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IN THE UNITED STATES DISTRICT COURT


FOR THE EASTERN DISTRICT OF VIRGINIA
ALEXANDRIA DIVISION
CURTIS A. EVANS,
WHIPGOLF, LLC
Plaintiffs,
Civil Action No. 1:15-cv-683-CMH-TCB
v.
PLUSONE SPORTS, LLC,
ALEX VAN ALEN,
Defendants.

DEFENDANTS OPPOSITION TO PLAINTIFFS


MOTION FOR PRELIMINARY INJUNCTION
Defendants PlusOne Sports, LLC (PlusOne) and Alex Van Alen (Van Alen) submit
this opposition to the motion for preliminary injunction filed by Plaintiffs WhipGolf, LLC
(WhipGolf) and Curtis A. Evans (Evans).
INTRODUCTION
Plaintiffs filed their two-count complaint for breach of contract on May 29, 2015. (Doc.
1.) Defendants moved to dismiss Plaintiffs complaint on June 24, 2015. (Doc. 9.) On July 2,
2015, Plaintiffs filed their motion for a preliminary injunction. (Doc. 14.) Argument on
Defendants motion to dismiss and Plaintiffs motion for a preliminary injunction is set for July
17, 2015. One fact resolves all pending issues there is no contract to enforce.
In November 2014, the parties prepared a Term Sheet. The Term Sheet merely
outlined the provisions of a license agreement the parties expected to negotiate, and it left
numerous material terms and issues unresolved. Under Virginia law, the Term Sheet is precisely
the type of agreement to agree that is invalid. Similarly, under Massachusetts or Delaware
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law, the terms are too incomplete, indefinite, and informal to be enforced. Not only that, but the
last sentence of the Term Sheet recites that the parties were to subsequently negotiate,
memorialize, and execute a written binding Non-Exclusive License Agreement. That language
alone confirms that the Term Sheet was not intended to be binding or anything other than the
starting point for negotiations of a complex license agreement.
Nevertheless, Plaintiffs move the Court for the extraordinary remedy of a preliminary
injunction. Plaintiffs motion must be denied: First, Plaintiffs cannot show that they are likely to
succeed on the merits of their breach of contract claims. There is no enforceable contract.
Second, Plaintiffs cannot show that they would be irreparably harmed in the absence of
injunctive relief. If any relief is due (it is not), monetary damages suffice and are not difficult to
ascertain. Third, Plaintiffs cannot show that the balance of equities tips in their favor. Equity
strongly favors Defendants. Fourth, Plaintiffs have not shown that an injunction is in the public
interest. An injunction would stop PlusOne from filling orders for people relying on PlusOne to
deliver FlingGolf equipment, and it would hinder the advancement of a dynamic, inexpensive,
and fun new sport.
Plaintiffs have to demonstrate that they can satisfy all four of the requirements for a
preliminary injunction. They cannot satisfy one.
FACTUAL BACKGROUND
Set out below is a lengthy factual background, as a detailed description of the parties
relationship and dealings may aid the Courts assessment of certain factors in its preliminary
injunction analysis (e.g. irreparable harm and the balance of equities). It bears noting, however,
that the Term Sheet speaks for itself. Because the Term Sheet is, patently, an agreement to
agree and is incomplete, indefinite, and informal, it is unenforceable. Plaintiffs instant motion

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may be resolved on this basis alone (and Plaintiffs complaint should be dismissed on this basis
as well, see Docs. 9-10, 19).
FlingGolf
FlingGolf is a dynamic new sport. It was invented and developed by Van Alen. (See
Declaration of Alex Van Alen in Support of Defendants Opposition to Plaintiffs Motion for
Preliminary Injunction (Van Alen Dec.) at 2-14, 28.)
FlingGolf is played with a FlingStick, which is shown below:

(Id. at 14.)
In FlingGolf, players fling (i.e., throw) a golf ball along a golf course and putt with the
face of the FlingStick. (Id. at 7.)
In the summer of 2012, Van Alen began developing the FlingStick. (Id. at 3-4.) He
began with a Jai-alai basket, and he spent thousands of hours developing different prototypes
until, finally, he had the FlingStick. (Id. at 3-5, 9-12.) The below image depicts the
evolution of Van Alens product from Jai-alai basket (on left) to FlingSticks (on right).

(Id. at 5.)
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PlusOne is a limited liability company that Van Alen organized on February 1, 2013. (Id.
at 11.) PlusOne began selling FlingSticks in June and July 2014. (Id. at 13.)
Today, FlingGolf is being played in states throughout the country, several provinces in
Canada, and several countries in Europe. (Id.)
Negotiations Between PlusOne And Evans Up To And Including Nov. 3, 2014
On July 29, 2014, PlusOne became aware of U.S. Patent Application No. 13/779,676
(the 676 Application), which names Evans as inventor. (Id. at 15; see also Declaration of
Edward R. Gates in Support of Defendants Opposition to Plaintiffs Motion for Preliminary
Injunction (Gates Dec.) at 4.)
Following review of the 676 Application, PlusOne reached out to Evans to discuss a
potential license, and negotiations commenced shortly thereafter. (Gates Dec. at 5; Van Alen
Dec. at 16.)
In August 2014, Van Alen sent a FlingStick to Evans, at Evanss request. (Van Alen
Dec. at 17.) At this time, Evans was not manufacturing or selling any throw golf products.
(Id.) WhipGolf, formed at the end of October 2014, did not exist. (Id. at 15.)
In September 2014, Van Alen flew to Virginia from Boston to meet with Evans in
person. (Van Alen Dec. at 18.) Shortly after this September 2014 trip, Van Alen sent to Evans
two additional FlingSticks and five FlingGolf hats. (Id. at 19-20.)
On November 2, 2014, Evans and PlusOne signed a Term Sheet. PlusOne emailed a
copy of the signed Term Sheet to Evans on November 3, 2014. (Gates Dec. at 6; id., Ex. A
(Term Sheet)); Van Alen Dec. at 21-22).
The Term Sheet was a framework that was to be used to reach a subsequent, binding nonexclusive license agreement. (Gates Dec. at 7.) The last sentence of the Term Sheet confirms

