IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW MEXICO MICHAEL D.

GATTEN, a/k/a MICHAEL DEAN GATTEN, and MIRACLE INDUSTRIES LLC, Plaintiffs, vs. No. 11 cv 684

RUSSELL GATTEN and RUSTY CAN ENTERPRISES LLC, Defendants. COMPLAINT FOR DAMAGES AND INJUNCTIVE RELIEF AND JURY DEMAND COME NOW the Plaintiffs, Michael D. Gatten, a/k/a Michael Dean Gatten, and Miracle Industries LLC, by and through their attorneys, Butt Thornton & Baehr PC, and respectfully state as follows for their Complaint for Damages and Injunctive Relief and Jury Demand: JURISDICTIONAL ALLEGATIONS 1. Michael D. Gatten, a/k/a Michael Dean Gatten, (Michael

Gatten) is a resident of Rio Rancho, New Mexico. 2. Miracle Industries LLC (Miracle Industries) is a limited

liability company organized and existing under the laws of the State of New Mexico with its principal place of business in Rio Rancho, New Mexico. 3. Upon information and belief, Russell Gatten is a resident of

Newbury Park, California.

4.

Upon information and belief, Rusty Can Enterprises LLC

(Rusty Can Enterprises) is a limited liability company organized and existing under the laws of the State of California with its principal place of business in Newbury Park, California. 5. Certain of the events giving rise to this action occurred in the

State of New Mexico. 6. This Court has jurisdiction over Michael Gattens patent

infringement claims pursuant to the United States Patent Act, 35 U.S.C. 1, et. seq. Jurisdiction is conferred upon this Court pursuant to 28 U.S.C. 1331 and 1338(a). This Court has jurisdiction over Michael Gattens Lanham Act claims pursuant to 28 U.S.C. 1331, 1338, and 15 U.S.C. 1121. This Court has supplemental jurisdiction over the state law claims under 28 U.S.C. 1367. 7. Venue is proper in this district pursuant to 28 U.S.C.

1391(b) and 1400(b). GENERAL ALLEGATIONS 8. Michael Gatten is the owner of U.S. Patent Nos. 6,868,566;

7,043,783; and 7,181,789 (hereinafter Gatten Patents). 9. Michael Gatten is the owner of U.S. Trademark Registration

Nos. 3,025,128 for Miracle Blanket and 3,600,962 for The Gift of Sleep. 10. Michael Gatten has, through continuous use since at least

as early as May 1, 2002, acquired common law trademark rights in the term 2

Amazing Miracle Blanket. The U.S. Trademark Registrations and the common law trademark rights are collectively referred to herein as the Gatten Trademarks. 11. Michael Gatten has granted Miracle Industries the right to

distribute swaddling blankets using the Gatten Patents and the Gatten Trademarks. 12. In the course of years of continuous advertising and use in

commerce, the Gatten Trademarks have come to identify a particular brand. The Gatten Patents, the Gatten Trademarks, and the goodwill and reputation associated therewith, along with the right to use the Gatten Patents and the Gatten Trademarks, are among the most valuable of the assets of Michael Gatten and Miracle Industries. 13. Russell Gatten is a former independent distributor for

Miracle Industries and its predecessor, Amazing Miracle Blanket Enterprises, and as such is aware of the Gatten Patents and Gatten Trademarks, including the use of the word Amazing in commerce since at least May 1, 2002, to identify the Miracle Blanket swaddling blanket. 14. Upon information and belief, the Defendants are using the

term Amazing Blanket in commerce to identify a swaddling blanket being sold by the Defendants to former customers of Michael Gatten, Amazing Miracle Blanket Enterprises, and Miracle Industries who would otherwise purchase the Miracle Blanket swaddling blanket. 3

15.

Upon information and belief, the Defendants have infringed,

induced infringement of, and contributorily infringed the Gatten Patents and the Gatten Trademarks, and are still doing so by making, using, selling, and/or offering for sale swaddling blankets embodying the inventions of the Gatten Patents and using the Gatten Trademarks in this Judicial District and throughout the United States. 16. The use by the Defendants of the term Amazing Blanket

causes a significant likelihood of confusion. Specifically, consumers confronted with the use by the Defendants of the term Amazing Blanket are likely to conclude that the product of the Defendants is somehow sponsored or licensed by or otherwise affiliated with Michael Gatten and Miracle Industries. 17. By causing a likelihood of confusion, the Defendants have

