Composite Technology Receives Court Authorization to Broaden Its Case Against Mercury Cable & Energy
New Defendants Include Mercury's Subsidiary ETI, Its U.S. Strander General Cable Corporation, Its U.S. Core Producer Diversified Composites, and Individuals Ronald Morris, Todd Harris, Wang Chen and Edward Skonezny
IRVINE, CA--(Marketwire - 11/08/10) - Composite Technology Corporation (CTC) (OTC.BB:CPTC - News) is pleased to announce that, on October 18, 2010, the United States District Court for the Central District of California granted CTC Cable Corporation's motion for leave to file a Second Amended Complaint in its patent and copyright infringement action against Mercury Cable & Energy (Civil Action No. SACV 09-261 DOC (MLGx)). The Second Amended Complaint names several individuals as additional defendants as well as naming Mercury Cable's wholly-owned subsidiary Energy Technology International (ETI), its U.S. stranding manufacturer, General Cable Corporation, and its U.S. core manufacturer, Diversified Composites.
Individual Liability The Second Amended Complaint, which remains subject to proof at trial, adds Ronald Morris, Todd Harris, Edward Skonezny, and Wang Chen as individual defendants based on their alleged acts of patent and copyright infringement, as well as their alleged establishment and/or control of numerous U.S., off-shore and Chinese corporate entities that are alleged to be involved in the infringement of CTC Cable's patents and copyrights. Morris is the CEO and a director of Mercury. Harris is its President and a director. Chen is an officer and a director. Skonezny is alleged to have participated in its infringing activities.
Shell Corporations The Second Amended Complaint alleges that the individual defendants set up numerous U.S., off-shore and Chinese "shell" corporate entities as a scheme to evade personal liability. In sworn depositions conducted in a related state court action, one or more of these individual defendants have admitted to establishing these various entities, but have claimed to have little if any knowledge of their corporate structure, organization or operation, despite that one or more of these individuals are identified as officers and/or directors of the shell entities.
Diversified Composites, General Cable Corporation, and ETI The Second Amended Complaint alleges that Diversified Composites and General Cable Corporation are both liable for patent infringement because Diversified has pultruded composite core and General Cable Corporation has stranded Mercury Cable's HVCRC conductor in the United States. Mercury Cable's subsidiary, ETI, is also alleged to be manufacturing Mercury Cable's HVCRC core.
Infringement Allegations and Potential Liability CTC Cable alleges that Mercury Cable's HVCRC conductor infringes two of CTC Cable's patents for composite core technology (U.S. Patent No. 7,368,162 and U.S. Patent No. 7,211,319) and also alleges that certain of the defendants have committed federal copyright infringement. If the federal court finds Mercury Cable or any of the newly-added defendants liable for patent or copyright infringement, the infringing parties will be liable to CTC Cable for actual and/or statutory damages, and the Court may also enter an injunction prohibiting further infringement by them. If the court finds that Mercury Cable or any of the newly added defendants has willfully infringed CTC Cable's patents or that the suit is exceptional, the defendants could be liable for up to treble damages and attorneys' fees. Any third party that makes, uses, sells, offers for sale or imports any infringing products of Mercury Cable or the newly-added defendants in the United States -- including third-party manufacturers or customers of installed Mercury Cable transmission lines -- may also be subject to suit for patent infringement and -- if found liable -- may be subject to damages and injunctive relief.