IN THE UNITED STATES DISTRICT COURTFOR THE WESTERN DISTRICT OF TEXAS

AUSTIN DIVISION

WILLIAM GARDNER, III, and §DIANE GARDNER § JURY DEMANDED

§Plaintiffs, §

§-vs- § CIVIL ACTION NO.1:13-cv-00320

§RICHARD SHIELDS, §BESS SHIELDS, §PAUL SCHWEIZER, §AMANDA SCHWEIZER and §PURPLE PASSION COMPANY, LLC §

§Defendants. §

PLAINTIFFS’ ORIGINAL COMPLAINT

Plaintiffs William Gardner, III and Diane Gardner (hereafter collectively called the

“Gardners” or “Plaintiffs”), complain of Defendants, Richard Shields, Bess Shields

(“Shields”), Paul Schweizer, Amanda Schweizer (“Schweizers”) and Purple Passion

Company, LLC.

Summary of Lawsuit

1. This is a case about the disintegration of the business relationship between The

Gardners on the one hand and the Shields and Schweizers on the other hand.

The three couples jointly own Purple Passion Company, LLC.

2. William Gardner invented and patented several ultraviolet flashlights for use in

inspecting crystals and rocks. Initially, William Gardner allowed the Shields and

the Schweizers to sell the patented inventions through their jointly owned

company, however there was no licensing agreement between William Gardner

and the company.

3. When the Gardners came to believe that the Shields and the Schweizers were

being dishonest about the finances of the business and unfairly denying the

Gardners the benefit of their ownership interest, William Gardner sent a letter

advising the Shields and the Schweizers to cease and desist selling and offering

the sell his patented devices through Purple Passion Company, LLC or

otherwise. To date, the Shields and the Schweizers continue to sell and offer to

sell the patented devices without a licensing agreement. In addition, the Shields

and the Schweizers continue to unfairly deny the Gardners the financial benefits

of their ownership interest in Purple Passion Company, LLC.

Parties

4. Plaintiff William Gardner, III is a natural person residing in Maricopa County,

Arizona.

5. Plaintiff Diane Gardner is a natural person residing in Maricopa County, Arizona.

6. Defendant Richard Shields is a natural person residing in Kendall County, Texas.

He may be served 215 Cibolo Branch Drive, Boerne, Texas, 78006.

7. Defendant Bess Shields is a natural person residing in Kendall County, Texas.

She may be served 215 Cibolo Branch Drive, Boerne, Texas, 78006.

8. Defendant Paul Schweizer is a natural person residing in Kendall County, Texas.

He may be served at: 8 Guthrie Road, Boerne, Texas, 78006.

9. Defendant Amanda Schweizer is a natural person residing in Kendall County.

She may be served at: 8 Guthrie Road, Boerne, Texas, 78006.

10. Defendant, Purple Passion Company, LLC, is a Texas limited liability company.

Its principal place of business is in Kendall County, Texas. It may be served with

C.A. No. 1:13-cv-00320 Gardner v. Shields 2

summons by serving the registered agent: Richard M. Shields, 215 Cibolo

Branch Drive, Boerne, Texas, 78006.

Jurisdiction

11. This Court has subject matter jurisdiction over this lawsuit because the Plaintiff,

William Gardner, brings suit pursuant to 35 U.S.C. § 271 for the defendants’

infringement upon three of his United States Patents. Diane Gardner, William

Gardner’s spouse, has a community property interest in the patent rights. The

United States District Courts have original jurisdiction of all civil actions arising

under the Constitution, laws or treaties of the United States pursuant to 28

U.S.C. § 1331.

12. This Court has supplemental jurisdiction over the claims of breach of fiduciary

duty, shareholder oppression and fraud because the facts made the basis of the

patent infringement claim substantially related to the original claim of patent

infringement. The United States District Courts have jurisdiction to hear these

ancillary state law claims pursuant to 28 U.S.C. § 1367. Venue

13. Venue is proper in the Western District of Texas because the Shields and

Schweizer Defendants reside in the Western District of Texas and Purple

Passion Company, LLC is headquartered in the Western District of Texas.

14. Venue is further proper in the Western District of Texas because many of the

acts and omissions upon which Plaintiffs’ causes of action pled herein are based

occurred in the Western District of Texas.

