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Old 06-20-17, 09:26 AM   #1
downtube
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Tern V Downtube the legal case is over. Downtube wins

In March Mobility Holdings & Stile ( aka Tern ) filed legal papers to sue me, the founder of Downtube, for patent infringement. The papers claimed an infringement for the Ferrari bike, the claim was based on two design patents which they received from Dahon. Please read my version of the story below:

Tern's attorney sent me a letter via email unfortunately it went into my SPAM folder ( I tried to attach but it was too large ). When I found the letter I thought it was a joke. They used an Agora Hills, Ca address for me ( I've never been in Agora Hills, Ca and I have never had an address in Ca ). Additionally the patents are radically different than the Ferrari bike. I describe some of the differences below, but there are many more. I discussed the case with an attorney that laughed at the claim, yes he found it that ridiculous, and I agreed. Please understand they own a design patent, they would need NO differences in the frame design to make a valid claim....ironically everything is different.

They continued to file a lawsuit in PA claiming I lived and/or used one of three addresses. I have not lived in Pa for over 10 years ( last four I lived in NC ). They used my childhood address, and old addresses. In the complaint they referenced the letter sent to the Agora Hills address and claimed I was served the letter via FedEx ( this is a lie which they submitted to a Federal Court ). In the complaint they name several co-defendants such as Downtube LLC, Bike1.com. Prosolvers, and Prosolvers.com. The complaint alleges that I run these entities as shell companies.Unfortunately, none of the companies they claim are legal entities....hence they can not be shell businesses ( they are not businesses ). The Downtube LLC they reference is a DE corporation which we absolved a long time ago ( Doiwntube is a NC company ). Prosolvers is a computer consulting business I ran before I finished my Ph.D., it was dissolved a very long time ago, bike1.com is a URL that points to downtube.com it is not an entity in itself.

Then they claim we are a fraudulent operation with capitalization totally inadequate for the business in which we are engaged. This is officially the first time I have been accused of fraud in this way. I understand they have a hard time competing with us....but come on. The truth is we have been selling our own branded bikes since 2003, and we have grown dramatically over the years. I think we are ok and I would encourage them to focus on fixing their recall & frame failure stuff before they look at anyone else.

Then we get to the heart of the infringement claim. They state that they BELIEVE there is an infringement. All these accusations with not one photo of the Ferrari bike compared to their patents. There are some major problems with the claim. Firstly they have a design patent ( not a functionality patent ), these are hard to prove.....especially so when there is no similarity. Some differences are:

1. Ferrari has minimal chaistays ( both patents have full chain stays ). See pictures
2. The Ferrari seat tube sits directly above the bottom bracket while both patents have the seat tube behind the bottom bracket.
3. Tubes meeting at the BB are radically different due to placement of the seat tube ( this is possibly the most dramatic difference )
4. Completely different dropouts.
5. The downtube ( it's a tube on a bike ) in both patents is a tube, while the Ferrari bike uses a straight piece of aluminum as the downtube.
6. Most tube shapes are all different.

Overall I was surprised that someone made such a claim, especially on a design patent ( it is NOT a functionality patent ).

I was served at home in NC in early May just before a European family trip, so I filed for a 21-day extension. Upon arrival in the states I contacted Tern's attorney on record and brought up all of these issues. The biggest being the creation of a fake address and lack of connection between the Ferrari bike and the patents. The attorney claimed the Plaintiff had that address for me somehow, and claimed he had an expert witness to testify for the infringement. I gave notice that I would file for Rule 11 sanctions. It is almost impossible to get Rule 11 sanctions, but I have a felling this case might meet the high level of burden required. I held my response and sanction claim until the 20th ( the fist day I could file for sanctions ). FYI I provided 21 day sanction notice at the end of May. Then on the 19th I got an email that Tern's attorney's were filing to dismiss the case without prejudice. I assume they were scared of the nonsense they got themselves into. Today is the 20th, I filed my response ( change of venue motion ) and Rule 11 sanctions claim, I am unable to attach due to size limits....anyone have server space?

