`
`I
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`Patent and Trademark Oflice
`
`Trademark Trial and Appeal Board
`2900 Crystal Drive
`Arlington, VA 22202-3 513
`
`May 10, 2004
`
`Re: Notification for Resumption
`Opposition No: 91157392
`Serial No: 76435273
`
`China Healthways Institute, Inc.
`V.
`
`Xiaoming Wang
`
`
`
`us. menu-TM°*°’“" Ma“ mp‘
`
`Dear Sir/Madam:
`
`On May 3, 2004, United State District Court, Central District of California, ordered
`“East Health’s motion for summary judgment on China Healthways’ claim for
`federal and state trademark infringement and unfair competition under Lanham
`Act is GRANTED for the terms: CHI, CHI BMCHINE, QGM, QI GONG
`MACHINE, CHAOS, and Q1 GONG MASSAGER”. (Page 66, line 12-16). Please
`see Exhibit A.
`
`Please resume the case (Opposition No. 91157392) at TTAB.
`
`Respectfully submitted
`
`¢/%.e>._<i
`
`Xiaoming Wang. Ph.D.
`27 Calle Alamitos
`
`Rancho Santa Margarita, CA 92688
`(949) 766-4809
`As Applicant
`
`
`
`
`
`EXHIBIT A
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`
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`UNl'l'ED STATES DISTFICT COURT
`
`CENTRAL DISTRICT OF CALIFOFNIA
`
`Automated Document Delivery Service
`Notice pursuant to Rule 77ldl FRCiv.P
`
`The attached copy is hereby served upon you pursuant to Federal Rule of Civil Procedure 7 7ld).
`
`Fax Notes:
`
`Case 2:02-CV-03137 : CHINA HEALTHWAYS INC V. CHI ANIMAL THERAP, ET AL
`
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`
`
`
` FILED
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`35 OLE!-1K.U.S DISTRICT COURT
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`MAY -52004
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`CSNTRAL DISTRICT OF CALIFORNIA
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`1*!‘nsv..n.-v-.
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`.)‘..F".|‘Il"IL_I..a'
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`UNITED STATES DISTRICT COURT
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`CENTRAL DISTRICT OF CALIFORNIA
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`Send
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`CHINA HEALTHWAYS INSTITUTE,
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`Plaintiff,
`
`NO. CV 02-3 l37—LGB (JWJX)
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`Scan 0n|y___
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`v.
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`CHI ANIMAL THERAPEUTICS, et al.,
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`Defendants.
`
`ORDER GRANTING IN
`PART AND DENYING IN
`P A R T ,
`C H I ’N A
`HEALTHWAYS’ MOTION
`FOR SUMMARY JUDGMENT
`AGAINST EAST HEALTH-
`ORDER GRANTING IN
`PART, AND DENYING IN
`PART
`EAST HEAL'I‘H’S
`CROSS-MOTION FOR
`SUMMARY JUDGMENT
`AGAINST CHINA
`HEALTHWAYS; ORDER
`DENYING CHINA
`HEALTHWAYS’ MOTION
`FOR SUMMARY JUDGMENT
`AGAINST STOLTz- ORDER
`DENYING GHINA
`HEALTHWAYS’ MOTION
`FOR SUMMARY JUDGMENT
`AGAINST FU' ORDER
`GRANTING IN PART AND
`DENYING IN PART, OHINA
`HEALTHWAYS’ MOTION
`FOR SUMMARY JUDGMENT
`AGAINST LAL
`
`
`
`
`
`I.
`
`INTRODUCTION
`
`.
`
`This Order addresses four summary judgment motions filed by PlaintiffChina .’
`Healthways Institute, Inc. (“China Healthways”) against various defendants in this ‘
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`action and Defendant East Health Development Group, Inc.’s (“East Healt ”) cross-
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`motion for summary judgment against China Healthways. The claims in this case
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`include allegations ofcopyright, trademark, false advertising, and unfair competition
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`violations.
`
`"1i'-n*::__I_.-
`
`_i
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`II.
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`FACTUAL AND PROCEDURAL BACKGROUND
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`A.
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`General Factual Background
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`These facts are undisputed unless otherwise noted.
