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Civ. Action No. 1

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J. MARK HOLLAND (140453)
3. MARK HOLLAND & ASSOCIATES
a ProIessional Law Corporation
19800 MacArthur Blvd., Suite 300
Irvine, CA 92612
Telephone: (949) 718-6750
Facsimile: (949) 718-6756
Email: oIIicejmhlaw.com
Attorneys Ior PlaintiII
ALLERGIA, INC., et al.
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF CALIFORNIA
)
ALLERGIA, INC., a CaliIornia )
corporation, )
)
PlaintiII, )
)
vs. )
)
DENIS BOUBOULIS, an individual; )
and DOES 1 THROUGH 5, inclusive, )
)
DeIendants. )
)
Civil Action No. _______________
COMPLAINT FOR
DECLARATORY 3UDGMENT
OF PATENT APPLICATION
OWNERSHIP AND/OR OTHER
PATENT RIGHTS; PATENT
INVALIDITY; AND BREACH
OF FIDUCIARY DUTY
3URY TRIAL DEMANDED
THE PARTIES
1. PlaintiII Allergia, Inc. (Allergia) is a corporation incorporated under
the laws oI the State oI CaliIornia, with a principal place oI business in CaliIornia
at 1479 Glencrest Dr. #A, San Marcos, CA 92078.
2. Upon inIormation and belieI, DeIendant Denis Bouboulis (Bouboulis)
is an individual residing in the State oI Connecticut, with an address oI 125
Strawberry Hill Avenue, StamIord, CT 06902.
3. The true names and capacities oI Doe DeIendants 1 through 5 are not
known to Allergia at this time, and Allergia thereIore sues them under Iictitious
names. When the actual identities oI Does 1 through 5 are determined, Allergia
intends to seek leave oI Court to amend this Complaint to name such persons as
Doe DeIendants. Allergia is inIormed and believes, and thereon alleges, that Does
_______________
'14CV1566 RBB W
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Civ. Action No. 2
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1 through 5 participated in the wrongIul acts described herein, and are responsible
in some way Ior the wrongIul acts and resulting damages alleged herein.
Accordingly, as indicated above and depending on the context in which it is used
herein, the terms DeIendant and/or DeIendants are intended to include not
only Bouboulis, but also any other DeIendants or any individuals or other
entities acting on behalI oI or in coordination with Bouboulis regarding the
matters discussed herein.
3URISDICTION AND VENUE
4. This complaint is Ior a declaratory judgment oI patent application
ownership and/or other patent rights; alternatively Ior patent invalidity regarding
certain patent application(s) Iiled by DeIendant (as Iurther explained below); and Ior
breach oI Iiduciary duty. The ownership and invalidity issues arise under the patent
laws oI the United States, Title 35, United States Code.
5. This Court has jurisdiction over this action pursuant to 28 U.S.C. 1331,
1332, 2201, and 1338(a).
6. The amount in controversy, without interest and costs, exceeds the sum
or value speciIied by 28 U.S.C. 1332.
7. This Court has personal jurisdiction over the DeIendants consistent with
the principles oI due process, by virtue oI one or more oI the Iollowing:
- the DeIendant transacting and doing business in this District,
- because a substantial part oI the relevant events occurred in this District,
and/or
- because a substantial part oI the property that it is the subject oI this
action is situated here.
8. Venue is proper in this judicial District pursuant to 28 U.S.C. 1391(b).
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Civ. Action No. 3
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FACTUAL BACKGROUND COMMON TO ALL COUNTS
9. Beginning several years ago, DeIendant worked with PlaintiII`s
predecessor-in-interest (CLRS Technology, Inc., or CLRS) and received in
exchange Ior his contributions approximately 116,111 shares oI CLRS common
stock. That stock was consideration Ior (among other things) DeIendant`s
contribution to the invention and/or development oI medical devices (apparatus)
and related methods Ior using phototherapeutics to alleviate the symptoms oI
allergic rhinitis. Those methods and apparatus also related to some degree to
technology that had been previously developed by CLRS Ior other
phototherapeutic medical devices.
10. On or about August 5, 2010, CLRS Iiled a provisional patent
application with the United States Patent and Trademark OIIice (USPTO), as
Application Ser. No. 61/371,172 (the 172 application) directed to the Ioregoing
invention (Ior alleviating the symptoms oI allergic rhinitis). DeIendant was one oI
three named inventors in that 172 patent application.
11. Approximately two months aIter Iiling the 172 patent application, in
connection with a corporate transaction involving a third party (Solta), CLRS spun
out that patent application to a new entity, PlaintiII Allergia, Inc.