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this. It provides, The undersigned parties agree to work in good faith to record the terms of the
Term Sheet in a binding Non-Exclusive License Agreement. (Id., Ex. A.)
In the Term Sheet, the parties failed to address a number of material terms, including:
(1)
(2)
(3)
(4)

how royalties were to be calculated;


the bounds of access, inspection, and reporting obligations (including audit rights);
cooperation in third party infringement suits;
whether and how PlusOnes performance would be guaranteed (e.g., by Mr. Van Alen or
other mutually acceptable substitute guarantee);
(5) PlusOnes have made rights;
(6) the scope of PlusOnes covenant not to sue;
(7) when the obligation to pay royalties was to begin;
(8) foreign manufacturing;
(9) the binding or non-binding nature of any arbitration, and rules for same; and
(10) the term of the Term Sheet.
(Gates Dec. at 9-22.)
The parties communications concerning the Term Sheets execution also confirm that
the Term Sheet was a non-binding framework for a subsequent license. On November 3, 2014,
when Van Alen emailed the signed Term Sheet to Evans, he wrote, I look forward to finalizing
these terms in a license agreement with you. (Id., Ex. B.) About an hour and a half later, Van
Alens counsel responded to Van Alen and Evans, offering to help with the next step, i.e.,
drafting a final binding agreement. (Gates Dec. at 24; id., Ex. B.) Evans responded, declining
drafting help. (Id., at 24; id. at Ex. B.) He closed his responsive email with the following, I
look forward to getting this finalized very shortly. (Id., at 24; id. at Ex. B.)
Negotiations Between PlusOne And Evans After Nov. 3, 2014
On November 4, 2014, Evans sent to Van Alen his draft of the final Non-exclusive
License Agreement. (Gates Dec. at 26; id., Ex. B.) Evanss draft was materially different
than the Term Sheet. (Id. at 26; Van Alen Dec. at 25.) It deviated significantly with respect
to at least these terms and issues:

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(1) the definition of Inventor and requirement that Evans be identified as the inventor of
PlusOnes FlingStick;
(2) the definition of Licensed Patents;
(3) the definition of gross sales;
(4) the inclusion of a twenty-year term provision;
(5) reporting requirements;
(6) audit rights;
(7) an Effect of Termination provision that required PlusOne to cease making and selling
licensed products, for all time, if the license was terminated;
(8) confidentiality requirements;
(9) arbitration requirements;
(10) waiver of jury trial;
(11) disclaimer of licensor representations and warranties;
(12) limitation of liability;
(13) indemnification;
(14) venue;
(15) a provision calling for PlusOne to grant to Evans a security interest in PlusOnes assets;
(16) a provision granting Evans the right to use PlusOnes name, logo, and trademarks with
impunity; and
(17) a separate, appended Personal Guarantee agreement.
(Gates Dec. at 27-45; see also Van Alen Dec. at 25-26.)
One of the few ways that Evanss draft license tracked the Term Sheet was in its
inclusion of an overbroad covenant not to sue, one that would immunize Evans and/or any
Evans Company from any and all suits except those relating to the license itself. (Gates Dec. at
46.) This is notable because, on November 6, 2014 (i.e., two days after Evans included the
overbroad covenant not to sue), Evans filed a design patent application in the United States
Patent and Trademark Office (the PTO)1 that contained figures bearing an uncanny
resemblance to PlusOnes FlingStick. (Gates Dec. at 46, 50; id., Ex. E.) Additionally, three
months later, when PlusOnes trademarks were abandoned, inadvertently, Evans (who is an
attorney registered to practice before the PTO) filed trademark applications seeking to register
1

The filing date for this design patent application (U.S. Pat. App. No. 29/508,440) was identified
using the PTOs Patent Application Information Retrieval service (PAIR), which is available
at http://portal.uspto.gov/pair/PublicPair; however the application itself first came to Defendants
attention on November 19, 2014. (Gates Dec. at 46, 50; see also Van Alen Dec. at 28.)
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PlusOnes trademarks in WhipGolfs name. (See Van Alen Dec. at 33-38; see also Section
III, below (discussing Evanss applications for PlusOnes FLINGGOLF and FLINGSTICK
marks)).
Below are the figures from Evanss design patent application, which Evans disclosed to
Van Alen on November 19, 2014.

(Van Alen Dec. at 28; Gates Dec. at 46, 50; id., Ex. E)
Van Alen believed that Evans copied the design of PlusOnes FlingStick. (Van Alen
Dec. at 28.) The below images show FlingSticks and figures from Evanss design patent
application side-by-side.

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On November 18, 2014, via email, Van Alens counsel sent to Evans an edited version of
Evanss November 4, 2014 draft license. (Gates Dec. at 48; id., Ex. D) Evans returned another
iteration of the parties license agreement on November 19, 2014. (Id. at 50; id., Ex. E.) He
had, by and large, rejected Van Alens counsels edits from the day before. (Id. at 50.)
On November 24, 2014, Van Alens counsel emailed Evans to explain PlusOnes
objections to Evanss most recent draft license. (Id. at 51-52; id., Ex. F.) Evans was advised
that PlusOne objected to the drafts twenty year term; the requirement that Evans be referred to
as the sole inventor of the Licensed Products; the language allowing Evans to use PlusOnes
name, logo, and trademarks with impunity and without prior consent; the provision calling for a
security interest in PlusOnes assets; the selective limitation of liability; and the deletion of an
edit that would have made clear that while PlusOne would cooperate in a third party
infringement litigation suit, Evans would bear the cost of any such suit. (Id. at 51; id., Ex. F.)
Van Alens counsel wrote to Evans, Your two contract proposals go further and are outside of
what PlusOne agreed to and what PlusOne would be willing to agree to. It appears from your
agreement drafts that the term sheet does not reflect what would be even close to a meeting of
the minds. (Id. at 51; id., Ex. F.) He also expressed PlusOnes disappointment with Evanss
design patent application (discussed above). (Id. at 52.)
Evans responded to Van Alens counsel on November 25, 2014, but his email and
attached revised draft license did little to help faltering negotiations. (Id. at 53; id., Ex. G.)
On December 3, 2014, Van Alens counsel emailed Evans and advised Evans that
PlusOne was disinclined to edit and return another draft license. (Id. at 54; id., Ex. H; Van
Alen Dec. at 30.) Van Alens counsel also detailed why PlusOne felt that Evans had not acted

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in good faith during negotiations. (Gates Dec. at 54; id., Ex. H.) Some pertinent portions of
the email are reproduced below:

PlusOne does not believe you have acted in good faith.


