Memorandum For Temporary Restraining Order

PO-363690 v12
K&L GATES LLP

ONE SW COLUMBIA STREET
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B. John Casey, OSB # 120025
Email: john.caseyklgates.com
Stephanie McCleery, OSB # 115834
Email: stephanie.mccleeryklgates.com
K&L GATES LLP
One SW Columbia Street, Suite 1900
Portland, OR 97258
Phone: (503) 228-3200 / Fax: (503) 248-9085

Michael J. Abernathy (pro hac vice pending)
Email: michael.abernathyklgates.com
K&L GATES LLP
70 West Madison Street, Suite 3100
Chicago, IL 60602
Phone: (312) 372-1121 / Fax: (312) 827-8000

Attornevs for Plaintiffs

UNITED STATES DISTRICT COURT
DISTRICT OF OREGON (PORTLAND DIVISION)

CARBON AUDIO, LLC, a Delaware limited
liability company, and HEADBOX, LLC, d/b/a
BOOMPHONES, a Delaware limited liability
company,

PlaintiIIs,
v.

MONSTER, INC., a CaliIornia corporation,

DeIendant.

Case No. 3:14-cv-00332

MEMORANDUM OF POINTS AND
AUTHORITIES IN SUPPORT OF
PLAINTIFFS` APPLICATION FOR
TEMPORARY RESTRAINING
ORDER AND MOTION FOR
EXPEDITED DISCOVERY

EXPEDITED HEARING AND ORAL
ARGUMENT REQUESTED

Case 3:l4-cv-00332-PK Document 8 Filed 02/27/l4 Page l of 4l Page lD#: 65
PAGE i MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
APPLICATION FOR TEMPORARY RESTRAINING ORDER AND MOTION
FOR EXPEDITED DISCOVERY
K&L GATES LLP
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TELEPHONE: (503) 228-3200

TABLE OF CONTENTS
PAGE
INTRODUCTION .......................................................................................................................... 1
STATEMENT OF FACTS ............................................................................................................. 4
A. Carbon Audio and Boomphones Innovators ................................................................. 4
B. The Design and Development oI the Pocket Speaker ...................................................... 5
C. Carbon`s Discussions With Sol Republic ........................................................................ 8
D. The Pocket Speaker Hits The Market In November 2013 ............................................... 8
E. The Pocket Speaker`s Unique Design .............................................................................. 9
F. CES 2014: Monster Unveils A Knock-OII ................................................................... 10
G. Monster Uses The Same Chinese ManuIacturer And Has Misappropriated PlaintiIIs`
Trade Secrets .................................................................................................................. 14
H. Monster`s Marketing Is False ........................................................................................ 15
I. The Superstar is Creating ConIusion in the Marketplace .............................................. 16
ARGUMENT ................................................................................................................................ 16
A. Standard Ior Temporary Restraining Order ................................................................... 16
B. PlaintiIIs Are Likely to Succeed on the Merits oI Their Claims Ior Misappropriation oI
Trade Secrets, Tortious InterIerence with Contractual Relations and Misrepresentation
Under The Lanham Act .................................................................................................. 17
1. Misappropriation oI Trade Secrets ........................................................................... 17
a. PlaintiIIs possess valuable commercial designs................................................... 18
b. PlaintiIIs took reasonable eIIorts to maintain the secrecy oI their trade secrets.. 20
c. Monster`s conduct constitutes misappropriation under Oregon law ................... 21
2. Tortious InterIerence with Contractual Relations .................................................... 23
a. Third-party Monster interIered with valid
contracts between Carbon and 3NOD ................................................................. 23
b. Monster interIered with Carbon`s contracts with 3NOD by an ........................... 24
c. Monster`s interIerence directly and adversely
damaged and continues to damage PlaintiIIs ...................................................... 24
3. Lanham Act Misrepresentation ................................................................................ 26
C. A Temporary Restraining Order is Necessary to Prevent Irreparable Harm ................. 26
D. The Balance oI the Equities Weighs Decidedly in PlaintiIIs` Favor ............................. 28
E. A Temporary Restraining Order Serves the Public Interest .......................................... 29
F. Any Bond Required Should Be Minimal ....................................................................... 29
REQUEST FOR EXPEDITED DISCOVERY ............................................................................. 30
A. The Requested Discovery Is Core to the Case and Is Needed Immediately Given
Monster`s Apparent March 2014 Launch oI The Superstar .......................................... 32
B. The Requests Are Narrowly Tailored ............................................................................ 33
Case 3:l4-cv-00332-PK Document 8 Filed 02/27/l4 Page 2 of 4l Page lD#: 66
PAGE ii MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT
OF APPLICATION FOR TEMPORARY RESTRAINING ORDER AND
MOTION FOR EXPEDITED DISCOVERY

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C. The Requested Discovery Is Not Burdensome and Monster Will Be Able To Provide
The InIormation In An Expedited Manner .................................................................... 33
D. Advanced Discovery Is JustiIied.................................................................................... 34
CONCLUSION ............................................................................................................................. 34

PAGE iii MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT
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TABLE OF AUTHORITIES
PAGE(S)
Federal Cases
Alcatel USA, Inc. v. DGI Technologies, Inc.,
166 F.3d 772 (5th Cir. 1999) .............................................................................................19, 22
Apple Inc. v. Samsung Electronics Co., Ltd.,
No. 11-1846, 2011 WL 1938154 (N.D. Cal. May 18, 2011) ...................................................32
Bank of Am., N.A. v. Lee,
No. 08-5546 CAS (JWJX) 2008 WL 4351348 (C.D. Cal. Sept. 22, 2008) .............................29
Campbell Soup Co. v. ConAgra, Inc.,
977 F.2d 86 (3d Cir. 1992).......................................................................................................17
Cellco Partnership v. Hope,
469 Fed.Appx. 575 (9th Cir. 2012) ..........................................................................................27
Contour Design, Inc. v. Chance Mold Steel Co.,
No. 09-451, 2010 WL 4774283 (D.N.H. Oct. 22, 2010) ................................................. passim
Dr. Seuss Enters. v. Penguin Books USA, Inc.,
109 F.3d 1394 (9th Cir. 1997) .................................................................................................17
GoTo.Com v. Walt Disnev Co.,
202 F.3d 1199 (9th Cir. 2000) .................................................................................................29
Hard Drive Prods., Inc. v. Does 1-118,
No. 11-cv-1567 LB, 2011 WL 1431612 (N.D. Cal. April 14, 2011) ......................................31
Interserve, Inc. v. Fusion Garage PTE, Ltd.,
No. 09-cv-05812 JW (PVT), 2010 WL 143665 (N.D. Cal. Jan. 7, 2010) ...................31, 32, 34
KLA-Tencor Corp. v. Murphv,
717 F. Supp. 2d 895 (N.D. Cal. 2010) ...............................................................................32, 34
Lamb-Weston, Inc. v. McCain Foods, Ltd.,
941 F.2d 970 (9th Cir. 1991) .................................................................................17, 20, 27, 28
Lear, Inc. v. Adkins,
395 U.S. 653 (1969) .................................................................................................................19
Our Sonoran, Inc. v. Flowers,
408 F.3d 1113 (9th Cir. 2005) .................................................................................................30
PAGE iv MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT

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Pod-Ners, LLC v. Northern Feed & Bean of Lucerne, Ltd. Liabilitv Co.,
204 F.R.D. 675 (D. Colo. 2002) ..............................................................................................32
Qiang Wang v. Palo Alto Networks, Inc.,
No. 12-05579 WHA, 2013 WL 415615 (N.D. Cal. January 31, 2013) ...................................19
Rent-A-Center, Inc. v. Canvon Television & Appliance Rental, Inc.,
944 F.2d 597 (9th Cir. 1991) ...................................................................................................27
Semitool, Inc. v. Tokvo Electron Am., Inc.,
208 F.R.D. 273 (N.D. Cal. 2002) ...........................................................................31, 32, 33, 34
SI Handling Svstems v. Heislev,
753 F.2d 1244 (3d Cir.1985)....................................................................................................17
Speech Tech. Associates v. Adaptive Commcn Svs., Inc.,
C-88-2392-VRW, 1994 WL 449032 (N.D. Cal. Aug. 16, 1994) ............................................18
Stuhlbarg Intl Sales Co. v. Brush & Co.,
240 F.3d 832 (9th Cir. 2001) ...................................................................................................27
Tovo Holdings of Americas Inc. v. Continental Tire North America Inc.,
609 F.3d 975 (9th Cir. 2010) ...................................................................................................16
Jaqueria Tres Monfitas, Inc. v. Iri:arrv,
587 F.3d 464 (1st Cir. 2009) ....................................................................................................29
Wempe v. Sunrise Med. HHG, Inc.,
61 F. Supp. 2d 1165 (D. Kan. 1999) ........................................................................................18
Winter v. Natural Res. Def. Council, Inc.,
555 U.S. 7 (2008) .........................................................................................................16, 26, 29
Zobmondo Entertainment LLC v. Imagination Intern. Corp.,
No. CV 09-02235 ABC, 2009 WL 8714439 (C.D. Cal. June 23, 2009) .................................26
State Cases
Allen v. Hall,
328 Or. 276 (1999) ...................................................................................................................23
Church v. Woods,
190 Or. App. 112 (Or. App. 2003) ...........................................................................................24
Holland Developments, Ltd. v. Manufacturers Consultants, Inc.,
81 Or.App. 57 (Or. App. 1986) ................................................................................................18
PAGE v MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT

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McGantv v. Staudenraus,
321 Or. 532 (1995) .............................................................................................................23, 30
Northwest Natural Gas Co. v. Chase Gardens, Inc.,
328 Or. 487 (1999) ...................................................................................................................24
Straube v. Larson,
287 Or. 357 (1979) ...................................................................................................................24
Wampler v. Palmerton,
250 Or. 65 (1968) .....................................................................................................................23
Federal Statutes
Lanham Act, 15 U.S.C. 1125 ..................................................................................................3, 26
State Statutes
New Hampshire UniIorm Trade Secrets Act .................................................................................19
Oregon UniIorm Trade Secrets Act ORS 646.461-646.475 et seq ..........................3, 17, 19, 21, 24
Rules
Federal Rule oI Civil Procedure 26 ...................................................................................31, 32, 33
Federal Rule oI Civil Procedure 30(b)(6) ................................................................................33, 34


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PlaintiIIs Carbon Audio, LLC ('Carbon Audio or 'Carbon) and Headbox, LLC, d/b/a
Boomphones ('Boomphones and, collectively, 'PlaintiIIs) hereby seek an emergency
temporary restraining order preventing DeIendant Monster, Inc. ('Monster) Irom introducing to
the market and/or otherwise promoting a Bluetooth speaker it calls the 'Superstar. PlaintiIIs
Iurther seek expedited discovery in this matter.
INTRODUCTION
PlaintiII Carbon Audio is a Portland technology start-up success story. Founded in 2011,
the company has made waves in the audio industry in just a Iew short years with creative
wireless speaker products incorporating cutting edge technology. The company is relatively
small, but its ideas are big. As the electronics review website Digital Trends recently noted:

Carbon Audio is not what we would call a bandwagon company.` While others
crank out oII-the-shelI, cookie-cutter products all will-nilly to get in on trending
categories like headphones and Bluetooth speakers, Carbon Audio keeps it
unique. The company takes time to step back, Iigure out how to Iill a need, and
do it in a way no one else has.
1

Carbon`s latest innovative product is the 'Pocket Speaker, which debuted on the market
in Apple stores in November 2013. The Pocket Speaker was very diIIerent than any previous
Bluetooth speaker. With its portable 'pocket size, its distinctive rectangular shape with Iour
evenly rounded corners, its perIorated grille, its circle-design passive radiator in the center oI the
grille, as well as its powerIul and high quality sound, the Pocket Speaker stood alone in the
market.
DeIendant Monster is a much larger electronics company. Although its history has been
in cables it touts itselI as the 'world`s leading manuIacturer oI high perIormance cables
Monster more recently has entered into the portable speaker market. With its customary Ilash
and IanIare, Monster is planning to introduce to the U.S. market, at some point in March 2014, a
portable Bluetooth speaker device called the 'Superstar. The Superstar which is a signiIicant
departure Irom Monster`s previous speakers is a complete knock oII oI the Pocket Speaker,

1
Declaration oI Stephanie E.L. McCleery, February 27, 2014 ('McCleery Decl.) Ex. K.
Case 3:l4-cv-00332-PK Document 8 Filed 02/27/l4 Page 7 of 4l Page lD#: 7l
PAGE 2 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT

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Irom the appearance and design all the way down to the distinctive 'on, 'oII and 'connected
tones that were created speciIically Ior the Pocket Speaker by Carbon. Below are side-by-side
comparisons oI the products:
PLAINTIFFS` PRODUCT DEFENDANT`S PRODUCT

This was deliberate. To manuIacture its Superstar product, Monster tapped the same
Chinese company, Shenzhen 3NOD Electronics Co. Ltd. ('3NOD), that manuIactures
PlaintiIIs` Pocket Speaker. 3NOD uses valuable trade secrets owned by PlaintiIIs including
the acoustic technology, Iirmware, tooling, and internal speciIications to manuIacture the
Pocket Speaker and is required, by contract with Carbon, to keep those trade secrets conIidential.
Monster knew or, at the very least, had reason to know oI these Iacts. PlaintiIIs Iurther have
received inIormation that Monster had (i) wrongIully obtained Irom 3NOD a prototype oI the

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Pocket Speaker long beIore the product was even out on the market, and (ii) placed a Monster
logo on the prototype, promoting it as a Iorthcoming 'Monster product.
By wrongIully obtaining a prototype, and using 3NOD to make a virtually identical
product with the same internal conIiguration, the same external conIiguration, the same
Iirmware, and the same tones to designate particular operations in breach oI 3NOD`s
contractual conIidentiality obligations to Carbon, Monster has both misappropriated PlaintiIIs`
trade secrets and tortiously interIered with Carbon Audio`s contract.
2

Monster claims in its marketing materials that it 'created this speaker, touting that it is
'tempered with Monster innovation. These types oI claims are important to today`s consumers,
who wish to associate themselves with 'innovators. They are also consistent with the image
that Monster`s Iounder and long-time CEO, Noel Lee, has tried to cultivate Ior quite some time.
Indeed, just a Iew years ago, Mr. Lee was quoted as saying:
If you can`t do it differently or better, there`s no sense in doing it. There are
leaders and there are followers. And some of the followers are copiers:
counterfeit. So there`s hundreds of people out there, thousands doing that.
If I make a headphone, I just go to China and there are a thousand
manufacturers. It`s easy to pick one from the crowd and say, ~you know
what, modify the color on this one, and that`ll be my headphone. And there
are hundreds of companies that go out there and do that. Doing a headphone
from scratch and being innovative, doing something that no one else has ever
done, both in sound and innovation, is really hard.
3

But Monster`s conduct relating to the Superstar Ilies in the Iace oI Mr. Lee`s statements.
Mr. Lee is, however, correct when he says that 'being innovative, doing something that no one
else has ever done, both in sound and innovation, is really hard. When Carbon Audio

2
PlaintiIIs seek emergency relieI under three oI the nine Counts they asserted against
Monster: (i) misappropriation oI trade secrets under the Oregon UniIorm Trade Secrets Act, ORS
646.461, et seq., (ii) tortious interIerence with contractual relations, and (iii) misrepresentation
under the Lanham Act, 15 U.S.C. 1125(a)(1)(B). PlaintiIIs believe that these claims especially
lend themselves to adjudication without trial.

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approached 3NOD about manuIacturing a product like this, 3NOD said it would be impossible.
It took months oI time Pocket Speaker inventor Jason Riggs oI Carbon literally moved to
China Ior several months and worked with the Iactory day and night on the development oI the
product to perIect the device. It is that 'sweat equity which trade secret law is designed to
protect that Monster has wrongIully taken.
Monster`s conduct has caused, and will continue to cause, PlaintiIIs to suIIer irreparable
harm, including loss oI customers, damage to PlaintiIIs` distribution channels and loss oI
customer goodwill. Indeed, Ior small, start-up companies like PlaintiIIs (with combined gross
revenues oI $3.3 million, and net income oI negative $3.5 million Ior 2013), predatory conduct
like Monster`s is enterprise-threatening. Courts routinely Iind irreparable harm where, like here,
a much larger competitor with signiIicantly more market power produces a knock oII product
that (i) incorporates a smaller competitor`s trade secrets, and (ii) interIeres with the smaller
competitor`s manuIacturing relationship, customer base and distribution network.
Monster`s conduct must be put to a stop.
STATEMENT OF FACTS
A. Carbon Audio and Boomphones - Innovators
Carbon Audio is made up oI a group oI product design, development and
commercialization experts who strive to provide new and creative audio products that are both
high quality and low cost. Declaration oI Jason Martin, February 26, 2014 ('Martin Decl.)
3-4. Carbon`s very Iirst product, the Zooka a Kickstarter
4
Iunded project was a remarkable
success. Martin Decl. 5, 9. The Zooka, launched in 2012, looked nothing like previous

3
McCleery Decl. Ex. O.
4
Kickstarter is a 'crowd-Iunding platIorm that allows a large number oI people the
chance to contribute small or large amounts oI money in order to Iund a creative project.
Case 3:l4-cv-00332-PK Document 8 Filed 02/27/l4 Page l0 of 4l Page lD#: 74

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speakers it is a small, high quality speaker, wrapped in medical grade silicone, with a slit
running down the middle so that it can easily be attached to a tablet or laptop. Martin Decl. 8;
McCleery Decl., Ex. A.
The product was an instant hit, listed in Rolling Stone and Wired Magazines` 2012 'GiIt
Guides. McCleery Decl. Exs. C-D. Several media outlets, including the New York Times, gave
positive reviews. McCleery Decl. Exs. E-F. In addition to online sales, the Zooka is sold in
Apple stores and in 'big box stores such as Target, Wal-Mart and Best Buy.
In September 2013, Carbon Audio entered into a license agreement with PlaintiII
Boomphones in which Boomphones became the exclusive licensee Ior the Pocket Speaker
device, and all intellectual property including patent applications, trade secrets and trade dress
related to that product (the 'Pocket Speaker Intellectual Property). Martin Decl. 34.
B. The Design and Development of the Pocket Speaker
Following the success oI Zooka, the Carbon team came up with a new idea another
Bluetooth speaker but one that had the look, Ieel, and size oI a smartphone with room-Iilling,
high-quality sound. Martin Decl. 10; Declaration oI Jason Riggs, February 26, 2014 ('Riggs
Decl.) 3.
The result was the Pocket Speaker. Id. AIter conceiving the idea in approximately
September 2012, the Carbon team worked diligently designing and creating the Pocket Speaker.
Martin Decl. 11; Riggs Decl. 5-8.
By October 2012, Carbon had built a working prototype oI the Pocket Speaker, and in
mid-November, met with representatives oI Apple about the product.
5
Martin Decl. 12-13;
Riggs Decl. 6-7. On January 3, 2013, Carbon Iiled an application Ior a utility patent Ior the
Pocket Speaker, as well as an application Ior a design patent. Martin Decl. 14; Riggs Decl. 8.