Factual Background

15. Plaintiffs have operated a business selling ultraviolet lamp fixtures since in or

about March 1, 1998, first as sole proprietors under the Arizona-registered trade

C.A. No. 1:13-cv-00320 Gardner v. Shields 3

name “Way Too Cool,” and then, beginning in or around March 2007, as owners

of the Arizona limited liability company called “Way Too Cool, LLC.” The

ultraviolet lamp fixtures sold by Plaintiffs are used for the purposing of viewing

and examining rocks and crystals, as well as having applications in forensics,

research and other uses.

16. Plaintiff William Gardner has been issued several patents relating to ultraviolet

lamps and the use of filters to change the wavelength of the light emitted from

such devices. U.S. Patent No. 7,148,497 was issued on December 12, 2006.

U.S. Patent No. 7,485,883 is a continuation-in-part of No. 7,148,497 and it was

filed on July 10, 2006, and issued on February 3, 2009. U.S. Patent No.

7,781,751 is also a continuation-in-part of the first and second Patents, and it

was filed on February 7, 2008 and it issued on August 24, 2010. This third

Patent is specific to UV LED Flashlights with drawings and descriptions for a

flashlight form factor. The third Patent was originally denied as not being

different and it was only issued with a “terminal disclaimer,” meaning that the

rights set forth therein have the same effective dates as the second Patent. All

three of these patents were issued only to Plaintiff William Gardner, and not to

any other individual or entity.

17. Defendant Richard Shields is a dealer of rocks and crystals. In or around 2004

or 2005, Defendant Richard Shields became the Gardners’ agent for the purpose

of serving as a distributor of the ultraviolet lamp fixtures that the Gardners

produced and sold under the name “Way Too Cool.” In connection with

Defendant Richard Shields’ role as a distributor for the Gardners, a confidential

relationship existed between Shields and the Gardners, and Shields was given

C.A. No. 1:13-cv-00320 Gardner v. Shields 4

access to proprietary and confidential information, including customer information

and trade secret information belonging to the Gardners that was necessary for

Shields’ work as a distributor for the Gardners.

18. Shortly thereafter, Defendant Paul Schweizer also became an agent of the

Gardners serving as a manufacturer of certain of the ultraviolet lamp fixtures that

the Gardners produced and sold. In connection with Defendant Paul Schweizer’s

role as a manufacturer for the Gardners, a confidential relationship existed

between Schweizer and the Gardners, and Schweizer was given access to

proprietary and confidential information belonging to the Gardners that was

necessary for Schweizer’s work for the Gardners.

19. In January and February of 2007, Plaintiff William Gardner attended the Tucson

Gem and Mineral Show, which is the largest gem and mineral show in the United

States. At that time Plaintiff William Gardner discovered that Defendants Richard

Shields and Paul Schweizer had been secretly operating a business selling UV

LED flashlights that was competing against the Gardners’ Way Too Cool

business and which used, without the authorization of the Gardners, Plaintiff

William Gardner’s intellectual property which is protected by the above-

mentioned Patents, along with confidential and proprietary customer information

and other confidential and proprietary information belonging to the Gardners.

20. After Plaintiff William Gardner confronted Defendant Richard Shields regarding

this conduct, Defendant Richard Shields promised and represented to Plaintiff

William Gardner, with the intent that the Gardners rely upon such promises and

representations, that a company would be created for the purpose of marketing

the UV LED flashlights that Defendant Richard Shields had been secretly selling

C.A. No. 1:13-cv-00320 Gardner v. Shields 5

and that the Gardners would own a collective 50% interest in such company.

Defendants then later told the Gardners that the Gardners would only receive a

collective 49% interest in the company, with the Shields also receiving a

collective 49% interest in the company, and with Defendants Paul Schweizer and

Amanda Schweizer (the “Schweizers”) collectively receiving the remaining 2%

ownership interest in Purple Passion Company, LLC.

21. Defendant Richard Shields also promised and represented to Plaintiff William

Gardner, with the intent that Plaintiff William Gardner rely upon such promises

and representations, that the soon-to-be-formed company would enter into a

reasonable licensing agreement with Plaintiff William Gardner whereby the

company would license the right to use Plaintiff William Gardner’s patented

technology in the production of ultraviolet LED flashlights, via a non-exclusive

and non-transferable license. In reliance upon Defendant Richard Shields’

representations, the Gardners made a capital contribution of $3,500 in

connection with the formation of Purple Passion Company, LLC.