PlusOne, among other things, is uncomfortable doing business with someone who
inappropriately copied its product design and sought a design patent on it.
[Y]our negotiating tactics have not demonstrated good faith. The only time PlusOne has
made any progress on its legitimate business concerns has been when it got so frustrated
with your intransigence and positions, that it had to consider discontinuing the
negotiation.
[Y]ou made numerous requests to add material terms that deviated from the term sheet.
[Y]our draft agreements have repeatedly sought terms drastically different from those in
the Term Sheet (and always significantly to your advantage).
Requiring PlusOne to anoint you as the sole inventor of the Licensed Products is but
one example of advancing a position drastically different and significantly more
favorable to you than in the Term Sheet. This was not in good faith.
Asking for royalties beyond the patent term was not in good faith.
In each of the three binding agreement proposals you made to PlusOne, you stuck to the
language of your first draft and took almost none of PlusOnes comments in its re-draft
seriously. PlusOne raised legitimate concerns in its draft, which concerns any reasonable
business would expect to be addressed in a binding agreement. You not only inserted all
kinds of protections for yourself in the non-binding term sheet, but then, when the time
came to negotiate the actual agreement and PlusOne raised legitimate concerns from its
side, you took the view that they were precluded. That is not good faith.
For example, in your termination section you refused a clarification that makes certain
that your right to enjoin PlusOne from selling its product disappears in the event it
terminates and is fully paid up. Your proposed language seems to leave an implication
hanging over PlusOne that by entering into this agreement with you, you could forever
enjoin PlusOne from making its product, even if the agreement were properly terminated.
That is not a good-faith position to have taken.
The scope of the covenant not to sue is an important issue for PlusOne, and its
importance has grown since your disclosure of the design application copying PlusOnes
design. PlusOne believes that design was based entirely on its product that it sent to you
for a different purpose. The covenant not to sue must be limited in its scope; it was never
intended to be a carte-blanche for you to take advantage of PlusOne.
There has not been a meeting of the minds between you and PlusOne over any binding
license agreement.

(Gates Dec., Ex. H).

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Several days after Van Alens counsel sent the December 3, 2014 email, Van Alens
counsel and Evanss counsel discussed whether the gap between Evans and PlusOne could be
bridged. This discussion did not close the gap in the negotiations. (Gates Dec. at 55.)
On New Years morning, January 1, 2015, Evans emailed the following message to Van
Alen:
I am writing to wish you a Happy New Year and to let you know Im looking
forward to receiving the first guaranteed annual minimum royalty payment of
$10,000 by January 5, 2105. If it hasnt been sent already, please send it by
FedEx and forward the tracking number by email so I might ensure it is timely
received by Jan 5. Thank you.
(Van Alen Dec. at 31; id., Ex. A; Gates Dec. at 56.)
On January 4, 2015, Van Alen terminated the parties negotiations. (Van Alen Dec. at
32; id., Ex. B; Gates Dec. at 57.)
On January 6, 2015, Evanss counsel emailed Van Alens counsel, providing formal
notice of [PlusOnes] breach of the Term Sheet. (Gates Dec. at 58; id., Ex. I.) The alleged
breach identified was PlusOnes failure to pay the first guaranteed annual minimum royalty
payment on January 5, 2015. (Id. at 58; id., Ex. I.)
On March 6, 2015, Evanss counsel sent Van Alens counsel a letter invok[ing] the
acceleration clause of the Term Sheet and declar[ing] the sum of $50,000 to be immediately
due in view of an alleged failure to cure [d]efault in the payment of an annual minimum
royalty payment. (Id. at 58; id., Ex. J.)
Plaintiffs Complaint was filed on May 29, 2015.

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ARGUMENT
A preliminary injunction is an extraordinary remedy never awarded as of right, Winter
v. NRDC, Inc., 555 U.S. 7, 24 (2008) (citing Munaf v. Geren, 553 U.S. 674, 689-90 (2008)), and
it is to be applied only in [the] limited circumstances which clearly demand it. Allegra
Network LLC v. Reeder, 2009 WL 3734288, at *2 (E.D. Va. Nov. 4, 2009) (quoting Direx Israel,
Ltd. v. Breakthrough Med. Corp., 952 F.2d 802, 811 (4th Cir. 1991)). This case does not present
circumstances clearly demanding an extraordinary remedy.
To prevail on their motion, Plaintiffs must demonstrate by a clear showing that: (1) they
are likely to succeed on the merits; (2) they are likely to suffer irreparable harm in the absence of
preliminary relief; (3) the balance of equities tips in their favor; and (4) an injunction is in the
public interest. See Winter, 555 U.S. at 20; see also Real Truth About Obama, Inc. v. FEC, 575
F.3d 342, 345 (4th Cir. 2009), vacated on other grounds, 130 S.Ct. 2371 (2010), reinstated in
pertinent part by 607 F.3d 355 (4th Cir. 2010). Plaintiffs must satisfy all four requirements. See
Real Truth About Obama, Inc., 575 F.3d at 346. They cannot satisfy one.
I.

PLAINTIFFS CANNOT DEMONSTRATE A LIKELIHOOD OF SUCCESS ON


THE MERITS
Plaintiffs cannot show that they are likely to succeed on the merits (regardless of whether

Virginia, Massachusetts, or Delaware law applies), and for this reason alone, Plaintiffs motion
for preliminary injunction should be denied.

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A.

There Is No Likelihood Plaintiffs Will Succeed Under Virginia Law

Under Virginia law, which applies to the parties dispute for reasons explained in
Defendants motion to dismiss memoranda,2 there is no likelihood that Plaintiffs can succeed on
the merits of their breach of contract claims.
Under Virginia law, [t]he elements of a breach of contract action are (a) a legally
enforceable obligation of a defendant to a plaintiff; (b) the defendants violation or breach of that
obligation; and (c) injury or damage to the plaintiff caused by the breach of obligation. Sunrise
Continuing Care, LLC v. Wright, 671 S.E.2d 132, 135 (2009) (quoting Filak v. George, 594
S.E.2d 610, 614 (2004)).

1.