5
Discussions at the meeting with Apple were covered by a Non-Disclosure Agreement
already in place between Carbon Audio and Apple. See Martin Decl. 13.
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Both oI those patent applications are still pending beIore the U.S. Patent and Trademark OIIice
('PTO), although the PTO has indicated that 'Iirst oIIice action will be taken on the design
patent application in May 2014. Martin Decl. 15-16; Riggs Decl. 9. The Pocket Speaker
packaging states 'patent pending. Martin Decl. 17.
In January oI 2013, at the Consumer Electronics Show ('CES) in Las Vegas, Nevada,
Carbon Audio met with 3NOD, the Chinese manuIacturing company that was already producing
Carbon`s Zooka, to discuss Iabrication oI the Pocket Speaker.
6
Martin Decl. 6, 18; Riggs
Decl. 10. 3NOD originally believed that it would be impossible to manuIacture a speaker with
the innovative Ieatures Carbon desired, including Iour 'drivers or speakers two in the Iront
and two in the back in a product the size and thickness oI a smartphone. Martin Decl. 19;
Riggs Decl. 11-12. Eventually, however, aIter numerous technical meetings with Carbon`s
engineers and designers, 3NOD agreed to manuIacture the Pocket Speaker with the
speciIications and details Carbon had envisioned. Martin Decl. 20; Riggs Decl. 12-13.
3NOD`s work on the Pocket Speaker was governed by a ManuIacturing Agreement with
Carbon and a Non-Disclosure Agreement ('NDA).
7
Martin Decl. 20, 22, Ex. A; Riggs Decl.
16, Ex. A. Pursuant to these agreements, 3NOD agreed to keep conIidential all proprietary
inIormation provided by Carbon, including trade secrets. Riggs Decl. 14-15, Ex. A at 9.1;
Martin Decl. 22, Ex. A at p. 1.
By the end oI January 2013, 3NOD had manuIactured prototypes oI the Pocket Speaker,
working closely with Carbon`s engineers to Iine tune the manuIacturing process and make the
product that was envisioned by Carbon. Martin Decl. 21; Riggs Decl. 17-19. Pocket
Speaker inventor Jason Riggs lived on-site in China Ior several months working with 3NOD to

6
A Non-Disclosure Agreement in place with 3NOD prior to disclosure oI any proprietary
inIormation. See Martin Decl. Ex. A, 13.
7
The NDA is between 3NOD and a company called '8 LLC. 8 LLC is the predecessor oI
Carbon Audio. See Martin Decl. 21.

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develop the product. Riggs Decl. 18. The process included development oI (i) 'tooling
8
to
make the components, (ii) 'Iirmware
9
Ior operation oI the Pocket Speaker, (iii) acoustic,
electrical and mechanical architecture, and (iv) packaging Ior the Pocket Speaker. Riggs Decl.
19.
Under the ManuIacturing Agreement, all oI the inIormation provided to 3NOD, including
the prototype, the acoustic technology, the internal and external speciIications, and the Iirmware,
as well as the manuIacturing processes that were developed, constitute the proprietary
intellectual property and speciIically, the trade secrets oI Carbon (the 'Pocket Speaker Trade
Secrets). Riggs Decl. Ex. A at 1 ('Created Intellectual Property), and 10.2. 3NOD was
required to keep the Pocket Speaker Trade Secrets conIidential and was authorized to use these
trade secrets only in connection with manuIacturing the Pocket Speaker. Riggs Decl. Ex. A at
9.1; Martin Decl. Ex. A at p.1.
Carbon`s Jason Martin created and provided to 3NOD the Iunctional sound Iiles Ior use
in the Iirmware oI the Pocket Speaker. Martin Decl. 23. Carbon is in the process oI applying
Ior trademark and copyright protection Ior these sound eIIects. Id. Exactly six oI the Iinal
prototypes were provided to Carbon in Portland. Martin Decl. 24; Riggs Decl. 22. Two oI
the prototypes were kept in a locked cabinet in Carbon`s CEO`s oIIice, one was provided to
Carbon Iounder Jason Martin, and three were provided to inventor Jason Riggs. Id. The
prototypes provided to Carbon are still in Carbon or its employees` custody or control. Martin
Decl. 25; Riggs Decl. 23.

8
Tooling is the process by which a Iactory develops machinery in preparation Ior
production. The tooling developed Ior the Pocket Speaker includes the molds Ior the insertion oI
liquid plastic that Iorm the device and components thereoI. See Riggs Decl. 19.
9
Firmware is the hardware and computer programming instructions stored on read-only
memory ('ROM) that instruct a device how to respond to user input. For example, the
Iirmware in a stereo powers the stereo on when a user pushes the 'POWER button.

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The rest oI the prototypes, and the other trade secrets that were provided or developed,
remained at the 3NOD Iactory, subject to the ConIidentiality and Non-Disclosure Agreements in
place between the parties. Martin Decl. 25; Riggs Decl. 24.
C. Carbon`s Discussions With SOL Republic
Throughout 2013, Carbon was experiencing Iinancial diIIiculties. Martin Decl. 27.
Consequently, the Carbon principals began looking Ior investors to tide the company over until
the Pocket Speaker could reach the market, or to buy the company out-right. Martin Decl. 28.
One oI the potential suitors Ior Carbon was SOL Republic, a consumer electronics
company Iounded by Kevin Lee. Martin Decl. 29-30. Kevin Lee, SOL Republic`s CEO, is the
son oI Noel Lee, Iounder and CEO oI Monster. McCleery Decl. Exs. H-I. Kevin Lee worked
exclusively at Monster Ior years beIore starting SOL Republic and, notwithstanding his position
at SOL Republic, he continues to hold a senior executive position Vice President oI Corporate
Strategy at Monster. Id.
In May 2013, Carbon principals met with Kevin Lee and other executives to discuss a
potential buyout oI Carbon by SOL Republic. Martin Decl. 30. The two companies could not
come to an agreement, and they eventually parted ways. Id. ThereaIter, an executive at SOL
Republic inIormed Jason Martin that Noel Lee oI Monster had 'the exact same product with a
Monster logo on it, and was 'shopping it around in Europe. Martin Decl. 31. The executive
also advised Mr. Martin to 'get your Iactory in line, which Martin took to mean that the
executive believed Noel Lee had obtained the Pocket Speaker prototype Irom 3NOD, its
manuIacturer. Martin Decl. 32. When Carbon conIronted 3NOD about this conversation,
3NOD denied providing a prototype to anyone. Martin Decl. 33.
D. The Pocket Speaker Hits The Market In November 2013
Over a year aIter the concept was developed, the Pocket Speaker was Iirst oIIered Ior sale
to consumers in November 2013. Martin Decl. 35. The product initially was sold as a Carbon

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product, but it now is being sold exclusively as a Boomphones product. Martin Decl. 36. The
press took note. PC Maga:ine wrote that the speaker is 'an aIIordable, very portable Bluetooth
speaker with clean, bright audio perIormance, touting its 'very cool design element oI being
able to pair two speakers to the same device. Digital Trends, noting that Carbon 'tends to think
outside the box, raved about Pocket Speaker`s design and perIormance and concluded that the
Pocket Speaker 'will shock you with its ability to play Iar louder than its size should allow and
that it 'is the most travel-Iriendly speaker we`ve evaluated to date. McCleery Decl. Exs. J-L.
E. The Pocket Speaker`s Unique Design
The Pocket Speaker`s design is diIIerent Irom the devices that preceded it. Riggs Decl.
25. No previous speaker was designed to Iit into one`s pocket like a smartphone. Id. Even the
smaller Bluetooth speakers were typically thicker and much less portable. Id. But it is not just
portability that made the Pocket Speaker stand out. Its overall design and aesthetic are diIIerent
Irom anything on the market. Riggs Decl. 26. While previous Bluetooth speakers were larger,
thicker and more 'blocky, the overall design oI the Pocket Speaker is a thin, rectangular-shaped
product, with Iour evenly rounded corners. Id.