12. SpeciIically, on or about October 5, 2010, Allergia was incorporated
under the laws oI CaliIornia. All oI the then-existing shareholders oI CLRS
became shareholders oI PlaintiII Allergia, including DeIendant. Similar to the
other CLRS shareholders, DeIendant received shares oI stock in PlaintiII based on
DeIendant`s then-existing shares in CLRS. Following this reorganization,
DeIendant held the same number oI shares in PlaintiII Allergia as DeIendant had
in CLRS prior to the corporate transaction with Salto.
13. Approximately one week later (as shown on documents dated on or
about October 12 and 13, 2010), CLRS assigned all rights in the 172 provisional
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Civ. Action No. 4
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patent to PlaintiII Allergia. The beginning, end, and other portions oI certain oI
those documents are copied below, including the signature (at the bottom oI the
document) by DeIendant on behalI oI PlaintiII Allergia. The excerpts below are
Irom an Assignment and Assumption Agreement dated October 12, 2010, and a
License Agreement dated October 13, 2010:
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Civ. Action No. 5
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Civ. Action No. 6
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Civ. Action No. 7
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14. A Iew days later, on or about October 15, 2010, the initial incorporator
oI PlaintiII Allergia Iormally named DeIendant as an initial director oI PlaintiII.
That designation is shown in a corporate record copied here:
15. Thus, as shown above, DeIendant assisted and was directly involved in
the aIorementioned CLRS/Allergia corporate transactions, and signed documents
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conIirming Allergia`s ownership oI the 172 patent application and related rights,
and DeIendant`s position as a director oI Allergia. SpeciIically, DeIendant signed
at least two documents on behalI oI that new company Allergia, documents that
acknowledged that CLRS owned the 172 patent application and that Allergia was
receiving that ownership Irom CLRS.
16. A Iew months later, during an organizational telephone call oI the
proposed Allergia board oI directors, and without any advance notice to the other
shareholders and directors, DeIendant proposed that he would assume the duties oI
CEO oI PlaintiII Allergia iI he were granted a controlling interest in the capital
stock oI Allergia (rather than the smaller percentage that DeIendant actually did
own at that time). The other Allergia shareholders and directors rejected
DeIendant`s proposal (such directors held in the aggregate the majority oI the
shares oI PlaintiII Allergia).
17. Sometime in the next several months, and without the knowledge and/or
authorization oI Allergia or its other shareholders, DeIendant secretly prepared a
related and apparently competitive patent application. On inIormation and belieI,
DeIendant`s application is so closely related to Allergia`s pending application that
it may Ioreseeably interIere with or negatively aIIect Allergia`s business eIIorts
related to Allergia`s patent-pending technology. On inIormation and belieI, the
Iacts relating to the various pending applications and related acts oI invention may
support Allergia having co-ownership oI the DeIendant`s potential patent rights
(Ior example, by virtue oI one or both oI the other Allergia inventors being co-
inventors in DeIendant`s separate patent application), and DeIendant`s patent
application may be invalid Ior Iailing to name any such co-inventor. On
inIormation and belieI, those same Iacts may support Allergia`s equitable claim oI
ownership and/or right to use the technology set Iorth in DeIendant`s
aIorementioned patent applications.
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Civ. Action No. 9
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18. Without knowledge oI DeIendant`s other secret patent application,
PlaintiII Allergia continued to prosecute its 172 patent application, including
Iiling a Iull utility application (Ser. No. 13/198,672; the 672 application).
PlaintiII Iiled that 672 application on or about August 4, 2011. PlaintiII kept
DeIendant apprised oI the status oI PlaintiII`s patent application, and even
solicited DeIendant`s signature on some related Iormal Iiling documents. To a
large or even complete extent, DeIendant reIused to participate or assist in that
prosecution. By way oI example, the other two inventors named in the 172 patent
application executed Iormal assignment agreements conIirming their
understanding that ownership oI the intellectual property associated with the
invention resided with Allergia, but DeIendant reIused to sign that same
document.
19. On or about August 5, 2011 (just one day aIter PlaintiII`s
aIorementioned August 4, 2011 Iull utility patent application Iiling), and again
without the knowledge and/or authorization oI PlaintiII, DeIendant secretly Iiled a
separate provisional patent application with the U.S. Patent and Trademark OIIice
(Application Ser. No. US 13/204,282; the 282 application). DeIendant`s U.S.
provisional application has since expired by its own terms (provisional
applications expire one year aIter they are Iiled), but DeIendant Iiled an
international PCT patent application (also without the knowledge and/or
authorization oI PlaintiII) related to and based on DeIendant`s 282 application,
and DeIendant`s PCT application remains pending. Due to conIidentiality and
non-publication oI various patent application Iilings and related inIormation,
PlaintiII Allergia is not able to conIirm at this time whether DeIendant has Iiled
and/or has pending other related patent applications, and thereIore PlaintiII alleges
on inIormation and belieI that PlaintiII`s rights and/or DeIendant`s duties with
respect to any such additional patent applications are the same as set Iorth herein
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Civ. Action No. 10
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with respect to DeIendant`s 282 application and DeIendant`s related PCT
application (and PlaintiII intends that the allegations herein are directed to all such
applications).
