Pyle v. Stone et al

Filing 18

CONSENT JUDGMENT and PERMANENT INJUNCTION in favor of Ricci B. Pyle, Sr against Richard R. Stone, Russell B. Endean as set forth. ***Civil Case Terminated. Signed by Honorable Robert T. Dawson on January 22, 2009. (lw)

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IN THE UNITED STATES DISTRICT COI]RT F O R THE WESTERN DISTRICT OF'ARKANSA$ FORT SMITH DIVISION R I C C I B, FYLE, SfiC i v i l Action No, 0&.200E RICI{ARD R STOT\E d/b/A C E N T U R Y ASSOCIATES f l N dRUSSELL R. ENDEAN Plainttff DefendflntB C O N S E N TJIJDGMENT A N D PERMANENT INJUNCTION T I r E PARTIES AGREE to the folowing $tipu]ared factuar findings,which a d o p t sand incorporates reference: by I. JURISDICTIONANDVENUE thc court T h i s caseconcems claimsof improper anddeceptive invention promotion, unauthorized p r a c t i c eof law, fraud,and deceptive advertising. This co'rt hasoriginaljurisdictionover this a o t i o nunder28 u.s'c. ggl33l, 1332(a)(I)and2202. This courr maintains jurisdictionfor the c o ' r m o n law causo actionbasod of uponthoprinciplos supplemental jurisdiction,?g u.s.c. of the $ 1 3 6 7 ,hocause claim is so relatedto claimsin theaotionwithin suchoriginar jurisdiction t h a t it lirrmspart ofthe same caseor controversy undt)rArticle III of theUnifetl States Constitution. In addition to jurisdiction basedupon a tideral qucstion,thereis jurisdiction under 2g U . S . C ' $ 1332(a) beoause diversityof citizurshipin that Plaintiff is a oitizenof the Stateof of Arkansasand Defendants citizsns ofaaother state"and the amouflt in controversv are in excess o f $ 7 5 , 0 0 0 ,exolusive interest oosts. of and This court haspersonal jurisdiction underArk. code Arur. $ r6-4-10r er soq.overthe defendants that the defendants in have advertisedin this judicial district and lraveintentionally targetgdtortiou.s conductin the Stateof Arkansasand suchconductestablishes the c o n s t i t u t i o n a l lrequired y minimumcontacts with trrisstatc. venuc is properin this court by v i r t ' s of28 u s'c. $l39r (b) because subsrantial of the a part events omissions or givingriseto t h eclaim occurred this disbict. in U. TIIE PARTIES Arkansas.Defendant P l a i n t i f f ,Ricci B. pyle, sr., (*'pylc") is a residont creffiwood, of R u s s e l l Endean a resident R. is ofpittsburgh, purnsylvania, although thetime ofthe a eged at c v e n t swasa resident Miami, Frorida.,"RictrardR. stone" is an of ariasusodby Mr. Endean ano c e n t u r y Associates a registered is ficticiousnamein tho stateofFlorida registored the xo f i c t i c i o u sRichard stone,who is actualryMr. Endean.(Entrean, R. stoneandcenturyAssociates w i l l all be rclbnedm collectivelyas ..Endoan"). III. FACTUA]]BACEGROUND Nickel,an advertising o n or aboutDecember 2()04,Endean 30, advortised the Thrifty in p u b l i c a t i o n American of Classifieds, i0?5 Gra'd Avenue,Fo,. Smith,Arkansas. The *INvENToRs pATENT advertisemcnt srated and sell! $$$$ 1_888_528_6766". or abour on pyle responded lhe advertisoment January 31,20()5, to andwas oontacted Endean, by who i d e n t i f l e dhimselfasRichardR. stone,the "chief roohnologisl"for centuryAssociates, Research Developmerrt aud Division. AIr conespondence Endoanto pyre wa$undertho by arias Richard R. stonc. Endeanstatedifl a letter that "centuy Associates will now assistyou in every j! FfilpE6dCarEnl JudFlnt ZOOS- -2- aspect ofprotectingyour idea." The rnarkering ..sorrth materiars referenced FloridaBetter Business Burcau: www.bbb-org".NeitherEndearr his nor BusinessBureauin SouthFlorida or anywhereelse. E n d e . f lsentpyle an ..Agreemflttof Secrecy', signedby him, andpyle repliedwilh a ahases members the Better are of disclosure ofhis inventionideasasdescribed theconfidentrar in Discrosure Recordofhis and invcnrion, knownas..Mailcall" datedJanuary 2005. By lotterdatod 31, February , 2005, I Endcan rofercnced "recommended u.s. pdtentsearohfor ,ma his a calr,,,.Thereftersurted " T h e purpose ofpatentresearch to determine product'sumqueness is a andoriginality,and w h e t h e r patent'or someothert5qre a ofprotection, likoly, is m a r k