As the above schematics show, individual, distinctive Ieatures oI the Pocket Speaker
include:
a distinctive, perIorated grille on both the Iront and back oI the product;
two opposable circular passive radiators in the middle oI the device that vibrate
with the bass oI the music and convey the message 'loud;

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a removable silicone band that comes in diIIerent colors and that wraps around
the product;
slightly raised, intuitive, and easy to use buttons on top Ior Bluetooth
connectivity, pairing, volume and power;
distinctive and innovative sounds, including Ior 'on 'Iull battery 'searching
and 'connected;
two LED light indicators Ior power, charging and connectivity and one
microphone opening;
a power outlet located on the side, covered by a removable Ilap oI the silicone
wrapping;
Riggs Decl. 26.
Since the Pocket Speaker debuted in November 2013, the product has been available both
online and in Apple stores, and is being distributed by 17 diIIerent distributors in 15 countries.
Martin Decl. 37. PlaintiII also has engaged in signiIicant marketing eIIorts Ior the Pocket
Speaker, including an extensive marketing campaign at the January 2014 Consumer Electronics
Show (CES) in Las Vegas and a creative social media presence.
10
Martin Decl. 38, 42.
F. CES 2014: Monster Unveils A Knock-Off
CES is the most important trade show in the consumer electronics industry. Martin Decl.
39. Held yearly in Las Vegas in January, technology companies unveil their latest technology
gadgets at CES, oIten with considerable IanIare. Martin Decl. 39-41. CES is a marketplace
where large and small companies, innovators, and manuIacturers come together to exhibit
consumer electronics. Martin Decl. 40.

10
See, e.g., http.//www.voutube.com/watch?vhqiaG:tPWlw;
http.//www.voutube.com/watch?vmtNeKAbm1H4.

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CES 2014 was held January 7-10, 2014. Martin Decl. 41. At CES 2014, Monster had a
prime location immediately oII oI the grand lobby oI the Las Vegas Convention Center,
complete with a Lamborghini and celebrities. Martin Decl. 43. Not coincidentally, SOL
Republic was also at CES, sharing a hospitality suite with Monster. Martin Decl. 51. Monster
unveiled the 'Superstar at this year`s CES, tapping Iormer Los Angeles Laker, Shaquille
O`Neal as its spokesperson. Martin Decl. 44. Shaq promoted the Superstar with the slogan,
'Size Does Matter:

AIter the Boomphones team was alerted at CES that Monster was showcasing a very
similar product, Boomphones representatives went to the Monster booth to investigate, only to
Iind essentially the same product being touted as 'Monster innovation. Martin Decl. 45-46;
Riggs Decl. 28. One oI the Boomphones` employees recorded a video oI the Monster product
at the show, and the team discovered that the similarities were not simply visual the Monster
Superstar`s Iunction tones were the exact same as the Pocket Speaker`s distinctive and
proprietary tones. Martin Decl. 50; Riggs Decl. 30. This is conIirmed by sound wave
comparisons between the Pocket Speaker`s tones and Monster`s tones:
11

11
The slight diIIerences in the soundwave images are likely due to the Iact that the Monster
tones were taken Irom a video recording made at CES, where there was signiIicant background
noise. The Pocket Speaker tones were taken Irom audio Iiles with no background noise.
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During this interaction at Monster`s booth, the Boomphones representatives told the
Monster representative that they were also aIIiliated with Carbon Audio. Martin Decl. 48;
Riggs Decl. 29. The Monster representative said in reply 'Oh, then you know the whole story
with this product. Don`t worry there is plenty oI pie Ior us to share. Martin Decl. 48; Riggs
Decl. 29.
The products are nearly identical:
the overall shape a thin rectangular product with Iour evenly rounded corners
is the same, and the overall dimensions appear to be identical as well;
the Superstar is likewise wrapped in a silicone-type product;
the Superstar likewise has a perIorated grille;

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the Superstar likewise has circular passive radiators in the center oI the Iront and
back oI the product that appear to have the same dimensions as the Pocket
Speaker`s circular passive radiators, giving it the same overall look;
the Superstar likewise has slightly raised buttons on the top oI the device also
Ior 'power, 'volume, and 'pairing with the exact same symbols;
the Superstar likewise has two LED light indicators Ior power, charging and
connectivity and one microphone opening all in the exact same locations;
the Superstar`s power/charging inlet is in the exact same location as the Pocket
Speaker`s and uses the exact same symbol.
Riggs Decl. 30.
Monster`s Albert Lee, who describes himselI as lead product developer at Monster,
showed oII the Superstar in a promotional video Iilmed at CES. Part oI his pitch was that the
speaker 'Iits in your pocket, and even demonstrated this Ieature in the video.
12
Mr. Lee stated
at CES that the Superstar was diIIerent Irom previous speakers because it was 'Ilat, which
diverged Irom the 'bulbous, round, big, blocky speakers that were already on the market.
13

This statement would have been accurate iI Mr. Lee was describing the Pocket Speaker.
Notably, many oI Monster`s previous speakers were, in Iact, 'bulbous, round, big and blocky,
making the Superstar a distinct departure Irom Monster`s previous products:

12
See http://www.youtube.com/watch?vN8h2KoIIWo8.
13
Id.

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DEFENDANT`S PREVIOUS SPEAKERS

G. Monster Uses The Same Chinese Manufacturer And Has Misappropriated
Plaintiffs` Trade Secrets
3NOD was also at CES. Martin Decl. 52; Riggs Decl. 31. AIter Iirst conIronting
Monster about its knock-oII product, representatives oI Boomphones met with a representative
oI 3NOD in 3NOD`s hospitality suite. Id. During this meeting, the representative oI 3NOD
acknowledged two critical points: (i) it was manuIacturing the Superstar Ior Monster (necessarily
using PlaintiIIs` trade secrets), and (ii) it had given a prototype oI the device to SOL Republic
prior to the time the Pocket Speaker was on the market. Martin Decl. 53; Riggs Decl. 32.
Notably, although SOL Republic is ostensibly a competitor oI Monster, it has been called a 'spin
oII oI Monster, given that (i) it was Iounded by Kevin Lee, a long-time Monster executive and
the son oI Monster Iounder and CEO Noel Lee, and (ii) SOL Republic has been described as
selling Monster-like products but at cheaper prices.
14

Even though he Iormed SOL Republic, Kevin Lee continues to hold a senior executive
position Vice President oI Corporate Development at Monster. Kevin Lee has also made
clear that his loyalties very much remain with Monster and his Iather:
Q: How would you Ieel about possibly running your Iather`s empire in the near Iuture?
A: Kevin |Lee|: One, I`d be honored. Cut me open, I`m a monster and will always be
a monster. Doing that and being apart oI the ongoing Iuture oI Monster, also

14
McCleery Decl. Ex. N.

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running the company as good as he |Noel Lee| did, or even better, I would want to
make him even prouder. .
15

H. Monster`s Marketing Is False
Monster is making a number oI Ialse statements about the Superstar in its marketing. In
the same promotional video reIerenced supra, Monster`s Albert Lee states:
'Our latest new oIIering here at CES 2014 is the Monster Superstar, a brand new
micro-Bluetooth speaker, a new breed oI speaker..
'With this we actually stuck three drivers, a huge radiator in the middle, we are
able to achieve a lot oI SPL, a lot oI great volume Ior people who respect that..
'We`ve spent a lot oI time with our acoustic engineers to make sure this sounds
every bit as big as people expect..
16

Monster`s press release on the Superstar states:
'Monster has challenged the limits in creating a Bluetooth speaker with the
smallest Iorm Iactor design.
'.Monster has incorporated Pure Monster Sound into every aspect oI this
design and '.the Monster SuperStar has also been engineered with Pure
Monster Sound, the high-perIormance tuning concept created by Head Monster
Noel Lee.
'|Superstar| . |t|echnology . is . tempered with Monster innovation.
17

As long lines at Apple stores reIlect whenever the company introduces a new product,
these kinds oI statements are important to consumers, who value associating themselves with
'innovative companies and products. But Monster`s statements are Ialse. It is not the
'creator, 'designer or 'engineer oI this speaker. Nor does the Superstar reIlect any Monster

15
McCleery Decl. Ex. O.
16
McCleery Decl. Ex. P.
17
McCleery Decl. Ex. G.
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'innovation. Rather than innovate, Monster chose the easy route it wrongIully copied
PlaintiIIs` innovation.
I. The Superstar is Creating Confusion in the Marketplace
A number oI attendees at CES noted to Boomphones representatives the marked
similarities between the products and expressed conIusion over the source oI the products. Riggs
Decl. 28; Martin Decl. 45. Consumers are likewise expressing conIusion on social media.
For example, in response to Monster`s CES promotional video, one commentator on Youtube
stated: 'Umm dont they sell some similar to these in the apple stores? Carbon Audio Portable
Speakers.
18
On Monster`s Instagram page Ieaturing the Superstar, one commentator also
noted that the Superstar was not original: 'Boomphones did it Iirst!!!
19

ARGUMENT
A. Standard for Temporary Restraining Order
A party seeking a temporary restraining order must demonstrate: (1) a likelihood oI
success on the merits; (2) it is likely to suIIer irreparable harm in the absence oI preliminary
injunctive relieI; (3) the balance oI hardships tips in its Iavor; and (4) an injunction is in the
public interest. Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 20 (2008); see also Tovo
Holdings of Americas Inc. v. Continental Tire North America Inc., 609 F.3d 975, 982 (9th Cir.
2010). The Ninth Circuit has also employed a 'sliding scale approach, on which '|t|he moving
party must show either (1) a combination oI probable success on the merits and the possibility oI
irreparable injury, or (2) that serious questions are raised and the balance oI hardships tips
sharply in Iavor oI the moving party. Dr. Seuss Enters. v. Penguin Books USA, Inc., 109 F.3d
1394, 1397 n.1 (9th Cir. 1997).

