IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`
`.
`
`'
`
`9'
`
`EC
`
`»)
`C‘.
`
`£1;
`
`Opposition No. 91157799
`
`Application. Serial No. 78008124
`C.-3
`"°
`
`Mark: ZENITH
`
`)
`
`)
`
`)
`
`)
`
`)
`
`EUROSURGICAL, S.A.
`
`Opposer,
`
`v.
`
`PATRICK BERTRANOU.
`
`Applicant.
`
`SUPPLEMENT TO MOTION TO VACATE APPLICANT’S TECHNICAL DEFAULT
`
`The following is a Supplement to the Motion to Vacate Applicant’s Technical Default of
`
`Applicant PATRICK BERTRANOU, by and through Counsel, regarding Opposition No.
`
`91 ,1 57,799.
`
`Applicant filed a Motion to Reopen Applicant’s Time to File and Late Answer on
`
`November 12, 2003. Said motion was construed by the Board as a Motion to Vacate Applicant’s
`
`Technical Default. Said motion was granted and Applicant’s concurrently filed answer was
`
`accepted.
`
`By letter of December 2, 2003, Cindy B. Greenbaum, TTAB Attorney, Applicant was
`
`given thirty days to submit copies of the complaints in the two pending civil actions referenced
`
`in the Motion, so that the Board may evaluate whether it is appropriate to suspend this
`
`proceeding pending the final determinations in the civil actions.
`
`In response to the request of the Board, Applicant attaches copies of the first amended
`
`complaint in the Superior Court of California in Los Angeles (Case No. BC 276 958), filed
`
`January 23, 2003 [Exhibit A]; the complaint filed July 25, 2003, in the U.S. District Court of
`
`r‘-
`
`
`
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`
`.
`
`'
`
`9'
`
`EC
`
`»)
`C‘.
`
`£1;
`
`Opposition No. 91157799
`
`Application. Serial No. 78008124
`C.-3
`"°
`
`Mark: ZENITH
`
`)
`
`)
`
`)
`
`)
`
`)
`
`EUROSURGICAL, S.A.
`
`Opposer,
`
`v.
`
`PATRICK BERTRANOU.
`
`Applicant.
`
`SUPPLEMENT TO MOTION TO VACATE APPLICANT’S TECHNICAL DEFAULT
`
`The following is a Supplement to the Motion to Vacate Applicant’s Technical Default of
`
`Applicant PATRICK BERTRANOU, by and through Counsel, regarding Opposition No.
`
`91 ,1 57,799.
`
`Applicant filed a Motion to Reopen Applicant’s Time to File and Late Answer on
`
`November 12, 2003. Said motion was construed by the Board as a Motion to Vacate Applicant’s
`
`Technical Default. Said motion was granted and Applicant’s concurrently filed answer was
`
`accepted.
`
`By letter of December 2, 2003, Cindy B. Greenbaum, TTAB Attorney, Applicant was
`
`given thirty days to submit copies of the complaints in the two pending civil actions referenced
`
`in the Motion, so that the Board may evaluate whether it is appropriate to suspend this
`
`proceeding pending the final determinations in the civil actions.
`
`In response to the request of the Board, Applicant attaches copies of the first amended
`
`complaint in the Superior Court of California in Los Angeles (Case No. BC 276 958), filed
`
`January 23, 2003 [Exhibit A]; the complaint filed July 25, 2003, in the U.S. District Court of
`
`r‘-
`
`
`
`I
`
`Delaware, :in Wilmington (Civil Docket No. 03 -CV-757) [Exhibit B]; and the most recent action
`
`which was filed following the Applicant’s motion in this proceeding, the complaint filed
`
`November 14, 2003, in the U.S. District Court, Central District of California (Case No. CV03-
`
`8308) [Exhibit C]. See attached Exhibits A, B and C. Applicant, Patrick Bertranou, is the CEO
`
`and principal of Orthotec, LLC and Orthotec, Inc. See attached Exhibit D.
`
`Applicant has complied with the request made by the letter from Cindy B. Greenbaum on
`
`December 2, 2003. See attached Exhibit E. Should any further information or exhibits be
`
`required, please do not hesitate to contact counsel for Applicant.