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`Richard Lee (“Lee”) is the founder and President of China Healthways. I Lee
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`Dec1.,1l 1.‘ Prior to 1990, Lee operated the business of China Healthways until its
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`1 The Court has devised the following citation nomenclature to distinguish
`the pleadings filed in support of the different motions: (1) all pleadings filed in
`support of China Healthways motion against East Health shall be preceded by an
`“I”; (2) all pleadings filed in support of East Hea1th’s motion against China
`Healthways shall be preceded by an “II”; (3) all pleadings filed in support of
`China Healthways motion against Stoltz and Chi Animal shall be preceded by an
`“III”; (4) all pleadings filed in support of China Healthways’ motion against Fu
`shall be preceded by an “IV”; (5) all pleadings filed in support of China
`Healthways motion against Lal shall be preceded by a
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`incorporation in 1999. I Lee Decl., 1] 3.2 In 1999, Lee assigned the rights and assets
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`of the business to the corporation, China Healthways. 1 Lee Decl., 1] 3.
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`I
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`Beginning in late 1988 to early 1989, Lee began importing a series of i
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`'
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`therapeutic massagers from a Chinese factory known as Shen Yun Electronics
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`Company (“Shen Yun”). 1 Lee Decl., 1] 3.’ The massagers had the name QIGONG
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`HEALTH APPARATUS on the front of them. I Lee Dec1.,1] 3, Exh. 1.‘ Lee states
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`2 Lee declares that he operated the business as a “sole proprietorship” until
`its incorporation in 1999. I Lee Decl., 1] 3. However, Defendant Fu, who is Lee’s
`ex-wife, declares that she was married to Lee from November 9, 1986 until 1997
`and that they operated the business together during that time. IV Fu Decl., 1] 4.
`Therefore, this fact is disputed.
`
`China Healthways objects to Fu’s declaration based on its contention that
`Fu previously requested a Chinese-English interpreter for her deposition testimony
`in an unrelated state court action. S_e_e IV Objs. Fu Decl., at 1; IV Lee Decl., 1] 23,
`Exh. 4. However, Fu stated in her deposition that she could read English. IV Lee
`Reply Decl., Exh. 4, 57:10-1 1. China Healthways has not presented any evidence
`that Fu does not speak English. Therefore, this objection is OVERRULED.
`
`3 East Health states that Lee, in his March 7, 2003 deposition, stated that he
`did not begin importing the massagers until 1989. However, Lee’s deposition
`testimony states that he began importing the massagers in 1988. II East Hea1th’s
`Unc. Facts, March 7, 2003 Lee Depo., 3924-5.
`
`* East Health has submitted the declaration of Lizhu Li (“Li”) which states
`that he is the General Manager of YingPu Electronics Co., Ltd (“YingPu”) of Shen
`Yun and that some of the massagers were manufactured with the name Qi-Gong
`Machine imprinted on them in 1986. II Li Decl., 1] 2. China Healthways objects to
`Li’s statement because he does not state that he worked for Shen Yun in 1986.
`
`Furthermore, Lee declares that Fa Zhuo Ran was‘ the general manager of Shen Yun
`when he was buying the massagers from Shen Yun from 1989 to 1995. 11 Lee
`Decl., 1] 3. The Court finds that Li has failed to establish a foundation to testify
`about matters at Shen Yun during any period other than the date of his declaration.
`
`3
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`
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`in his declaration that in June 1989, Lee instructed Shen Yun to change the name on
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`the faceplate of the rnassager to Q1-GONG MACHINE.
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`I Lee Decl., $1 4, Exh. 2, at
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`38.5 Lee sent five letters to Shen Yun detailing some problems with the massagers.
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`S_ee I Lee Dec1., Exh. 2, 39-42 & 45. Lee’s letter of April 21, 1994 praised Shen
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`Yun’s latest product as being “of very good quality.” I_d. at 45. In or around 1990,
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`Lee had an original line drawing created for the QI-GONG MACHINE. LL, 1] 5. Lee
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`Z)L.)-‘iN.‘\iELl
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`never obtained a written assignment agreement from the artist who created the
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`drawing for him. Q In 1991, China Healthways began labeling its massagers
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`INFRATONIC QGM. 1d,, 1| 6. China Healthways began purchasing its massagers
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`from another manufacturer in China, Lu Yan Fang, in 1994. 11 Wang Decl., 1] 6; ILee
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`Decl., 1[ 41. After China Healthways began purchasing its rnassagers from another
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`manufacturer, it made further improvements to the original INFRATONIC QGM. I
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`Lee Decl.,1[1] 14, 15, 16 & 17. The INFRANTONIC QGM 4.0 was developed in
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`1997. Li. ‘H 17.
