Free Proposed Order - District Court of California - California

Case 5:07-cv-04507-JF

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1 ROBERT J. YORIO (SBN 93178) [email protected] 2 COLBY B. SPRINGER (SBN 214868) [email protected] 3 CHRISTINE S. WATSON (SBN 218006) [email protected] 4 CARR & FERRELL LLP 2200 Geng Road 5 Palo Alto, California 94303 Telephone: (650) 812-3400 6 Facsimile: (650) 812-3444 7 Attorneys for Plaintiff ACTICON TECHNOLOGIES LLC 8 9 10 11 12 13 ACTICON TECHNOLOGIES LLC, 14 15 v. Plaintiff, [PROPOSED] TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW CAUSE FOR PRELIMINARY INJUNCTION CASE NO. C 07-4507 JF (HRL) UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION

16 PRETEC ELECTRONICS CORPORATION, a dissolved California corporation; PTI 17 GLOBAL, INC., a California corporation; CHIU FENG CHEN, an individual; GORDON 18 YU, an individual; TOMMY HO, an individual; ROBERT WU, an individual; GRACE YU, an 19 individual; KUEI LU, an individual; and DOES 1 through 20, 20 Defendants. 21 22

Having reviewed Plaintiff ACTICON TECHNOLOGIES LLC's ("ACTICON") Complaint

23 and its Ex Parte Application for Temporary Restraining Order and Motion for Preliminary 24 Injunction, its Memorandum of Points and Authorities in Support of ACTICON's Ex Parte Motion 25 for Temporary Restraining Order and Motion for Preliminary Injunction, the supporting 26 Declaration of Christine S. Watson dated October 4, 2007, and the exhibits attached thereto, and 27 upon all other papers and proceedings herein, the Court hereby issues this Temporary Restraining 28 Order and Order to Show Cause for a Preliminary Injunction. It appears from ACTICON's written -1[Proposed] Temporary Restraining Order and Order to Show Cause for Preliminary Injunction C 07-4507 JF (HRL)

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1 submissions and declarations that ACTICON will suffer immediate and irreparable injury before 2 the adverse parties can be heard in opposition. Further, because of the nature of the allegedly 3 fraudulent acts, notice to the adverse party is not required. Pursuant to Fed.R.Civ.P. 65, the 4 grounds for this Order, as set forth in ACTICON's Complaint, brief, declaration and exhibits are as 5 follows: 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1. Plaintiff ACTICON is a limited liability company, which has its principal place of business in Suffern, New York. ACTICON is the owner of the entire right, title and interest in U.S. Patent Nos. 4,603,320 (the "`320 Patent"); 4,543,450 (the "`450 Patent"); 4,972,470 (the "`470 Patent"); and 4,686,506 (the "`506 Patent") (collectively, the "Patents-in-Suit"), which describe various forms of electronic connectors. 2. Defendant PRETEC ELECTRONICS CORPORATION ("PRETEC") was a California corporation, until its dissolution on or about November 28, 2006. Defendant PTI GLOBAL, INC. is a California corporation, which was formerly known as Pretec Technology, Inc. and has its principal place of business in Fremont, California. PRETEC designed, manufactured, marketed, distributed, imported, sold and/or offered for sale in the United States PCMCIA, CompactFlash and Secure Digital I/O form factor electronic connectors prior to its dissolution and that PTI GLOBAL, INC. continues to operate PRETEC's business, selling PRETEC brand name products on its web site, from its Amazon.com online marketplace storefront and from its principal place of business. 3. The Court has personal jurisdiction over each of the defendants ("DEFENDANTS") based upon the fact that each defendant resides and/or conducts business in or around Fremont, California. This Court has subject matter jurisdiction under 28 U.S.C. sections 1331 and 1338(a) because the Complaint alleges infringement claims under the United States Patent Act (35 U.S.C. § 271 et seq.). 4. On August 1, 2006, ACTICON filed a patent infringement action titled, Acticon Technologies LLC v. Pretec Electronics Corp., et al., in the United States District Court for the Northern District of California, Case No. C 06-4679 JF (HRL) ("FIRST COMPLAINT"). In a series of improper actions, PRETEC evaded court process by failing -2[Proposed] Temporary Restraining Order and Order to Show Cause for Preliminary Injunction C 07-4507 JF (HRL)

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to respond to the FIRST COMPLAINT, failing to appear at the Initial Case Management Conference which had been re-scheduled at PRETEC's request after the entry of PRETEC's default, filing for corporate dissolution without responding to the FIRST COMPLAINT or notifying the Court or counsel for ACTICON and continuing to do business subsequent to its dissolution as PTI GLOBAL, INC. 5. It is likely that ACTICON will be able to establish that PRETEC improperly filed for dissolution with the California Secretary of State on or about November 28, 2006. 6. PRETEC transferred its assets to Pretec Technology, Inc., which changed its name to PTI GLOBAL, INC. one month before PRETEC filed for dissolution, without receiving a reasonably equivalent value in exchange for the transfer and engaged in a transaction for which its remaining assets were unreasonably small in relation to the transactions. Despite PRETEC's dissolution, PRETEC's products continue to be sold by PTI GLOBAL, INC. 7. A plaintiff is entitled to preliminary injunctive relief when it demonstrates (1) a strong likelihood of success on the merits, (2) the possibility of irreparable injury to the plaintiff if preliminary relief is not granted, (3) a balance of hardships favoring the plaintiff, and (4) advancement of the public interest by granting the injunction. 8. Alternatively, a plaintiff is entitled to preliminary injunctive relief when it demonstrates either (1) a combination of probable success on the merits and the possibility of irreparable injury, or (2) the existence of serious questions going to the merits and that the balance of hardships tips sharply in its favor. 9. ACTICON is likely to succeed on the merits of its fraudulent transfer of assets claim under California Civil Code Section 3439 and improper dissolution claim under California Corporations Code Section 1903(c). 10. DEFENDANTS' acts described above will cause immediate and irreparable injury, loss and harm to ACTICON unless such acts are immediately enjoined and restrained by Order of this Court. 11. The balance of hardships favors enjoining and restraining DEFENDANTS' acts described above since ACTICON will be immediately and irreparably injured if DEFENDANTS are -3[Proposed] Temporary Restraining Order and Order to Show Cause for Preliminary Injunction C 07-4507 JF (HRL)