knowingly and unlawfully misappropriated a portion of the value of the Gatten Patents and the Gatten Trademarks and their associated goodwill for the use and profit of the Defendants. Because consumers familiar with the Gatten Patents and the Gatten Trademarks are likely to conclude mistakenly that that the Defendants product is somehow sponsored or licensed by or otherwise affiliated with the product of Michael Gatten and Miracle Industries, those consumers are more likely to purchase the product of the Defendants or recommend it to others. This mistaken association inures to the benefit of the Defendants. 18. The likelihood of confusion caused by the Defendants is 4

causing and will continue to cause substantial and irreparable harm to Michael Gatten and Miracle Industries. Consumers who have an unpleasant or disappointing experience with the product of the Defendants are likely to conclude that similar problems exist with the product of Michael Gatten and Miracle Industries, even though they have no relationship or affiliation. The Defendants are directly and irreparably damaging one of the most valuable assets of Michael Gatten and Miracle Industries their goodwill and reputation. 19. Upon information and belief, the Defendants have published

or caused to be published statements that have a defamatory imputation concerning Michael Gatten, Miracle Industries, or both, including but not limited to publication on the internet social networking site Facebook. COUNT I - INFRINGEMENT OF UNITED STATES PATENT NO. 6,868,566 20. Plaintiffs hereby adopt and incorporate by reference

Paragraphs 1 through 19 of their Complaint, as if fully set forth herein. 21. Michael Gatten is the owner of U.S. Patent No. 6,868,566

(the 566 Patent), attached hereto as Exhibit A, entitled Swaddling Blanket. Michael Gatten owns and has standing and capacity to sue and recover damages for infringement under the 566 Patent. 22. Upon information and belief, the Defendants have violated 5

Michael Gattens patent rights by making, using, selling, and/or offering for sale swaddling blankets covered by at least one claim of the 566 Patent, without the authority of Michael Gatten. 23. Upon information and belief, the Defendants have

intentionally and actively induced, caused, urged, encouraged, and aided in the infringement of others with knowledge that others would infringe. 24. Upon information and belief, the infringement of the 566

Patent by the Defendants has been willful, wanton, and in bad faith. 25. As a direct and proximate consequence of the actions of the

Defendants, as alleged hereinabove, Michael Gatten has been, is being, and, unless such actions are enjoined by the Court, will continue to be injured in his business and property rights, and has suffered, is suffering, and will continue to suffer injury and damages for which it is entitled to relief under 35 U.S.C. 284. 26. As a direct and proximate consequence of the actions of the

Defendants, as alleged hereinabove, the Defendants have also caused, are causing, and, unless such actions are enjoined by the Court, will continue to cause irreparable harm to Michael Gatten for which there is no adequate remedy at law, and for which Michael Gatten is entitled to injunctive relief under 35 U.S.C. 283.

COUNT II - INFRINGEMENT OF UNITED STATES PATENT NO. 7,043,783 27. Plaintiffs hereby adopt and incorporate by reference

Paragraphs 1 through 26 of their Complaint, as if fully set forth herein. 28. Michael Gatten is the owner of U.S. Patent No. 7,043,783

(the 783 Patent), attached hereto as Exhibit B, entitled Swaddling Blanket. Michael Gatten owns and has standing and capacity to sue and recover damages for infringement under the 783 Patent. 29. Upon information and belief, the Defendants have violated

Michael Gattens patent rights by making, using, selling, and/or offering for sale swaddling blankets covered by at least one claim of the 783 Patent, without the authority of Michael Gatten. 30. Upon information and belief, the Defendants have

intentionally and actively induced, caused, urged, encouraged, and aided in the infringement of others with knowledge that others would infringe. 31. Upon information and belief, the infringement of the 783

Patent by the Defendants has been willful, wanton, and in bad faith. 32. As a direct and proximate consequence of the actions of the

Defendants, as alleged hereinabove, Michael Gatten has been, is being, and, unless such actions are enjoined by the Court, will continue to be injured in his business and property rights, and has suffered, is suffering, and will

continue to suffer injury and damages for which it is entitled to relief under 35 U.S.C. 284. 33. As a direct and proximate consequence of the actions of the

Defendants, as alleged hereinabove, the Defendants have also caused, are causing, and, unless such actions are enjoined by the Court, will continue to cause irreparable harm to Michael Gatten for which there is no adequate remedy at law, and for which Michael Gatten is entitled to injunctive relief under 35 U.S.C. 283. COUNT III - INFRINGEMENT OF UNITED STATES PATENT NO. 7,181,789 34. Plaintiffs hereby adopt and incorporate by reference

Paragraphs 1 through 33 of their Complaint, as if fully set forth herein. 35. Michael Gatten is the owner of U.S. Patent No. 7,181,789