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`Therefore, this objection is SUSTAINED.
`
`China Healthways also objects to Li’s declaration because Li previously
`submitted a declaration in Chinese in support of the opposition to the preliminary
`injunction motion and does not speak English. China Healthways has not
`submitted any evidence that Li does not speak English. Therefore, this objection
`is OVERRULED.
`
`5 China Healthways has submitted a letter from Lee to Shen Yun dated June
`15, 1989 which requests a change in the name on the faceplate. See I Lee Decl.,
`Exh. 2, at 38. However, the letter is not signed by Lee and Lee stated in his
`deposition that he did not know if he had mailed this particular letter to Shen Yun.
`11 East Health Uncon. Facts, 4/10/03 Lee Depo., 30: 19-3217.
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`In or about September 1995, a representative ofShen Yun contacted Xiaoming ,
`4 Wang aka Simon Wang (“Wang”). II Wang Decl., 1] 6. Shen Yun’s representative '
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`told Wang that Lee had discontinued distribution of the INFRATONIC QGM in
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`1994.
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`I_d.“ Shen Yun’s representative told Wang that it was looking for a United
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`States distributor to replace Lee. 1; Shen Yun changed the faceplate ofthe massager
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`to Qi Gong Massager fiom INFRATONIC QGM. _Id_., 1] 7. Wang personally sold the
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`Qi Gong Massager under a sole proprietorship using the fictitious business name East
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`Health Development Group (“East Health”) from 1996 to the end of 1997. E, 1] 8.
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`In January 1998, Wang incorporated his business in California as East Health
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`Development Group, Inc. (“East Health”). LI. The machine is essentially half the
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`size of a shoe box which is plugged into an electric outlet.
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`I_d., 1] 13. The box
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`generates a signal transmitted through a cord to a transducer (“handset”).
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`Id. The
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`transducer contains a diaphragm which manufactures both a vibration and infrasonic
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`sound waves. Q After Judge Hupp granted China Healthways a preliminary
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`injunction against East Health, East Health renamed its massager “SI WANG
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`MACHINE,” after Simon Wang. I Wang Decl.,1] 10.7
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`6 The parties agreed at oral argument that China Healthways’ massager is
`referred to as the INFRATONIC QGM, not the QGM INFRATONIC. Therefore,
`for the sake of clarity, the Court will refer to China Healthways’ massager as the
`INFRATONIC QGM.
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`7 China Healthways objects to this paragraph of Wang’s declaration based
`on hearsay, relevance, speculation, etc. This objection is overruled.
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`B.
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`Defendant Egg Health
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`f.!
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`C.
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`Def
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`S
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`3 nd hi Animal Thera eutics
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`Stoltz met Lee in August of 1992 and purchased an infrasonic therapeutic
`massager fromhim. III Stoltz Decl., at 2.’ In December 1992, Stoltz approached Lee I
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`with the idea of selling the infrasonic therapeutic massagers to people in the equine
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`market, as well as the general animal market. kl In 1992 or 1993, Lee and Stoltz
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`began a business relationship whereby Stoltz acted as a distributor for Lee. III Lee
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`Dec1., 11 6. In 1998, Stoltz became a sales representative for Lee where she received
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`a commission for sales of massagers sold to the equine market.
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`I_d., ‘[1 13. Around
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`1998, Lee and Stoltz decided to change the name of the equine Inassagers to
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`Equisonic QGM. Id., 1[ 14. On October 11, 2001, Lee sent Stoltz a letter which states
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`that their agreement to do business together would terminate on October 25, 2001 if
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`Stoltz did not sign anew distributor agreement with Lee. Stoltz Decl., at 9, Exh. 509,
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`at 207. Stoltz did not sign the agreement.
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`I_d. at 9-10. Stoltz began purchasing
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`massagers from East Health afier October 11, 2001.