20. Both DeIendant`s 282 application and DeIendant`s related PCT Iiling
were/are virtually the same as PlaintiII`s 172 and 672 patent applications. By
way oI example, DeIendant`s provisional and related PCT patent applications
include description and claims that are similar or even virtually identical to the
description and claims as in the PlaintiII`s pending patent applications. Based on
the parties` relationship, DeIendant had a duty to disclose to PlaintiII (a) any
arguably new inIormation in DeIendant`s 282 application and DeIendant`s
related PCT Iiling, and/or (b) at least that DeIendant had Iiled those patent
applications. DeIendant never did either oI those things.
21. In other words, despite DeIendant`s relationships (a) to and with
PlaintiII and (b) to the subject matter oI PlaintiII`s pending 172 and 672 patent
applications, DeIendant never disclosed to PlaintiII Allergia the Iiling oI
DeIendant`s provisional patent and/or DeIendant`s related PCT application. A
reasonable person would have understood that DeIendant`s aIorementioned secret
patent applications would have been oI interest to PlaintiII and would likely have
aIIected PlaintiII`s actions. DeIendant intentionally withheld that inIormation
Irom PlaintiII, and by virtue oI that Iailure to disclose inIormation to PlaintiII,
DeIendant misled PlaintiII into continuing to provide to DeIendant conIidential
inIormation relating to PlaintiII`s pending 172 and 672 patent applications, such
as OIIice Action communications received by PlaintiII Irom the United States
Patent and Trademark OIIice.
22. Again without the knowledge that DeIendant had Iiled those secret and
separate patent applications, and despite having no legal or Iactual basis requiring
Allergia to give DeIendant anything Iurther beyond the shares that DeIendant
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already owned, Allergia continued to make reasonable eIIorts to get DeIendant to
sign certain Iormal assignment documents related to the 172 patent
application/technology/invention. PlaintiII`s good Iaith eIIorts have continued in
that regard, including very recently a conIerence call on June 13, 2014, in which
Allergia oIIered to DeIendant 5 oI the equity in Allergia as oI the date oI
Allergia`s organization (the oIIered shares were to be common shares and would
not carry anti-dilution rights). Allergia made the oIIer in good Iaith with the
intention oI obtaining DeIendant`s signature and addressing any other existing
diIIerences between the parties. DeIendant reIused the settlement oIIer.
COUNT I
DECLARATORY 3UDGMENT OF PATENT APPLICATION
OWNERSHIP AND/OR OTHER PATENT AND INTELLECTUAL
PROPERTY RIGHTS
23. Allergia realleges and incorporates by reIerence the allegations set Iorth
in paragraphs 1-22.
24. Based on the Ioregoing, PlaintiII Allergia is the owner oI 100 oI
PlaintiII`s 172 and 672 patent applications, and the technology and inventions
underlying and disclosed therein.
25. Based on the Ioregoing, PlaintiII Allergia is at least the co-owner oI
DeIendant`s provisional and related PCT patent applications, and/or is authorized
to practice any inventions disclosed and/or claimed in those applications (and/or
any patents that may eventually issue based on same).
26. Based on the Ioregoing, DeIendant`s provisional and related PCT patent
applications are invalid (at least to the extent that they may aIIect patent rights
within the United States) because DeIendant has Iailed to name the proper
inventors in those patent applications.
27. On inIormation and belieI, DeIendant`s action cloud Allergia`s title to
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the relevant technology. Further on inIormation and belieI, DeIendant intends to
continue his unlawIul activity, and Allergia continues to and will continue to
suIIer irreparable harmIor which there is no adequate remedy at lawIrom such
unlawIul activity unless this Court declares and conIirms Allergia`s rights
concerning the Ioregoing, and unless DeIendant is enjoined by this Court Irom his
indicated behaviors and actions. Although Allergia believes that the existing
record (including the documents excerpted above) are suIIicient to establish at
least certain oI Allergia`s above-discussed rights, absent a declaration Irom the
Court conIirming one oI more oI the Ioregoing points (in paragraphs 24-26
above), DeIendant is likely to continue to take actions inconsistent with Allergia`s
ownership and related rights, and Allergia is likely to continue to be damaged by
DeIendant`s actions.
COUNT II
BREACH OF FIDUCIARY DUTY
28. Allergia realleges and incorporates by reIerence the allegations set Iorth
in paragraphs 1-27.