18
McCleery Decl. Ex. P.
19
McCleery Decl. Ex. Q.

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B. Plaintiffs Are Likely to Succeed on the Merits of Their Claims for Misappropriation
of Trade Secrets, Tortious Interference with Contractual Relations and
Misrepresentation Under The Lanham Act
1. Misappropriation of Trade Secrets
In Count III oI the Complaint, PlaintiIIs seek to enjoin Monster Irom use oI PlaintiIIs`
misappropriated trade secrets. Under ORS 646.463, 'Actual or threatened misappropriation may
be temporarily, preliminarily or permanently enjoined. Id. TROs and preliminary injunctions
are commonly granted in trade secret misappropriation cases: 'Extensive precedent supports an
injunctive remedy where the elements oI a trade secret claim are established. Campbell Soup
Co. v. ConAgra, Inc., 977 F.2d 86, 92 (3d Cir. 1992) (quoting SI Handling Svstems v. Heislev,
753 F.2d 1244, 1265 (3d Cir.1985)).
Misappropriation oI trade secrets under Oregon law requires a showing oI '|a|cquisition
oI a trade secret oI another by a person who knows or has reason to know that the trade secret
was acquired by improper means. ORS 646.461(2)(a). A trade secret must 'derive independent
economic value, actual or potential, Irom not being generally known to the public, and must be
'the subject oI eIIorts that are reasonable under the circumstances to maintain its secrecy. ORS
646.461(4)(a)-(b). Acquisition through an 'improper means includes the 'inducement oI a
breach oI a duty to maintain secrecy or espionage through electronic or other means. ORS
646.461(1). See also Lamb-Weston, Inc. v. McCain Foods, Ltd., 941 F.2d 970, 972 (9th Cir.
1991) ('Misappropriation oI trade secrets under Oregon law requires a showing oI (1) a valuable
commercial design, (2) a conIidential relationship between the party asserting trade secret
protection and the party who disclosed the inIormation and (3) the key Ieatures oI the design that
were the creative product oI the party asserting protection.) (citing Holland Developments, Ltd.
v. Manufacturers Consultants, Inc., 81 Or.App. 57, 62 (Or. App. 1986)).

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a. PlaintiIIs possess valuable commercial designs
Carbon has numerous commercially valuable trade secrets that existed both up to and
aIter the launch oI the Pocket Speaker. The concept and design oI a Ilat, pocket-sized Bluetooth
speaker with room-Iilling, high-quality sound was completely new to the market in November
2013.
20
In Iact, when Carbon brought the design speciIications Ior the Pocket Speaker to its
manuIacturer, 3NOD, in January oI 2013, 3NOD maintained that the pocket speaker, as
speciIied, could not be built. Riggs Decl. 11; Martin Decl. 19. AIter months oI hands-on
help and guidance Irom Carbon`s engineers to create tooling, Iirmware, and speciIic
manuIacturing processes Ior the product, 3NOD successIully manuIactured the Pocket Speaker.
Riggs Decl. 18-19.
Carbon learned that Monster obtained a prototype oI the Pocket Speaker even prior to the
introduction oI the Pocket Speaker to the market. The prototype certainly qualiIies as a
'valuable commercial design. See Speech Tech. Associates v. Adaptive Commcn Svs., Inc., No.
C-88-2392-VRW, 1994 WL 449032, at *9 (N.D. Cal. Aug. 16, 1994) (prototypes trade secrets,
especially where deIendants had reason to know prototypes has been disclosed in conIidence;
deIendant`s use oI plaintiII`s prototype to make competing product constituted trade secret
misappropriation even though deIendant`s product had some variations); see also Wempe v.
Sunrise Med. HHG, Inc., 61 F. Supp. 2d 1165, 1176 (D. Kan. 1999) (prototype trade secret
where 'conIidentially presented to deIendants). Indeed, all oI the designs and elements
internal and external oI the Pocket Speaker were non-public 'valuable commercial designs
prior to the product`s launch in November 2013.
In addition, while the concept and general design became public knowledge upon the
product`s launch in November 2013, the Pocket Speaker also includes still-conIidential patent-

20
Three months aIter its debut, the Apple store still has nothing like the Pocket Speaker in
their Bluetooth speaker collection. See McCleery Decl. Ex. B.


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pending acoustic technology and architecture, tooling and Iirmware that are still not generally
known to the public.
21
See Alcatel USA, Inc. v. DGI Technologies, Inc., 166 F.3d 772, 784 (5th
Cir. 1999) (upholding jury verdict Iinding that plaintiII`s Iirmware was a trade secret); see also
Lear, Inc. v. Adkins, 395 U.S. 653, 671 (1969) ('During the time the inventor is seeking patent
protection, the governing Iederal statute requires the Patent OIIice to hold an inventor`s patent
application in conIidence.); and Qiang Wang v. Palo Alto Networks, Inc., No. 12-05579 WHA,
2013 WL 415615 (N.D. Cal. January 31, 2013) (patent applications conIidential until published).
In Contour Design, Inc. v. Chance Mold Steel Co., No. 09-451, 2010 WL 4774283
(D.N.H. Oct. 22, 2010), the court Iirst issued a TRO, and then a preliminary injunction, under
very similar Iacts and circumstances. PlaintiII in Contour Designs accused its Iormer
manuIacturer oI misappropriating its trade secrets
22
tooling and Iirmware that it jointly
developed with the manuIacturer, which enabled the manuIacturer to bring to market a
competing device. The court Iound that both the tooling and the Iirmware constituted trade
secrets, given declaration evidence that:
The tooling 'was unique to Contour`s products and was based on Contour`s
product design and implementation inIormation.
PlaintiII 'spent signiIicant time and eIIort working with and directing |deIendant
manuIacturer| in the development oI the tooling to achieve such things as precise
Iit ... |and| right Ieel.`
There was 'extensive eIIort, time, and expertise that went into development oI the
Iirmware, and the Iirmware 'was not easily subject to duplication by simple
observation.

21
The utility patent application Ior the Pocket Speaker was Iiled on January 3, 2013 and has
not yet been published.
22
While Contour arose under the New Hampshire UniIorm Trade Secrets Act, that statute,
like the Oregon UniIorm Trade Secrets Act, is modeled aIter the UniIorm Trade Secrets Act.

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Contour, 2010 WL 4774283, at *7. As the declarations submitted herewith demonstrate,
PlaintiIIs` tooling and Iirmware were developed with 3NOD under very similar circumstances.
Riggs Decl. 18-19. See generallv Lamb-Weston, Inc. v. McCain Foods, Ltd., 941 F.2d 970,
975 (9th Cir. 1991) (even aIter patent granted Ior product, speciIications, materials and
manuIacturing process Ior making product were still trade secrets because not disclosed in patent
application).
The Pocket Speaker`s patent-pending acoustic technology and architecture, its other
internal design speciIications, its Iirmware, the speciIications used to create the Pocket Speaker`s
tooling, the tooling itselI, and the manuIacturing processes jointly developed with 3NOD, are all
independently valuable and derive value Irom not being generally known to the public. Indeed,
Carbon expended over a million dollars designing, developing, marketing, and distributing the
Pocket Speaker. Martin Decl. 57.
b. PlaintiIIs took reasonable eIIorts to maintain the secrecy oI their trade
secrets
Carbon also took reasonable eIIorts to maintain the secrecy oI its concept and design (up
through the on-sale date in November 2013), as well as the acoustic technology, the internal
Iirmware, the tooling used to manuIacture the product, and the manuIacturing process
technology. In Lamb-Weston, Inc., the Ninth Circuit Iound that asking an independent contractor
to sign a conIidentiality agreement after suspected disclosure oI conIidential inIormation was
suIIicient to demonstrate a concern Ior protection oI trade secrets. Id. at 973-74. Here, a non-
disclosure agreement was in place with 3NOD prior to disclosure oI any trade secret
inIormation, which required 3NOD to hold trade secrets in conIidence, and not use trade secrets
'Ior any other purpose, including any commercial purpose, and not to 'disclose, reveal or
communication InIormation to any Person, directly or indirectly, by any means, without prior
written consent.. Martin Decl. Ex. A. Carbon also had a manuIacturing agreement with