(the 789 Patent), attached hereto as Exhibit C, entitled Swaddling Blanket. Michael Gatten owns and has standing and capacity to sue and recover damages for infringement under the 789 Patent. 36. Upon information and belief, the Defendants have violated

Michael Gattens patent rights by making, using, selling, and/or offering for sale swaddling blankets covered by at least one claim of the 789 Patent, without the authority of Michael Gatten. 37. Upon information and belief, the Defendants have

intentionally and actively induced, caused, urged, encouraged, and aided in the infringement of others with knowledge that others would infringe. 38. Upon information and belief, the infringement of the 789

Patent by the Defendants has been willful, wanton, and in bad faith. 39. As a direct and proximate consequence of the actions of the

Defendants, as alleged hereinabove, Michael Gatten has been, is being, and, unless such actions are enjoined by the Court, will continue to be injured in his business and property rights, and has suffered, is suffering, and will continue to suffer injury and damages for which it is entitled to relief under 35 U.S.C. 284. 40. As a direct and proximate consequence of the actions of the

Defendants, as alleged hereinabove, the Defendants have also caused, are causing, and, unless such actions are enjoined by the Court, will continue to cause irreparable harm to Michael Gatten for which there is no adequate remedy at law, and for which Michael Gatten is entitled to injunctive relief under 35 U.S.C. 283. COUNT IV UNFAIR COMPETITION AND FALSE DESIGNATION OF ORIGIN 41. Plaintiffs hereby adopt and incorporate by reference

Paragraphs 1 through 40 of their Complaint, as if fully set forth herein. 42. This cause of action is for false designation of origin and

unfair competition under 15 U.S.C. 1125 (a).

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Through their use of the Gatten Trademarks, the Defendants

have caused, and if not enjoined will continue to cause, consumers in this judicial district and elsewhere to be confused, mistaken, or deceived as to the affiliation, connection, or association of the products of the Defendants with those of Michael Gatten and Miracle Industries or as to the sponsorship or approval by Michael Gatten and Miracle Industries of the products of the Defendants. 44. The use by the Defendants of the Gatten Trademarks has

caused significant harm to Michael Gatten and Miracle Industries, including irreparable harm for which there is no adequate remedy at law. 45. The conduct of the Defendants is both knowing and willful. COUNT V TRADEMARK INFRINGEMENT 46. Plaintiffs hereby adopt and incorporate by reference

Paragraphs 1 through 45 of their Complaint, as if fully set forth herein. 47. This cause of action is for infringement of U.S. Trademark

Registration Nos. 3,025,128 for Miracle Blanket, attached hereto as Exhibit D, and 3,600,962 for The Gift of Sleep, attached hereto as Exhibit E. 48. Through their use of the Miracle Blanket mark and the

trademarked phrase The Gift of Sleep, the Defendants have used a reproduction, counterfeit, copy or colorable imitation of U.S. Trademark

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Registration Nos. 3,025,128 for Miracle Blanket and 3,600,962 for The Gift of Sleep in connection with the sale of goods or services in commerce and thereby caused, and if not enjoined will continue to cause, a likelihood that consumers in this judicial district and elsewhere will be confused, mistaken, or deceived. 49. The use by the Defendants of U.S. Trademark Registration

Nos. 3,025,128 for Miracle Blanket and 3,600,962 for The Gift of Sleep has caused significant harm to Michael Gatten and Miracle Industries, including irreparable harm for which there is no adequate remedy at law. 50. The Defendants willful and unauthorized misuse of U.S.

Trademark Registration Nos. 3,025,128 for Miracle Blanket and 3,600,962 for The Gift of Sleep has damaged Michael Gatten and Miracle Industries in an amount to be determined at trial. Such use has also caused Michael Gatten and Miracle Industries to suffer irreparable harm, and they will continue to be irreparably harmed unless and until the unlawful conduct of the Defendants is enjoined. Michael Gatten and Miracle Industries have no adequate remedy at law. 51. The conduct of the Defendants is both knowing and willful.