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`I_d. at 10. Stoltz sells these
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`massagers using the name Alphasonic. Id,
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`D.
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`Defendant Yuan Zhi Fu
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`Fu was married to Lee, the President of China Healthways, until July 9, 1997.
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`3 Susan Stoltz is also referred to in the parties’ papers as Susan
`Dowlatshahi; it appears that she changed her name to “Stoltz” at some point
`during this litigation. For the sake of clarity, the Court will refer this defendant as
`Susan Stoltz throughout this Order.
`'
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`9 China Healthways objects to the entirety of Stoltz’s declaration because
`she wrote it in the third person. This objection is overruled.
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`IV Fu Decl., 1] 6. As part of the divorce settlement, Lee was awarded the business
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`known as China Healthways. 1_d, Fu was awarded the part of the business known as
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`the Family Acupuncture Center. Id, After 1999, Lee incorporated his business under .
`the name China Healthways Institute. IV Lee Decl., 1| 2. Beginning in August 1999, I
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`Lee and Fu had a dispute over whether Fu had a right to sell the massagers. IV Fu
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`Decl.,1l 7. On February 17, 2000, Fu and Lee entered into a Conflict Resolution
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`Agreement (“CRA”). IV Fu Decl.1] 8, Exh. C. The CRA provides, in relevant part,
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` .)i....|"’xI‘H‘ll_L.'
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`that:
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`lt-T
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`Yuan Zhi [Fu] agrees that the CHI logo is the exclusive property of
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`Richard [Lee] and CH1, and she hereby gives up all claim to it.
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`Richard is welcome to purchase products and services from Yuan Zhi’s
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`companies at retail price unless discounted prices are offered. Yuan Zhi
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`is welcome to purchase products from CHI at distributor prices, and can,
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`as a customer, negotiate lower prices on bulk purchases ifboth CH1 and
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`Yuan Zhi agree.
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`No restrictions on the sales ofproducts or services, beyond those legally
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`created such as trademark, copyright, and patent laws, shall apply to
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`either Yuan Zhi or Richard. Specifically, [both are free to sell therapy
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`devices imported from anywhere, including Shen Yun, except that
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`Richard agrees not to provide acupuncture services in San Clemente.
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`E.
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`Defendant Kanishka Lal
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`In 1997, La] began selling East Health’s products. V Lal Decl., 1[ 3. Those .3
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`products were on Lal’s website from its inception in 1997. _I_tL
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`In December, 1998,
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`China Healthways approached Lal and asked if he wanted to begin selling China
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`Healthways’ products.
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`_I_d_., 1[ 4. Lal sold China Healthways’ Infiatonic QGM
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`massager. V Lee Decl., 1] 13. On September 11, 2002, Lee sent Lal an email that
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`requested that Lal remove all CHI trademarks and copyrighted CHI photos and text
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`from his website, www.natura1-1iving.com, and informed him that China Healthways
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`was no longer selling its massager to web advertisers. V Lal’s Gen Issues, Exh. F.‘°
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`On September 12, 2002, Lal sent Lee an email which stated that he had done as Lee
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`requested in the earlier email. Id,
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`F.
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`General Procedural Histog
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`On March 24, 2003, China Healthways filed its Second Amended Complaint
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`(“SAC”) against various defendants.
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`The Defendants against whom China
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`Healthways has filed the pending summary judgment motions are Defendants Chi
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`Animal Therapeutics (“Chi Animal”), Susan Stoltz (“Sto1tz”), East Health
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`1° The exhibits to Lal’s Genuine Issues of Material Fact are not properly
`tabbed or numbered. The Court, therefore, will identify the exhibits as follows:
`Exhibit A is the first two pages of attachments. Exhibit B is the third page of
`attachments. Exhibit C is the fourth and fifth page of attachments. Exhibit D is
`the sixth page of attachments. Exhibit D is the seventh page of attachments.
`Exhibit E is the eighth and ninth page of attachments. Exhibit F is the tenth page
`of attachments. Exhibit G is the eleventh, twelfth, and thirteenth pages of
`attachments.
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` I;-_»“.t-5i'v|CL‘
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`1 Development Group, Inc. (“East Health”), Kanishka Lal (“Lal”) and Yuan Zhi Fu
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`(“Flt”).
