cold steel v crkt

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COMPLAINT

LightGabler LLP By: Glenn J. Dickinson (State Bar #159753) 760 Paseo Camarillo, Suite 300 Camarillo, CA 93010 (805) 248-7208 (805) 248-7209 (fax) [email protected]

Attorneys for Plaintiff Cold Steel, Inc.

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

COLD STEEL, INC., a California corporation,

Plaintiff,

vs.

COLUMBIA RIVER KNIFE & TOOL COMPANY, a business entity, form unknown; GB II CORPORATION, an Oregon corporation, dba COLUMBIA RIVER KNIFE & TOOL COMPANY; and DOES 1 through 10, inclusive.

Defendants.

Case No.

COMPLAINT for:

1. False Advertising, Lanham Act section 43

2. Unfair Competition, California Business & Professions Code section 17200 et seq.

Demand for Jury Trial

Plaintiff Cold Steel, Inc. (Cold Steel) complains of Defendants Columbia River Knife & Tool Company, GB II Corporation dba Columbia River Knife & Tool Company and Does 1-10, and alleges as follows:

1. This is an action for false advertising section 43(a) of the Lanham Act, 15 U.S.C. 1125(a); and for violation of related California state law. These claims address the false and misleading statements in Columbia River

Case 2:15-cv-04166-AB-PJW Document 1 Filed 06/03/15 Page 1 of 12 Page ID #:1

TawnyB.LightGablerTypewritten Text

TawnyB.LightGablerTypewritten Text2:15-CV-4166

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2 COMPLAINT

Knife & Tools published advertising regarding the qualities and performance of the companys folding knives.

2. Columbia River Knife & Tool claims that locking mechanisms on its folding knives convert these knives into virtual fixed blade knives. This is a completely false claim. These knives cannot begin to match the strength of a fixed blade.

3. The claim that Columbia River Knife & Tool makes folding knives that convert into virtual fixed blade knives is an empty advertising slogan. The truth is that the locks on these knives will fail catastrophically when significant pressure is applied. The knives perform worse than many other comparably priced knives, and far worse even than lower cost knives manufactured by Cold Steel.

4. Cold Steel files this action to halt Columbia River Knife & Tools practice of making blatantly false claims about the strength of the companys knives, and to compel the company to pay out the damages and unlawful profits it has earned by these dishonest tactics.

Parties 5. Plaintiff Cold Steel, Inc. (Cold Steel) is a California corporation

with its principal place of business in Ventura, California, in the Central District of California.

6. On information and belief, defendant Columbia River Knife & Tool Company is a business entity, form unknown, based in Oregon and doing business in the Central District of California.

7. On information and belief, GB II Corporation dba Columbia River Knife & Tool Company is an Oregon corporation with its principal place of business in Oregon, and doing business in the Central District of California.

8. Defendants Columbia River Knife & Tool Company and GB II Corporation dba Columbia River Knife & Tool Company are referred to


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3 COMPLAINT

collectively as Columbia River. 9. Defendants Doe 1 through 10 are persons responsible for Cold

Steels damages or otherwise answerable to Cold Steel for its claims. Cold Steel does not know the true identities or capacities of these persons or how in the conduct alleged and therefore sues these persons by fictitious names. Cold Steel will amend this cross-complaint to allege the true identities of the Doe cross-defendants when ascertained.

10. The plaintiff is informed and believes that each of the defendants was acting as an agent, servant, employee, representative of or joint venturer with the other defendants, or was acting under the direction and control of these codefendants and within the course and scope of such agency, service, employment or joint venture. The plaintiff is informed and believes that, at all relevant times, the acts of the defendants, and each of them, were authorized and ratified by their co-defendants.