I understand Tern has been filing these kinds of cases around the world to get concessions & press releases. I know of a someone in the UK that had to deal with this crap. I want this information in the public domain, if they come after anyone else I will help for free. I have decided that I will sit for the BAR Exam in VA in the next few years. I am not a lawyer, but I have learned a few things.

A long time ago I mentioned that Tern created alot of negative karma for themselves via their creation ( alot of IP that was Dahon's and somehow transferred to Tern ). Then their behavior with the 2nd recall was nothing short of appalling. The negative karma from that are most likely to great for them to handle. Now I understand they must be in real trouble to file such a case as a scare tactic. Courts are places for justice, attempting to create fear by using a court doesn't work.

Please comment and/or share this information as you see fit. I think it best for people to know the truth about the ridiculous behavior....that never seems to end.

Thanks,
Yan
Attached Images
File Type: jpg Ferrai-vs-patents-description.jpg (86.0 KB, 315 views)
File Type: jpg Ferrari-BB-shell-patent.jpg (86.1 KB, 313 views)
File Type: jpg Rear-Dropout-Ferrari-vs-Patent1.jpg (88.7 KB, 315 views)
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Last edited by downtube; 06-21-17 at 07:10 AM.
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Old 06-20-17, 10:05 AM   #2
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They are essentially patent trolls. Sucks, glad you got through this Yan.
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Old 06-20-17, 10:10 AM   #3
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That's very good news for Downtube and Downtube's customers. Congratulations !
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Old 06-20-17, 10:45 AM   #4
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Wow, what a story. Good for you that you prevailed and didn't have to endure a trial!
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Old 06-20-17, 11:21 AM   #5
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The 'Ferrari' bike you posted looks like a minor tweek of the 2006 Dahon Mu style frame...uh, is that why you asked about the history of the Mu last month?

This 'Ferrari' bike looks like the one in the Tern drawings above. This frame design first came to market as the Dahon Vector in 2010, the year before Tern was founded, but that didn't stop Tern from getting a European court to issue an injunction against Dahon over its use. The terms of settlement in the big 2011-2013 Dahon/Tern lawsuit were never made public and their statements (Dahon, Tern) suitably vague, but Dahon seemed to get everything they wanted and I note still build bike models with the disputed frame.

Last edited by tcs; 06-20-17 at 11:29 AM.
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Old 06-20-17, 11:33 AM   #6
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Funny, I'd have thought there would be more trouble using the name "Ferrari."
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Old 06-20-17, 01:46 PM   #7
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Funny, I'd have thought there would be more trouble using the name "Ferrari."
Doubtful. I don't know the history of Yan selling Ferrari-branded bikes, but you'd be amazed how many products they've stuck their stickers on. It's a rarity in the US, but Europe is awash in clothing and sunglasses and trinkets branded Ferrari..I'm sure Yan was cleared to sell the licensed product.
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Old 06-20-17, 02:38 PM   #8
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Funny, I'd have thought there would be more trouble using the name "Ferrari."
The Ferrari bike is an official licencee of the brand. I paid a small fortune for them. The manufacturer stopped making them, so my current stock is all that's left of these folders.

Thanks,
Yan
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Old 06-20-17, 02:48 PM   #9
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@tcs I asked about the Mu frame due to my initial confusion about this case. It is kind of intimidating when you get served papers with all sorts of crazy accusations in them. I understand that the patents are most likely derivatives of the Mu frame, which was launched several years prior to the patent application ( prior art ). However I understand these design patents are essentially worthless, so there was no reason use the previous art arguement.

Thanks,
Yan
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Old 06-20-17, 02:50 PM   #10
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Wow, what a story. Good for you that you prevailed and didn't have to endure a trial!
The case is so ridiculous I can' understand how they could get past a quick motion to dismiss. I will contact the BAR about the fake address and claim that I was served at the fake address. I don't know the rules, but I imagine someone law license may be at risk doing that sort of stuff.

Thanks,
Yan
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Old 06-20-17, 02:53 PM   #11
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They are essentially patent trolls. Sucks, glad you got through this Yan.
I disagree. Patent trolls have something of value, and extort money for the patents. These guys have nothing of value so they are worse than trolls. Additionally they filed a ridiculous complaint that was wrong on no less than four major points. I will post it online soon...would love to share this foolishness.