`
`Opposer hereby appoints Erik M. Pelton, member of the Bar of the State of New Jersey,
`
`at Erik M. Pelton, Attorney at Law, 1408 North Fillmore Street, Suite 2, Arlington, Virginia
`
`22201, to act as attorney in the matter of the opposition identified above, to prosecute said
`
`opposition, to transact all business in the Patent and Trademark Office, and in the United States
`
`courts connected with the opposition, to sign its name to all papers which are hereinafter to be
`
`filed in connection therewith, and to receive all communications relating to the same.
`
`Respectfully Submitted,
`
`PATRICK BERTRANOU
`
`CEO, ORTHO
`By: /
`
`Erik M. Pelton, Esq.
`Attorney for Applicant
`
`Erik M. Pelton, Attorney at Law
`1408 North Fillmore Street, Suite 2
`Arlington, Virginia 22201
`TEL: (703) 525-8009
`FAX: (703) 525-8089
`
`Mark: ZENITH
`Serial No.: 78/008824
`
`Opposition No.: 91 157799
`
`
`
`
`
`Attachments:
`
`Exhibit A: First amended complaint in the Superior Court of California in Los Angeles (Case
`No. BC 276 958), filed January 23, 2003
`Exhibit B: Complaint filed July 25, 2003, in the U.S. District Court of Delaware, in Wilmington
`(Civil Docket No. 03-CV-757)
`Exhibit C: Complaint filed November 14, 2003, in the U.S. District Court, Central District of
`California (Case No. CV03-8308)
`Exhibit D: Printout from California Business Portal for Orthotec, LLC
`Exhibit E: December 2, 2003, letter from Board Attorney Cindy B. Greenbaum
`
`CERTIFICATE OF DEPOSIT
`
`I hereby certify that this Supplement to the Motion to Vacate Applicant’s Technical
`Default is being deposited by hand delivery with the office of the Trademark Trial and Appeal
`Board, 9”‘ F or, 2900‘(Crystal Drive, South Tower, Arlington, VA 22202 on
`'s the _[Z__
`
`of
`[2
`, 2003.
`
`
`
`
`Erik M. Pel on, Esq.
`
`Mark: ZENITH
`Serial No.: 78/008824
`
`Opposition No.: 91 157799
`
`- 3 -
`
`
`
`
`
`CERTIFICATE OF SERVICE
`
`I hereby certify that a true copy of the Supplement to Motion to Vacate Applicant’s
`Technical Default was deposited as First Class mail with the United States Postal Service on__
`gguejz I g
`, 2003, to the following:
`
`James R. Hastings
`Collen IP
`
`The Holyoke-Manhattan Building
`80 South Highland Avenue
`Ossining, New York 10562
`
`Erik M. Pelton, Esq.
`Attorney for Applicant
`
`Erik M. Pelton, Attorney at Law
`1408 North Fillmore Street, Suite 2
`Arlington, Virginia 22201
`
`Mark: ZENITH
`Serial No.: 78/008824
`
`Opposition No.: 91 157799
`
`- 4 -
`
`
`
` l
`
`Exhibit A
`
`V
`
`‘ Michael J. Perry, Esq.
`ATTORNEY AT LAW
`‘ 330 Washington Boulevard, Suite 400
`1 Marina Del Rey, California 90292
`; Te1ephone:(310) 822-5037
`Telefaxz (310) 306-3456
`
`(State Bar No. 123214)
`
`.
`
`.
`
`-
`
`JAN 2 3 2533
`
`\ Attorneys for Plaintiff and cross-Detendant
`LOS
`ORTHOTEC, LLC.
`
`supsai'‘8§E6
`
`'
`
`'
`
`:-
`
`SUPERIOR COURT OF THE STATE OF CALIFORNIA
`
`FOR THE COUNTY OF LOS ANGELES
`
`LLC., a Delaware
`_ ORTHOTEC,
`' Limited Liability Company,
`
`CASE NO. BC 276958
`
`FIRST AMENDED COMPLAINT
`
`\li\a\J\a&r\a§¢\/\./é~&\1-\f§l§r
`
`Plaintiff,
`
`V5.
`
`. EUROSURGTCAL, S.A., 8 French
`a Corporation, and DOES 1
`th‘°“9h °°'
`
`1. Breach of Contract;
`2. Restitution of
`Forfeited Property;
`3_ Declaratory Relief;
`4_ Accounting;
`5.
`Injunctive Relief;
`6. Conversion-
`7.
`De£endant'.
`Intentionai
`C 'j Interference With
`'
`Contract;
`
`8. Negligent
`Interference With
`Contract
`9. Breach of Contract;
`
`10. Unfair Competition;
`11.