22. At the inception of Purple Passion Company, LLC, Plaintiff William Gardner was

named (and he remains to this day) a Director/Manager and the Vice President

of Defendant Purple Passion Company, LLC. Upon information and belief,

Defendant Richard Shields is a Director/Manager and the President of Purple

Passion Company, LLC, and Defendant Paul Schweizer is a Director/Manager of

Purple Passion Company, LLC. Upon information and belief, Defendant Amanda

Schweizer is the Treasurer of Purple Passion Company, LLC, and Defendant

Bess Shields is the Secretary of Purple Passion Company, LLC.

C.A. No. 1:13-cv-00320 Gardner v. Shields 6

23. Contrary to the representations and promises of Defendant Richard Shields, he

and the other defendants have failed to cause Purple Passion Company, LLC to

enter into a licensing agreement with Plaintiff William Gardner. Defendants have

also failed to cause Purple Passion Company, LLC to display the patent numbers

for the patents owned by Plaintiff William Gardner. Plaintiff William Gardner has

never received any royalty amounts even though Purple Passion Company, LLC

has been using and continues to use his patented technology despite having

been told to cease and desist from such use. On May 4, 2011, William Gardner

sent an express cease and desist letter to the Shields and Schweizers to stop

selling and offering for sale the patented inventions through Purple Passion

Company, LLC or otherwise. The Shields and the Schweizers continued to sell

and offer to sell, through today, the patented inventions owned exclusively by

William Gardner.

24. Defendants have also engaged in other unlawful conduct in breach of their

fiduciary duties to Purple Passion Company, LLC and/or which constitutes

oppression of a minority owner. For example, and without limitation, Plaintiffs

have repeatedly requested that they be provided access to all of Purple Passion

Company, LLC’s financial records, but Defendants have, in violation of Sections

3.152-53 of the Texas Business Organizations Code, without limitation, failed

and refused to provide all such information to Plaintiffs. Rather than providing

access to Plaintiffs of all of the requested financial information of Purple Passion

Company, LLC including general ledgers, bank account statements, credit card

account statements and other financial information, Defendants have only

provided a smattering of un-audited in-house profit and loss statements and

C.A. No. 1:13-cv-00320 Gardner v. Shields 7

balance sheets. Defendants have repeatedly failed and refused to provide to

Plaintiffs the general ledgers, bank account statements, credit card statements,

and other critical financial information of Purple Passion Company, LLC, even

though Plaintiffs have repeatedly requested all such information. There have

been substantial inconsistencies between the figures on certain of the un-audited

financial documents provided to Plaintiffs and the K-1 tax forms that Purple

Passion Company, LLC has issued to Plaintiffs, making it all the more critical that

Plaintiffs be provided with this information.

25. Defendants have failed to give notice to Plaintiffs of any member meetings or to

Plaintiff William Gardner of any manager meetings for Purple Passion Company,

LLC during the entirety of its existence. Even though Plaintiff William Gardner

has been a manager/director of Purple Passion Company, LLC since its

inception, Defendants have, apart from a single conference call early on in

Purple Passion Company, LLC’s existence, never consulted with or informed

Plaintiff William Gardner on any Purple Passion Company, LLC business matters

during its entire existence, nor have they notified Plaintiff William Gardner of any

vote of the managers/directors of Purple Passion Company, LLC.

26. Defendants’ unlawful actions have caused and continue to cause severe

economic and other injury to Plaintiffs and Purple Passion Company, LLC, and/or

have benefitted Defendants.