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`China Healthways’ SAC alleges the following claims: Claim 1:
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`false
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`designation of origin—unfair competition under the Lanham Act, Claim 2: false
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`designation of origin—false advertising under the Lanham Act, Claim 3: federal
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`trademark dilution, Claim 4: federal copyright infiingement, Claim 5: California
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`trademark infringement, Claim 6: California unfair competition and deceptive trade
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`practices, and Claim 7: California trademark dilution.
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`On March 10, 2003, East Health filed its Answer to China Healthways’ SAC.
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`On May 20, 2002, Chi Animal, Stoltz, and East Health filed the following
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`counterclaims against China Healthways: Counterclaim 1: false designation of
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`origin—false advertising, Counterclaim 2: false advertising, Counterclaim 3: federal
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`trademark dilution, Counterclaim4: California trademark infringement, Counterclaim
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`5: California Unfair Competition and Deceptive Trademark Practices, and
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`Counterclaim 6: California trademark dilution. East Health admitted in its answers
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`to interrogatories that
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`it was not maintaining a counterclaim for trademark
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`infringement and that the claim of infringement “was asserted by others.” I Rirner
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`Decl., Exh. 17, 283. The Court, therefore, assumes, that the trademark infringement
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`claim was asserted solely by Stoltz and Chi Animal.
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`On July 22, 2003, China Healthways filed a dismissal of its copyright claim
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`based on the work entitled Infratonic QGM Line Drawing (Copyright Registration
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`No. VA 1-123-731).
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`G.
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`Prgliminaiy Injunctions
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`-1
`. 1']
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`On August 5, 2002, Judge HarryHupp enteredapreliminaryinjunction against .
`EastHealth and a separate preliminary injunction against Stoltz and Chi Animal. & I {I
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`August 5, 2002 Minute Order. East Health’s preliminary injunction enjoined its use
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`ofQ1 GONG MACHINE, Q1 GONG MASSAGER, and INFRASONIC. fi August
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`5 , 2004 Order Granting Preliminary Injunction Against Defendant East Health Group,
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`Inc. (“East Health PI”), at 2-3. The injunction against Stoltz and Chi Animal enjoined
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`their use of CH1 (and design), CHAOS THERAPY (and design), INFRATONIC,
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`QGM,
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`INFRASONIC, QI GONG MACHINE, QI GONG MASSAGER,
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`EQUISONIC, and EQUISONIC QGM. $9 August 5, 2002 Order Granting
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`Preliminary Injunction Against Defendants Chi Animal Therapeutics, Inc. and Susan
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`Dowlatshahi (“Stoltz/Chi Animal Pl”), at 2-3.
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`H.
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`Evidentiary Objections
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`The parties have submitted evidentiary objections to the evidence. The Court
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`will only address the objections to the evidence that the Court relies upon.
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`HI. LEGAL STANDARD
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`Rule 56 of the Federal Rules of Civil Procedure provides that a court shall
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`grant a motion for summary judgment if “the pleadings, depositions, answers to
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`interrogatories, and admissions on file, together with the affidavits, if any, show that
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`there is no genuine issue as to any material fact and that the moving party is entitled
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`to judgment as a matter of law.” Fed. R. Civ. P. 56(c). Material facts are those that
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`.')L.I'*.t‘H'I.
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`L)
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`1 may affect the outcome of the case. Anderson v. Libergty Lobby, Inc., 477 U.S. 242,
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`248 (1986). A dispute as to a material fact is genuine if there is sufficient evidence
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`for a reasonable jury to return a verdict for the nonmoving party. I_d.
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`The party moving for summary judgment bears the initial burden of informing
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`the district court ofthe basis of the summary judgment motion and of demonstrating
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`the absence ofa genuine issue ofmaterial fact for trial. ggglotex Qorp, v. Catrett, 477
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`U.S. 317, 323 (1986); Katz 1. §;hilg1ren’s Hosp. of Orange County, 28 F.3d 1520,
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`1534 (9th Cir. 1994). On an issue for which the nonmoving party has the burden of
`proof at trial, the moving party need only point out “that there is an absence of
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`evidence to support the nonmoving party’s case.” Qelotex, 477 U.S. at 325.