Jurisdiction and Venue 11. The Court has subject matter jurisdiction of this action pursuant to

15 U.S.C. section 1121(a) and 28 U.S.C. section 1338(a) and (b). Personal jurisdiction in the Central District of California is proper, because Columbia River conducts business and distributes products within the Central District of California and throughout the United States. For example, according to Columbia Rivers web site, the company has more than 20 authorized dealers in the Central District of California. On information and belief, consumers in the Central District of California purchase knives and other items through the internet websites operated by Columbia River.

12. Venue is proper in this district pursuant to 28 U.S.C. section 1391(b)(2).

The Parties Business 13. Cold Steel manufactures and sells knives, edged weapons and


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4 COMPLAINT

other items. Cold Steel sells its products through distributors and authorized dealers in the United States and around the world. The Cold Steel dealers in the United States principally are hunting and camping stores, gun stores, and military and law enforcement supply stores. These dealers include national retail chains such as Bass Pro Shops, Cabelas and Sportsmans Warehouse. Cold Steel also sells knives through its website, and many of its authorized dealers sell Cold Steel products through their websites as well.

14. Columbia River primarily sells folding knives and fixed-blade knives but also sells a few other items such as multi-function tools and flashlights. Columbia River also sells its knives through distributors and authorized dealers, including Big 5, The Sports Authority and REI.

15. Cold Steel and Columbia River are direct competitors. Factual Allegations

16. Cold Steel seeks redress for Columbia Rivers deliberate and unlawful false and misleading representations regarding its folding knives sold with one of three locking mechanisms, which are designated LAWKS, AutoLAWKS and L.B.S. Knives with these locking mechanisms are marketed and sold by Columbia River based on representations that these locking mechanisms convert the folding knives into virtual fixed blade knives.

17. A folding knife without a locking mechanism can be closed simply by gripping the handle and applying pressure on the spine of the blade (the back or nonsharpened edge). A slight amount of pressure typically is sufficient to overcome the spring tension holding the knife open. This characteristic does not affect the performance of the knife when it is being used in a manner that applies pressure directly on the blade, such as cutting or whittling. However, it can become a serious safety issue if the knife is being used to stab a hard surface or pry a resilient material, or if, while


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5 COMPLAINT

cutting, the users grip slips and the knife rotates in the hand, such that pressure is then being applied to the side or spine of the blade. In any of those circumstances, a nonlocking folder can snap shut on the users fingers, inflicting a potentially serious injury.

18. The locking mechanism on a folding knife is intended primarily to prevent accidental closing in use. This is the most important difference between folding knives with locks and those without locks.

19. For consumers seeking a folding knife with a locking mechanism, the strength and reliability of the locking mechanism is material to the consumers buying decision.

20. Marketing claims about the strength and reliability of a folding knifes locking mechanism refer directly to its resistance to accidental closing while in use.

21. Columbia River markets folding knives with the LAWKS locking mechanism by making statements such as the following:

22. Sliding the LAWKS lever forward assures that the folder is a virtual fixed blade. It is very difficult, if not impossible, to accidentally release the liner lock when the LAWKS lever is activated and if the blade pivot is properly adjusted. . . .

Integrated into the design is the patented (1) LAWKS safety, which effectively converts the [knife] into a virtual fixed blade very reassuring when you are using your knife for difficult and tiring tasks.

23. Columbia River markets folding knives with the AutoLAWKS locking mechanism by making statements such as the following:

The AutoLAWKS lever moves forward automatically whenever the blade is opened and locked to assure that the folder is a virtual fixed blade. It is very difficult, if not


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6 COMPLAINT

impossible, to accidentally release the liner lock when the AutoLAWKS lever is activated and if the blade pivot is properly adjusted. [The knife] locks automatically into the open position courtesy of our patented AutoLAWKS safety that creates a virtual fixed blade.

24. Columbia River markets folding knives with the L.B.S. locking mechanism by making statements such as the following:

When the blade is opened, locked and the L.B.S. is actuated, the knife becomes a virtual fixed blade, and will not accidentally fold while in use.