e t i n g . "Thc letterincludoda statement, hilling pyle which helpsto $tate productfor the $590for a..u.s. preliminarypatent s o a r c h " ' Pyresignedr.ho agreemont datedFebruary 2005,agrceing pay the$5g0for i, to a patont searoh. P y r epaid century Associates $5g0for the u.s. preliminarypatenlsearch, which was ncver pertbrmedby Endean by any registeredpatentattomey or regrstered patentagentor anyone clse. on our aboutFebruary14,2005,Endean sentpyle a retterwith a proposed press release aboutFyle's Ma carl invurtion andrequested pyle's approval a photograph and ofpyle. o n or amount February15.2005,pyle exeouter Disclosure a Doc'rhentDepo$it Request p r c p a r e d Endean submission thc u.s. palentand hy for to rtadcna'k office. tsy retterdated F ' e b r u a r y 2005,Endean I5, notified pyle that the Discrosure Document Discrosure Request hati b e e nfiled with the u.s. patentafld rrademarkoffioe and that he would rcceive recoiptin 4-6 a wecks. Endca-u statcd'this step marks the compretionof the patent search,and satisfiesour c o n f s c t with you." However,Endean achrafly had neverperformed patent any searoh statcd as above. Fmpc*sd CorEsrl Judgnl{, too8n245 dcc -3- By anotherletterdatedFebruary15,2005,stonesentpyle a provisionalpatent Application contact and Licensing Represontation contract. Thc provisiof,al patent A p p l i c a t i o ncofltract providedthatpylc wourdpay $3,500 filing a ,*U.s.provisionarpatont.,. for H o w e v e r ,if the accompanyi'greprcsentation contract wasexeouted, cost wourd drop from the $ 3 ' 5 0 0to $950- In eithersihution, pyle arsoagreod payEndean r 5olo 1,0 a royaity on alr prcceeds from lice.nsing invention. the T h e LicensingRepresentation Agreeftefltexecuted Endean FebruaryIs,2005 by on and b y Pyle on February23, 2005providedthatpyrewouldpaycenturyAssociatos $4,9s0for a 12m o n t hcontractwherc it would marketthe Mailcall invcntionto 100manufachrrers and attempt r , oliconsethe inventionwith cantury Associates receiving l5% royalty on a any procoeds. Defendants madono bonafide attempts ftdrket of license invention. to the o n or beforcFebruary 25,2005,centuryAssociates counsercd advisedpyreon how and l o raisomoneyfrom family andfriendsto pay for centr.'y Associates' fees. p f c p a r e dthe following documents: (l) Anflourrcement Limited offer (private)fbr sharcs $s00 per share afld at "U.S. patent for ApplicationEndRepresontation; Licursing R e p r e s e n t a t i o nandidentifiedce,nhuyA6so0iates ", as,,Representative". T h e offeriug docrrment indicated deadlino Maroh7, 2d0S. a of Investdent Agreunent for pyle asIflventor af,(i othersas Investors p r o v i d i n g lhat in exchange cashthe Invcstor for wouldreceivea p e f , c e n t a gofroyaltiesfrom licensing.TheInvestment e Agroement indicatesthat the cashw l bo appliedtoward the '?epresentation ofthe i n v e n t i o n ,(e.g.paturting,Marketingrcpresentation, Licensing " representation). and Non-Discrosure secrecyAgreemont and pyreasInventorand the betwoen I n v c s t o r s protectthe confidontiality to ofthe Mailcall invention. cent'ry Associalos (2) (3) Endeansent Pyre an undatedletter with the doouments be usedwith raising to money from ttrird party investors- In the letter, he states'Do not give the investor my phone n'mbor, FtDpcadc6nl|rn Judom6fit ?00n ?45doc - 4 ^ plcase." Based uponthe representations advioe courxelofEndeaaandwith and and the d o c u m e n t s provided, he Fyreraised$5,000from tirmily andfiiend to fund thefeesof Endoan. Q n or aboutFebruary 2005,Endean 28, signcd prnvisionalpatentapplication behalf a on o f Pylc andsubmitt.dit to the u.s. patentandrrademarkofficc. Endean not is registered to p r a c t i c ebeforothc u.s. patcntandTradernark office in theprosecution patentapplioations. of o n or aboutMarch6,2005, Endean wroteFyrerequesting he exeoute small that a Entity Declaration Letierfor submission the u.s. pdtentandrrademarkoffice andrequestod to that P y l e pay an additional $400. E n d e a n his aliases and QsnfuryA,ssociates fuchardR. Stoneconstitute and an..invention p r o m o t e r "within themeaning the 35 u.s.c. g 