4:19-cv-00648
Bayco Products Inc v. Tim Goetz Associates LLC
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Bayco Products, Inc. (Texas)
- Defendant: Protorch Company, Inc. (Texas); Suzhou Protorch Co., Ltd. (People's Republic of China); Tim Goetz & Associates LLC (Wisconsin); and Hong Huang a/k/a Henry Huang (People's Republic of China)
- Plaintiff’s Counsel: Whitaker Chalk Swindle & Schwartz PLLC; Siebman Forrest Burg & Smith, LLP
- Case Identification: 4:19-cv-00648, E.D. Tex., 03/20/2020
- Venue Allegations: Venue is alleged to be proper based on Defendants' residence, incorporation in Texas, regular and established places of business, commission of infringing acts, and contractual agreements to be sued in Texas.
- Core Dispute: Plaintiff alleges federal and common law trademark and trade dress infringement, federal and state trade secret misappropriation, unfair competition, and breach of contract related to Defendants' portable lighting products.
- Technical Context: The dispute centers on the market for portable and corded lighting products, such as work lights, retractable cord reels, and clamp lights for industrial and consumer use.
- Key Procedural History: This filing is a First Amended Complaint. Notably, Plaintiff explicitly withdraws its patent infringement claims in this amendment. The complaint details a long history between the parties, including an OEM manufacturing relationship beginning in 2003 between Plaintiff and a company owned by Defendant Huang, and a subsequent 2010 Memorandum of Understanding addressing alleged patent infringement by Huang in China.
Case Timeline
| Date | Event |
|---|---|
| 2003 | Bayco begins OEM relationship with Minghui (owned by Defendant Huang) |
| 2005-04-07 | U.S. Design Patent D523,577 filing date |
| 2006-06-20 | U.S. Design Patent D523,577 issue date |
| 2010-03-31 | Bayco and Minghui memorialize OEM Agreement |
| 2010-04-26 | Bayco and Minghui sign Memorandum of Understanding regarding IP rights |
| 2010-10-28 | U.S. Design Patent D672,894 filing date |
| 2012-12-18 | U.S. Design Patent D672,894 issue date |
| 2016-12-22 | Defendant ProTorch U.S. is formed |
| Late 2017 | Defendant Goetz allegedly hired by ProTorch U.S. |
| 2017-2018 | ProTorch Defendants allegedly hire former Bayco manager Carlos Mendez |
| First Half 2018 | Goetz allegedly secures sales contract between ProTorch U.S. and Lowe's |
| 2020-03-20 | Plaintiff's First Amended Complaint is filed |
II. Technology and Patent(s)-in-Suit Analysis
As this First Amended Complaint explicitly withdraws all patent infringement claims, there are no active patents-in-suit for the purpose of an infringement analysis (Compl. p. 1, fn. 1). However, the complaint references two design patents as part of its broader allegations that Defendants copied Plaintiff's intellectual property to support claims of unfair competition and trade secret misappropriation.
U.S. Design Patent No. D523,577 - "Flourescent Task Lamp," issued June 20, 2006
The Invention Explained
This patent claims the ornamental design for a handheld fluorescent task lamp. The design consists of the visual characteristics of the lamp, including a cylindrical body with a textured, crisscross-patterned grip section, a transparent cage over the light element, and specific configurations for the head and base where the power cord exits (’577 Patent, Figs. 2-5). The complaint alleges that the design of "ProTorch's Task Lamp" is "substantially the same" as the design covered by this patent (Compl. ¶59).
Key Claims at a Glance
As a design patent, it contains a single claim: "The ornamental design for a flourescent task lamp, as shown and described" (’577 Patent, Claim). Infringement claims based on this patent have been withdrawn.
U.S. Design Patent No. D672,894 - "Dual Function Rechargeable Work Light," issued December 18, 2012
The Invention Explained
This patent claims the ornamental design for a wand-style rechargeable work light. The design's protected features include the light's overall slender, elongated form, a patterned surface on the light-emitting portion, a distinct handle shape, a hook at one end, and a faceted cap at the opposite end (’894 Patent, Figs. 1, 4-5). The complaint alleges that Defendants' "PT3214 Slim Rechargable Work Light" copies the ornamental design covered by the ’894 Patent (Compl. ¶58).