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3NOD which likewise included provisions that (1) 3NOD was required to keep Carbon`s trade
secrets conIidential; (2) the rights to any intellectual property created or developed in preparing a
product covered by the agreement would be retained by Carbon Audio; and (3) that 3NOD
would 'use the same degree oI care, but no less than a reasonable degree oI care, as such Party
uses with respect to its own similar inIormation to protect the Proprietary InIormation oI the
other Party and to prevent any use oI Proprietary InIormation other than Ior the purposes oI the
ManuIacturing Agreement. Riggs Decl. Ex. A 9.1, 10.2. Carbon maintained the secrecy oI
its conIidential inIormation in its own oIIices via conIidentiality and non-disclosure agreements
with employees, and the prototypes created by 3NOD Ior Carbon were maintained under lock-
and-key. Martin Decl. 24; Riggs Decl. 22.
c. Monster`s conduct constitutes misappropriation under Oregon law
Under the Oregon UniIorm Trade Secrets Act, 'Misappropriation has a number oI
deIinitions, and the conduct described here Iits within multiple deIinitions including:
'(d) Disclosure or use oI a trade secret oI another without express or implied consent
by a person, who at the time oI disclosure or use, knew or had reason to know that
the knowledge oI the trade secret was:
(C) Derived Irom or through a person who owed a duty to the person seeking
relieI to maintain its secrecy or limit its use.
ORS 64.461. The statute also prohibits acquisition or use through 'Improper Means, and
deIines 'Improper Means to include 'theIt, bribery, misrepresentation, breach or inducement oI
a breach oI a duty to maintain secrecy or espionage through electronic or other means.
On inIormation and belieI, Monster, who is a sophisticated and long-time player in the
Iield oI consumer electronics, gained access to Carbon`s trade secrets by inducing 3NOD to
breach its contractual conIidentiality obligations with Carbon and disclose Carbon`s trade
secrets. ORS 646.461(2)(a); ORS 646.461(1). Monster undoubtedly has non-disclosure and
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conIidentiality provisions in its own manuIacturing agreements (and assuredly has these
arrangements with 3NOD), and thereIore must have known that its acquisition oI a prototype oI
an as-yet-unreleased product, especially one as innovative as the Pocket Speaker, was inducing a
breach oI 3NOD`s duty to maintain the secrecy oI Carbon`s trade secrets. Further, not only did
Monster improperly acquire Carbon`s trade secrets in the Iorm oI a prototype, it exacerbated the
situation by contracting with the same manuIacturing company to make its knock-oII Superstar
product. See Alcatel USA, Inc., 166 F.3d at 785 ('A complete catalogue oI improper means is
not possible. In general they are means which Iall below the generally accepted standards oI
commercial morality and reasonable conduct.).
By accessing and using PlaintiIIs` trade secret inIormation regarding the acoustic
technology, the Iirmware and the tooling developed Ior the Pocket Speaker on a daily basis,
Monster`s actions Iall squarely below the standard oI commercially moral and reasonable
conduct. Finally, to the extent that Monster argues that it independently developed the Superstar,
its claims would be belied by the use oI Carbon`s Iirmware. Indeed, the very Iact that Monster
had access to the Pocket Speaker`s Iirmware, coupled with the Iact that the Superstar has the
same dimensions and conIiguration as the Pocket Speaker and uses the exact same, distinctive
tones that were developed by Carbon, is powerIul evidence that Monster is using the Pocket
Speaker`s Iirmware in its product. Contour Design, 2010 WL 4774283, at *9 (Iinding likelihood
oI success on trade secret (Iirmware) misappropriation where deIendant manuIacturer 'had
access to the machine code oI plaintiII`s product).
Moreover, the similarities in the appearance oI the products support a Iinding oI
misappropriation oI Carbon`s tooling. Contour Design, 2010 WL 4774283, at *9 (Iinding
likelihood oI success on trade secret (tooling) misappropriation where products 'appear nearly
identical, including 'dimensions, shapes, |and| buttons).

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PlaintiIIs have shown that they have protectable trade secrets and that Monster
misappropriated those trade secrets in violation oI Oregon state law. PlaintiIIs have thereIore
shown that that they are likely to succeed on the merits oI their misappropriation oI trade secrets
claim.
2. Tortious Interference with Contractual Relations
In Count IV oI the Complaint, PlaintiIIs seek to enjoin Monster Irom use oI PlaintiIIs`
conIidential inIormation obtained by inducing a breach oI Carbon`s contracts with its
manuIacturer, 3NOD. Under Oregon common law, the tort oI intentional interIerence with
economic relations requires plaintiIIs to prove '(1) the existence oI a proIessional or business
relationship (which could include, e.g., a contract or a prospective economic advantage); (2)
intentional interIerence with that relationship or advantage; (3) by a third party; (4) accomplished
through improper means or Ior an improper purpose; (5) a causal eIIect between the interIerence
and the harm to the relationship or prospective advantage; and (6) damages. Allen v. Hall, 328
Or. 276, 281 (1999). The law serves to protect 'contracting parties against interIerence in their
contracts Irom outside parties. McGantv v. Staudenraus, 321 Or. 532, 536 (1995) (citing
Wampler v. Palmerton, 250 Or. 65, 73 (1968)).
a. Third-party Monster interIered with valid contracts between Carbon and
3NOD
As discussed supra, Carbon and its manuIacturer, 3NOD, are currently operating under
two separate contracts the Non-disclosure Agreement and the ManuIacturing Agreement both
oI which require 3NOD to maintain the conIidentiality oI PlaintiIIs` trade secret inIormation.
Martin Decl. Ex. A; Riggs Decl. Ex. A. Monster is not a party to those contracts. Id. Monster
is, however, a sophisticated designer and manuIacturer oI consumer electronics, and, on
inIormation and belieI, Monster is careIul to protect its own trade secrets and intellectual
property by means oI non-disclosure and conIidentiality agreements with its manuIacturers

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(including, most likely, 3NOD). Monster interIered with Carbon`s relationship with 3NOD by
inducing 3NOD to breach its contracts with Carbon. Monster knew, or should have known, that
by acquiring a Carbon prototype and utilizing a third-party`s trade secrets to manuIacture a
knock-oII, interIerence was 'substantially certain to occur Irom |its| actions and |was| a
necessary consequence thereoI. Straube v. Larson, 287 Or. 357, 361 (1979) (internal citation
omitted). Under Straube, thereIore, Monster`s interIerence was intentional even iI Monster did
not act Ior the purpose oI interIering because it knew that the interIerence was 'a necessary
consequence. Id.
b. Monster interIered with Carbon`s contracts with 3NOD by an
improper means by violating a statute and an established standard oI trade
Monster`s interIerence with Carbon`s contracts with 3NOD was accomplished via an
improper means. Under Oregon law, an 'improper means is one that 'violate|s| some
objective, identiIiable standard, such as a statute or other regulation, or a recognized rule oI
common law, or, perhaps, an established standard oI a trade or proIession. Northwest Natural
Gas Co. v. Chase Gardens, Inc., 328 Or. 487, 498 (1999) (internal citation omitted). By inducing
3NOD`s breach, Monster violated both a statute (ORS 646.461-646.475 et seq.), and the
established standard Ior conIidentiality in the consumer electronics trade under which trade
secrets are protected via conIidentiality and non-disclosure agreements. In addition, on
inIormation and belieI, Monster`s considerable market power and platIorm also permitted it to
use undue inIluence to induce 3NOD`s breach, thereby procuring 'an unIair advantage. Church
v. Woods, 190 Or. App. 112, 118 (Or. App. 2003) ('The use oI undue inIluence also constitutes
an improper means,` in that it involves the procurement oI an unIair advantage.).
c. Monster`s interIerence directly and adversely damaged and continues to
damage PlaintiIIs
As a direct result oI Monster`s inducement oI 3NOD`s breach oI Carbon`s contracts with
3NOD, PlaintiIIs have suIIered economic and non-economic damages. PlaintiIIs` trust in 3NOD

