Frank J. Dykas (ISB #1777) Scott D. Swanson (ISB #8156) Keri L.

Hamilton (ISB #5280) DYKAS & SHAVER LLP PO Box 877 Boise, Idaho 83701-0877 Telephone: (208) 345-1122 Facsimile: (208) 388-6035 Attorneys for Plaintiff UNITED STATES DISTRICT COURT FOR THE DISTRICT OF IDAHO

HILLCO TECHNOLOGIES, INC.,

) ) Plaintiff, ) ) v. ) ) ) TFC INTERNATIONAL, LLC ) ) Defendant, ) ____________________________________)

Case No. COMPLAINT FOR DECLARATORY JUDGMENT

COMES NOW, Plaintiff HILLCO TECHNOLOGIES, INC., a corporation (Plaintiff or Hillco), by and through its attorneys of record Dykas & Shaver LLP and alleges and complains of defendant TFC INTERNATIONAL, LLC (Defendant or TFC) as follows: THE PARTIES 1. Plaintiff Hillco is a registered business entity organized and existing under the

laws of the State of Idaho. Hillco maintains a principal place of business at 107 1st Avenue, Nezperce, Idaho 83543. 2. Upon information and belief that defendant TFC, doing business as Hanson

Worldwide, LLC, is a registered business entity organized and existing under the laws of the

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State of Washington. TFC maintains its principal place of business at 2425 East Magnesium Road, Spokane, Washington, 99217. Upon information and belief that TFC may be served through its registered agent, Christopher Wood, 2132 South Helena Street, Spokane, Washington, 99203. 3. Upon information and belief, TFC is and has been doing business in this judicial

district at all times relevant hereto. 4. TFC is the owner of record of the 586 patent, having acquired its ownership

interest through a series of interim owners from the original assignee of the 586 patent, R. A. Hanson Company, Inc. JURISDICTION AND VENUE 5. This is an action for declaratory judgment of invalidity, unenforceability due to

laches, waiver, acquiescence and estoppel, and non-infringement of U.S. Patent No. 5,415,586 (the 586 or 586 patent) (a copy of the 586 patent is attached as Exhibit A) brought under 28 U.S.C. 2201-2202 and the Patent Laws of the United States, Title 35 United States Code for the purpose of determining a question of actual controversy between the parties, as more fully appears below. 6. This Court has original jurisdiction pursuant to 28 U.S.C. 1331 & 1338. This

Court also has supplemental jurisdiction under 28 U.S.C. 1367. 7. Venue is proper in this district pursuant to 28 U.S.C. 1391 and 1400 in that

Defendant conducts business in this judicial District, the acts alleged by Defendant as being an infringement of United States Patent 586 took place within this jurisdiction. Defendants threats created a reasonable apprehension upon Hillco, and because Defendant is subject to general and personal jurisdiction in this District venue is proper.

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FACTUAL BACKGROUND AND ALLEGATIONS 8. Since at least as early as 1992, Wallace Hill, founder of Hillco, and Leonard Hill,

his son, have developed a process and machinery for leveling combines operated on hilly fields, and in particular when the combine is being used to harvest grain on side hills. Hillco sold and continues to manufacture and sell leveling devices, as well as accessories and supplies associated with their leveling system. The development of this system represented a substantial investment of resources by Hillco. 9. Starting in the early spring of 1993 Hillco talked with, and disseminated drawings

of Hillcos leveling system highlighting a hydraulic header control to the Case-International Harvester dealers in the Pacific Northwest. Some of these dealers were also dealers for equipment manufactured by R. A. Hanson Company, Inc. These discussions included detailed disclosures concerning the proposed design for using a master-slave hydraulic system to tilt the rotating cutting head assembly located at the front end of a combine in an equal, but opposite, direction to the tilting adjustment for the main chassis of the combine so as to automatically keep the cutting head assembly parallel to the sloping ground when the combine was being tilted in the opposite direction to compensate for the angle of the side hill. The use of master-slave hydraulic systems to tilt the cutting head was not a new idea and had been done before by others, but what was unique and new was the inclusion of an additional, operated controlled valve to the hydraulic system that permitted the combine operator the ability to control the tilt of the cutting head independently, and in addition to, the control provided by the master-slave hydraulic arrangement. This was disclosed to dealers who also sold equipment manufactured by the R. A. Hanson Company.

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10.

R. A. Hanson Company and Hillco, and some of the employees of each, were

known to each other. Both competed in similar markets with similar lines of products. Unbeknownst to Hillco, the R. A. Hanson Company was also, simultaneously developing a similar tilting mechanism for use on combines. 11. In August and September 1993, Hillco was field testing a combine equipped with

a prototype of their leveling system for field testing and marketing purposes. In the original design, the wheel suspensions for the individual wheels on the combine were adjustable so that when the combine was traversing a side hill, the downhill wheels were extended downward, and the uphill wheels were retracted upward to keep the combine chassis level. It was the first combine tilting mechanism introduced to the market that included a master-slave hydraulic system for tilting the cutting head which included the additional, and unique, operator controlled hydraulic valve. For purposes of clarity in this Complaint, the design is designated as the Old Hillco Design. R. A. Hanson Company introduced its first prototype tilting mechanism, including a master-slave hydraulic system to the market at approximately the same time. This R. A. Hanson Company prototype also included the additional, and unique, operator controlled hydraulic valve as included in the original Hillco design. 12. R. A. Hanson Company applied for a patent for a Combine Harvester Leveling

System, Combine Harvester Header Adjusting system and Pivoting Chain Drive System on November 17, 1993, which said patent issued on May 16, 1995 as the 586 patent. 13. Prior to the filing of the application for patent 586, R. A. Hanson Company

representatives surreptitiously inspected the prototype produced by Hillco. This was observed by representatives of Hillco, and others, and it included a detailed inspection by the R. A.