29. Based on the Ioregoing, DeIendant has breached his Iiduciary and/or
other duties to PlaintiII, including by applying Ior separate and competitive patent
protection that has or will Ioreseeably negatively aIIect PlaintiII`s opportunities to
commercialize PlaintiII`s invention. DeIendant had at least an implied duty to not
compete with PlaintiII Allergia with technology or systems closely related to
Allergia`s patent applications, and/or closely related to the subject matter oI the
172 patent application. Upon inIormation and belieI, the subject matter oI
DeIendant`s 282 application and DeIendant`s related PCT Iiling are so closely
related to PlaintiII`s 172 patent application that DeIendant has a duty to assign or
license those applications to PlaintiII and/or at least not to compete with PlaintiII
by practicing (or licensing/authorizing and third party to practice) the subject
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matter oI DeIendant`s 282 application and DeIendant`s related PCT Iiling.
30. By virtue oI the Ioregoing, and on inIormation and belieI, DeIendant
intends to continue his unlawIul activity, and Allergia continues to and will
continue to suIIer irreparable harmIor which there is no adequate remedy at
lawIrom such unlawIul activity unless DeIendant is enjoined by this Court.
Absent a declaration Irom the Court conIirming one oI more oI the Ioregoing
points (in paragraph 29 above), DeIendant is likely to continue to take actions
inconsistent with Allergia`s rights, and Allergia is likely to continue to be
damaged by DeIendant`s actions.
31. By virtue oI the Ioregoing, Allergia is entitled to recover Irom
DeIendant the damages suIIered by Allergia as a result oI DeIendant`s unlawIul
acts.
32. On inIormation and belieI, DeIendant`s above-discussed actions have
been and are intentional and willIul and deliberate, entitling Allergia to an award
oI enhanced damages and reasonable attorney Iees and costs.
PRAYER
WHEREFORE, PlaintiII Allergia prays Ior relieI as Iollows:
A. For a judgment declaring that PlaintiII Allergia is the sole owner oI
PlaintiII`s 172 and 672 patent applications, and the technology and
inventions underlying and disclosed therein;
B. For a judgment declaring that DeIendant is estopped Irom asserting any
claim inconsistent with PlaintiII Allergia being the sole owner oI PlaintiII`s
172 and 672 patent applications, and the technology and inventions
underlying and disclosed therein, by virtue oI DeIendant`s actions described
above;
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Civ. Action No. 14
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C. For a judgment declaring that PlaintiII Allergia is at least the co-owner oI
DeIendant`s provisional and related PCT patent applications, and/or is
authorized to practice any inventions disclosed and/or claimed in those
applications (and/or any patents that may eventually issue based on same);
D. For a judgment declaring that DeIendant`s provisional and related PCT
patent applications are invalid (at least to the extent that they may aIIect
patent rights within the United States) because DeIendant has Iailed to name
the proper inventors in those patent applications;
E. For a judgment that DeIendant has breached Iiduciary and/or other duties
that he owes or owed to PlaintiII Allergia;
F. For a judgment awarding Allergia compensatory damages as a result oI
DeIendant`s wrongIul actions, in an amount to be proven at trial;
G. For a judgment declaring that DeIendant`s Ioregoing actions have been
intentional, willIul, deliberate, and/or in bad Iaith;
H. For a judgment awarding Allergia enhanced damages Allergia`s expenses,
costs, and (upon motion as provided under Rule 54(d) oI the Federal Rules
oI Civil Procedure) attorneys` Iees;
I. For a mandatory injunction requiring DeIendant to conIirm in writing
PlaintiII`s ownership oI the Ioregoing PlaintiII`s patent applications, and to
assign in writing the Ioregoing unauthorized DeIendant`s patent
applications and/or any other similar Iilings by DeIendants, and to
reasonably cooperate with PlaintiII in connection with any Iurther
prosecution or related actions concerning such applications;
J. For a permanent injunction enjoining DeIendant Irom Iurther actions
inconsistent with Allergia`s ownership and rights in the Ioregoing patent
applications, any resulting patents, and technology; and
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K. For such other and Iurther relieI as the Court deems just and proper.
RespectIully submitted,
Dated: June 26, 2014 s/J. Mark Holland
J. Mark Holland
3. MARK HOLLAND & ASSOCIATES
Attorney Ior PLAINTIFF ALLERGIA
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DEMAND FOR 3URY TRIAL
Pursuant to Rule 38(b) oI the Federal Rules oI Civil Procedure, demand is
hereby made Ior trial by jury on all issues properly triable by jury.
RespectIully submitted,
Dated: June 26, 2014 s/J. Mark Holland
J. Mark Holland
3. MARK HOLLAND & ASSOCIATES
Attorney Ior PLAINTIFF ALLERGIA
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