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COUNT VI COMMON LAW TRADEMARK INFRINGEMENT 52. Plaintiffs hereby adopt and incorporate by reference,

Paragraphs 1 through 51 of their Complaint, as if fully set forth herein. 53. This cause of action is for infringement of the Amazing

Miracle Blanket common law trademark. 54. Through their use of Amazing Blanket in connection with the

sale of swaddling blankets, the Defendants have used a reproduction, counterfeit, copy or colorable imitation of the Amazing Miracle Blanket common law trademark in connection with the sale of goods or services in commerce and thereby caused, and if not enjoined will continue to cause, a likelihood that consumers in this judicial district and elsewhere will be confused, mistaken, or deceived. 55. The use by the Defendants of Amazing Blanket has caused

significant harm to Michael Gatten and Miracle Industries, including irreparable harm for which there is no adequate remedy at law. 56. The Defendants use of Amazing Blanket has damaged

Michael Gatten and Miracle Industries in an amount to be determined at trial. Such use has also caused Michael Gatten and Miracle Industries to suffer irreparable harm, and they will continue to be irreparably harmed unless and

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until the unlawful conduct of the Defendants is enjoined. Michael Gatten and Miracle Industries have no adequate remedy at law. 57. The conduct of the Defendants is both knowing and willful.

COUNT VII COMMON LAW UNFAIR COMPETITION

58.

Plaintiffs hereby adopt and incorporate by reference

Paragraphs 1 through 57 of their Complaint, as if fully set forth herein. 59. This cause of action is for unfair competition under New

Mexico common law. 60. Through their misappropriation of the Gatten Trademarks,

the Defendants have caused, and if not enjoined will continue to cause, consumers in this judicial district and elsewhere to be confused, mistaken, or deceived as to the affiliation, connection or association of the products of the Defendants with those of Michael Gatten and Miracle Industries or as to the sponsorship or approval by Michael Gatten and Miracle Industries of the products of the Defendants. 61. The misappropriation by the Defendants of the Gatten

Trademarks has caused significant harm to Michael Gatten and Miracle

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Industries, including irreparable harm for which there is no adequate remedy at law. 62. The conduct of the Defendants is both knowing and willful.

COUNT VIII QUANTUM MERUIT/UNJUST ENRICHMENT 63. Plaintiffs hereby adopt and incorporate by reference

Paragraphs 1 through 65 of their Complaint, as if fully set forth herein. 64. This cause of action is for quantum meruit/unjust

enrichment under New Mexico common law. 65. As alleged hereinabove, the Defendants have unlawfully

retained the benefit of the Gatten Patents and Gatten Trademarks and will continue to benefit from the Gatten Patents and Gatten Trademarks unless enjoined by the Court. 66. The Defendants have knowingly benefitted from the Gatten

Patents and Gatten Trademarks at the expense of Michael Gatten and Miracle Industries. 67. The Defendants have also been unjustly enriched by the

misappropriation of the Gatten Patents and the Gatten Trademarks. 68. As a direct and proximate consequence of the actions of the

Defendants, as alleged hereinabove, Michael Gatten and Miracle Industries have been, are being, and, unless such actions are enjoined by the Court, will

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continue to be injured in their business and property rights, and have suffered, are suffering, and will continue to suffer injury and damages. COUNT IX MISAPPROPRIATION 69. Plaintiffs hereby adopt and incorporate by reference

Paragraphs 1 through 68 of their Complaint, as if fully set forth herein. 70. The Defendants have unlawfully exercised, and continue to

exercise, dominion and control over intellectual property of Michael Gatten and Miracle Industries and have converted and misappropriated said valuable property to their use and benefit in defiance of Michael Gattens and Miracle Industries rights. 71. The Defendants conduct has caused, and will continue to

cause, Michael Gatten and Miracle Industries substantial damage. COUNT X TORTIOUS INTERFERENCE WITH BUSINESS RELATIONS 72. Plaintiffs hereby adopt and incorporate by reference

Paragraphs 1 through 71 of their Complaint, as if fully set forth herein. 73. The Defendants tortiously interfered with Michael Gattens

and Miracle Industries longstanding business relationships with their customers. The Defendants had knowledge of these relationships by virtue of their prior business relationship with Michael Gatten and Miracle Industries. Without having any privilege or justification to do so, the Defendants played and continue to play an active and substantial part in causing and attempting to cause the business of some of these customers to be diverted to the 15

Defendants, thus depriving Michael Gatten and Miracle Industries of the benefits of its longstanding business relationships with these customers. 74. The Defendants have used improper means or have acted

with an improper motive intended solely to harm Michael Gatten and Miracle Industries in diverting Michael Gattens and Miracle Industries business to the use and benefit of the Defendants. 75. The Defendants conduct was wrongful in character, and the

Defendants conduct is and has been knowing, willful, intentional, reckless, and in bad faith. 76. The Defendants wrongful conduct has caused, and will

continue to cause, Michael Gatten and Miracle Industries substantial damage. COUNT XI TORTIOUS INTERFERENCE WITH PROSPECTIVE BUSINESS RELATIONS

77.

