PODS Press Releases, Corporate News Stories

June 22, 2006

6/22/2006

Federal Court Issues Permanent Injunction Against Willful Infringer of PODS’ Patent and Trade Dress Rights

The United States District Court for the Middle District of Florida (Tampa Division) ruled, as a matter of law, that defendant Porta Stor Inc., a Pasco County, Florida franchisor of portable storage services, infringed PODS’ patent on its proprietary PODZILLA® lift system. The ruling was issued by Magistrate Judge Mark A. Pizzo on June 16, 2006 following a three day jury trial. The jury awarded PODS money damages equal to 10% of all revenues derived by Porta Stor using its infringing lifting device. Defendant admitted it had developed its infringing lifting device after studying the PODZILLA lift system and PODS’ patent covering same.

The jury also found that Porta Stor had willfully engaged in unfair competition and had willfully violated the Florida Deceptive and Unfair Trade Practices Act by making false statements on its web page and by using a business card remarkably similar to PODS’ unique business card. In addition, the Court found Porta Stor liable for copyright infringement of PODS’ federally registered copyright covering PODS’ rental agreement.

The patented PODZILLA lift system is a self-contained motorized device that detaches from local delivery trucks carrying PODS containers. The hydraulic systems in the lift allow PODS to keep the portable storage containers level (and thus avoid shifting of contents) in the placement and retrieval of containers at customers premises.

The Court has issued a permanent injunction against Porta Stor requiring it to cease its use of the infringing Porta Stor lift system that was, in all material respects, identical to the lift system patented by PODS. This action by the Court is consistent with the temporary injunction issued by the Court in September 2004.

The permanent injunction further prevents Porta Stor from using its consumer rental agreement, which the Court found infringed PODS’ copyright covering PODS’ rental agreements. Porta Stor must also cease using its business card, which the jury found infringed PODS’ “trade dress” on PODS’ unique business card. Trade dress is a category of trade mark and unfair competition law addressing the scope of protection afforded to advertising, promotional and other materials used by companies to develop and enhance their market branding. The jury awarded $15,000 to PODS for defendant’s willful infringement of PODS’ trade dress.

The Court will schedule a separate hearing on the award of attorneys’ fees to PODS, which award is in the discretion of Judge Pizzo. In view of the finding of willful patent infringement by the jury, it is expected that attorney’s fees and expenses will be awarded to PODS.

PODS’ CEO and President, Peter S. Warhurst, was a key witness for PODS at the trial. Mr. Warhurst, the founder of PODS and a co-inventor of the PODZILLA lift system stated in response to the jury verdict:

I am very satisfied that the Court and the jury understood the importance of PODS’ intellectual property rights. PODS has a distinctive business model and our intellectual property serves as one of the many barriers to entry to the PODS business format. There are many new entrants to the portable storage and moving business that we pioneered. We felt compelled to protect the public and our shareholders by stopping those who unlawfully trade upon our hard work and technology. We believe the Court’s action should serve notice to all imitators that we will, when necessary, take appropriate action to protect ourselves and our franchisees.

Aaron B. Parker, PODS’ Sr. VP, General Counsel added:

This was a remarkable and just result. The Court directed a verdict in favor of PODS by ruling that the defendant infringed 21 claims of PODS’ patent on the PODZILLA lift system.

The distinctive graphical presentation of PODS’ branding is apparent in its advertising, business cards, logo, containers and other brand extensions of its products and services. Notably, the jury award to PODS for trade dress infringement equaled 100% of all revenues derived by defendant from the time it used the infringing trade dress until the temporary injunction was issued in 2004.

This case sends a clear message to those who seek to compete unfairly. The infringement of PODS’ intellectual property rights is illegal and will not be tolerated. We will address unfair competition when and where it arises

PODS’ General Counsel assembled a prolific litigation team composed of specialized intellectual property litigation attorneys Joseph Diamante and Richard H. An of Jenner & Block’s New York City office. Messrs.Diamante and An joined Robert V. Williams of the Williams Schifino law firm located in Tampa, Florida.

Mr. Diamante stated:

Imitation may be the highest form of flattery, but it is also, in many instances, unlawful. The Court and jury in this case clearly acknowledged that PODS has extremely valuable intellectual property; that is, PODS’ intellectual property should be respected by the competition or else appropriate measures will be taken to protect those rights.

Parker commented “Joe Diamante is a sophisticated and experienced intellectual property litigator. His colleague, Richard An, is also a highly skilled litigator with technical knowledge gained from his masters degree in engineering. We paired Joe and Richard’s patent litigation expertise with local counsel Rob Williams’ superlative court room skills for a winning combination.”

PODS revolutionized the moving and storage industry by originating the concept of transporting mobile storage containers. The convenient, cost-effective service is unique in that the patented hydraulic lift system is available only with PODS and is designed to significantly reduce shift in contents and securely transport PODS brand containers to a safe and secure warehouse or from state to state. Sturdy, weather-resistant PODS brand containers (partially full) are specially designed to withstand a wind velocity of up to 110 miles per hour.

Currently, the PODS network services 20,000 cities and serves over 200 million residents and business customers in 44 states. The Company has serviced over 510,000 customer reservations accommodating over 62,000 inter-franchise relocations. There are approximately 101,000 PODS brand containers in service.

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