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`Once this initial burden is satisfied, the non-moving party is required to “go
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`beyond the pleadings and by her own affidavits, or by the depositions, answers to
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`interrogatories, and admissions on file, designate ‘specific facts’ showing that there
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`is a genuine issue for trial.” Celotex, 477 U.S. at 324 (internal quotations omitted);
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`see also Nilssgn, Bobbins, Dglgam, Berliner, §;_a_r§Qn & Wurst v. Louisiana Hydrolec,
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`854 F.2d 1538, 1544 (9th Cir. 1988). Where the standard of proof at trial is
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`preponderance of the evidence, the non-moving party’s evidence must be such that
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`a “fair-mindedjury could return a verdict for the [non-moving party] on the evidence
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`presented.” Anderson, 477 U.S. at 252.
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`The court views all facts and draws all inferences therefrom in the light most
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`favorable to the nonmoving party.
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`llnited States v. Diebold, Inc., 369 U.S. 654,
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`655(1962). The Court must accept the plaintifi’s view ofall material disputed facts.
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`LaLonde v.
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`o
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`of
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`iver ide, 204 F.3d 947, 954 (2000).
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`If, however, the
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`nonmoving party's evidence is “merely co1orable” or “not significantly probative,” .
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`summary judgment may be granted. Anderson, 477 U.S. at 249-50.
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`IV. ANALYSIS
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`China Healthways seeks summary judgment on its claims against East Health,
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`Stoltz, Fu, and Lal. China Healthways also seeks surmnary judgment on East
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`Health’s counterclaims against China Healthways.
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`East Health seeks summary judgment on China Healthways’ claims against
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`East Health.
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`As a preliminary matter, the Court notes that since China Healthways seeks
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`summary judgment on all ofEast Health’s counterclaims against China Healthways,
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`and East Health has only opposed its false advertising counterclaim against China
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`Healthways in its motion, East Health concedes to China Healthways’ motion for
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`summary judgment against it for the rest of East Hea1th’s counterclaims. Therefore,
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`the Court grants China Healthways’ motion for summary judgment on East Hea1th’s
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`counterclaims for federal trademark dilution and California Unfair Competition and
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`Deceptive Trademark Practices.
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`The Court will
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`first address China Healthways’ claims for copyright
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`infringement against East Health, Stoltz and Lal.
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`The Court will then address China Healthways’ trademark infiingement and
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`unfair competition under the Lanham Act claims against EastHea1th, Stoltz, Fu, and
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`1 Lal.
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`The Court will then address China Healthways’ claims for trademark dilution
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`against East Health, Stoltz, Fu, and Lal.
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`ELHNNEU
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`The Court will then address China Healthways’ claim for false advertising
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`against East Health, East Hea1th’s claim for false advertising against China
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`Healthways, and China Healthways’ claims for false advertising against Stoltz, Fu,
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`and La].
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`The Court will
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`then address China Healthways’ claims for state unfair
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`competition against East Health, Stoltz, Fu, and La].
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`Finally, the Court will address China Healthways’ civil conspiracy claim
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`against Fu and China Healthways’ conspiracy and aiding and abetting claims against
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`East Health.
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`A.
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`Copmght Infringement
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`To establish copyright infiingement, the holder of the copyright must prove
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`both valid ownership of the copyright and infiingement of that copyright by the
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`alleged infringer. fig; gg._, North Coast Indus. v. Maxwell, 972 F.2d 1031, 1033 (9th
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`Cir. 1992); Sid & Magty Kroffi Television v. McDonald's Corp., 562 F .2d 1 157, 1 162
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`(9th Cir. 1977). Ifthe plaintiffcopyright holder survives the first step by establishing
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`that he or she owns a valid copyright, the plaintiff must then establish infringement
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`by showing both access to the copyrighted material on the part ofthe alleged infringer
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`and substantial similarity between the copyrighted work and the alleged infringing
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`work. North Coast, 972 F.2d at 1033. Under the copyright laws, the registration of
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`a copyright certificate constitutes prima facie evidence of the validity of a copyright
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`in a judicial proceeding commenced within five years of the copyright‘s first
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`publication. 17 U.S.C. § 410(c); see also North Coast, 972 F.2d at 1033; Maggi
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`Novelty, Inc. v. Unigue Indus., Inc., 912 F.2d 663, 668 (3rd Cir. 1990); S.Q.§., Inc.
