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Composite Technology Receives Court Authorization to Broaden Its Case Against Mercury Cable & Energy

Monday, November 08, 2010

Irvine, CA -- Composite Technology Corporation (CTC) (OTCBB: CPTC) is pleased to announce that, on October 18, 2010, the United States District Court for the Central District of California granted CTC Cable Corporation's motion for leave to file a Second Amended Complaint in its patent and copyright infringement action against Mercury Cable & Energy (Civil Action No. SACV 09-261 DOC (MLGx)). The Second Amended Complaint names several individuals as additional defendants as well as naming Mercury Cable's wholly-owned subsidiary Energy Technology International (ETI), its U.S. stranding manufacturer, General Cable Corporation, and its U.S. core manufacturer, Diversified Composites.

Individual Liability

The Second Amended Complaint, which remains subject to proof at trial, adds Ronald Morris, Todd Harris, Edward Skonezny, and Wang Chen as individual defendants based on their alleged acts of patent and copyright infringement, as well as their alleged establishment and/or control of numerous U.S., off-shore and Chinese corporate entities that are alleged to be involved in the infringement of CTC Cable's patents and copyrights. Morris is the CEO and a director of Mercury. Harris is its President and a director. Chen is an officer and a director. Skonezny is alleged to have participated in its infringing activities.

Shell Corporations

The Second Amended Complaint alleges that the individual defendants set up numerous U.S., off-shore and Chinese "shell" corporate entities as a scheme to evade personal liability. In sworn depositions conducted in a related state court action, one or more of these individual defendants have admitted to establishing these various entities, but have claimed to have little if any knowledge of their corporate structure, organization or operation, despite that one or more of these individuals are identified as officers and/or directors of the shell entities.

Diversified Composites, General Cable Corporation, and ETI

The Second Amended Complaint alleges that Diversified Composites and General Cable Corporation are both liable for patent infringement because Diversified has pultruded composite core and General Cable Corporation has stranded Mercury Cable's HVCRC conductor in the United States. Mercury Cable's subsidiary, ETI, is also alleged to be manufacturing Mercury Cable's HVCRC core.

Infringement Allegations and Potential Liability

CTC Cable alleges that Mercury Cable's HVCRC conductor infringes two of CTC Cable's patents for composite core technology (U.S. Patent No. 7,368,162 and U.S. Patent No. 7,211,319) and also alleges that certain of the defendants have committed federal copyright infringement. If the federal court finds Mercury Cable or any of the newly-added defendants liable for patent or copyright infringement, the infringing parties will be liable to CTC Cable for actual and/or statutory damages, and the Court may also enter an injunction prohibiting further infringement by them. If the court finds that Mercury Cable or any of the newly added defendants has willfully infringed CTC Cable's patents or that the suit is exceptional, the defendants could be liable for up to treble damages and attorneys' fees. Any third party that makes, uses, sells, offers for sale or imports any infringing products of Mercury Cable or the newly-added defendants in the United States -- including third-party manufacturers or customers of installed Mercury Cable transmission lines -- may also be subject to suit for patent infringement and -- if found liable -- may be subject to damages and injunctive relief.

About CTC

Composite Technology Corporation's patented ACCC® conductor technology enables superior performance of high voltage transmission and distribution electrical grids. ACCC® conductors use CTC's proven carbon fiber core which is produced by its subsidiary, CTC Cable Corporation, at its Irvine, California headquarters and delivered to qualified conductor manufacturers who produce and distribute ACCC® conductors to operators of electrical grids worldwide. CTC's conductor technology significantly reduces thermal line sag and can replace similar diameter and weight traditional conductors with its higher capacity and more energy efficient ACCC® conductor. It is an ideal conductor for both upgrading existing power lines as well as building new lines since the technology allows for the reduction of the number of support structures and/or a reduction of their height. Since its commercial introduction in 2005, nearly 9,000 kilometers of ACCC®conductor have been installed in all environmental and operating conditions, including severe heat and ice environments, long span applications and high capacity corridors for the modern grid. ACCC® is a registered trademark of CTC Cable Corporation.

For further information, visit our website: or contact Investor Relations, James Carswell, +1-949-428-8500.

This press release may contain forward-looking statements, as defined in the Securities Reform Act of 1995 (the "Reform Act"). The safe harbor for forward-looking statements provided to companies by the Reform Act does not apply to Composite Technology Corporation (the "Company"). However, actual events or results may differ from the Company's expectations on a negative or positive basis and are subject to a number of known and unknown risks and uncertainties including, but not limited to, resolution of pending and threatened litigation matters involving CTC or its subsidiaries, resolution of disputes with CTC's or subsidiaries' creditors competition with larger companies, development of and demand for a new technology, general economic conditions, the availability of funds for capital expenditure and financing in general by us and our customers, availability of timely financing, cash flow, securing sufficient quantities of essential raw materials, timely delivery by suppliers, ability to maintain quality control, collection-related and currency risks from international transactions, the successful outcome of joint venture negotiations, or the Company's ability to manage growth. Other risk factors attributable to the Company's business may affect the actual results achieved by the Company, including those that are found in the Company's Annual Report filed with the SEC on Form 10-K for fiscal year ended September 30, 2009 and subsequent Quarterly Reports on Form 10-Q and subsequent Current Reports filed on Form 8-K that will be included with or prior to the filing of the Company's next Quarterly or Annual Report.

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