The Term Sheet Is Not An Enforceable Contract

Here, there is no contract. (See Doc. 10 at 5-11, Doc. 19 at 9-10.) This Court has ruled
that [a] letter of intent or any other writing in which the terms of a future transaction or later,
more formal agreement are set out is presumed to be an agreement to agree rather than a binding
contract, and that an agreement to negotiate open issues in good faith to reach a contractual
objective within [an] agreed framework will be construed as an agreement to agree rather than a
valid contract. Virginia Power Energy Mktg., Inc. v. EQT Energy, LLC, 2012 WL 2905110, at
*4 (E.D. Va. July 16, 2012). The Term Sheet is precisely the type of agreement to agree that
is invalid under Virginia law, see id. at *5, and Plaintiffs only argument to the contrary is
premised on application of a Fourth Circuit case discussing West Virginia (not Virginia) law.
(See Doc. 10 at 5-11, Doc. 19 at 9-10.)
2

See Doc. 10 at 2-5; Doc. 19 at 3-9. Because argument on Defendants motion to dismiss and
on Plaintiffs motion for preliminary injunction will be heard by the Court at the same hearing,
on July 17, 2015, Defendants do not belabor arguments fully briefed in their motion to dismiss
papers. Instead, Defendants incorporate by reference into this opposition the arguments
presented in their motion to dismiss memoranda, Docs. 10 & 19.
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Accordingly, Plaintiffs motion for preliminary injunction should be denied. See, e.g.,
Jones v. Bank of Am., N.A., 2012 WL 405053, at *6 (E.D. Va. Feb. 7, 2012) (ruling that because
no contract existed plaintiffs breach of contract claim should be dismissed and their motion for
preliminary injunction should be denied).

2.

Because No Guaranteed Annual Minimum Royalty Payment Was


Due, Non-Payment Was Not A Breach

Even if the Term Sheet were enforceable under Virginia law, Plaintiffs still cannot
prevail. Plaintiffs have not demonstrated that they are likely to succeed in showing breach. The
following passage is Plaintiffs entire argument concerning likelihood of success:
Defendants failure to make their first guaranteed annual minimum royalty
payment of $10,000 on January 5, 2015, and their subsequent failure to cure their
breach within 10 business days of the January 6, 2015 delinquency notice, is an
unquestionable default. The Agreements acceleration clause permits Evans to
accelerate guaranteed royalties and to terminate the license to make, use, or sell
the licensed product upon default. Thus, in analyzing Plaintiffs likelihood of
success on the merits, the only issue is whether the Agreement is a valid and
enforceable contract.
(Doc. 15 at 8 (emphasis added).)
The above passage shows that Plaintiffs have pinned their prayer for injunctive relief on
one alleged breach the supposed failure of PlusOne to pay a guaranteed annual minimum
royalty on January 5, 2015 which Plaintiffs presume is unquestionable default. No other
alleged breach is discussed in Plaintiffs argument. (See Doc. 15 at 7-19.)
A single section of the Term Sheet discusses guaranteed annual minimum royalty
payments. (See Gates Dec., Ex. A at 2). The first sentence of that section reads, PlusOne to
guarantee annual minimum royalty payment of $10,000 each year, for term of issued patent,
paid by January 5 each year, Id. Licensed Patents under the Term Sheet are Patent(s)
issuing on US Patent Application 13/779,676 and continuations of any type. It follows that a
guaranteed annual minimum royalty payment is not due until the term of a patent issuing on U.S.
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Pat. App. No. 13/779,676, or on a continuation thereof, begins. To date, no such patents have
issued. (Gates Dec. at 17; see also Doc. 10 at 9 n.2). PlusOne, therefore, was under no
obligation to make a guaranteed annual minimum royalty payment on January 5, 2015, and
PlusOnes failure to make such a payment is not a breach. Because Plaintiffs instant motion
is premised on only this alleged breach, Plaintiffs motion must be denied.
Indeed, Defendants note that Plaintiffs have made no showing of likelihood of success
with respect to any other alleged breach. Plaintiffs, therefore, have no basis for requesting
preliminary injunctive relief premised on any other alleged breach. No showing of likelihood of
success is not the clear showing required for the extraordinary remedy of a preliminary
injunction. See Real Truth About Obama, 575 F.3d at 345 ([T]he party seeking the preliminary
injunction must demonstrate by a clear showing that it is likely to succeed on the merits);
see also BP Prods. N. Am. Inc. v. Southside Oil, L.L.C., 2013 WL 6493598, at *4 (E.D. Va. Dec.
10, 2013) (denying a motion for preliminary injunction because plaintiff failed to show that it
was likely to succeed in showing breach).
It also bears noting that (a) in Evanss January 1, 2015 email, payment of a guaranteed
annual minimum royalty was the only payment demanded (see Van Alen Dec., Ex. A); (b) the
alleged non-payment of a guaranteed minimum was the only basis for Evanss January 6, 2015
formal notice of [PlusOnes] breach (see Gates Dec., Ex. I); and (c) the alleged failure to cure
non-payment of such a guaranteed minimum was the only basis for Evanss March 6, 2015
invocation of the Term Sheets acceleration clause and declaration that the sum of $50,000
was immediately due (see Gates Dec., Ex. J). All of these actions were misguided in view of the
fact that the Term Sheet did not call for payment of a guaranteed annual minimum royalty on
January 5, 2015.

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B.

There is No Likelihood Plaintiffs Will Succeed Under Massachusetts


Law

The Court should apply Virginia law to the parties dispute for the reasons set out in
Defendants motion to dismiss memoranda (see Doc. 10 at 3-5; Doc. 19 at 3-8). Massachusetts
law does not govern. (See Doc. 19 at 3-8). Even if the Court were to apply Massachusetts law to
the parties dispute, however, there is no likelihood that Plaintiffs can succeed on the merits of
their breach of contract claims.
The elements for a breach of contract claim under Massachusetts law are (a) the existence
of an agreement supported by consideration; (b) that plaintiff performed or was ready, willing,
and able to perform; (c) that defendant breached the agreement; and (d) that plaintiff suffered
injury as a result. See, e.g., Unum Grp. v. Benefit Pship, Inc., 938 F. Supp. 2d 177, 185 (D.
Mass. 2013); Singarella v. City of Boston, N.E.2d 290, 291 (Mass. 1961).

1.