25. The foregoing claims refer to the knives resistance to accidental closing while in use.

26. The foregoing claims refer to the ability of the knife to remain open when being used to stab, chop, or pry an object in a manner that puts pressure on the knife in a direction that would tend to make the blade close.

27. The foregoing claims constitute representations that, when pressure is applied to the knife in the open position while the lock is engaged, the knife will have almost the same resistance to folding as would a fixed blade knife.

28. Columbia Rivers folding knives with the LAWKS, AutoLAWKS and L.B.S. locking mechanisms are not remotely near the strength of a fixed blade knife of comparable cost, or even one costing much less. The locking mechanisms will fail when pressure is applied, which could cause the knife to suddenly snap shut while being gripped in the users hand, potentially causing a serious injury.

29. Knives with the LAWKS, AutoLAWKS and L.B.S. locking mechanisms exhibit far less resistance to folding than comparably priced


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7 COMPLAINT

fixed blade knives in general. 30. Knives with the LAWKS, AutoLAWKS and L.B.S. locking

mechanisms exhibit far less resistance to folding than comparably priced fixed blade knives manufactured by Columbia River.

31. Knives with the LAWKS, AutoLAWKS and L.B.S. locking mechanisms exhibit far less resistance to folding than lower priced fixed blade knives in general.

32. Knives with the LAWKS, AutoLAWKS and L.B.S. locking mechanisms exhibit far less resistance to folding than lower priced fixed blade knives manufactured by Columbia River.

33. The phrase a virtual fixed blade in the Columbia River advertising is understood by consumers to mean very nearly as strong as a fixed blade or almost exactly as strong as a fixed blade.

34. The locking mechanism on any folding knife will fail if sufficient pressure is applied to the handle while the blade is engaged in a surface. When a locking mechanism fails, the knife tends to act like a folding knife without a locking mechanism namely, the blade pivots where it connects with the handle, and the blade tends to swing around into a closing position.

35. Any fixed blade knife also will fail if sufficient pressure is applied to the handle while the blade is engaged in a surface. However, unlike a folding knife, when a fixed blade knife fails, it almost always snaps into two pieces. When that happens, there is no tendency for the sharpened edge of the blade to swing around and cut the users fingers. The failure of the lock on a folding knife thus exposes the user to much greater risk of serious injury than the failure of a fixed blade knife.

36. Columbia Rivers claims that its folding knives operate as virtual fixed blade[s] constitute false claims about the safety of its knives. These statements are understood by consumers to mean that the user is exposed


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8 COMPLAINT

to very nearly the same risk of injury when using the knife as when using a fixed blade knife.

37. In fact, because of a folding blades tendency to swing closed upon failure of the lock, rather than simply breaking free of the handle, users are exposed to a much higher risk of injury when using Columbia Rivers folding knives, as compared to a fixed blade knife.

FIRST CAUSE OF ACTION (Trademark Infringement, Lanham Act Section 32, 15 U.S.C. 1114)

38. Cold Steel incorporates by reference the allegations of paragraphs 1 through 36 of this Complaint.

39. The defendants have made and distributed in interstate commerce and in this District advertisements that contain false and misleading statements of fact regarding their products. These advertisements contain actual misstatements and/or misleading statements or failures to disclose, including without limitation the statements that certain locking mechanisms convert a Columbia River knife into a virtual fixed blade.

40. These statements actually deceive, or have a tendency to deceive, a substantial segment of Columbia Rivers customers and potential customers. This deception is material in that it concerns an inherent quality or characteristic of Columbia Rivers products and is likely to influence the purchasing decisions of Columbia Rivers customers.

41. The defendants false and misleading advertising statements and omissions injure both consumers and Cold Steel.

42. The defendants false and misleading advertising statements and omissions violate section 43(a) of the Lanham Act, 15 U.S.C. 1125(a).

43. The defendants have caused, and will continue to cause, immediate and irreparable injury to Cold Steel, for which there is no adequate remedy at law. Cold Steel is therefore entitled to an injunction under 15


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9 COMPLAINT

U.S.C. section 1116 restraining the defendants and their agents, employees, representatives and all persons acting in concert with them from engaging in future acts of false advertising and ordering removal of all of the defendants false advertisements.

