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Randy Lipsitz, Esq. (RL-1526) Matthew Olinzock, Esq. (M0-3111) KRAMER LEVIN NAFTALIS & FRANKEL LLP 1177 Avenue of the Americas New York, NY 10036 Telephone: 212.715.9100 Facsimile: 212.715.8000 David W. Axelrod, Esq., pro hac vice to be filed Devon Zastrow Newman, Esq., pro hac vice to be filed SCHWABE, WILLIAMSON & WYATT, P.C. 1211 S.W. 5th Avenue, Suite 1600 Portland, OR 97204 Telephone: 503.222.9981 Facsimile: 503.796.2900
Attorneys for Plaintiff OutThy Technologies Corporation

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

OUTDRY TECHNOLOGIES CORPORATION, Civil Action No. Plaintiff,

V.

GEOX S.p.A.; S & A DISTRIBUTION, INC.; and S & A : RETAIL, INC., Defendants.

DEMAND FOR JURY TRIAL

COMPLAINT FOR PATENT INFRINGEMENT

Plaintiff OutDry Technologies Corporation ("OutDry") brings this Complaint for patent infringement against Defendants Geox S.p.A., S & A Distribution, Inc., and S & A Retail, Inc. (collectively, "the Geox Defendants") and alleges as follows:

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I. 1.

NATURE OF THE ACTION

This is an action for patent infringement arising under the patent laws of the

United States, including 35 U.S.C. 271 and 281-285. 2. This lawsuit pertains to the Geox Defendants' infringement of U.S. Patent

No. 6,855,171 the ("'171 Patent"), entitled "PROCESS FOR WATERPROOFING LEATHER AND LEATHER OBTAINED BY MEANS OF SAID PROCESS." 3. OutDry seeks injunctive and monetary relief against the Geox Defendants for

infringement of the '171 Patent. H. THE PARTIES 4. Plaintiff OutDry Technologies Corporation is a corporation organized and

existing under the laws of the state of Oregon, with its principal place of business at 14375 NW Science Park Drive, Portland, OR 97229. OutDry licenses its technology to companies that design, manufacture, import and market footwear, apparel, and outdoor equipment featuring its revolutionary waterproofing process covered by the '171 Patent in the United States and by corresponding patents in Italy, Germany, Spain, France, Great Britain, Portugal, and China. OutDry is a wholly owned subsidiary of Columbia Sportswear Company, also an Oregon
corporation.

5.

Defendant Geox S.p.A. is an Italian corporation having a principal place of

-

business at Via Feltrina Centro, 16

31044 Biadene di Montebelluna, Treviso, Italy. Upon

information and belief, Geox S.p.A is a subsidiary of Italian company LIR S.r.l. Upon information and belief, Geox S.p.A. designs, markets and sells footwear and apparel. 6. Defendant S & A Distribution, Inc. is a Delaware corporation with its principal

place of business located at 29 W 34 th Street, 3 Td Floor, New York, NY 10001-3069. Upon information and belief, S&A Distribution, Inc. is a subsidiary of Geox Holland, BV, itself a subsidiary of Geox S.p.A. 7. Defendant S & A Retail, Inc. is a Delaware corporation with its principal place of

business located at 29 W 34th Street, 3 rd Floor, New York, NY 10001-3069. Upon information 2

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and belief, S & A Retail, Inc. is a wholly-owned subsidiary of S & A Distribution, Inc. 8. Upon information and belief, the Geox Defendants together comprise and

establish a distribution network that manufactures the infringing Amphibiox-branded footwear described below in foreign countries and markets the products through this distribution network in the United States. III. JURISDICTION AND VENUE 9. This action arises under the Patent Laws of the United States, 35 U.S.C. 101 et

seq., including 35 U.S.C. 271. This Court has subject matter jurisdiction over this matter pursuant to 28 U.S.C. 1331, and 1338(a). 10. This Court has personal jurisdiction over S & A Distribution, Inc. because S & A

Distribution, Inc. has systematic and ongoing contact with this judicial district by virtue of its location of its principal place of business in this district. 11. This Court has personal jurisdiction over S & A Retail, Inc. because S & A Retail,