The Term Sheet Is Not An Enforceable Contract

Plaintiffs cannot meet Massachusetts requirement of an agreement supported by


consideration for the same reason they cannot show a legally enforceable obligation under
Virginia law the Term Sheet is unenforceable.
As Defendants explained in their motion to dismiss reply, Massachusetts law, including
the case Plaintiffs rely on most heavily for their enforceability argument (Goren v. Royal
Investments, Inc., 516 N.E.2d 173 (Mass. App. Ct. 1987)), recognizes that a preliminary writing
that is imperfect on points which [a]re material should be considered an agreement to reach
an agreement, which impose[s] no obligation[s]. See Goren, Inc., 516 N.E.2d at 175-76 (citing
Rosenfield v. United States Trust Co., 290 Mass. 210 (1935)); see also Doc. 19 at 10-14.

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The Term Sheet, standing alone, evidences the parties failure to reach agreement on a
number of material terms. Its language shows that the terms and issues left unresolved include:
1. How royalties were to be calculated
See Gates Dec. at 9 (The Term Sheet indicates that royalties are based on
gross sales, but it did not define gross sales, which would form the basis for
payment.).
2. The bounds of access, inspection, and reporting obligations, and the
confidentiality of any information PlusOne might share with Evans
See id. at 12 ([The Term Sheet] fails to provide any detail about access,
inspection, and reporting such as would be essential to a binding agreement,
including the failure to address the proprietary nature of such information (e.g.,
customer contact information) and agreement on confidentiality provisions
protecting against Evanss disclosure of such information).
3. Cooperation in third party infringement suits
See id. at 18 (The Term Sheet is silent regarding which party bears the expense
of any such cooperation or suit.).
4. Whether and how PlusOnes performance would be guaranteed (e.g., by Mr. Van
Alen or other mutually acceptable substitute guarantee)
See id. at 11 (noting that the Term Sheets guarantee-related language
contemplates further negotiation respecting the identity of the guarantor and the
specifics of a guarantee).
5. PlusOnes have made rights
See id. at 14 (It is unclear what type of entity qualifies as a manufacturer
under the Term Sheet and whether PlusOne could employ the services of more
than one such manufacturer.).
6. The scope of PlusOnes covenant not to sue
See id. at 16 (PlusOne never would have formalized a covenant not to sue that
would immunize Evans and any Evans company from suit concerning all
potential misconduct unrelated to that agreement. No reasonable party would
formalize such a covenant not to sue.).
7. When the obligation to pay royalties was to begin
See id. at 10, 17 (The Term Sheet indicates that gross sales includes sales
made from November 1, 2014 to November 1, 2016.; The Term Sheet,
however, also contains annual minimum royalty-related language, which treats
annual minimum royalties differently.).
8. Foreign manufacturing
See id. at 15 (The Term Sheet fails to delimit when a product manufactured
outside the United States would or would not be manufactured for the purpose of
avoiding payments.).

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9. The binding or non-binding nature of any arbitration, and rules for same
See id. at 21 (Important arbitration-related details are absent, such as whether
the arbitration is binding, the nature of the breach for which arbitration can be
invoked, and the rules for any arbitration the parties might enter.).
10. The term of the Term Sheet
See id. at 22 (The Term Sheet contains no provision governing its term.).
The conclusion that the Term Sheet did not resolve these issues is further evidenced by
the fact that after the Term Sheet was signed and subsequent negotiations, Evans and PlusOne
still could not reach agreement on some of the above issues (and others). (See Gates Dec. at
26-45 (presenting a list of material changes Evans made in his November 4, 2014 draft of the
final Non-exclusive License Agreement); id. at 48-55 (discussing how negotiations
faltered)). Indeed, the parties tortuous negotiations plainly demonstrate that (a) the Term Sheet
did not resolve all (or even most) material issues, and (b) execution of the binding nonexclusive
license anticipated by the Term Sheet was much more than a mere formality. (It turned out to
be a Sisyphean task.) Massachusetts law recognizes that under such circumstances, preliminary
agreements are unenforceable. See Doc. 19 at 12-14 (discussing and collecting cases).

2.

Evans Was Neither Ready Nor Willing To Satisfy His Term Sheet
Obligations

Even if the Term Sheet were enforceable under Massachusetts law (it is not), Plaintiffs
cannot show a likelihood of success on the merits because Evans was not ready, willing, and able
to perform.
The Term Sheets last sentence provides that [t]he undersigned parties agree to work in
good faith to record the terms of this Term Sheet in a binding Non-Exclusive License
Agreement. (Gates Dec., Ex. A at 4 (emphasis added).) Evans was not prepared to satisfy at
least this obligation.

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As noted above, after the Term Sheet was signed, Van Alens counsel offered to help
draft the binding non-exclusive license agreement, but Evans rejected that offer and, on
November 4, 2014, returned a draft license that deviated significantly from the framework the
Term Sheet provided. (Gates Dec. at 26; Id., Ex. B, Nov. 4th Draft); Van Alen Dec. at 25)
In his draft, Evans made numerous, material changes, most, if not all, of which were unfavorable
to PlusOne. (See Gates Dec at 27-45 (listing and discussing those changes in detail).) This
was not work, undertaken in good faith, to record the Term Sheets terms in a binding
agreement. It was one of Evanss many acts of bad faith during negotiations. (See Gates Dec.,
Ex. H; see also Factual Background, above (presenting portions of an email detailing Evanss
bad faith in negotiations).)
Plaintiffs motion for preliminary injunction should be denied for the added reason that
Evans was not ready, willing, and able to perform under the Term Sheet.

3.

Because No Guaranteed Annual Minimum Royalty Payment Was


Due, And Because The Term Sheet Was Terminated, Non-Payment
Was Not A Breach

Even if the Term Sheet were enforceable (it is not), and even if Plaintiffs could show that
Evans was ready, willing, and able to perform (he was not), Plaintiffs still cannot prevail, as they
have not demonstrated that they are likely to succeed in showing breach.
As discussed above, Plaintiffs have pinned their prayer for injunctive relief on the alleged
failure of PlusOne to pay a guaranteed annual minimum royalty on January 5, 2015. PlusOne,
however, was under no obligation to make such a payment. (See Section A.2.) Thus, Plaintiffs
have failed to demonstrate that they are likely to succeed in showing breach, and Plaintiffs
motion must be denied for this reason.
Additionally, Defendants did not breach the Term Sheet on January 5, 2015, because Van
Alen terminated the parties relationship the day before, on January 4, 2015. (See Van Alen
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Dec., Ex. B (I will not be making any payment to you. You have not negotiated a definitive
license agreement in good faith and I am terminating further negotiations as a result. To the
extent it is ever determined we had any meeting of the minds and agreement embodied in the
term sheet, I am terminating any such agreement for cause arising from your breach.).) Van
Alen acted well within his rights in terminating. The Term Sheet is of indefinite duration, as it
has no provision delineating term, and under Massachusetts law, a contract of indefinite duration
is terminable at will. See, e.g., Moore v. La-Z-Boy, Inc., 639 F. Supp. 2d 136, 141 n.5 (D.
Mass. 2009) (Where an agreement fails to specify a term of duration, the contract will be
construed as one terminable at will by either party upon reasonable notice. (quoting Mass
Cash Register, Inc. v. Comtrex Sys. Corp., 901 F. Supp. 404, 417 (D. Mass. 1995)). Plaintiffs
motion should be denied for this reason as well.