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`I;5_.“‘»,l‘N\ll‘_‘U
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`v. Payday, Inc., 886 F.2d 1081, 1085-86 (9th Cir. 1989).
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`Infringement occurs when a defendant violates one of the exclusive rights of
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`the copyright holder. 17 U.S.C. § 50l(a). A plaintiff can establish infiingement by
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`demonstrating that a defendant used the copies in any ofthe ways described under 17
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`U.S.C. § 106, which include: (1) reproduction of the copyrighted work, (2)
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`preparation ofderivative works based upon the copyrighted work, (3) distribution of
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`copies of the copyrighted work to the public by sale or other transfer of ownership,
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`or (4) display of the copyrighted work publicly. 17 U.S.C. § 106.
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`1.
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`China Healthways’ Claim Against East Health for Copyright
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`Infringement ofthe Infratonic QGM Line Drawing
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`East Health is seeking summary judgment on China Healthways’ copyright
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`infringement claim based on East Health’s allegedly infringing use of the Infratonic
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`QGM Line Drawing (“IQLD”). China Healthways filed a voluntary dismissal of its
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`copyright claim based on this drawing on July 22, 2003.
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`_S;C_ Plaintiffs Partial
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`Dismissal of Copyright Claims. However, Bast Health filed its Answer to the SAC
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`on March 10, 2003, three months before China Healthways’ dismissal.
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`Once an adverse party serves an answer or motion for summary judgment in
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`an action, Federal Rule ofCivil Procedure 4l(aX2) comes into play stating, “an action '
`shall not be dismissed at the plaintiff’s insistence save upon order of the court and
`upon such terms and conditions as the court deems proper .
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`.” Fed. R. Civ. P. I
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`I
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`41(a)(2). Since East Health had already served its Answer on China Hcalthways
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`before it filed his voluntary dismissal, the Court finds that China Hcalthways is not
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`entitled to a voluntary dismissal pursuant to Federal Rule of Civil Procedure 41(a).
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`East Health argues that
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`it
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`is entitled to summary judgment on China
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`Hcalthways’ claim for copyright
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`infiingement on the IQLD because China
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`Hcalthways is not the author of the copyrighted work and there is no work for hire
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`agreement between the author ofthe copyrighted work and China Hcalthways. China
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`Hcalthways concedes that it cannot maintain its copyright claim based on the IQLD
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`but argues that China Hcalthways’ use of the IQLD supports its unfair competition
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`claim against East Health.“ _S_e_e II Opp., 2. Since China Hcalthways concedes that
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`it cannot maintain its copyright infringement claim based on the IQLD, the Court
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`grants East Health’s summary judgment motion on China Hcalthways’ copyright
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`infringement claim based on the IQLD.
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`2.
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`China Healthways’ Claim Against Stoltz for Copyright
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`Infringement of the Chi Point Chart and Infratonic QGM
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`Advertisement
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`China Hcalthways argues that it is entitled to summary judgment on its
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`11 The Court will address China Hcalthways’ unfair competition claim .
`based on East Health’s use of the IQLD in the section on state unfair competition.
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`copyright claim against Stoltz based on her allegedly infringing use of China
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`2 Healthways’ copyrighted works—the Chi Point Chart (“CPC”) and the Infratonic
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`3 QGM Advertisement (“IQA”). Since China Healthways and Stoltz were working
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`.3L.‘-".r‘lHEL1
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`together until October 2001 and Stoltz had permission to use China Healthways’
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`trademarks and materials until that point, any allegedly infringing use must have
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`occurred after October 2001.
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`‘In order to succeed on a claim for copyright infringement, a plaintiff must
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`show: (I) ownership of a valid copyright; and (2) copying by the defendant of
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`protectable elements ofthe work. CDN, Inc. v. Kapes, 197 F.3d 1256, 1258 (9‘h Cir.
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`1999). Permissive use of the copyright is a defense to copyright infringement.
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`3.