Inc. has systematic and ongoing contact with this judicial district by virtue of its location of its principal place of business in this district. 12. This Court has personal jurisdiction over Geox S.p.A. by virtue of Geox S.p.A.'s

complete control over the acts of infringement by S & A Distribution, Inc. and S & A Retail, Inc. within this judicial district and by reason of its creation and use of an established distribution network to market its infringing products in the United States. 13. This Court also has personal jurisdiction over the Geox Defendants because, on

information and belief, the Geox Defendants have purposefully directed activities at residents of this district by selling products that infringe the '171 Patent through at least one retail store in this district. The Geox Defendants have also sold infringing products to customers in the United States through retail stores elsewhere in the United States and through online sites operated by these defendants, including www.shopgeox.com . ClutDry's claim for infringement of the '171 Patent arises out of the Geox Defendants' sales of these infringing products. 14. Venue is proper in this judicial district with regard to alien company Geox S.p.A. -3LIPSITZIKU 2937893.1 067238/09002

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pursuant to 28 U.S. C. 1391(d). 15. Venue is proper in this judicial district with regard to S & A Distribution, Inc. and

S & A Retail, Inc. pursuant to 28 U.S.C. 1391(b)(1) and (c) because these defendants reside in this state and have principal places of business in this district, both at 29 W 34` 11 Street, 3'1 Floor, New York, NY 10001-3069.

IV. FACTUAL BACKGROUND OutDry Technologies Corporation and the Patented Invention
16. OutDry is the owner, by assignment, of all rights, title, and interest in the '171

Patent. The '171 Patent claims priority to an international application filed under the Patent Cooperation Treaty, PCT/IT99/00333, which claims priority to the original patent application filed in Italy by inventor Antonio Morlacchi on October 20, 1998. The application for the '171 Patent was filed April 19, 2001. Inventor Morlacchi assigned ownership of the application that became the '171 Patent to Nextec, s.r.l. ("Nextec"). The '171 Patent was fully examined by the United States Patent and Trademark Office and was duly and legally issued to Nextec on February 15, 2005. 17. Columbia Sportswear Company purchased Nextec in 2010, and established

OutDry Technologies Corporation in Oregon as owner by assignment of the '171 Patent. Columbia Sportswear Company and its affiliated companies, Montrail Corporation and Mountain Hardwear, Inc., manufacture and sell products under licenses to the '171 patent. 18. The subject matter of the '171 Patent generally is a revolutionary method of

waterproofing leather through bonding of a waterproof but breathable membrane directly to the leather using an adhesive that blocks some, but not all of the pores of the leather. Prior art boots used seam-sealed membranes inside the boot, but water would pool between the inside of the leather and the membrane layer, creating an uncomfortable "water cushion" between the wearer's foot and leather upper. 19. The technology of the '171 Patent addresses this issue through direct bonding of

the membrane to the inside of the upper leather. The membrane successfully blocks moisture -4-

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from penetrating beyond the leather into the inner portion of the boot, but smaller vapor molecules generated by the wearer can exit or "transpire" through the leather. This technology eliminates the former water cushion effect and leads to significantly enhanced wearer comfort. Products made through the patented process are particularly suited for outdoor use in footwear, gloves and other clothing items where standard manufacturing techniques based on seam-sealed waterproof fabrics are unsuitable and where leather is particularly desirable due to its comfortable but rugged characteristics. The '171 Patent also claims leather made using the claimed waterproofing process. 20. OutDry products made using the technology of the '171 Patent are sold

throughout the world via Internet direct sales, in brick-and-mortar Columbia Sportswear stores, and through product resellers, including under OutDry's registered trademark, OutDry. 21. OutDry products have enjoyed commercial success in the outdoor products

market, both for work-related and recreational uses. The patented process received the Volvo SportsDesign "EcoDesign" award in 2008 explaining that this designation recognized eight winners from more than 300 competitors judged using the following criteria: "functionality, form, innovative step, ergonomics, shape and produCtion, material, manufacturing, distribution, product life cycle, recyclability and usability."

Geox Defendants
22. Geox S.p.A. ("Geox") has shown interest in the technology of the '171 Patent

(hereafter "OutDry technology") since April 2006 when Geox's CEO, Diego Bolzonello, visited Nextec's booth at the Lineapelle fair in Bologna, Italy. Mr. Bolzonello subsequently initiated discussions between Nextec and Geox's Research and Development manager, Alessandro Sacilotto. 23. Geox representative Alessandro Sacilotto met with Nextec representatives Luca

Morlacchi and Giovanni Ostani on or about May 3, 2006, to discuss the OutDry technology and explore a potential business relationship between Geox and Nextec. During this meeting, Nextec generally described its OutDry technology. 5
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24.