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not restrained and enjoined. There is relatively little to no harm or prejudice that PTI GLOBAL, INC. will suffer if it is restrained and enjoined from transferring its assets to any other entity or the INDIVIDUAL DEFENDANTS, except for those sales, removals or transfers which ordinarily occur during the normal course of business, during the pendency of this litigation. 12. Preserving the status quo by restraining and enjoining DEFENDANTS' acts described above advances the public interest of upholding legal process in the court system. THEREFORE, IT IS HEREBY ORDERED that from the effective date of this Order,

9 DEFENDANTS, together with all their officers, agents, servants, employees, representatives, 10 attorneys and assigns, and all other persons, firms or companies in active concert or participation 11 with them are temporarily restrained from directly or indirectly: 12 13 14 15 16 17 18 19 20 21 22 23 24 25 c. b. a. Transferring, selling, hypothecating or otherwise moving or removing any assets (including cash and any other monetary deposits or accounts) of Defendant PTI GLOBAL, INC. to the DEFENDANTS or any defendant's parent companies, subsidiaries, officers, directors, attorneys, agents, affiliates or anyone acting in concert with any defendant; Transferring, selling, hypothecating or otherwise moving or removing any of the Accused Products to the DEFENDANTS or any defendant's parent companies, subsidiaries, officers, directors, attorneys, agents, affiliates or anyone acting in concert with any defendant; and Transferring, selling, hypothecating or otherwise moving or removing any assets (including cash and any other monetary deposits or accounts) of Defendant PTI GLOBAL, INC. to any business entity or individual, except for transactions occurring in the ordinary course of business. IT IS FURTHER ORDERED that DEFENDANTS or their attorneys show cause on the

26 ______ of October, 2007, at _____ o'clock, __.m., or as soon thereafter as counsel can be heard, in 27 Courtroom 3, United States District Court, 280 South First Street, Fifth Floor, San Jose, California 28 95113, why an Order should be issued granting ACTICON a preliminary injunction, pursuant to -4[Proposed] Temporary Restraining Order and Order to Show Cause for Preliminary Injunction C 07-4507 JF (HRL)

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1 Rule 65 of the Federal Rules of Civil Procedure, enjoining and restraining DEFENDANTS, 2 together with all of their officers, agents, servants, employees, representatives, attorneys and 3 assigns and all other persons, firms or companies in active concert or participation with them from 4 directly or indirectly: 5 6 7 8 9 10 11 12 13 14 15 16 17 18 c. b. a. Transferring, selling, hypothecating or otherwise moving or removing any assets (including cash and any other monetary deposits or accounts) of Defendant PTI GLOBAL, INC. to the DEFENDANTS or any defendant's parent companies, subsidiaries, officers, directors, attorneys, agents, affiliates or anyone acting in concert with any defendant; Transferring, selling, hypothecating or otherwise moving or removing any of the Accused Products to the DEFENDANTS or any defendant's parent companies, subsidiaries, officers, directors, attorneys, agents, affiliates or anyone acting in concert with any defendant; and Transferring, selling, hypothecating or otherwise moving or removing any assets (including cash and any other monetary deposits or accounts) of Defendant PTI GLOBAL, INC. to any business entity or individual, except for transactions occurring in the ordinary course of business. IT IS FURTHER ORDERED that this Order shall be effective upon the posting of security by

19 ACTICON in the amount of $_________, for the payment of such costs and damages as may be 20 incurred or suffered by DEFENDANTS if DEFENDANTS are found to have been wrongfully 21 restrained. 22 IT IS FURTHER ORDERED that DEFENDANTS serve any papers in opposition to

23 ACTICON's Ex Parte Application for Temporary Restraining Order and Motion for Preliminary 24 Injunction by hand upon Carr & Ferrell LLP, 2200 Geng Road, Palo Alto, California 94303, 25 attorneys for ACTICON, at or before _____ o'clock, __.m., on October _____, 2007. 26 IT IS FURTHER ORDERED that service of a copy of this Order and the papers annexed

27 thereto on the DEFENDANTS should be deemed sufficient if served on or before October _____, 28 2007, upon DEFENDANTS at PTI GLOBAL, INC.'s principal place of business, as follows: 231 -5[Proposed] Temporary Restraining Order and Order to Show Cause for Preliminary Injunction C 07-4507 JF (HRL)

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1 Whitney Place, Fremont, California, 94539. 2 3 4 Dated: October _________, 2007 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -6[Proposed] Temporary Restraining Order and Order to Show Cause for Preliminary Injunction C 07-4507 JF (HRL) __________________________ HON. JEREMY FOGEL United States District Judge