297 (c)(3)whrch entercrr of into a,.contmctfor i f l v e n t i o npromotion services" within themeaning 35 u.s.c. g 297(c)(l). Endoan ed to of fa m a k e thedisclosures rcquiredby 35 u.s.c. $ ?g7(a) prior to enteringinto a contract for i n v e n t i o f lpromotion services'Endean rradematcrialfalsestatanents rcpresentations pyle or to a n d omittedmateriar thctsand failed to makerequired disclosuros pylo pursuant to to35u.s.c. s 2 9 7 ( a ) . As a rcsrrltof suchactsandomissions Endcan, of Endean engaged in improper and decoptive pyreto sufferactuar invention promotioncausing damages, oosts andattomeys fees. Endeanis not afl attorney and is certair y not an attomey liconsedto practice in the State o f A r k a n s a s Neithctis Endean attomeyor age't registered practice an to beforethc u.s. patent and rrademark offioe. By advertisingwithin the state of Arkansasarr reprcsenting to crients within thc state ofArkansas that Endeanwould obtainparentp,rotection plaintiff, for i n d u c e dthePlaintiffinto relying upon Endean lcgal ropresentation. for Endean ProFdcld cansflt Judsn.d ?000-12{6.ddE -5- Endeanprepared cofltracts,securitiesoffering documentsand patut filing documents a n d sentthominto the stateofArkansasfor cxecutionby tho plaintiffas his olient. srrchacts c o n s t i l u t e unauthorizod the practicc oflaw within thc StateofArkansas. prepared signed provisionalpatentapplication behalfofhis client Endcan and a on P l a i n t i f f Pyle,and submitted to the u.s. Patentandrrademarkoffice although wasnora ir he registered patentattomey patefltagent, of and suchactionsaro in violationof 37 C.F.R.$ 1 1 . l O ( a ) .Theseactsby Endoan coflstitute unauthorizcd the practioe law beforethe U.SPatent of a n dTrademark Office. A l t h o u g hexpressly ongaged do so andpaid for their servioes, to Endean failedto portbrm Ecornpotent patcfltsearch Plaintiffs invcntion,Mailoall. If suchcompetent on patentsearch had b c c nperformed Defendants would corrldhaveadvised Plaintiffupon the pmspects for p a l e f l H b i l i t yofthe invention, would haveadviscdPldhtiffthat thc if,vention or wasnot patentable based upontheprior art or othu requirements patenting invctrrion.tsy failing tbr an t o performa oompotent patefltsearch, Endean dupedPlaintiffinto filing ofa provisioflal patent justificationandcharged application withorrt exorbitantfbesfor perlormingthework of a patenl attomey, Endeanfailed to counselPyle adequatelyooncemingthe needto lile a utility patent a p p l i c a t i o n obtainaflyprotection to whatsocver stop othersfrom making,usingor sellingthe to c l a i m e dinvention. Endean failedto file or havefiled by a oompctent patentattomey, utility a pyle to seekpatontcounsel.Inventiorrs patEnt application behalfof Pyleor to eflcourage on s i m i l a rto the Mailcall invention Plaintiffare now found in themarket. of Endean's marketing activities reprssentations olientssuchasPlaintiffPylewere and to p a r t ofa schemc deftaud to unilformodclientswho rcly upon his pmfessional patefltservices. FrEF.fld ConEfi ljdlrnnt200E-1?{5doc - 6 - As a resurtofsuch actsandomissions ofEndeanin the unauthorized practice law, pyle has of srrfferedactualdamagos, costsanrJattomeys fees. Endeanhaswotked as an employeeor independent contractJr for severalinvention p r o m o t i o nbusinesses' Endean acknowledgeti neither nor centuryA'so'iates that he had ever 'een successfur obtaining the ricensingofany invention to in a firsnufirchrror.The rcquirements o f the InventorProtection of r ggg werespecificay enacted Act to avoidthis tSaeofdeception. P y l e hasalleged thatEndcanengaged a schemc defraud in to low-income individuals w h o areunsophisticated legal,tcchnological business in and sk ls andwho seek professional a s s i s t a n cin thepatenting, c deveropment marketing their and of inventions.pyrehasalreged thar they will obtain patent Endoanpreyodupo theseprospcctiveclients by reproscnting 10them rhat p r o t e c t i o nfor theclients'inventions" althoughEndean Iacksthe pror.essionar trainingand skill, l i c e n s i n gto providecompetent lcgal services the cliurts_ to Endean