Plaintiffs’ Causes of Action

Infringement of Patent 35 U.S.C. § 271

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27. On May 4, 2011, William Gardner, owner of the patents which make the UV

flashlights sold by Purple Passion Company, LLC demanded that the Shields and

Schweizer Defendants as the operators of Purple Passion Company, LLC to

cease and desist using the patented inventions without a licensing agreement

from him. The specific patents which the Shields and Schweizer Defendants sell

and offer to sell through Purple Passion Company, LLC without a licensing

agreement are: (1) U.S. Patent Number 7,148,497; (2) U.S. Patent Number

7,485,883; and (3) U.S. Patent Number 7,781,751. The acts of the Shields and

Schweizer Defendants in selling and offering to sell the patented inventions

through Purple Passion Company, LLC without the express agreement of William

Gardner are acts of infringement pursuant to 35 U.S.C § 271(a). In addition, the

Shields and Schweizer Defendants sell and offer to sell through Purple Passion

Company, LLC components of the patented inventions, and not a staple article or

commodity of commerce suitable for substantial noninfringing use, are liable as a

contributory infringer as set forth by 35 U.S.C. § 272(b).

Civil Action for Infringement of Patent 35 U.S.C. § § 281, et seq.

28. William Gardner has a civil action against the Shields and Schweizer Defendants

and Purple Passion Company, LLC for infringing upon his patents. Williams

Gardener hereby gives notice, through this pleading, of the patent infringement

by the Shields and Schweizer Defendants and Purple Passion Company, LLC as

required by 35 U.S.C. §282(c).

Damages for Infringement of Patent 35 U.S.C. § 284

29. William Gardner is entitled to an award of damage to adequately compensate

him for the infringement of but in no event less than a reasonable royalty for the

C.A. No. 1:13-cv-00320 Gardner v. Shields 9

use made of the invention by the infringers, together with interest and costs as

fixed by the court. William Gardner seeks three times the amount found or

assessed as compensatory damages for the Shields and Schweizer Defendants

and Purple Passion Company, LLC’s intentionally infringement of the patent.

30. William Gardner seeks the reasonable cost of necessary legal services to

prosecute this claim pursuant to 35 U.S.C. § 285.

Breach of Fiduciary Duty

31. As officers, directors, managers and agents of Purple Passion Company, LLC, a

closely held business organization, a relationship of trust and confidence existed

between the Shields and Schweizer Defendants, on the one hand, and the

Gardners, on the other hand.

32. The Shields and Schweizer Defendants as majority shareholders and officers,

directors, managers and agents of Purple Passion Company, LLC owe fiduciary

duties to the Gardners, including without limitation, the fiduciary duties to act

fairly, honestly, with care, in utmost good faith, with undivided loyalty, to make full

disclosure of all matters affecting Purple Passion Company, LLC, to account for

all profits and property, and to refrain from self-dealing and usurping corporate

opportunities for personal gain. As described more fully above, Defendants

intentionally breached their fiduciary duties to the Gardners, which breaches

proximately resulted in injury to the Gardners, on the one hand, and/or benefit to

the Shields and Schweizer Defendants, on the other.

Shareholder Oppression

33. The Shields and Schweizer Defendants, as the majority and/or controlling owners

in Purple Passion Company, LLC, owe duties to Plaintiffs as minority owners,

including without limitation, a duty to refrain from engaging in oppressive

behavior toward Plaintiffs as minority owners. This means the majority

shareholders cannot take actions which unreasonably deny the Gardners’ the

C.A. No. 1:13-cv-00320 Gardner v. Shields 10

value of their ownership in the company. As described more fully above as well

as in the following paragraph, the Shields and Schweizer Defendants

intentionally breached their duties to Plaintiffs, which breaches proximately

resulted in injury to Plaintiffs, on the one hand, and/or benefit to the Shields and

Schweizer Defendants, on the other.

34. For example, and without limitation, the Shields and Schweizer Defendants have

intentionally or otherwise failed to provide Plaintiffs with access to all of Purple

Passion Company, LLC’s financial information, including without limitation Purple

Passion Company, LLC’s general ledgers, bank account statements, credit card

statements, and other financial and corporate information, even though Plaintiffs

have repeatedly requested such information, and even though there are

substantial discrepancies between the un-audited in-house summaries and the

K-1 forms that Defendants have provided to Plaintiffs.

Fraud

35. The Shields and Schweizer Defendants have made intentional

misrepresentations of existing fact regarding the profits and loss of Purple

Passion Company, LLC. The Shields and Schweizer Defendants have

withdrawn money from the business to pay for either personal expenses or

unnecessary business expenses for which they represented were in fact

necessary business expenses. The Gardners relied on 215the Shields and

Schweizer Defendants to handle the finances of the company and their

representations the finances of the company to their detriment. The Gardners

seeks damages for the misrepresentation of fact regarding the true nature of the

profits and losses of the business.