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has been stretched to the breaking point and they may be Iorced to Iind another suitable
manuIacturer Ior the Pocket Speaker. Martin Decl. 56-57. See Contour Design, 2010 WL
4774283, at *11 (irreparable harm established where Iormer manuIacturer misappropriated trade
secrets to introduce competing product, and plaintiII was Iorced to Iind new manuIacturer).
In addition, as a direct result oI Monster`s inducement oI 3NOD`s breach, Monster has
been able to get its knock-oII product to market much Iaster than it would have, had it been
Iorced to design and conceive the Superstar Irom scratch. This resulted in Monster displaying a
product substantially identical to PlaintiIIs` at CES 2014. Martin Decl. 45; Riggs Decl. 28.
PlaintiIIs used their resources to widely publicize the Pocket Speaker at CES, and those eIIorts
were thwarted by Monster`s splashy debut oI the knock-oII Superstar with celebrities and
models. Martin Decl. 42-44. PlaintiIIs` goodwill was damaged, as evidenced by conIusion
oI potential customers and distributors at CES approaching PlaintiIIs with comments such as
'Monster has the same thing. Martin Decl. 45; Riggs Decl. 28. In addition, PlaintiIIs` sales
people have encountered market resistance due to Monster`s impending release oI the knock-oII
Superstar, and Monster`s press releases claiming the technology as its own implies that
Plaintiffs` product is the 'knock-oII, Iurther damaging PlaintiIIs` goodwill. Martin Decl. 54.
PlaintiIIs have established valid contracts with their manuIacturer (3NOD), to which
Monster is not a party. PlaintiIIs` evidence also indicates that Monster intentionally interIered
with those contracts, by using improper means which violate Oregon statutes, by using undue
inIluence based on Monster`s market presence, and in violation oI the established standards oI
conIidentiality in the consumer electronics trade. Finally, PlaintiIIs have evidence oI a direct,
'causal eIIect between Monster`s interIerence and harm to PlaintiIIs` relationship with 3NOD
and PlaintiIIs` ability to sell and distribute the Pocket Speaker. PlaintiIIs have thereIore shown
that they are likely to succeed on their Oregon common law claim oI intentional interIerence
with contractual relations.
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3. Lanham Act Misrepresentation
In Count II oI the Complaint, PlaintiIIs seek to enjoin Monster Irom making
misrepresentations about its product in violation oI Section 43(a)(1)(B) oI the Lanham Act, 15
U.S.C. 1125(a)(1)(B). That section prohibits any statements in 'commercial advertising or
promotion |that| misrepresents the nature, characteristics, qualities, or geographic origin oI his or
her or another person`s goods, services, or commercial activities. DeIendant`s marketing Ior
the Superstar is misleading in that it misrepresents, inter alia, the nature and origin oI its product
in its advertising and promotion. Among other things, Monster represents that the Superstar was
'created by Monster and that the Superstar reIlects Monster`s 'innovation. Martin Decl. 47.
These claims are demonstrably Ialse. PlaintiIIs, thereIore, are likely to succeed on their claim
under 15 U.S.C. 1125(a)(1)(B). See generallv Zobmondo Entertainment LLC v. Imagination
Intern. Corp., No. CV 09-02235 ABC (PLAx), 2009 WL 8714439, at *4 (C.D. Cal. June 23,
2009) (Section 43(a)(1)(B) claim stated where deIendant competitor wrongly stated that its board
game product was the 'original board game in the genre).

C. A Temporary Restraining Order is Necessary to Prevent Irreparable Harm
To prove their entitlement to a temporary restraining order, PlaintiIIs must show that, in
the absence oI such relieI, PlaintiIIs are likely to suIIer irreparable harm. Winter, 555 U.S. at 20.
Here, a much larger competitor with more market power intends to produce a knock oII
product that: (i) incorporates a smaller competitor`s trade secrets and (ii) interIeres with the
smaller competitor`s manuIacturing relationship, the smaller competitor`s customer relationships
and distribution network. Courts routinely Iind irreparable harm in these circumstances. See
Cellco Partnership v. Hope, 469 Fed. Appx. 575 (9th Cir. 2012) ('|e|vidence oI threatened loss
oI prospective customers or goodwill certainly supports a Iinding oI the possibility oI irreparable
harm) (quoting Stuhlbarg Intl Sales Co. v. Brush & Co., 240 F.3d 832, 841 (9th Cir. 2001));

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see also Rent-A-Center, Inc. v. Canvon Television & Appliance Rental, Inc., 944 F.2d 597, 603
(9th Cir. 1991) ('|W|e have also recognized that intangible injuries, such as damage to ongoing
recruitment eIIorts and goodwill, qualiIy as irreparable harm.); Lamb-Weston, Inc., 941 F.2d at
974 (Iinding injunction in trade secrets case necessary to allow smaller company whose trade
secrets were misappropriated to compete against deIendant with a more established distribution
system).
Indeed, PlaintiIIs and Monster compete in the exact same space, and both customers and
distributors already have expressed conIusion over Monster`s device. See Riggs Decl. 28;
Martin Decl. 45. Given that Monster is a much larger company, there is an immediate threat
that distributors and customers will choose to align themselves with the 'more established
Monster, and its 'pocket speaker, and not take the 'risk on much smaller, 'less established
companies like PlaintiIIs. See Martin Decl. 54. Not only are distribution and customer
relationships being immediately threatened, so is Carbon`s goodwill and reputation as an
innovator in the industry. See id. 55-58. Additionally, PlaintiIIs now may be Iorced to Iind a
new manuIacturer, as 3NOD`s breaches oI conIidence have created obvious trust issues between
the parties. See id.
23
In the absence oI a temporary restraining order, PlaintiIIs will be Iorced to
compete against their own trade secrets in the market. Considering the market power oI Monster
as compared to PlaintiIIs, these threats are enterprise-threatening. These types oI harms are
extremely diIIicult to quantiIy, and, thus, are the very deIinition oI irreparable harm. See Lamb-
Weston, Inc., 941 F.2d at 974.

23
See also Contour Design, 2010 WL 4774283, at *11 (irreparable harm established where
Iormer manuIacturer misappropriated trade secrets to introduce competing product, and plaintiII
was Iorced to Iind new manuIacturer).

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Notably, the Contour case, cited supra, Iound irreparable harm under very similar
circumstances:
Chance`s copying and selling oI Contour`s products, its use oI Contour`s
production tooling, and its reIusal to return the tooling to Contour Ior Contour`s
continued production oI its mouse products, has caused harm not readily Iixed by
an award oI money damages, as Iollows: (1) a two-year delay in Contour`s release
oI new products as it attempts to Iind a new manuIacturing partner and to develop
new tooling; (2) loss oI customers who see Chance`s copied products as
replacements Ior Contour`s products; (3) damage to Contour`s product
distribution channels as Chance solicits Contour`s distributors to distribute its
copied products; and (4) loss oI customer goodwill as a result oI Contour running
out oI product due to loss oI tooling.

Contour Design, Inc., 2010 WL 4774283, at *11.
Lastly, the Non-Disclosure Agreement that Monster has induced 3NOD to breach
Iurther conIirms that 3NOD`s disclosure oI Carbon`s trade secrets and other conIidential
inIormation is causing irreparable harm:
Receiver acknowledges that the remedies available at law Ior any breach oI this
Agreement by Receiver will, by their nature, be inadequate and cause harm to
Discloser. Accordingly, without prejudicing any other remedies that may be
available to it, discloser may obtain injunctive relieI or other equitable relieI to
restrain a breach or threatened breach oI this Agreement or to speciIically enIorce
this Agreement, without proving that any monetary damages have been sustained.

Martin Decl. Ex. A, pp. 1-2. See also Contour Design, Inc., 2010 WL 4774283, at *12
(similar provision in breached NDA 'lend|s| Iurther support to a Iinding oI irreparable
harm`) (citation omitted).
D. The Balance of the Equities Weighs Decidedly in Plaintiffs` Favor
The balance oI the equities weighs decidedly in Iavor oI PlaintiIIs. Without a temporary
restraining order and expedited discovery, Monster will be able to proIit Irom its own bad acts.
The purpose oI injunctive relieI is to maintain the status quo ante litem, which is the 'last

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uncontested status which preceded the controversy. GoTo.Com v. Walt Disnev Co., 202 F.3d
1199, 1210 (9th Cir. 2000). Here, the status quo ante litem existed beIore Monster
misappropriated PlaintiIIs` trade secrets and induced a breach oI the contracts between PlaintiIIs
and their manuIacturer. Id. (holding 'status quo ante litem was the situation beIore alleged
inIringement). Courts must balance the eIIects oI granting the requested relieI on each party.
Winter, 555 U.S. at 23. PlaintiIIs are seeking a narrowly tailored temporary restraining order
requiring Monster to reIrain Irom publicizing and selling the Superstar until PlaintiIIs are
allowed the opportunity to conduct expedited discovery and Iully brieI a motion Ior a
preliminary injunction. Such a restraining order would protect PlaintiIIs` trade secret and
contract rights, but have little eIIect on Monster`s ability to conduct its estimated $100 million
business.
24
Contour Design, Inc., 2010 WL 4774283, at *12 (citing Jaqueria Tres Monfitas,
Inc. v. Iri:arrv, 587 F.3d 464, 486 (1st Cir. 2009) (holding balance oI hardships weighs in
plaintiIIs` Iavor where deIendants` potential harm is 'oI their own doing)).
E. A Temporary Restraining Order Serves the Public Interest
The public has an interest both in protecting trade secrets and in maintaining the security
oI contractual relations. See Bank of Am., N.A. v. Lee, No. 08-5546 CAS(JWJX), 2008 WL
4351348 (C.D. Cal. Sept. 22, 2008) ('the public interest lies in Iavor oI protecting plaintiIIs`
trade secrets); McGantv v. Staudenraus, 321 Or. 532, 536 (1995) (public interest in preventing
tortious interIerence with contracts) (internal citation omitted).
F. Any Bond Required Should Be Minimal
Under Ninth Circuit precedent, requiring a bond is in the sound discretion oI the district
court. See Our Sonoran, Inc. v. Flowers, 408 F.3d 1113, 1126 (9th Cir. 2005). Here, given the
Iact that the Superstar is not yet Ior sale on the market, keeping the status quo until a Iull hearing
on the merits oI an injunction will not cause any material harm to Monster. Additionally, even iI

