2COMPLAINT 123456789101112131415161718192021222324252627287.Venue is proper in this District under 28 U.S.C. §§ 1391(b) and (c) as both parties are residents in this District, the claim arises in this Judicial District, and the injury suffered by LMT took place in this Judicial District. GENERAL ALLEGATIONS 8.LMT is in the business of manufacturing unique metallic parts and components that possess an amorphous glass like structure with unique metallic properties and characteristics that enable precision parts with little no shrinkage and no weak regions. LMT’s amorphous metals are created in a unique molding process that freezes the random atomic structure of molten metal into a solid metal part. Consequently, LMT is the world leader in amorphous metal manufacturing and has licensed its technology to a number of companies, including Apple, for exclusive use in the field of consumer electronics. 9.LMT has invested significant resources over a long period of time in building its business and brand, and consequently is the registered owner of the trademark “LIQUIDMETAL” in the U.S. Patent & Trademark Office across myriad registrations including Reg. No. 3610314, Reg. No. 4732528, Reg. No. 3633282, Reg. No. 2312889, across myriad classes related to alloy and metal structures and items and amorphous metals (hereafter “Mark” or “Marks”). 10.Defendant LMC was once an LMT business line that LMT spun out several years ago. LMC was and is in the business of coating products with an alloy material, but not actually manufacturing the products like LMT. As part of the divestiture process, LMC was granted a limited license to use the mark “Liquidmetal” only with respect to its coating business and not with respect to any other business such as, but not limited to, LMT’s business area. 11.Kang has publicized jury verdicts of federal mail fraud and securities fraud against him. 12.LMT seeks nothing to do with Kang professionally or businesswise and seeks no affiliation or association with him. Case 8:19-cv-00890-DOC-KES Document 1 Filed 05/13/19 Page 3 of 13 Page ID #:3
3COMPLAINT 1234567891011121314151617181920212223242526272813.Defendants have advertised the LMT name and Marks on the internet and in promotional materials and to potential customers as follows: a.Kang has started a website located at www.johnkangliquidmetal.com that claims he is “John Kang of Liquidmetal Technologies parent company LM Group Holdings, Inc.” That claim is false as he is not a member, agent or employee of LMT, nor is he affiliated with, or “of,” LMT in any manner; and nor is “LM Group Holdings, Inc.” the parent company of LMT, and as such he has misappropriated LMT’s business goodwill that LMT heavily advertises. b.Kang’s website also misappropriates LMT’s business goodwill or style of doing business in other ways. Specifically, he repeatedly uses LMT’s marks in myriad ways that are infringing uses and are not fair uses of the mark, and are indeed and instead uses of the LMT Mark designed to constantly repeat the word “Liquidmetal” so as to drive traffic to his website when people may search using LMT’s Mark and confuse customers into believing that Kang or LMC are in the LMT business space or affiliated with LMT and in a manner that intentionally does not make clear he is not affiliated at all with LMT. i.For example, the Marks above are used constantly after the words “John Kang” as if Liquidmetal is his surname and in a manner that is not even grammatically correct, but which manner of use insures the Mark is constantly used so as to drive search engine traffic, such as for example “John Kang Liquidmetal” is repeatedly used as a headline and then text will state “Restrictions on John Kang’s Liquidmetal.” ii.He claims that the “most exciting applications of John Kang’s Liquidmetal” include the Apple iPhone which he claims is one of “our top most exciting applications for Case 8:19-cv-00890-DOC-KES Document 1 Filed 05/13/19 Page 4 of 13 Page ID #:4
4COMPLAINT 12345678910111213141516171819202122232425262728Liquidmetal.” In truth and fact, neither LMC nor Kang have any relationship with Apple and instead LMT has licensed its technology to Apple for exclusive use in the field of consumer electronics. Kang’s use of the Mark is designed to trade off the goodwill LMT possesses in its Marks and its relationship with Apple. iii.His About page states “John Kang Liquidmetal Technologies” and that “at present John Kang of Liquidmetal Technologies Inc. is responsible for the overall vision and strategy...” but he is in fact not of LMT, with LMT or part of LMT at all, and nor is he responsible for any of LMT’s vision or strategy. iv.The Experience page also, similarly and falsely, claims “John Kang of Liquidmetal Technologies Inc.” v.His site’s repeat use of the Marks after his name expressly and impliedly state or claim that is part of LMT or affiliated with LMT when in fact that is false and LMT has nothing to do with him and wants nothing to do with him, given his unsavory past. vi.His Twitter and Pinterest social media names/handle are not just his actual name, i.e., “John Kang” but instead are “John Kang Liquidmetal” which is also false and misleading as to consumers as to his relationship or affiliation with LMT and unlawful infringement as to his use of the LMT Marks in his social media advertising. c.As a result of this above course of false advertising conduct, Kang and LMC approached customers using the “Liquidmetal” name and mark for non-coating business offerings and thereby led customers to believe those Case 8:19-cv-00890-DOC-KES Document 1 Filed 05/13/19 Page 5 of 13 Page ID #:5