At the meeting on May 3, 2006, Nextec advised Geox that Nextec had issued

patents and pending patent applications covering the OutDry technology 25. Geox requested a second meeting with Nextec representatives, which was held at

Geox on or about July 11, 2006. Geox asked to learn more information about the OutDry technology, and in particular asked to see a demonstration of the manufacturing process. Luca Morlacchi agreed to permit Geox representatives to view the manufacturing process at the OutDry Technology Center in China, provided Geox agreed to a non-disclosure agreement covering the viewing. Geox orally agreed to treat OutDry's manufacturing process as confidential OutDry information and to later sign a written non-disclosure agreement. 26. Pursuant to and in reliance on the oral non-disclosure agreement, Nextec

representatives Matteo Morlacchi and Johnny Huang took Alessandro Sacilotto on a tour of the OutDry Technology Center in China on or about July 12, 2006. Morlacchi provided a detailed description of the manufacturing process, which included performing the process on a sample of Geox footwear upper material provided by Geox from its Sherwood factory, to demonstrate how the process could be used with Geox materials. The finished material was provided to Mr. Sacilotto for his use in further discussions with Geox about potential business opportunities with Nextec. 27. Geox invited Nextec to a third meeting at Geox on September 6, 2006, to continue

discussions about potential business opportunities between the companies. Luca Morlacchi and Giovanni Ostani attended on behalf of Nextec and Alessandro Sacilotto on behalf of Geox. Morlacchi asked Sacilotto to sign the written non-disclosure agreement re-affirming the oral agreement that governed the companies' prior discussions and Geox's inspection of the Nextec technology. Sacilotto refused. 28. On or about September 19, 2006, Sacilotto advised that Geox did not wish to

continue further discussions regarding collaborating with Nextec. 29. In December 2009, LIR s.r.l. ("LIR"), an Italian holding company that wholly

owns Geox S.p.A., approached Nextec about a partnership. Geox expressed interest in acquiring -6LIPSITZ/KL3 2937893.1 067238/00002

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co-ownership of the waterproofing technology, which had by this time been awarded multiple patents worldwide, including the '171 Patent in the United States. 30. Nextec and LIR entered into discussions regarding a potential partnership

pursuant to a nondisclosure agreement dated January 5, 2010. Nextec disclosed information regarding its customers and business plans to LIR pursuant to the nondisclosure agreement. On January 19, 2010, LIR provided a letter of intent to Nextec, proposing a potential co-ownership of the OutDry technology. 31. Nextec declined to enter into partnership with LIR on the terms proposed. Later

in 2010 Nextec was purchased by Columbia Sportswear Company. In or about 2012, the Geox

Defendants released in the United States a line of footwear sold under the brand name "AMPHIBIOX." Examples of Geox's advertising regarding Amphibiox footwear can be found at: http://amphibiox.geox.com/. The Geox advertisements claim the Amphibiox footwear is constructed using a process identical to that used to make OutDry's products that are patented under the '171 Patent. Geox's website states under the "Technolo " tab:

Unlike traditional waterproof shoes which apply the membrane to

a shoes sock-like

inner lining, Geox applies the membrane directly to the inside of the upper shell. This

avoids leaving
32.

any space into which water could penetrate and accumulate.

Geox also advertises the Amphibiox footwear in a manner similar to OutDry,

using a graphic that shows elimination of the water cushion on its website:
Amphibiox

600 8

-. u 8 g 64 dn 0 64 08, t 00,
044

Traditional waterproof

dg0t1 '4g, a$d A 64 0 4 41 80 0

'

kJ,

ie

Pdhpletiox prevents water penetrahno the shoe,

whIch In

hadOioriel WaterNoot shoes

can lead to reduced bresaiablay and leave your feet reeling cold.

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The Geox website states its manufacture includes use of a "breathable waterproof membrane":

A breathable waterproof membrane Is used In the sole and upper construction of the shoe. Moisture mollecutes are hundreds of times smaller than the micro-pores in the
membrane, and so can easily pass through. Water mollecules however are thousands of

times larger than the micro-pores and can'it pass through. Therefor the membrane ensures that the shoes remains breathable yet waterproof.