Key Claims at a Glance
The patent contains a single claim: "The ornamental design for a dual function rechargeable work light, as shown and described" (’894 Patent, Claim). Infringement claims based on this patent have been withdrawn.
III. The Accused Instrumentality
- Product Identification: The complaint identifies several accused products, including the "PT3214 Slim Rechargable Work Light," a "Task Lamp," and various retractable cord reels such as the "PTC700" and "PTC800" (Compl. ¶¶58, 59, 65-66).
- Functionality and Market Context: The complaint alleges these products are "knock-offs" and "virtually identical" to Plaintiff's corresponding products (Compl. ¶¶58-59). The allegations center on the assertion that Defendants' products are sold as direct replacements for Plaintiff's products in the same sales channels, such as Lowe's retail stores, and to the same customers (Compl. ¶¶41, 95, 107). The image provided in the complaint shows Defendants' PT3214 work light, which appears to be a handheld, portable lighting device (Compl. ¶58).
As Plaintiff has withdrawn its patent infringement claims in this First Amended Complaint (Compl. p. 1, fn. 1), the following sections pertaining to patent infringement allegations and claim construction are not applicable to the active claims in this case and are therefore omitted.
VI. Other Allegations
The core of the amended complaint rests on allegations of trademark infringement, trade dress infringement, and trade secret misappropriation.
- Trademark and Trade Dress Infringement: Plaintiff alleges that Defendants engaged in multiple forms of infringement. This includes the direct copying of Plaintiff's website "look and feel," specifically the black and red color scheme, layout, and product categories (Compl. ¶¶91-93). The complaint provides a side-by-side comparison of the two companies' "Products" webpages to illustrate the alleged similarity (Compl. ¶¶92-93). Further, it is alleged that Defendants copied the trade dress of Plaintiff's product packaging, described as a gray box with a distinctive red stripe and a "halo" effect behind the central product image (Compl. ¶97). The complaint also alleges infringement of its common law trademarks in its product part numbers, providing a visual comparison of Bayco's "FL-700" cord reel and ProTorch's "PTC700" cord reel (Compl. ¶65).
- Trade Secret Misappropriation: Plaintiff alleges a systematic scheme to misappropriate its trade secrets, which are defined to include pricing, customer lists, manufacturing specifications, and component molds (Compl. ¶¶21-22, 126). The alleged scheme involved hiring Plaintiff's former National Accounts Manager (Tim Goetz) and a former Plant Manager (Carlos Mendez) (Compl. ¶¶47, 78). The complaint asserts these individuals provided Defendants with confidential business and technical information, enabling them to "undermine Bayco's business model and undercut Bayco's pricing" (Compl. ¶81). The complaint further alleges that the products are so similar that they "appear to come from the same molds," supporting this with photographic evidence of disassembled products from both companies (Compl. ¶90).
- Breach of Contract: The complaint alleges that Defendant Huang, through his company Minghui, breached a 2010 OEM Agreement that included a "Business Secret" clause requiring confidentiality (Compl. ¶¶99-100). It is also alleged that Defendant Goetz breached a 2006 Manufacturer's Representative Agreement containing a "Confidential Information" clause that survived the termination of the agreement (Compl. ¶¶102-104).
VII. Analyst’s Conclusion: Key Questions for the Case
With the withdrawal of the patent claims, the litigation now centers on trademark, trade dress, and trade secret law. The key questions for the court will likely be:
- A central issue will be one of trademark and trade dress confusion: Will a fact-finder conclude that the "look and feel" of Defendants' websites, product packaging, and part numbers is so similar to Plaintiff's established presentation as to cause a likelihood of consumer confusion regarding the source or sponsorship of the products?
- A key evidentiary question will be one of trade secret misappropriation: Can Plaintiff prove that Defendants acquired and used specific, legally protected trade secret information (such as proprietary molds, pricing models, or customer data) through improper means, including the hiring of former employees and the alleged breach of confidentiality agreements, as opposed to through legitimate reverse engineering or independent development?
- A third question will relate to contractual breach: Does the evidence show that Defendants Huang and Goetz violated the express terms of their respective confidentiality agreements with Bayco by using or disclosing protected information to establish and promote the ProTorch enterprise, and if so, what damages resulted from that breach?