preparcd unregislered sccurities documents rhe in fomr ofthe Linritcdofibring or to theinvestorr thattherc a n d the InvestnentAgreoment without adcquate discrosurc pylc to w a s litfle or no likerihoodthatoitherpyle or the investors wourrrreoover feeshoingpaid to the E n d c a nfor thc patentservioes were wofiI ess. By doing that so, Entrean harmed only on his not c l i e n t ,Pyle,but alsoon the pyle's frieards family members and who wererecruitod invesrin to t h e i'vention thatwasknownby Dcfendants shourd or havebeenknownby Endean haveno to value. pyle by deceivingpyle into belioving Endean harmed that his Mailcall invention was valuable basedupon a patentability scarchthar wasneverperformed and actualpatentpfotection that was nevcr perfocted. Endeanlod on pyle throughhis representatious promisesin ordor and Fyopc+ddofi snt tdgrnnt ?oo8.1?.0s.doc -7- to continuereceiving exorbitant fees for lcgal services that were insufficient to give plaintiff any cnforceable rights. The actionsofEndean ars unconscionable that they takescarcefunds away fiom in pmsons leastlikely to afford suchexpenditures by encouraging clientsto drag in and their f r i e n d sandfamily members investors a dubious as in inveshnenr. Endean engaged falseor deceptive in advertisiug srrggesting century Associatos by that i s licenscd registerEd represent or t0 invcntors theprosecution in ofpatetrtEpplications before the u.s Patefltand Trademarkoffice. Endeanengaged falseor deceptiveadvertising by in s u g g e s t i n g century Associates a mcmberin goodstanding that is ofthe south FloridaBetter Business Buuu, althoughit is not a momber complaints afld h:rvebeenpreviouslyfiletl against Century Associates suchorganization. to J U D G M E N T A N I } AWARD I T IS HER-EBYORDERED AND ADJUDGED thatplaintiff is entitred damages, to costs andatrofieys' feespursuant 35 U.S.C.$ 297(b),l5 u.s.c. g I 125,Ark. code Ann. {i l6to ??-308 andArk. CodeAm. $ 4-88-107. W H E R E F O R E , PlaintifTis awarded followingrelief: the A Defendant RussellR. Endcan (a,a</a RichanlR. stoneand '.centuryAssociatos'.), his agantsand employeesand thoseaotingin concerttherewitharopenhanently(xrjoined from advertising,off'edng or performing servicoswithin the state ofArkansas, or for any clicnr witlrin t h c slatr ofArkansas,relatedto patentpromotion, patent protcction, invenriondevelopmef,rt or s i m i l a rservices; Fropo5edC{nssnl JudEmrnt 2006-1r{s.doc -8- B Defcfldant Russe' R. Endean (a,4rla Riohard smneand "century Associates'.) R. i s orderedto pay Plaintiff pyle damages the sumof$150,000; in cDefendant Russo R. Endean (a/k/aRichard stoneand,.ccnturyAssociates,,) R. i s ordered pay praintiffpyre oosts reasonable to and attomeys feosof$35,000,for a totaljudgmentof $ 185,000 togcrher, whichshal bearinteresr the rato at per annumuntil paid in fLrll. D' The Courl findsthat Defendant's actions caused willful and malicious iniuri$ to of .43 p"."*r t h ePlaintiff within the fteaningof I I U.S.C.gj23(ax6). P R O V T D E DHowEvE& By AGREEMENT oF TrrE PARTTES,if Defendanr shall p a y to the speedLaw Firm TrustAccounl(l) $g00immodiately upon executron theparties by of t h i s Consent Judgment; $700monthlyby the 30'l rlayof eachmonth (2) for sixty eighr(6g) consecutive monthsbeginning January 30,2009;and(3) a fural paFnentof$400 on tho 30th day o f t h e 69rh consecutive monlh,for total cash payments $4g,g00, balance themofletary of tho of j u d g m e n tof g 185,000 prusinterest shallhe (ieemod satisfiod.If Defendant sha]lfail to makeany p a y m o n ttirflely,thebarance plus accrued due intctest, shanimmcdidtely dueantrpayable be and t h i s paragraph shallbe null andvoid. ora"."arhtfi0,rht STATES DISTRICT COURT EsrENDLSTR t(A R t_CJ NSAI AR JAN ? 2M9 2 oHnR. t$s{,ctERK EJof BY fl'BK DEPITIY U .S.IJIIi IHIU UUUH I I PEpo6ed Con!nLJudEmnt RICCI B. PYLE, SR. B Y H I S ATTORNEY R U S S E L LR. ENDEAN f- adfrq RIC R . STONE By: R U S S E L L R .ENDEAN C E N T U R YASSOCIATES /- s--.'?oaF' t", 'f ,it/t'r.', - /-{-Rdof RUSSELLR.ENDEAN Fropos6d Conranl Judlmonl? - 10 -

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