33.

After careful examination of Amphibiox footwear, OutDry has concluded that the

Amphibiox footwear infringes OutDry's '171 Patent. V. COUNT I - INFRINGEMENT 34. above. 35. OutDry is informed and believes, and on that basis alleges, that the Geox OutDry restates and realleges each of the assertions set forth in Paragraphs 1- 33

Defendants' manufacture, import, use, offer to sell, and/or sale of the Amphibiox footwear products identified in this Complaint infringe, directly or indirectly, both literally and/or under the doctrine of equivalents, at least claims 1, 10 and 14 of the '171 Patent, in violation of 35 -829378931 067238/00092

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U.S.C. 271. 36. OutDry is informed and believes, and on that basis alleges, that the infringement

of the '171 Patent by the Geox Defendants has been and continues to be intentional, willful, and without regard to OutDry's rights. OutDry is informed and believes, and on that basis alleges, that the infringement of the '171 Patent by the Geox Defendants is and has been intentional, deliberate, and willful at least because the Geox Defendants had knowledge of the '171 Patent through direct communications with Nextec, as set forth in paragraphs 21-29. 37. OutDry is informed and believes, and on that basis alleges, that the Geox

Defendants have gained profits by virtue of their infringement of the '171 Patent. 38. OutDry has sustained damages as a direct and proximate result of the Geox

Defendants' infringement of the '171 Patent. 39. OutDry is entitled to recover from the Geox Defendants the damages sustained by

OutDry as a result of the Geox Defendants' wrongful acts in an amount subject to proof at trial and not less than a reasonable royalty, together with interest and costs as fixed by this Court under 35 U.S.C. 284. 40. The infringement by the Geox Defendants of the '171 Patent will continue to

cause OutDry irreparable injury and damage for which there is no adequate remedy at law unless and until the Geox Defendants are enjoined from infringing the '171 Patent.

VI. PRAYER FOR RELIEF

WHEREFORE, OutDry respectfully requests that the Court enter judgment in its favor against Defendants, granting the following relief: a. A judgment that the Geox Defendants have infringed, contributorily infringed,

and/or induced infringement of one or more claims of the '171 Patent literally and/or under the doctrine of equivalents; b. An order and judgment pursuant to 35 U.S.C. 283, permanently enjoining

Defendants and their agents, servants, officers, directors, employees, affiliated entities, parents, subsidiaries, divisions, successors and assigns, and all others acting in concert or participation
-

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with them, from further acts of infringement of the '171 Patent; c. A judgment awarding OutDry all damages adequate to compensate OutDry for

Defendants' acts of infringement of the '171 Patent, and in no event less than a reasonable royalty for the Geox Defendants' acts of infringement, including all pre-judgment and postjudgment interest at the maximum rate permitted by law; d. A judgment awarding OutDry all damages, including treble damages, based on

any infringement found to be willful, pursuant to 35 U.S.C. 284, together with prejudgment interest; f. Actual damages suffered by OutDry as a result of the Geox Defendants' unlawful

conduct, in an amount to be proven at trial, as well as prejudgment interest as authorized by law; g. A judgment that this is an exceptional case and an award to OutDry of its costs

and reasonable attorneys' fees incurred in this action as provided by 35 U.S.C. 285; and h. circumstances. VII. DEMAND FOR JURY TRIAL Pursuant to Fed. R. Civ. P. 38(b), OutDry respectfully requests a trial by jury of all issues so triable. Such other and further relief as the Court may deem just and proper under the

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Dated this `lip day of August. 2013. Respectfully submitted. KRA41 By: Randy Lipsitz,1:sq. (RI, ' 526) Matthew Oil ozock. 1:sq. (MO-31 1177 Avenue of the Americas New York, NY 10036 Telephone: 212.715.9100 Facsimile: 212.715.8000 WIN AlUALL'ic FRA

Attornox fir Plaintiff Out Dly Thehnologies Corporiaion

Of Counsel: David W. Me1rod, Esq., pro hoc vice to he illed Devon Zastrow Ncl.vman, Esq., pro hoc vice to he .filed SCI IWABE, WILLIAMSON & WYATT, P.C. 1211 S.W, 5 th Avenue, Suite 1600 Portland, OR 97204 Telephone: 503.222.9981 Facsimile: 503.796.2900