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Hanson Company employees of the master-slave hydraulic system and the additional, and unique, operator controlled hydraulic valve. 14. In a letter dated January 10, 1994, TFCs predecessor in interest (at that time the

business was called R. A. Hanson Company, Inc.) advised Hillco that it might be infringing upon the applied for patent and once issued, if found to be infringing, Hillco could be liable for damages. A true and correct copy of Defendants letter dated January 10, 1994 is attached hereto as Exhibit B. This letter does not explicitly charge Hillco with infringement or provide or enclose a copy of the then pending 586 patent application (the 586 patent would not issue until May 16, 1995). This letter, Exhibit B, also did not disclose what exactly was claimed to be patent pending or the status of the application. At the time Exhibit B was sent, patent applications were not published and it was impossible for Hillco to determine the scope of potential patent coverage or whether there was indeed even a possibility of infringing. 15. At the time Exhibit B was sent to Hillco, Hillco had other design alternatives to

the master-slave hydraulic mechanism for tilting the cutting head available to it and could have avoided infringement if indeed a realistic possibility of infringement existed. However, Hillco was not to hear again from the R. A. Hanson Company for over eight more years. 16. In 1997 Hillco redesigned the combine tilting system. The wheel extension and

retraction mechanism was eliminated and a new system where the wheels never moved in relation to each and instead tracked over the ground and the combine chassis was tilted on a longitudinal axis to compensate for the sidehill tilt was used to level the combine chassis. The master-slave hydraulic system was also changed. The redesigned combine tilting system is hereinafter referred to in this Complaint as the New Hillco Design. The Old Hillco Design

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was the more complicated of the two Hillco designs, and had far more moving parts than the New Hillco Design. 17. The 586 patent, which issued on May 16, 1995, describes and claims a design for

a tilting system that is substantially similar to the Old Hillco Design, including the exact configuration for the master-slave hydraulic system of the Old Hillco Design including the additional, and unique, operator controlled hydraulic valve. It is possible the Old Hillco Design did infringe the 586 patent. It is also possible that the 586 patent is based upon the Old Hillco Design and thus, the named inventors are not the sole or true inventors of the 586 patent. 18. On August 15, 2002 a second letter was sent by TFCs predecessor in interest (at

that time the business was called RAHCO) to Hillco. In that letter RAHCO advised Hillco that it owned the patent 586, and enclosed a copy of the patent for Hillcos review, a true and correct copy is attached hereto as Exhibit C. TFCs predecessor advised that Hillco should be aware of the exclusive rights indicated by the patent and that it may apply to their activities. By the time this second letter was sent it had been over five years since Hillco had changed over to its New Hillco Design. The New Hillco Design does not infringe any claims of the 586 patent. 19. There were no further interactions between the parties regarding the 586 patent

for another nine years, until August 24, 2011, wherein Hillco received a third letter from Hanson Worldwide via their legal counsel, Steve Bertone of Sadler, Breen, Morasch & Colby P.S. This third letter attached a copy of patent 586 and for the first time, specifically alleged infringement of that patent. A true and correct copy of the letter dated August 24, 2011 is attached hereto as Exhibit D.

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CAUSES OF ACTION COUNT I Declaratory Judgment of Patent Invalidity and Unenforceability for Failure to Satisfy a Condition of Patentablity under or to Comply with 35 U.S.C. 102 or 103

20.

Plaintiff hereby restates the allegations contained in paragraphs 1-19 of this

Complaint as if set forth fully herein. 21. Defendant has accused Plaintiff of infringing the claims of the 586 patent

creating a reasonable apprehension and thus an actual controversy within the jurisdiction of this Court pursuant to 28 U.S.C. 2201-2202. 22. The claims of the 586 patent are invalid as being anticipated or rendered obvious

by the prior art. 23. The invention as defined by the claims of the 586 patent was known or used by

others in this country before the invention thereof by the applicant for the 586 patent. 24. Upon information and belief, the 586 patent is invalid because the purported

inventors did not invent the claimed invention. 25. Thus, the 586 patent is invalid and unenforceable for failure to meet the

requirements of the patent laws of the United States, including 35 U.S.C. 102 and 103. 26. Defendants allegation that the 586 patent is infringed is predicated upon the

assertion that the 586 patent is valid and enforceable. 27. Defendants allegations irreparably harm and injure Plaintiff and will continue to

do so unless prevented by this Court. To resolve the legal and factual questions raised by Defendant, Plaintiff is entitled to a judgment stating its rights and that the 586 patent asserted by the Defendant is invalid and unenforceable.