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`Infratonic QGM Advertisement
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`China Healthways has a registered copyright in the IQA. _S;e_ III Rimer Decl.,
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`Exh. 1 1. The image is ofthe massager, with the words “Chaos Therapy” on the front
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`of the massager, and a person’s hand holding the head ofthe rnassager. 1;" The top
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`left of the image states “Only $695.” I_d. China Healthways argues that Stoltz has
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`infringed China Healthways’ IQA copyright based on a “printout” of Stoltz’s website
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`www.equisonicqgm.com that has an image similar to the IQA image on it. HI Rimer
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`1’ The copyrighted image is not very clear and therefore, these are the only
`aspects of the copyrighted image that the Court is able to discern. There is some
`text on the right of the image that is illegible except for the following words: “Try
`the Infratonic .
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`. Risk free for .
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`. Discover .
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`. yourself .
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`. therapy .
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`. our health
`...”gl_.
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`.3'u.,.r'*'v.i'*‘£NEU
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`1 Decl., Exh. 13, at 88.” China Healthways asserts that this is an image of the website
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`from February 22, 2002, however, the image itselfdoes not have an identifying date.
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`III Rimer Decl., 1] 14, Exh. 13, 88. Rimer has filed a Reply Declaration which states
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`that he downloaded this image from the website on February 22, 2002.
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`III Rimer
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`5 Reply Decl., 1] 4.
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`Stoltz declares that the printout of the website is a prototype for a website that
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`Stoltz was working on while she was selling China Healthways’ machine. Gen.
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`Issues, 1[ 24. Stoltz also objects because the “print-out” does not contain any headers
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`I_¢ The image states,
`or footers indicating that it was printed off of the Internet.
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`“Here’s a new look for you Susan ——what do you think? None of the top buttons
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`13 work yet——don’t want to get too carried away until I see ifyou like this design. Tracey
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`:—).” III Rimer Decl., Exh. 13, 88. It is clear from this text that this image could be
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`a prototype for a website that was being developed by Stoltz.
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`The Court finds that Stoltz has raised a genuine issue of material fact whether
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`this image was printed offher website from the Internet on February 22, 2002. Based
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`on the foregoing, Stoltz has raised a genuine issue of material fact that she did not
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`infringe China Healthways’ IQA copyright.
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`*3 China Healthways also cites to the use of the IQA image in its own
`newsletter. III Rimer Decl., Exh. 31, 341. However, the use of the image in its
`own newsletter cannot be grounds for a copyright infringement claim against
`Stoltz.
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`b.
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`Chi Point Chart
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`China Healthways argues that it is entitled to summary judgment on its claim
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`of copyright infringement against Stoltz for her use of its Chi Point Chart (“CPC”).
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`China Healthways has a registered copyright in the CPC which was registered on
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`January 24, 2002. IH Rirner Decl., Exh. 4.
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`In support ofits motion, China Healthways has submitted documents that were
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`produced by Stoltz to China Healthways. III Rirner Decl., 1] 32, Exh. 31, 336 & 338.
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`The CPC appears on two pages of these documents as part of a six-page instructional
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`guide on the use of the “Infratonic.” I_d. However, China Healthways has not
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`authenticated these documents in any way other than to state that Stoltz produced
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`them to China Healthways. Also, the Court notes that Stoltz was not selling a
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`massager called the Infratonic after January 2002. Therefore, it is unclear whether
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`the documents were created or used by Stoltz and it is unclear if they were used after
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`Stoltz’s working relationship with China Healthways ended.” Based on the lack of
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`reliability and probative value of these documents, the Court does not rely on this
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`evidence.
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`China Healthways has also submitted promotional materials it received from
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`1‘ China Healthways also argues that Stoltz admitted that she used the CPC
`image in her own marketing materials during her deposition. III Unc. Facts, 1] 73.
`However, in her deposition, Stoltz stated that she sent the point chart to people and
`that she felt that she was allowed to continue distributing it. III Rimer Decl., Exh.
`38, 899: 1 1-18. She did not state that she actually distributed the CPC to her
`customers after her working relationship with China Healthways ended. LCL
`Therefore, the Court finds this evidence irrelevant.
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`Stoltz when it ordered an Alphasonic massager from Stoltz in January 2002. E [H
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`Lee Decl., 1] 27, Exh. 17. The materials include an image that appears to be identical
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`to the CPC. L; at 100. The materials were sent after China Healthways revoked its
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`3L..HNN’.:i..‘
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`permission for Stoltz to use its materials