UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA

Schlagel, Inc., Plaintiff, v. S-M Enterprises, Inc., Defendant.

Court File No. ______________ DEMAND FOR JURY TRIAL

COMPLAINT FOR PATENT INFRINGEMENT AND JURY DEMAND Plaintiff Schlagel, Inc. (Schlagel) alleges as follows: PARTIES 1. Schlagel is a Minnesota corporation with a principal place of

business at 491 N. Emerson St., Cambridge, Minnesota 55008. 2. Upon information and belief, Defendant S-M Enterprises, Inc.

(S-M Enterprises) is a Minnesota corporation with a principal place of business at 2310 26th St S., Moorhead, MN 56560. JURISDICTION AND VENUE 3. This is an action for patent infringement arising under the patent

laws of the United States of America, 35 U.S.C. 1, et seq., including 35 U.S.C. 271. This Court has subject matter jurisdiction pursuant to 28 U.S.C. 1331
1

and 1338(a) in that this is a civil action arising out of the patent laws of the United States of America. 4. On information and belief, this Court has personal jurisdiction over

S-M Enterprises because: a. It is a corporation organized under Minnesota laws; b. Its principal place of business is in Minnesota; or c. It regularly conducts business in the State of Minnesota and therefore has substantial and continuous contacts within this judicial district; because S-M Enterprises purposefully avails itself of the privileges of conducting business in this judicial district; or because S-M Enterprises has committed acts giving rise to Schlagel's claims within this judicial district. 5. Venue in this District is proper pursuant to 28 U.S.C. 1391(b)-(c)

and 1400(b) because, on information and belief, S-M Enterprises has committed acts giving rise to Schlagel's claims in this district, and S-M Enterprises resides or may be found in this district. FACTUAL BACKGROUND 6. Schlagel has been an industry leader since 1957 in the design and

manufacture of grain handling equipment.

7.

Schlagels pioneering efforts have brought innovation to the

industrys handling methods through enhancements to equipment design and increased machine capabilities and capacities. 8. Schlagel employees, including its co-founder William A. Schlagel,

patented a number of inventions that relate to the design and manufacture of grain handling equipment. 9. Schlagel is the assignee of a number of patents related to the

design and manufacture of grain handling equipment, including U.S. Patent 5,593,019 entitled Chain Return Support, which issued January 14, 1997 (the 019 Patent). William A. Schlagel is the inventor of the inventions claimed in the 019 Patent. 10. Schlagel owns all right, title, and interest in the 019 Patent,

including exclusive rights to bring suit with respect to any past, present, and future infringement thereof. 11. In addition to patenting technologies related to the design and

manufacture of grain handling equipment, Schlagel competes in these markets. Schlagel is a leading manufacturer of grain handling equipment. 12. Among the products that Schlagel makes and sells are grain

conveyors that have a chain return, which practices one or more claims of the 019 Patent.
3

13.

On information and belief, S-M Enterprises makes, uses, sells

or offers to sell grain conveyors that have a chain return. 14. Grain conveyors are often installed on private property and in

locations that are difficult to access, such as the top of a grain elevator. 15. The chain return of a grain conveyor is typically covered by an

outer casing, which typically prevents visual inspection of the chain return mechanism when the grain conveyor is installed for use. 16. On or around November 14, 2012, a Schlagel employee inspected

a S-M Enterprises grain conveyor that incorporated a chain return. This was the first known time a Schlagel employee observed the chain return of a S-M Enterprises grain conveyors chain return. 17. On or around November 20, 2012, a second Schlagel employee

inspected the same S-M Enterprises grain conveyor that incorporated a chain return. This employee also observed the chain return of the S-M Enterprises grain conveyor. 18. On information and belief, S-M Enterprises has made or sold

other grain conveyors that incorporate the same or similar chain return as the one observed by Schlagels employees.

19.

On or around December 12, 2012, Schlagels attorney wrote Dale

Niemi, CEO of S-M Enterprises, and informed S-M Enterprises that its grain conveyors infringe the 019 Patent. COUNT ONE INFRINGEMENT OF U.S. PATENT NO. 5,593,019 20. Schlagel incorporates by reference paragraphs 1 through 19 of this

Complaint and realleges them as though fully set forth herein. 21. On January 14, 1997, the United States Patent and Trademark

Office (PTO) issued the 019 Patent. A copy of the 019 Patent is attached as Exhibit A and incorporated into this Complaint. 22. Schlagel is the owner by assignment of all rights, title and interest in

and to the 019 Patent. 23. Schlagel marks its products with the 019 Patent in accordance with

35 U.S.C. 287, and has continuously for at least the last six years. 24. S-M Enterprises is making, using, offering to sell, or selling

conveyors with chain returns in the United States of America, including within the State of Minnesota. 25. S-M Enterprises has been and is now infringing (literally or under the

doctrine of equivalents), contributorily infringing, or actively inducing infringement of the 019 Patent. The infringing acts include, but are not limited to, making, using, offering to sell, or selling, in the United States of America conveyors
5

with chain returns falling within the scope of one or more claims of the 019 Patent, including but not limited to claim 1. S-M Enterprises is liable for infringement of the 019 Patent pursuant to 35 U.S.C. 271. 26. As a consequence of S-M Enterprises infringement, Schlagel is entitled to

recover damages adequate to compensate it for the infringement complained of herein, but in no event less than a reasonable royalty. 27. The infringement by S-M Enterprises has injured and will continue to

injure Schlagel, unless and until such infringement is enjoined by this Court. 28. Upon information and belief, S-M Enterprises has had knowledge of

its infringement of the 019 Patent since before the filing of this lawsuit, yet S-M Enterprises continues to infringe the 019 Patent. S-M Enterprises infringement of the 019 Patent is willful, entitling Schlagel to increased damages under 35 U.S.C. 284 and to attorneys fees and costs incurred in the prosecution of this action under 35 U.S.C. 285. PRAYER FOR RELIEF WHEREFORE, Schlagel respectfully requests that the Court enter judgment as follows: A. adjudging that the 019 Patent is enforceable and not invalid;

B.

adjudging that S-M Enterprises infringes, has infringed, has

contributed to infringement or has induced infringement of the 019 Patent, and that such infringement has been willful; C. enjoining S-M Enterprises and its affiliates, subsidiaries, officers,

directors, employees, agents, representatives, licensees, successors, assigns, and all those acting for them and on their behalf, or acting in concert with them, from further infringement of the 019 Patent; D. interest; E. awarding treble damages to Schlagel for Defendants willful awarding compensatory damages to Schlagel, together with

infringement of the 019 Patent; F. ordering a post-trial accounting of damages for the period of

infringement of the 019 Patent following the period of damages established by Schlagel at trial in accordance with 28 U. S.C. 1292(c)(2); G. awarding Schlagel its costs and attorneys fees pursuant to 35

U.S.C. 285; and, H. proper. awarding Schlagel such other and further relief as it deems just and

DEMAND FOR JURY TRIAL Plaintiff Schlagel hereby demands a jury trial on all issues so triable.

Dated: February 25, 2013

GRAY, PLANT, MOOTY, MOOTY & BENNETT, P.A.

s/Dean C. Eyler Dean C. Eyler (MN #267491) Loren L. Hansen (MN #387812) 500 IDS Center 80 South Eighth Street Minneapolis, Minnesota 55402 (612) 632-3000 Telephone (612) 632-4016 Facsimile dean.eyler@gpmlaw.com loren.hansen@gpmlaw.com
GP:3351619 v1