C.

Plaintiffs Concede That Delaware Law Does Not Apply

Plaintiffs discuss Delaware law in their memorandum in support of the present motion;
however, as Defendants explained in their motion to dismiss reply, Plaintiffs have effectively
conceded that Delaware law does not apply to the parties dispute. (See Doc. 19 at 9.) The
arguments Plaintiffs present in support of the present motion are the same as those presented in
Plaintiffs opposition to Defendants motion to dismiss. Thus, for the same reasons the Court
may ignore Plaintiffs Delaware law-related arguments in ruling on Defendants motion to
dismiss, the Court may ignore those arguments here. (See Doc. 10 at 4-5 (explaining why
Delaware law does not apply); Doc. 19 at 9 (discussing Plaintiffs concession that application of
Delaware law would put[] the cart before the horse)).
In any event, the Term Sheet is unenforceable under Delaware law as well. For reasons
discussed above, the Term Sheet does not satisfy Delaware laws requirement that the terms of a
contract be sufficiently definite. See Doc. 15 at 15 (citing Osborn ex rel. Osborn v. Kemp, 91
19

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A.2d 1153, 1158 (Del. 2010)). Also, for the same reasons Plaintiffs have not shown that they are
likely to succeed in showing breach under Virginia and Massachusetts law, Plaintiffs are unlikely
to show breach under Delaware law. Accordingly, even if Delaware law did apply (it does not),
Plaintiffs motion for preliminary injunction must be denied.
II.

PLAINTIFFS WILL NOT SUFFER IRREPARABLE HARM IN THE ABSENCE


OF PRELIMINARY RELIEF
Even if Plaintiffs could demonstrate that they are likely to succeed on the merits at trial,

their motion for preliminary injunction must be denied because Plaintiffs have not made a clear
showing of irreparable harm.

A.

No Irreparable Harm Would Result From The Courts Denial Of


Plaintiffs Motion

Plaintiffs will not suffer irreparable harm if their motion is denied, for the reasons
discussed below.
[I]t is beyond dispute that economic losses generally do not constitute irreparable harm,
Rio Assocs., L.P. v. Layne, 2015 WL 3546647, at *5 (W.D. Va. June 8, 2015), and [h]arm is not
considered irreparable if it can be compensated by money damages during the normal course of
litigation, McGean v. Montgomery Cnty, 1996 WL 295315, at *1 (4th Cir. June 5, 1996).
Breach of contract claims are prime examples of claims for which monetary damages are
adequate and readily calculable. See, e.g., ATCS Intl LLC v. Jefferson Contracting Corp., 807
F. Supp. 2d 516, 518-19 (E.D. Va. 2011) (holding money damages adequate for a contract
breach); Allegra Network LLC v. Reeder, 2009 WL 3734288, at *4 (E.D. Va. Nov. 4, 2009)
([A]ssuming Defendants breached the contract, any harm Plaintiff suffered from this breach
can be adequately compensated through damages and damages would not be too difficult to
ascertain.).

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In this matter, if any relief is due Plaintiffs, monetary damages will suffice. As noted
above, Plaintiffs motion is premised on PlusOnes alleged failure to pay a guaranteed annual
minimum royalty payment. This is the supposed breach that caused Evans to invoke the
acceleration clause in the Term Sheet. (See Doc. 15 at 6 (On March 6, 2015, Evans, through
counsel, sent formal notice of default to PlusOne, invoking the Agreements acceleration
clause).) In relevant part, the Term Sheets acceleration clause recites:
Acceleration clause In the event of: 1) default in the payment of an annual
minimum royalty payment, Licensor may a) declare the entire sum then unpaid
immediately due and payable, including future annual minimum royalty
payments, said future annual minimum royalty payment portion not to exceed
$50,000, and terminate the license and/or suspend Licensees permission to make,
use or sell any Licensed Product until all outstanding amounts are paid.
(Gates Dec., Ex. A, Acceleration clause section).
With this clause of the Term Sheet, Evans (1) expressly capped monetary damages at
$50,000 (this is not difficult to ascertain) and (2) explicitly made a right to enjoin PlusOnes
activities subordinate to receipt of $50,000. In other words, if the Term Sheet is enforceable,
then Evans agreed that monetary damages a capped $50,000 would adequately compensate
him for a PlusOne default on guaranteed annual minimum royalties. Further, he agreed that his
receipt of $50,000 would end any contractual right to enjoin PlusOne activities. These facts
belie Plaintiffs claims that they will be irreparably harmed if an injunction is not ordered.
Nevertheless, below, Defendants discuss Plaintiffs other irreparable harm arguments and
explain why Plaintiffs have failed to make a clear showing that they would suffer irreparable
harm if their motion is denied.
Plaintiffs claim that they delayed manufacturing their own product and did not
participate in the PGA Merchandising Show in late January, 2015 in reliance upon the promises
and representations contained in the [Term Sheet] (Doc. 15 at 20), and that [i]n delaying
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formal entry into the market, and failing to participate in the leading industry trade show,
Plaintiffs missed their chance to garner substantial recognition and goodwill (Id.) To support
these claims, Plaintiffs cite a declaration submitted by Evans, which, in relevant parts, simply
states what Plaintiffs present in their brief. (See Doc. 15-1 at 50-51).
Plaintiffs positions beg numerous questions, including:

To what particular product are Plaintiffs referring? Did it have a name?