44. Pursuant to 15 U.S.C. section 1117, Cold Steel is further entitled to recover from Columbia River the damages sustained by Cold Steel as a result of the defendants acts in violation of 15 U.S.C. section 1125(a). Cold Steel is at present unable to ascertain the full extent of the monetary damages it has sustained by reason of the defendants acts.

45. Pursuant to 15 U.S.C. section 1117, Cold Steel is further entitled to recover from the defendants the gains, profits and advantages that the defendants have obtained as a result of their acts in violation of 15 U.S.C. section 1125(a). Cold Steel is at present unable to ascertain the full extent of the gains, profits and advantages the defendants have obtained by reason of their acts.

46. Pursuant to 15 U.S.C. section 1117, Cold Steel is further entitled to recover the costs of this action. Cold Steel is informed and believes, and on that basis alleges, that the defendants conduct was undertaken willfully and with the intention of causing confusion, mistake or deception, making this an exceptional case entitling Cold Steel to recover additional damages and reasonable attorneys fees.

SECOND CAUSE OF ACTION (Unfair Competition,

California Business & Professions Code section 17200 et seq.) 47. Cold Steel incorporates by reference the allegations of

paragraphs 1 through 36 of this Complaint. 48. The foregoing actions of the defendants involve conduct that is

unlawful, fraudulent and unfair under California and federal law.


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10 COMPLAINT

49. The defendants acts, as set forth above, have caused irreparable injury to Cold Steel. The injury to Cold Steel is and continues to be ongoing and irreparable. An award of monetary damages alone cannot fully compensate Cold Steel for its injuries, and Cold Steel lacks an adequate remedy at law.

50. Cold Steel is entitled to a permanent injunction against the defendants, and to restitution of all amounts unlawfully obtained by the defendants through the foregoing conduct.

51. Cold Steel is entitled to restitution of all amounts unlawfully obtained by Columbia River as a result of its wrongful conduct.

Prayer WHEREFORE, the plaintiff prays for relief as follows: 1. That the defendants, their officers, agents, servants, employees,

and attorneys, and those persons in active concert or participation with them who receive actual notice of the court's order by personal service or otherwise, be permanently enjoined from making any false or misleading statements regarding their folding knives, including without limitation the claims that the defendants folding knives behave like a virtual fixed blade;

2. That the defendants, in accordance with 15 U.S.C. section 1116(a), be directed to file with the Court and serve upon Cold Steel, within 30 days after service of the permanent injunction, a report in writing under oath, setting forth in detail the manner and form in which the defendants have complied with the permanent injunction;

3. That Cold Steel recover its actual damages sustained as a result of the defendants wrongful actions;

4. That Cold Steel recover the defendants profits made as a result of the defendants wrongful actions;

5. That Cold Steel recover three times the defendants profits made


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11 COMPLAINT

as a result of the defendants wrongful actions or three times Cold Steels damages, whichever is greater;

6. That this case be deemed an exceptional case under 15 U.S.C. sections 1117(a) and (b) and that the defendants be deemed liable for and ordered to reimburse Cold Steel for its reasonable attorneys' fees;

7. That Cold Steel be awarded exemplary damages for the defendants willful and intentional acts;

8. That Cold Steel recover its costs of court; and 9. That Cold Steel recover such further relief to which it may be

entitled.

Dated: June 3, 2015

By:

LightGabler LLP

Glenn J. Dickinson Attorneys for Plaintiff Cold Steel, Inc.


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12 COMPLAINT

Demand for Jury Trial The plaintiff demands a jury trial of the triable issues in this action.

Dated: June 3, 2015

By:

LightGabler LLP

Glenn J. Dickinson Attorneys for Plaintiff Cold Steel, Inc.


cold steel v crkt

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