5COMPLAINT 12345678910111213141516171819202122232425262728customers were doing non-coating, alloy business with LMT or an LMT affiliate when in fact they were talking to LMC and when LMC has no license to the LMT bulk metallic technology. 14.Kang and LMC have created PowerPoint Presentations that claim LMC is in the liquid amorphous metal space, when it is not in fact in the amorphous alloy space at all and is instead only allowed to use the Mark for the coating space. The intentional use of the word “amorphous” in Defendants’ presentations is designed to confuse customers into thinking LMC is involved in the business space of LMT because the word amorphous in this space connotes that one is in the amorphous alloy business, when Defendants are not, and is false and intentionally misleading and confusing. 15.LMC’s highly-limited license to use the mark “Liquidmetal” only for its coating business requires that any deviation from LMT’s stylized version of the Mark needs written approval. But on both the customer presentations and above website, this has not been complied with. 16.LMC’s highly-limited license does not allow use of the mark outside the coating business and expressly LMC may not affix the mark “Liquidmetal” to any products beyond the coating business and may not use the mark in connection with any marketing or sales of any products other than coatings ones. But LMC has used the mark for non-coating marketing and advertising presentations. 17.Kang and LMC were notified several months ago to cease and desist in the unlawful advertising activity identified herein, all of which they knew or should have known was materially misleading and confusing, and none of which LMT authorized or consented to. Kang originally agreed to make modifications to the website, recognizing therefore that his advertising conduct was improper and misleading. But then he reneged, rendering the ongoing actions reckless and indeed willful. Case 8:19-cv-00890-DOC-KES Document 1 Filed 05/13/19 Page 6 of 13 Page ID #:6
6COMPLAINT 12345678910111213141516171819202122232425262728FIRST CAUSE OF ACTION (Federal Trademark Infringement – 15 U.S.C. § 1114(1) – Against All Defendants) 18.LMT repeats, realleges, and incorporates Paragraphs 1-17 as though fully set forth in this cause of action. 19.LMT owns the Marks and has used them continuously in commerce to advertise the LMT business and product offerings. 20.Defendants’ use in commerce of the Marks in connection with offerings to customers and marketing and promotional materials was done at little or no cost to LMC and was not done with the consent of LMT and is not consented to by LMT, and constitutes trademark infringement of LMT’s rights in the Marks under 15 U.S.C. § 1114(1). 21.Defendants’ use in commerce of the Marks in connection with services is likely to cause confusion, or to cause mistake, or to deceive consumers, who are likely to believe erroneously that LMT is affiliated with, originates from, or is otherwise affiliated, connected, or associated with Defendants, when in fact it is not. Defendants’ uses of LMT’s Marks are without LMT’s consent or license. 22.Defendants have knowingly and willfully infringed LMT’s trademark rights by deliberately exploiting the goodwill associate with LMT’s Marks. Defendants have diverted customers looking for LMT to itself or other vendors. The infringement is thus knowing, willful, and deliberate, and exceptional under 15 U.S.C. § 1117. 23.LMT has no adequate remedy at law. Defendants’ conduct as alleged herein has caused, and if not enjoined, will continue to cause irreparable harm to LMT’s rights and to its business reputation and goodwill, as well as damages that cannot accurately be computed at this time but will be proven at trial. Case 8:19-cv-00890-DOC-KES Document 1 Filed 05/13/19 Page 7 of 13 Page ID #:7
7COMPLAINT 12345678910111213141516171819202122232425262728SECOND CAUSE OF ACTION (Federal False Designation of Origin – 15 U.S.C. § 1125(a) – Against All Defendants) 24.LMT repeats, realleges, and incorporates Paragraphs 1-23 as though fully set forth in this cause of action. 25.Prior to any use in commerce of the Marks by Defendants, LMT used the Marks in connection with its brand and service offerings. 26.Defendants’ use in commerce of the Marks in connection with service offerings in LMT’s space (and outside the limited Coatings Business space) is likely to cause confusion, or to cause mistake, or to deceive consumers, who are likely to believe erroneously that Defendants originate from the same source as LMT, or is otherwise affiliated, connected, or associated with LMT, or sponsored or approved by LMT, when in fact it is not. 27.Defendants have knowingly and willfully infringed LMT’s trademark rights and engaged in this false description of fact in commerce by deliberately exploiting the goodwill associate with LMT’s Marks and by deliberately misrepresenting Defendants characteristics in commerce. Defendants have diverted customers looking for LMT to itself or other vendors. Defendants’ trademark infringement and false designation of origin is thus knowing, willful, and deliberate, making this an exceptional case under 15 U.S.C. § 1117. 28.LMT has no adequate remedy at law. Defendants’ conduct as alleged herein has caused, and if not enjoined, will continue to cause irreparable harm to LMT’s rights and to her business reputation and goodwill, as well as damages that cannot accurately be computed at this time but will be proven at trial. / / / / / / / / / Case 8:19-cv-00890-DOC-KES Document 1 Filed 05/13/19 Page 8 of 13 Page ID #:8
