Intellectual Property Attorneys
`
`i patent
`&r ou ?
`Imagine - Invent - Protect trademark
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`trade secrets
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`SENT VIA FEDEX (TRACKING NUMBER 806290317567)
`
`March 27, 2024
`
`Mr. Eric Smidt
`CEO/President
`
`Harbor Freight Tools USA Inc.
`26541 Agoura Road
`Calabasas, CA 91302
`
`RE: Potential Violation of Champion Covenant Not to Compete and
`Patent Infringement
`
`Dear Mr. Smidt:
`
`We represent Champion Power Equipment and Champion Engine Technology (“Champion”) with respect to
`protecting its intellectual property. It has come to our attention that Harbor Freight Tools USA Inc. (“HF”) has
`recently employed Mr. Scott Stefaniak as Senior Manager of New Product Development — specifically for
`generators. As you know, Mr. Stefaniak was employed at Champion from March 2014 through March 2024 as
`Product Manager responsible for generators having less than 40HP engines.
`
`Mr. Stefaniak entered into a Non-Compete Agreement as a condition of his employment with Champion, and
`that Agreement is enforceable under the laws of the State of Wisconsin. We believe HF has hired Mr. Stefaniak
`for the same or similar position as he held at Champion. Mr. Stefaniak agreed to a restricted services obligation
`which covers a term of 18 months following his employment at Champion. The restricted services include
`design, assembly, manufacture, distribution, or sale of any type of internal combustion engine which produces
`less than 40hp.
`
`During Mr. Stefaniak’s ten years at Champion, he had access to a wide array of both confidential information
`and trade secrets. This includes, but is not limited to, product design, product know-how, technical information
`relating to products/services, strategy, sales and marketing information, business ideas, inventions, and any
`information which was otherwise treated as confidential or proprietary. Further, at the time of Mr. Stefaniak’s
`departure from Champion he was involved in a number of confidential and proprietary projects that are in various
`stages of development. That information is Champion’s property. Any misappropriation of that information
`will not only be a violation of Mr. Stefaniak’s Agreement with Champion, and will be dealt with swiftly and
`aggressively, it may also be the subject of a corporate espionage charge. That is, should Champion discover
`evidence of trade secret misappropriation or theft, the matter will promptly be referred to Federal and State
`Authorities for investigation under the Economic Espionage Act of 1996 (codified at 18 U.S.C. §§ 1831-1839)
`and the Wisconsin Uniform Trade Secrets Act (codified at Wis. Stat. § 134.90), respectively. In such an event,
`Champion shall seek to recover any and all losses and legal costs incurred.
`
`While we recognize the core dispute here is between Champion and Mr. Stefaniak, HF should be aware that
`Champion expends a great deal of effort and resources in developing new products and in protecting its
`intellectual property in those new products. Champion has an extensive patent portfolio in the generator space
`and is aggressively enforcing those rights. For example, please take notice the pending patent litigation entitled
`Champion Power Equipment, Inc. v. Firman Power Equipment Inc., Case 2:23-cv-02371-DMF, filed on
`
`Ziolkowski Patent Solutions Group, SC
`
`136 S. Wisconsin St., Port Washington, Wl 53074
`
`i i - 262.268.8100 Fax 262.268.8185 zpspatents.com
`Lg)[?fl(f“)}T = T (7 U U =) (m\ D) / /\\l ,,,,,, Champion - EX2038, Page 1 of 2
`NN &7 U ‘ ‘ / N \\ A \\/” MWE Investments, LLC et al v. Champion Power Equip., Inc.
`IPR2025-01185
`
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`
`
`Mr. Eric Smidt
`
`Harbor Freight Tools USA Inc.
`
`March 27, 2024
`
`Page 2 of 2
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`November 10, 2023 in the United States District Court for the District of Arizona (copy of Amended Complaint
`enclosed). In this regard, we are in the process of investigating HF’s entry into the multi-fuel generator market,
`and accordingly, we bring to your immediate attention and actual notice of the following Champion patents
`relevant to HF’s generators.
`
`U.S. Patent Nos.
`9,435,273
`10,167,789
`10,221,780
`10,267,242
`10,393,034
`10,598,101
`10,641,187
`10,697,379
`10,697,398
`11,008,958
`11,143,120
`11,143,145
`11,306,667
`11,492,985
`11,530,654
`11,761,390
`11,840,970
`11,905,895
`11,905,896
`
`Once we have evaluated your products, we will be in touch.
`
`Please contact me directly if you would like to discuss this matter.
`
`Sincerely,
`
`Timothy J. Ziolkowski
`
`TJZ:rlt
`
`enclosure
`
`Ziolkowski Patent Solutions Group, SC
`
`136 S. Wisconsin St., Port Washington, Wl 53074
`262.268.8100 Fax 262.268.8185 zpspatents.com
`Champion - EX2038, Page 2 of 2
`MWE Investments, LLC et al v. Champion Power Equip., Inc.
`
`IPR2025-01185
`
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