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29.

As a result of the acts described in the foregoing paragraphs, there exists a

substantial controversy of sufficient immediacy and reality to warrant the issuance of a declaratory judgment. A judicial declaration is necessary and appropriate so that TFC may ascertain its rights regarding the 586 patent 30. Hillco is entitled to a declaratory judgment that it has not infringed and does not

infringe, directly or indirectly, any valid and enforceable claim of the 586 patent. COUNT II Declaratory Judgment of Waiver, Laches, and Acquiescence 31. Plaintiff hereby restates the allegations contained in paragraphs 1 through 30 of

this Complaint as if set forth fully herein. 32. TFC and any other owners known or unknown of the 586 patent were aware of

Hillcos products since at least 1993. 33. TFC and any other owners known or unknown of the 586 patent delayed in

bringing a patent infringement lawsuit against Hillco. 34. 35. This delay is unreasonable and unexcused. TFCs delay has caused economic and evidentiary prejudice to Hillco including

but not limited to: a loss of records, as the original electronic files relating to Hillcos combine leveling system have not been saved throughout the years, making it impossible to retrieve the necessary metadata proving Hillco was the first to invent; the death of witnesses, with at least one known death of a witness, R. A. Hanson, whose personal knowledge and testimony, which are integral in this matter, have been lost to the world; the unreliability of the memories of other witnesses, including Wallace Hill, who is eighty four (84) years old and not able to recall events from twenty (20) years ago with the requisite ability to testify clearly and concisely; and finally,

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the inability to determine the whereabouts of the representatives of Case- International Harvester and RAHCO who were present and inspected Hillcos combine leveling system prior to the application for the 586 patent. 36. TFC is barred in whole or in part from enforcing the 586 patent against Hillco, or

otherwise barred from obtaining damages for any alleged infringement of the 586 patent under the doctrine of waiver, laches and/or acquiescence. COUNT III Declaratory Judgment of Estoppel 37. Plaintiff hereby restates the allegations contained in paragraphs 1 through 36 of

this Complaint as if set forth fully herein. 38. TFC and any other owners known or unknown of the 586 patent failed to

prosecute the alleged infringement for seventeen (17) years, having knowledge throughout that time of Hillcos products. 39. TFCs, and any other owners known or unknown, failure to act led Hillco to

reasonably infer that they did not intend to enforce their 586 claimed patent rights against any alleged infringement. 40. 41. Hillco relied on TFCs conduct in continuing and expanding their business. TFCs delay has caused economic and evidentiary prejudice to Hillco including

but not limited to the facts that; Hillco has been, for over this seventeen (17) year period of time, increasing production of the combine leveling system, and if infringement allegations had been resolved earlier, the potential damages would have been significantly diminished; and, until this issue is resolved, Hillco does not know if it should be redesigning its combine leveling system, which may become a moot point during litigation as the 586 patent expires May 16, 2012.

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42.

TFC is barred in whole or in part from enforcing the 586 patent against Hillco,

or otherwise barred from obtaining damages for any alleged infringement of the 586 patent under the doctrine of estoppel. COUNT IV Declaratory Judgment of Patent Non-infringement 43. Plaintiff hereby restates the allegations contained in paragraphs 1 through 42 of

this Complaint as if set forth fully herein. 44. Plaintiff categorically denies that its combine leveling system infringes any valid

claim of the 586 patent, either literally or under the doctrine of equivalents, and thus asserts that Defendant is not entitled to a judgment of patent infringement against Plaintiff. PRAYER FOR RELIEF WHEREFORE, Plaintiff prays for the relief as follows: 1. 2. A declaration that jurisdiction is present and venue is proper. A declaration that Hillco has not infringed, either directly or indirectly, any valid

and enforceable claim of U.S. Patent 5,415,586. 3. 4. 5. 6. A declaration that U.S. Patent 5,415,586 is invalid. A declaration that U.S. Patent 5,415,586 is unenforceable against Hillco. A declaration that U.S. Patent 5,415,586 is not infringed by Hillco. A declaration that any damages TFC claims against Hillco are barred in whole or

in part by the doctrines of waiver, laches, acquiescence and estoppel. 7. An order declaring that Hillco is the prevailing party and that this is an

exceptional case, awarding Hillco its costs, expenses, disbursements and reasonable attorneys' fees under 35 U.S.C. 285, and all other statutes, rules and common law; and

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8. 9. and proper.

That TFC be ordered to pay all costs associated with this action; and That Hillco be granted such other and additional relief as the Court may find just

JURY TRIAL DEMAND Plaintiff demands a jury trial on all issues so triable. DATED this _____ day of November, 2011.

Respectfully Submitted, ____________________________ Attorneys for Plaintiff, Frank J. Dykas (ISB #1777) Scott D. Swanson (ISB #8156) DYKAS & SHAVER LLP PO Box 877 Boise, Idaho 83701-0877 Telephone: (208) 345-1122 Facsimile: (208) 388-6035

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