8COMPLAINT 12345678910111213141516171819202122232425262728THIRD CAUSE OF ACTION (Common Law Trademark Infringement and False Designation of Origin Against All Defendants) 29.LMT repeats, realleges, and incorporates Paragraphs 1-28 as though fully set forth in this cause of action. 30.Defendants’ conduct, as alleged in the two causes of action above and incorporated herein, has been undertaken willfully and maliciously, and with full knowledge and in conscious disregard of LMT’s rights. FOURTH CAUSE OF ACTION (Common Law Unfair Competition Against All Defendants) 31.LMT repeats, realleges, and incorporates Paragraphs 1-30 as though fully set forth in this cause of action. 32.By virtue of its conduct as alleged herein, Defendants have engaged and is engaging in unfair competition and passing off under California common law, causing competitive injury to LMT. 33.As well as harming the public, Defendants’ conduct as alleged herein has caused and will continue to cause LMT irreparable harm for which there is no adequate remedy at law, and is also causing damage to LMT in an amount which cannot be accurately computed at this time but will be proven at trial. 34.Defendants’ actions were undertaken intentionally to obtain an unfair advantage over LMT and in conscious disregard of LMT’s rights, and were malicious, oppressive, and/or fraudulent. LMT requests punitive or exemplary damages under California Civil Code § 3294(a) to punish and deter Defendants. FIFTH CAUSE OF ACTION (California Statutory Unfair Competition – California Business and Professions Code § 17200, et seq. – Against All Defendants)35.LMT repeats, realleges, and incorporates Paragraphs 1-34 herein. Case 8:19-cv-00890-DOC-KES Document 1 Filed 05/13/19 Page 9 of 13 Page ID #:9
9COMPLAINT 1234567891011121314151617181920212223242526272836. Defendants’ use in commerce of the Marks in connection withoffering of competing business offerings violates LMT’s rights, and is a willful and intentional attempt to trade on LMT’s goodwill, reputation, and financial investment in the Marks. 37. By reason of Defendants’ conduct as alleged herein, Defendants haveengaged in unlawful, unfair, and/or fraudulent ongoing business practices in violation of California Business & Professions Code § 17200. 38. As a direct result of Defendants’ unfair competition, Defendants haveunlawfully acquired, and continues to acquire on an ongoing basis, an unfair competitive advantage and has engaged in, and continues to engage in, wrongful conduct to Defendant’s monetary advantage and to the injury and detriment of LMT. 39. Defendants’ illegal and unfair business practices are continuing, andinjunctive relief under § 17203 is necessary to restrain further violations. PRAYER FOR RELIEF WHEREFORE, judgment against Defendants should issue as follows: a. That the Court preliminarily and permanently enjoin Defendants, theirsubsidiaries, parent and affiliated companies, successors, assigns, officers, directors, agents, partners, servants, employees, licensees, licensors and attorneys of those companies or individuals, and all others in active concert or participation with Defendant, from: (1) using the Marks, and any other mark, word, name, or domainname that is likely to cause confusion with the Marks onDefendant’s Website, in Defendant’s promotional andmarketing materials, or in any of Defendant’s advertising andmarketing materials including Twitter, Pinterest, or other socialmedia;Case 8:19-cv-00890-DOC-KES Document 1 Filed 05/13/19 Page 10 of 13 Page ID #:10
10COMPLAINT 12345678910111213141516171819202122232425262728(2) publishing any false statements of fact about LMT or about anyrelationship between LMT and Defendant; and(3) engaging in any false advertising that implies Defendant isaffiliated with LMT in the non-coatings business.b. That the Court order Defendants to regularly file with the Court andserve on LMT an affidavit setting forth in detail the manner and form in which it has complied with the terms of the injunction; c. That the Court require Defendants to account for and pay to LMT theamount of all profits derived by Defendants as a result of the acts alleged in this action; d. That the Court order Defendants to pay to LMT the amount of alldamages incurred by LMT by reason of Defendants’ misconduct alleged in this action, such amount to be proven at trial; e. That the Court treble any damages award under 15 U.S.C. § 1117;f. That the Court also order Defendants to pay compensatory damages inan amount to allow for corrective advertising; g. That the Court assess punitive damages against Defendants to punishand deter Defendants and others from engaging in similar conduct in the future; h. That the Court award LMT the costs of this action, together withreasonable attorneys’ fees finding this an exceptional case under the Lanham Act; i. That the Court order restitution; and/ / / / / / / / / Case 8:19-cv-00890-DOC-KES Document 1 Filed 05/13/19 Page 11 of 13 Page ID #:11
11COMPLAINT 12345678910111213141516171819202122232425262728j. For such other and further relief as the Court deems just and equitable.Dated: May 13, 2019 ONE LLP /s/ Peter R. Afrasiabi Peter R. AfrasiabiChristopher W. ArledgeJenny S. Kim Attorneys for PlaintiffLIQUIDMETAL TECHNOLOGIES, INC.Case 8:19-cv-00890-DOC-KES Document 1 Filed 05/13/19 Page 12 of 13 Page ID #:12