How long had Plaintiffs worked to develop this product?
Was the design for this product developed before or after Van Alen mailed
FlingSticks to Evans?3
Was the design for this product developed before or after Evans filed a design patent
application copying the FlingStick?4
Were manufacturers ready to go into production? At what volumes?
Could Plaintiffs unnamed product have been ready for the PGA Merchandising
Show, which took place January 21-23, 2015?5
Relatedly, how is January 4, 2015 the date Van Alen terminated the parties
dealings the eve of the PGA Merchandising Show?

Plaintiffs irreparable harm arguments boil down to the contention that Plaintiffs
sacrificed an opportunity to be the first mover in the sport of throw golf. But before
interactions with Defendants, Plaintiffs were not moving at all. (See Van Alen Dec. at 17.)
Van Alen and PlusOne developed FlingGolf and the FlingStick before they ever met, or dealt
with, Evans, and at least as late as August 2014, Evans was not manufacturing or selling any
throw golf products. (Van Alen Dec. at 17; see also id. (As of the date of this declaration, I

See Van Alen Dec. at 16 (In August 2014, Evans received a FlingStick that I sent to him, at
his request.); id. at 19 (Van Alen mailed to Evans two FlingSticks and five PlusOne
FlingGolf hats in September 2014).
4

See id. at 28 (Evans copied the design of PlusOnes FlingSticks, including those I mailed to
him in August and September 2014, at his request.).

See http://www.pgashow.com/.

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am not aware of any actual sale of a throw golf product ever being made by Evans or
WhipGolf.).
Additionally, had Plaintiffs wanted to move (first, second, or otherwise) to secure the
market goodwill their papers indicate they coveted, they could have. The Term Sheet did not
restrict Plaintiffs activities; there are no non-compete provisions. Plaintiffs could have
manufactured and sold their own product, even in direct competition with PlusOne. They chose
not to. It is neither Defendants nor the Courts duty to remedy supposed harm Plaintiffs
brought on themselves.
Plaintiffs also rely heavily on the following language in the Term Sheet: Delinquent
payment, uncured 10 business days from due date, presents irreparable harm to Licensor, and
parties agree to remedy in equity allowing Licensor to enjoin any further manufacture, use, or
sale. (Doc. 15 at 20; see also Gates Dec., Ex. A (Royalty payment section)). This language
is not determinative. [C]ontractual agreements alone do not control the district courts exercise
of its equitable discretion. Bethesda Softworks, L.L.C. v. Interplay Entm't Corp., 452 F. Appx
351, 353 (4th Cir. 2011). Indeed, Plaintiffs and the case upon which they rely acknowledge this.
See Doc. 15 at 20 (noting that such an acknowledgment is not conclusive); see also Dominion
Video Satellite, Inc. v. Echostar Satellite Corp., 356 F.3d 1256, 1266 (10th Cir. 2004)
(Although[] EchoStar and Dominion agreed that any breach of the Agreement would constitute
irreparable harm and would warrant an award of injunctive relief, that stipulation without more is
insufficient to support an irreparable harm finding.). Further, as discussed above, the Term
Sheets acceleration clause governs what occurs in the event of royalty payment default, and that
clause explicitly calls for the cessation of any contract-based injunction upon Evanss receipt of
monetary compensation.

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Lastly with regard to irreparable harm, contrary to what Plaintiffs contend, the
possibility of permanent loss of customers to a competitor or the loss of goodwill, does not
necessarily show the irreparable injury prong is satisfied (See Doc. 15 at 21). After all,
breaches of contract often result in the loss of future business and cause harm to goodwill. If
injunctions were appropriate in all such cases, injunctive relief would cease to be an
extraordinary remedy, and would be available in virtually every case involving a breach of an
agreement that affects future business. Safeway Inc. v. CESC Plaza Ltd. Pship, 261 F. Supp.
2d 439, 471 (E.D. Va. 2003). Indeed, this Court has explained that [a] mere possibility of
irreparable harm is not enough, and that courts considering the irreparable injury prong postWinter v. NRDC, Inc., 555 U.S. 7 (2008), often require specific evidence concerning the actual
or potential loss of customers or goodwill before finding irreparable injury, as [t]his approach
is consistent with the requirement that a plaintiff show that irreparable harm is likely and not
merely possible. Pro-Concepts, LLC v. Resh, 2013 WL 5741542, at *21 (E.D. Va. Oct. 22,
2013) (denying motion for a preliminary injunction) (italics in original).
Because Plaintiffs have not made a clear showing that irreparable harm will result if an
injunction is withheld, the Court should deny Plaintiffs motion.
III.

PLAINTIFFS CANNOT SHOW THAT THE BALANCE OF EQUITIES TIPS IN


THEIR FAVOR
Plaintiffs must show that the balance of equities tips in their favor. Winter, 555 U.S. at

20. They cannot.


This inquiry asks courts to balance the competing claims of injury and [ ] consider the
effect on each party of the granting or withholding of the requested relief. Rio Assocs., 2015
WL 3546647 at *6 (citing Doe v. Pittsylvania Cnty., 842 F.Supp.2d 927, 930 (W.D. Va. 2012);
Winter, 555 U.S. at 24).
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A decision withholding injunctive relief will have little to no effect on Plaintiffs. For
reasons discussed above, if Plaintiffs have been injured at all, they have been injured in the
amount of $50,000. Thats it. Without an injunction, Plaintiffs may still pursue the monetary
damages that would fully redress their alleged injuries. Plaintiffs also can enter the market any
time they are ready, willing, and able.
In stark contrast, an order enjoining Defendants from making, using, or selling
Defendants products would be catastrophic to Defendants business. (Van Alen Dec. at 39.)
Van Alen spent three years, thousands of hours, and hundreds of thousands of dollars,
without taking a salary, to develop FlingGolf and the FlingStick. (Id. at 3-13, 40.) Since long
before the Term Sheet, and until the present, Van Alen and PlusOne have been dedicated to
marketing and selling FlingSticks and introducing FlingGolf to new customers and new markets.
(Id. at 3-13, 40.) As a result of Van Alens and PlusOnes marketing and sales efforts,
FlingGolf, a sport that did not exist prior to Defendants efforts, is now being played in states
throughout the country, in Canada, and in several countries in Europe. (Id. at 13, 40.)
PlusOne, however, is still very much a startup company, and its continued day-to-day
operation is critical to its present and future success. (Id. 41.) An injunction would be
crippling and likely fatal to PlusOne Sports. (Id. 42.)
Moreover, the equities strongly favor Defendants in view of Evanss inequitable acts.
Each one of the following bad acts tips the scales in Defendants favor: A day after Evans
received the signed Term Sheet, he circulated a first draft of a binding non-exclusive license
agreement that deviated significantly and materially from the terms of the Term Sheet; two days
after circulating that draft, Evans filed a design patent application directed to designs copied
from Defendants Flingsticks; Evans consistently tried to imbue draft licenses with terms that