Plaintiffs’ Damages

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36. As a proximate, producing and direct result of the acts of Defendants as pleaded

hereinabove, without limitation, Plaintiffs have suffered the following damages,

without limitation:

(a) any and all compensatory damages and loss of royalties for patent infringement;

(b) any and all past and future actual, incidental, general, special, direct and

consequential damages of Plaintiffs associated with, produced and/or

proximately caused by Defendants’ (i) breach of fiduciary duty, (ii) shareholder

oppression, or (iii) fraud more specifically described hereinabove, without

limitation;

(c) any and all profits lost by Plaintiffs;

(d) any and all benefit of the bargain damages lost by Plaintiffs;

(e) any and all out of pocket damages lost by Plaintiffs;

(f) any and all reasonable and necessary mitigation expenses incurred by Plaintiffs;

(g) exemplary, punitive or treble damages in an amount sufficient to punish

Defendants for their unlawful conduct;

(h) pre-judgment and post-judgment interest at the highest rate allowed by law;

(i) attorney’s fees, expenses, and costs associated with prosecuting this lawsuit;

and

(j) all other damages of any kind, whether in equity or at law, to which Plaintiffs may

be entitled and as may be proved at trial.

Attorney’s Fees

37. Plaintiffs have been compelled to hire the undersigned attorneys to prosecute the

claims set forth in this lawsuit. Pursuant to §27.01(e) and §37.009 of the Texas

Civil Practice and Remedies Code and 35 U.S.C. § 285 and any other applicable

statute or common law precedent, Plaintiffs are entitled to an award of their

reasonable attorney’s fees and costs incurred herein.

C.A. No. 1:13-cv-00320 Gardner v. Shields 12

Request for Permanent Injunction

38. Pursuant to 17 U.S.C. § 502, 15 U.S.C. § 1116, §§ 65.001 et seq., of the TEX.

CIV. PRAC. & REM. C., and all other applicable authorities, whether federal or

state, Plaintiffs request the Court enter a permanent injunction ordering

Defendants to do the following:

a. timely disclose and provide full access to all corporate books and recordsto Plaintiffs;

b. refrain from causing any funds or assets of Purple Passion Company, LLCto be used for any purpose other than Purple Passion Company, LLC’sown legitimate business expenses;

c. cause Purple Passion Company, LLC to make reasonable and appropriatedistributions of profits to Plaintiffs;

d. refrain from engaging in any oppressive conduct toward Plaintiffs as aminority shareholder; and

e. refrain from using any of the intellectual property protected by thefollowing patents: (i) U.S. Patent No. No. 7,148,497, (ii) U.S. Patent No.7,485,883, and (iii) U.S. Patent No. 7,781,751.

39. Plaintiffs will likely suffer irreparable injury that would be imminent, there is no

adequate remedy at law, there is a likelihood of success on the merits, the

balance of hardships weighs in favor of granting injunctive relief to Plaintiffs, and

the effect on the public interest also weighs in favor of granting injunctive relief to

Plaintiffs.

Jury Demand

40. Plaintiffs, simultaneously with the filing of Plaintiffs’ Original Complaint, have paid

the statutory jury fee and demand that this case be tried before a jury.

Prayer

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For these reasons, Plaintiffs pray that the Court summon Defendants to appear

and answer, and that on final hearing Plaintiffs have judgment from this Court against

Defendants, for the following:

a. actual damages;

b. injunction;

c. reasonable cost of necessary attorneys’ services;

d. court costs;

e. exemplary, treble or punitive damages for Defendants’ fraudulent,

intentional and/or malicious perpetration of acts or omissions as pled more

particularly hereinabove;

f. pre-judgment interest at the highest rate allowed by law; and

g. post-judgment interest at the highest rate allowed by law on the amount of

the judgment against Defendants until all judgment amounts are satisfied.

Respectfully submitted,

THE GREENWOOD PRATHER LAW FIRM

By: /s/ Kelly G. Prather Kelly Greenwood PratherTBA: 00796670Mailing Address:PO Box 1358Houston, Texas 77251(713) 333-3200 telephone(713) 621-1449 telecopier

ATTORNEY FOR PLAINTIFFS

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