Thanks,
Yan
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Old 06-20-17, 07:15 PM   #12
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I find myself wondering if this was an attempt at getting back at you over your efforts regarding the Tern frame failures.
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Old 06-20-17, 07:23 PM   #13
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I don't know, but I don't think it's the end. Tern has been toxic member of the bicycle industry, and I don't expect it to stop.

Honestly they could have done better. this legal case was ridiculous in sooo many ways. I will find a way to upload it to share soon ( this site only allows small files ). I think everyone will be amazed when they see it all. I am glad I uploaded the sanctions claim, this should make it harder to harass other companies.

My apologies for hogging the forum and thread, however I needed to stay silent until today.

Thanks
Yan
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Last edited by downtube; 06-20-17 at 07:35 PM.
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Old 06-20-17, 09:20 PM   #14
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Good point Jur. Congrats Yan.
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Old 06-21-17, 03:27 AM   #15
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Thank you for sharing, one more resson to stay away from Tern bikes.

Hope this is the last you hear from them.

This makes me think about what really happened when Tern was started (when the son left the Dahon company) and I empathise with mr Hon who found that cuckoo in his nest. I know all too well what it is like to have family members like that.
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Old 06-21-17, 04:59 AM   #16
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I don't think this is the last I have heard from these people.

I think I found a way to share the files. Please understand I edited them to remove my home address. Please go to https://www.dropbox.com/sh/genfc21v0...wLxf3rCpa?dl=0 . Additionally, I wrote a letter to the attorney with my motion for Rule 11 sanctions. I offered to settle the sanctions claim with a donation to the Sivananda Yoga Organization and an admission of wrongdoing. I made it clear there will not be a settlement without an admission.

By the way I decided to postpone our Free Cross Country Tour until 2018, just in case these guys refile the case in NC.....I need to be around.


Thanks,
Yan
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Old 06-21-17, 09:34 AM   #17
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Congratulations, it's about time someone stood up to this nonsense.

As you probably know, "dismiss without prejudice" means "we reserve the right to try again". Hopefully the motion for sanctions and involving the Bar will deter them from messing with you.

I don't see the Ferrari on your website - did you pull it while this mess was going on?
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Old 06-21-17, 12:27 PM   #18
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This case is so ridiculous I welcome them to file it in NC.

Thanks
Yan
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Old 06-21-17, 02:04 PM   #19
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What is the Lawyer Getting out of this?
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Old 06-21-17, 02:16 PM   #20
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What is the Lawyer Getting out of this?
I assume money. That's how our economic system works. I can't imagine a sense of pride could ever be derived from this stuff.

Thanks
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Old 06-21-17, 03:04 PM   #21
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% of the fine, Like injury lawyers..
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Old 06-21-17, 03:08 PM   #22
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% of the fine, Like injury lawyers..
I don't think so. I understand they have some high class Patent attorneys. I was told that they spent at least 25k and possibly up to 100k.

The sanctions claim is still out there. Rule 11 sanctions are not only for the plaintiff, the filing attorney is also on the hook.

Thanks,
Yan
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Old 06-21-17, 03:13 PM   #23
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Makes sense a Patent Attorney gets involved at the front end , in filing a binding patent in the 1st place.
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Old 06-21-17, 03:43 PM   #24
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These guys really investigated me. They had an address for me on Mt. Pleasant Ave that I did not even remember, it was almost 25 yrs old. However it took them two months to get my home address in NC. I think their investigation left alot to be desired.

Hopefully they billed top dollar for their efforts

Thanks,
Yan
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Old 06-21-17, 04:08 PM   #25
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Keep your head high Yan. I hope it works out for you in a stress free manner as possible.
Having followed closely the Tern frame failures and even worse the cover up of them I have come to the conclusion they are a vile disguising company. I hope they go bust.
I will never buy one of their bike or products.
Really, as you know the frame failure cover ups and misinformation was staggering.
I feel this is simply due to you pointing this out in a public forum.
Pure vindictiveness from a corporate bully that tries aggression and sub defuse rather than honest brokering.
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