25

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were unfavorable to PlusOne; and Evans was unreceptive and intransigent throughout
negotiations, even with regard to minor tweaks (e.g., Evans refused to extend a payment deadline
by five days to accommodate the winter holiday season, see Gates Dec., Ex. H).
Additionally, after Van Alen terminated the parties relationship, and after PlusOne
inadvertently allowed its FLINGGOLF and FLINGSTICK trademark applications to go
abandoned, Evans (who is, as noted, registered to practice before the PTO) swooped in and filed
trademark applications for PlusOnes marks the very next day, to interfere with PlusOnes
ability to remedy those abandonments (as it intended). (Van Alen Dec. at 34.) In doing so,
Evans submitted sworn declarations to the PTO stating that WhipGolf was entitled to use the
FLINGGOLF and FLINGSTICK marks in commerce, that WhipGolf had a bona fide intention to
use those marks, and that Evans believed that no other person had the right to use those marks.
(Id. at 35.) When he submitted these declarations, Evans knew that PlusOne was using and had
been using its FLINGGOLF and FLINGSTICK marks, and he knew, or should have known, that
WhipGolf was not entitled to use PlusOnes marks. (Id. at 36.) (To date, WhipGolf has not
withdrawn those baseless applications and is forcing PlusOne to formally oppose and invalidate
them at great expense. (Id. at 37-38.)) These activities also tip the balance of equities in
favor of Defendants.
Lastly, Plaintiffs contend that an injunction would simply return the parties to the status
quo before Defendants breached the [Term Sheet]. (Doc. 15 at 22.) An injunction, however,
would do the opposite. Before January 5, 2015 when, according to Plaintiffs, Defendants
breached Defendants were manufacturing, marketing, and selling FlingSticks and FlingGolf,
and Plaintiffs were not making or selling anything. The status quo before the alleged breach

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consisted of Evans obstructing negotiations, and Defendants advancing the cause of an exciting
sport they had developed.
Because Plaintiffs have not made a clear showing that the balance of equities tips in their
favor, Plaintiffs motion must be denied.
IV.

THE PUBLIC INTEREST DOES NOT FAVOR AN INJUNCTION


Plaintiffs must establish by a clear showing that the public interest favors granting an

injunction. Rio Assocs., 2015 WL 3546647 at *6. In evaluating this factor, courts must pay
particular regard for the public consequences of granting an injunction. Id. Plaintiffs cannot
show that the public interest favors an injunction. Indeed, in their papers, Plaintiffs barely try.
The claims at issue in this case are breach of contract claims. This case does not, and will
not if it proceeds, involve any determination about intellectual property rights or patent
infringement. Nevertheless, in the first of its two public interest-related arguments, Plaintiffs
contend that the public interest favors an injunction here because the public interest is served by
protecting intellectual property interests, and [t]he public has a strong interest in maintaining
the integrity of the patent system. (See Doc. 15 at 24 (quoting ePlus, Inc. v. Lawson Software,
Inc., 2011 WL 2119410, at *1 (E.D.Va. 2011) (a patent case)). As this is not a patent case,
Plaintiffs first public interest-related argument is misguided.
Plaintiffs second public interest-related argument is relegated to a footnote, and it is
premised on Plaintiffs bald assumption that Defendants have committed trademark misuse.
This argument merits little discussion. Again, this is a contract case (albeit one with no contract
to enforce). The alleged contract at issue the Term Sheet neither includes the word
trademark nor discusses either partys trademark rights, at all. This is not a trademark case.
Because Plaintiffs have fallen far short of establish[ing] by a clear showing that the
public interest favors granting an injunction, their motion should be denied.
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An injunction would be contrary to the public interest as an injunction would stop


PlusOne from filling orders for people relying on PlusOne to deliver FlingGolf equipment, and it
would hinder the advancement of a dynamic, inexpensive, and fun new sport FlingGolf.
CONCLUSION
Plaintiffs motion for preliminary injunction should be denied.

Respectfully submitted,
Dated: July 15, 2015

By:

/s/ Craig C. Reilly


Craig C. Reilly (VSB # 20942)
The Law Office of Craig C. Reilly
111 Oronoco Street
Alexandria, VA 22314
Telephone No.: (703) 549-5354
Facsimile No.: (703) 549-5355
Craig.Reilly@ccreillylaw.com
Allen S. Rugg (VSB # 15481)
Christopher W. Henry (admitted pro hac vice)
WOLF, GREENFIELD & SACKS, P.C.
600 Atlantic Avenue
Boston, Massachusetts 02210-2206
Telephone No.: (617) 646-8000
Facsimile No.: (617) 646-8646
Allen.Rugg@wolfgreenfield.com
Christopher.Henry@wolfgreenfield.com
Attorneys for Defendants

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Case 1:15-cv-00683-CMH-TCB Document 22 Filed 07/15/15 Page 29 of 29 PageID# 190

CERTIFICATE OF SERVICE
I hereby certify that on July 15, 2015, this document was filed using the CM/ECF system,
which serves counsel for other parties who are registered participants as identified on the Notice
of Electronic Filing (NEF).
/s/ Craig C. Reilly
Craig C. Reilly (VSB # 20942)
The Law Office of Craig C. Reilly
111 Oronoco Street
Alexandria, VA 22314
Telephone No.: (703) 549-5354
Facsimile No.: (703) 549-5355
Craig.Reilly@ccreillylaw.com
Allen S. Rugg (VSB # 15481)
Christopher W. Henry (admitted pro hac vice)
WOLF, GREENFIELD & SACKS, P.C.
600 Atlantic Avenue
Boston, Massachusetts 02210-2206
Telephone No.: (617) 646-8000
Facsimile No.: (617) 646-8646
Allen.Rugg@wolfgreenfield.com
Christopher.Henry@wolfgreenfield.com
Attorneys for Defendants

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