24
See McCleery Decl. Ex. R.

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Monster would be in a position to actually oIIer Ior sale its product during the period any TRO
would be in eIIect, the dollar value oI those sales is entirely speculative. Further, the Court
should also consider the Iact that both Carbon and Boomphones are a small Iraction oI the size oI
Monster, with combined total revenues in 2013 oI approximately $3.3 million, and with
combined net income in 2013 oI approximately negative $3.5 million. Martin Decl. 57. Both
are essentially start-up entities and should not eIIectively be denied access to this kind oI relieI.
Accordingly, PlaintiIIs respectIully request that the Court either not require bond here or require
a nominal amount.
REQUEST FOR EXPEDITED DISCOVERY
PlaintiIIs request the Iollowing narrowly tailored inIormation to allow them to properly
prepare Ior a preliminary injunction hearing (to take place aIter the hearing on the temporary
restraining order):
(1) Two production models oI the Superstar, including commercial packaging and initial
release marketing materials;
(2) Two models oI the Superstar as it was displayed at CES 2014;
(3) Technical speciIications, schematics, maintenance manuals, user or operating
manuals and documents to show the physical conIiguration and operation oI the
Superstar;
(4) All documents relating to the initial conception and design oI the Superstar;
(5) All Monster internal documents relating to the Pocket Speaker, including design
elements oI, or attempts to design around, the Pocket Speaker;
(6) All communications with 3NOD involving the Superstar, the Pocket Speaker or any
related design, concept or product;
(7) All communications with SOL Republic involving the Superstar, the Pocket Speaker
or any related design, concept or product; and
(8) A 30(b)(6) deposition in the United States oI a Monster corporate representative
regarding the Iollowing topics:
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a. The design, Iunction, operation and manuIacture oI the Superstar;
b. Interactions with 3NOD regarding the Superstar, the Pocket Speaker or any
related design, concept or product; and
c. Interactions with Sol Republic regarding the Superstar, the Pocket Speaker or any
related design, concept or product.
Federal Rule oI Civil Procedure 26(d) states that early discovery may be permitted by
court order, and '|i|n the Ninth Circuit, courts use the good cause` standard to determine
whether discovery should be allowed to proceed prior to a Rule 26(I) conIerence. Interserve,
Inc. v. Fusion Garage PTE, Ltd., No. 09-cv-05812 JW (PVT), 2010 WL 143665, at *2 (N.D.
Cal. Jan. 7, 2010) (internal citation omitted); see also Hard Drive Prods., Inc. v. Does 1-118, No.
11-cv-1567 LB, 2011 WL 1431612, at *2 (N.D. Cal. April 14, 2011) (same). 'Good cause may
be Iound where the need Ior expedited discovery, in consideration oI the administration oI
justice, outweighs the prejudice to the responding party. Semitool, Inc. v. Tokvo Electron Am.,
Inc., 208 F.R.D. 273, 276 (N.D. Cal. 2002).
Courts routinely allow expedited discovery in cases like this one where PlaintiIIs are
seeking preliminary equitable relieI. See, e.g., Apple Inc. v. Samsung Electronics Co., Ltd., No.
11-1846, 2011 WL 1938154 (N.D. Cal. May 18, 2011); KLA-Tencor Corp. v. Murphv, 717 F.
Supp. 2d 895, 898 (N.D. Cal. 2010); Interserve, Inc. v. Fusion Garage PTE, Ltd., No. 09-cv-
05812 JW (PVT), 2010 WL 143665 (N.D. Cal. Jan. 7, 2010); Pod-Ners, LLC v. Northern Feed
& Bean of Lucerne, Ltd. Liabilitv Co., 204 F.R.D. 675 (D. Colo. 2002); see generallv Advisory
Committee Notes to the 1993 amendments to Rule 26(d) (discovery beIore the Rule 26(I)
conIerence 'will be appropriate in some cases, such as those involving requests Ior a preliminary
injunction .).
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Factors to consider in determining good cause Ior expedited discovery include (1) the
purpose oI the requested early discovery; (2) whether the discovery requests are narrowly
tailored; (3) whether the discovery burdens the deIendants; (4) whether the deIendants are able to
respond to the requests in an expedited manner; and (5) how Iar in advance oI the Iormal start oI
discovery the request is made. See Semitool, 208 F.R.D. at 276-77.
A. The Requested Discovery Is Core to the Case and Is Needed Immediately Given
Monster`s Apparent March 2014 Launch of The Superstar

Regarding the Iirst Iactor, PlaintiIIs` request Ialls squarely within the exception to the
standard discovery rule contemplated by Rule 26(d) Ior requests in anticipation oI requesting a
preliminary injunction. The discovery that PlaintiIIs seek, as in Semitool, is 'core ... to the
underlying case, and is inIormation which 'w|ould| be produced in the normal course oI
discovery. Semitool, 208 F.R.D. at 276. The Monster products, packaging and related
marketing materials are likely the best evidence oI Monster`s misappropriation oI PlaintiIIs`
trade secrets. Moreover, PlaintiIIs require the actual product to Iurther evaluate the Iunctionality
oI the Superstar and the design architecture, Iirmware and sound eIIects used in/by the Superstar.
Likewise, the communications requested are likely the best evidence oI Monster`s tortious
interIerence with Carbon`s contracts and other alleged wrongdoing.
Additionally, without an order permitting expedited discovery, PlaintiIIs would be
required to wait until Monster`s new product is commercially available, and would be Iorced to
suIIer the attendant irreparable harm that comes with the sale oI a product that inIringes on trade
secrets and beneIits Irom tortious interIerence. This motion represents PlaintiIIs` sole
opportunity to obtain inIormation to preserve the status quo, and to develop the record beIore it
is too late.

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B. The Requests Are Narrowly Tailored
PlaintiIIs request expedited production oI only a limited number oI product examples,
packaging, documents, and communications, in addition to a single Rule 30(b)(6) deposition.
The requests are narrowly tailored to the speciIic issues at hand: Monster`s misappropriation oI
PlaintiIIs` trade secrets and its interIerence with Carbon`s contractual relationship. Indeed,
PlaintiIIs` requests are very much consistent with the 'technical speciIications, schematics,
maintenance manuals, user or operating manuals and documents to show the physical
conIiguration and operation oI the |accused product| that the court in Semitool ordered be
produced on an expedited basis. Semitool, 208 F.R.D. at 276. A Rule 30(b)(6) deposition is
routinely permitted in similar circumstances. See, e.g., KLA-Tencor, 717 F. Supp. 2d at 898.
C. The Requested Discovery Is Not Burdensome and Monster Will Be Able To Provide
The Information In An Expedited Manner
Monster will not be burdened by the early production oI discovery, and is certainly
capable oI responding to these requests in an expedited manner. As described above, Monster
has already announced and publicly displayed the Superstar that is the subject oI this motion, and
is in sole possession oI the Superstar. Because oI the narrow scope oI the requested discovery,
whatever logistical issues Monster may encounter in collecting samples oI products and related
design materials would be minimal, and certainly outweighed by the potential harm to PlaintiIIs.
The burden on Monster in having to prepare a corporate representative on the limited designated
topics would also be negligible. Accordingly, these Iactors also weigh in Iavor oI expedited
discovery. See, e.g., Interserve, 2010 WL 143665, at *2 (permitting expedited discovery

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regarding the imminent release oI a tablet computer device because 'the administration oI justice
outweigh|ed| the prejudice to the responding party, including any 'logistical inconvenience).
D. Advanced Discovery Is 1ustified
Finally, though PlaintiIIs` request is made in advance oI the Iormal start oI discovery, the
circumstances here justiIy expediting the requested discovery. The critical nature oI the limited
number oI documents and products requested to the potential motion Ior preliminary injunction,
as well as the lack oI any real burden or prejudice to Monster in producing those materials and
making a witness available to testiIy, and the impending commercial release oI Monster`s
product counsel Ior the granting oI PlaintiIIs` motion.
CONCLUSION
For the Ioregoing reasons, PlaintiIIs respectIully request that the Court enter the Proposed
Temporary Restraining Order that is being Iiled contemporaneously herewith, which Order
enjoins Monster and its oIIicers, directors, agents, servants, employees, aIIiliates, attorneys,
parents, subsidiaries, divisions, successors and assigns, and all others acting in privity or in
concert or participation with them, who shall receive proper notice, Irom showing, selling,
marketing, distributing, discussing, or displaying the Superstar product or any product that is the
same or similar to the Pocket Speaker, or those derived Irom or based on the Pocket Speaker.
PlaintiIIs Iurther request that the Court grant its request Ior expedited discovery.

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DATED: February 27, 2014.
K&L GATES LLP

By s/ B. John Casey
B. John Casey, OSB #120025
Stephanie McCleery, OSB #115834
Michael J. Abernathy (pro hac vice pending)

Attornevs for Plaintiffs
Case 3:l4-cv-00332-PK Document 8 Filed 02/27/l4 Page 4l of 4l Page lD#: l05

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