the Duro License Agreement, Duro specifically

acknowledges that any breach of its obligations under this Agreement with respect to the

proprietary rights or confidential information of CRYE will cause CRYE irreparable injury for

which there are inadequate remedies at law, and therefore CRYE will be entitled to equitable

relief in addition to all other remedies provided by this Agreement or available at law.

50. Unless Duro is enjoined from continuing to breach its continuing obligations

under the expired Duro License Agreement as alleged herein, Plaintiffs will be irreparablyharmed.

51. Plaintiffs have no adequate remedy at law with regard to Duros breach of its

continuing obligations under the expired Duro License Agreement.

Second Claim for Relief(Breach of Contract/Damages)



53. Under Section 9(d)(ii), upon expiration of the Duro License Agreement, all

outstanding invoices to Duro for amounts due under the License Agreement were accelerated so

they became due and payable on the effective date of the termination, i.e., April 10, 2014, even if

longer terms had previously been provided. Ex. A, 9(d)(ii).

54. In breach of its obligations pursuant to Section 9(d)(ii) of the Duro License

Agreement, Duro has not made any payments on the outstanding invoices.

55. To the extent Duro has made sales of MultiCam fabrics after expiration of the

Duro License Agreement to fill open orders pursuant to Section 7(d) of the Duro License



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Agreement or to fill new orders in violation of its surviving obligations under the Duro License

Agreement, Duro has breached the Duro License Agreement by failing to make any payments to

Crye. As a result, Crye has, inter alia , lost profits it would have made on those sales.

56. By reason of the foregoing, Plaintiffs have suffered damages in an amount to be

determined at trial.

Third Claim for Relief(Trademark Infringement)



58. The 4,443,275 Registration is valid and subsisting, and is prima facie evidence of

the validity of LineWeights MultiCam trademark, its ownership of the MultiCam trademark,

and its exclusive right to use the MultiCam trademark. By virtue of this registration, the

MultiCam trademark is entitled to protection under the Lanham Act, 15 U.S.C. 1051, et seq .

59. Duros unauthorized use of the MultiCam trademark following expiration of

the Duro License Agreement and the termination of Duros right to use the trademark is likely to

cause confusion, mistake, or deception as to the source or origin of MultiCam fabrics in that

the trade and the consuming public are likely to believe that Duros MultiCam fabrics are

provided by, sponsored by, licensed by, affiliated or associated with, or in some other way

legitimately connected to Plaintiffs.

60. Duros unauthorized use of the MultiCam trademark following expiration of

the Duro License Agreement and the termination of Duros right to use the trademark is

intentional and is for the purpose of misleading the trade and the consuming public. These

willful actions are in violation of Section 32(1) of the Lanham Act, 15 U.S.C. 1114(1).

61. As a result of Duros infringement, as described above, the trade and the



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consuming public are likely to be confused and deceived as to the source, sponsorship, affiliation

or approval of MultiCam fabrics offered for sale and sold by Duro.

62. Plaintiffs have been damaged by the aforementioned acts in an amount to be

determined at trial.

63. Duros use of LineWeights MultiCam trademark after the expiration of the

Duro License Agreement and termination of Duros right to use the trademark is intentional,

malicious, and in bad faith. Therefore, Plaintiffs are entitled to recover from Duro treble

damages and attorneys fees.

64.

In addition, Duros conduct, unless enjoined, will result in irreparable harm toPlaintiffs and, specifically, to the goodwill associated with the MultiCam trademark.

Fourth Claim for Relief(Counterfeiting)



66. Upon information and belief, Duro has printed, distributed, offered for sale and

sold counterfeit fabrics bearing the MultiCam trademark (Counterfeit Fabrics) and continues

to do so in violation of 15 U.S.C. 1114.

67. Duro has distributed, offered, and sold Counterfeit Fabrics as if they were genuine

MultiCam fabrics and in direct competition with Cryes authorized licensees sale of genuine

MultiCam fabrics.

68. Duros use of copies or simulations of the MultiCam mark is likely to cause and

is causing confusion, mistake, or deception among the general purchasing public as to the origin

of the Counterfeit Fabric, and is likely to deceive the public into believing that the Counterfeit

Fabric being sold by Duro originates from, is associated with or otherwise authorized by



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Plaintiffs, all to the damage and detriment of Plaintiffs reputation, goodwill, and sales

69. In addition to compensatory damages, Plaintiffs are entitled to statutory damages

for Duros willful counterfeiting of the MultiCam trademark.

70. Duros conduct, unless enjoined, will result in irreparable harm to Plaintiffs and,

specifically, to the goodwill associated with the MultiCam trademark.

Fifth Claim for Relief(Patent Infringement)



72. LineWeight is the owner of all the right, title and interest in and to the 861

Patent.

73. The allegations in and relief requested by this Fifth Claim for Relief do not apply

to and specifically do not include patent infringement by Duro that occurs with the authorization

and consent of the United States and/or where Duros infringement occurs by or for the United

States.

74. The MultiCam fabrics being sold by Duro infringe the 861 Patent.

75. In violation of 35 U.S.C. 271(a), Duro is directly infringing the 861 Patent by

making, having made, using, importing, offering for sale, selling and/or marketing MultiCam

fabrics.

76. Duro has been and continues to willfully infringe upon LineWeights rights in the

861 Patent.

77. This is an exceptional case within the meaning of 35 U.S.C. 285, which

warrants reimbursement of Plaintiffs reasonable attorneys fees.



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EXHIBIT A

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EXHIBIT C



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EXHIBIT D



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EXHIBIT E



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EXHIBIT F



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Crye Precision v. Duro - Complaint

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