Plaintiffs hereby adopt and incorporate by reference

Paragraphs 1 through 76 of their Complaint, as if fully set forth herein. 78. Michael Gatten and Miracle Industries are in the business of

selling swaddling blankets and seek to obtain business from prospects. 79. The Defendants are also seeking to obtain business from

these potential customers. 80. The Defendants are aware of Michael Gattens and Miracle

Industries existing and prospective business relationships. 16

81.

The Defendants have engaged in ongoing and continual

attempts to disparage, criticize, denigrate, and insult Michael Gatten and Miracle Industries in their communications with existing or potential customers. 82. As such, the Defendants have intentionally and improperly

interfered with existing and prospective business relationships solely to harm Michael Gatten and Miracle Industries or has done so through an improper means. 83. As a proximate cause of the Defendants interference with

existing and prospective business relationships, Michael Gatten and Miracle Industries have been injured. 84. The Defendants wrongful conduct was willful, wanton,

reckless, and malicious and has caused damage to Michael Gatten and Miracle Industries. COUNT XII PRIMA FACIE TORT 85. Plaintiffs hereby adopt and incorporate by reference

Paragraphs 1 through 84 of their Complaint, as if fully set forth herein. 86. Alternatively, the actions of the Defendants as alleged herein,

although lawful, were conducted with the intent to injure and without sufficient economic or social justification. 87. The Defendants wrongful conduct has caused, and will

continue to cause, Michael Gatten and Miracle Industries substantial damage. 17

COUNT XIII DEFAMATION 88. Plaintiffs hereby adopt and incorporate by reference

Paragraphs 1 through 87 of their Complaint, as if fully set forth herein. 89. Various statements by the Defendants about Michael Gatten,

Miracle Industries, or both, are capable of defamatory meaning. 90. The statements by the Defendants were false or were made

with reckless disregard of whether the statements and their implications were false. 91. 92. The Defendants published the statements. The statements have injured the reputation and goodwill of

Michael Gatten and Miracle Industries. WHEREFORE, Michael Gatten and Miracle Industries request that the Court enter judgment against Russell Gatten and Rusty Can Enterprises, jointly and severally, as follows: a. Declaring that United States Patent Nos. 6,868,566; 7,043,783; and 7,181,789 were duly and legally issued, are valid and are enforceable; b. Declaring that Russell Gatten and Rusty Can Enterprises have directly infringed, contributorily infringed, and/or induced infringement of one or more claims of United States Patent Nos. 6,868,566; 7,043,783; and 7,181,789;

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c. Declaring that Russell Gatten and Rusty Can Enterprises have willfully infringed one or more claims of United States Patent Nos. 6,868,566; 7,043,783; and 7,181,789; d. Preliminarily and permanently enjoining Russell Gatten and Rusty Can Enterprises and their respective officers, agents, servants, employees, and attorneys, and those persons in active concert or participation with them who receive actual notice of the order by personal service or otherwise, from committing further acts of infringement under 35 U.S.C. 271 of any one or more claims of United States Patent Nos. 6,868,566; 7,043,783; and 7,181,789, pursuant to 35 U.S.C. 283; e. Awarding Michael Gatten damages in accordance with 35 U.S.C. 284; f. Deeming this to be an "exceptional" case within the meaning of 35 U.S.C. 285, entitling Michael Gatten to an award of his reasonable attorney fees, expenses and costs in this action; g. Preliminarily and permanently enjoining and restraining

Russell Gatten and Rusty Can Enterprises and their respective officers, agents, servants, employees, and attorneys, and those persons in active concert or participation with them who receive actual notice of the order by personal service or otherwise, from directly or indirectly using the Gatten Trademarks or any confusingly similar variation thereof which is likely to cause confusion, mistake, or to deceive; 19

h.

Awarding compensatory damages in an amount to be

determined at trial, such amount to be trebled by virtue of the willful misconduct of Russell Gatten and Rusty Can Enterprises; i. at trial; j. Awarding interest, costs and attorneys fees in an amount to Awarding punitive damages in an amount to be determined

be determined at trial; and k. Awarding such other and further relief as this Court may

deem appropriate under the circumstances. JURY DEMAND Plaintiffs demand a jury trial on all counts so available. Respectfully submitted, BUTT THORNTON & BAEHR PC /s/ Rodney L. Schlagel Rodney L. Schlagel rlschlagel@btblaw.com Sherrill K. Filter skfilter@btblaw.com Geoffrey D. White gdwhite@btblaw.com Attorneys for Plaintiffs P.O. Box 3170 Albuquerque, NM 87190 (505) 884-0777

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