`Indemnity;
`12. State Trademark
`Infringement;
`13. Dilution of
`Distinctive Quality
`of Trademarks and
`Trade Names;
`Infringement of
`Trademarks and Trade
`Names to Enhance
`Commercial Value of
`Prodgcts; and
`15. specific Performance
`
`14.
`
`5wa9e:L so-L-adv
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`.
`
`.t’'\,
`
`Plaintiff, Orthotec, LLC., alleges as follows:
`
`FIEUBT CHMUSE (M? Jnrrrcnw
`
`(Breach of Written Contract)
`
`1.
`
`Plaintiff Orthotec,
`
`LLC.
`
`(“Orthotec")
`
`is informed and
`
`believes and thereon alleges that at all times herein mentioned
`
`Defendant Eurosurgical,
`
`S.A.
`
`(“Defendant”)
`
`was
`
`and
`
`is
`
`a
`
`corporation purportedly incorporated under the laws of France and
`
`doing business
`
`in many countries in the world,
`
`including the
`
`sales of medical products to the United States. Defendant owns
`
`various rights in certain medical products that it manufactures
`
`or causes to be manufactured and sells.
`
`2.
`
`Orthotec was
`
`and
`
`is
`
`a Delaware
`
`limited liability
`
`company with its principal place of business in the County of Los
`
`Angeles, California, and has, and is, qualified to do business in
`
`California as a foreign limited liability company.
`
`3.
`
`Defendants Does
`
`1
`
`through 50,
`
`inclusive,
`
`are
`
`sued
`
`herein under fictitious names. Their
`
`true names and capacities
`
`are unknown to Orthotcc. when their true names and capacities are
`
`ascertained, Orthotec will amend this First Amended Complaint by
`
`inserting their true names and capacities herein or filing an
`
`amendment
`
`to the amended complaint. Orthotec is informed and
`
`believe and thereon allege that each of
`
`the fictitiously named
`
`defendants
`
`is responsible in some manner
`
`for
`
`the occurrences
`
`_ herein alleged,
`
`and that respective damages caused each orthotec
`
`as herein alleged were proximate1y caused by each of
`
`those
`
`defendants.
`
`Each reference in this First Amended Complaint
`
`to
`
`3 efiea
`
`5Hd993L B0'L'JdV
`
`59§V89080LB
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`5AHH3d ‘P TBVHOIW A0 331330 MV1 358 1098
`
`
`
`
`
`"Defendant," "Defendants," or a specifically named Defendant also
`
`refers to all Defendants sued under fictitious names, unless only
`
`certain DOE defendants are designated.
`
`4.
`
`Orthotec is informed and believes, and thereon alleges,
`
`that each of the Defendants herein, at all times material hereto,
`
`was
`
`the agent,
`
`servanL, partner, co—venturer or employee of each
`
`of
`
`the remaining Defendants herein,
`
`and in doing the things
`
`hereinafter alleged, were acting in the course,
`
`scope and purpose
`
`of said agency,
`
`service or employment,
`
`and. with the knowledge
`
`and/ or
`
`permission,
`
`express
`
`or
`
`imlied,
`
`of
`
`each
`
`remaining
`
`Defendant,
`
`and further,
`
`that all actions
`
`taken hereunder were
`
`taken by persons authorized to take said action and were ratified
`
`and/or approved by high corporate or company management officials
`
`of each Defendant.
`
`5.
`
`In or about September 1998,
`
`in Los Angeles, California,
`
`Defendant and Orthotec entered into a written contract entitled
`
`“Assignment Agreement" (hereinafter the “Agreement”) by the terms
`
`of which,
`
`among other
`
`things, Defendant granted Orthotec the
`
`—----"----‘---
`
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`
`spinal
`
`surgical
`
`implants
`
`and
`
`instruments
`
`(“Products”)
`
`from
`
`Defendant,
`
`to manufacture the Products within the United States
`
`and certain other
`
`countries;
`
`and
`
`(b)
`
`provide
`
`any
`
`and all
`
`appropriate information for the marketing and/or manufacturing of
`
`all of its products and to notify Orthotec about any and all new
`
`. products
`
`(“Property Rights").
`
`A
`
`true and correct copy of
`
`the
`
`Agreement is attached hereto as Exhibit “A”, and is incorporated
`
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`
`herein by this reference.
`
`6.
`
`Thereafter,
`
`in 1999, Orthotec and Defendant orally
`
`agreed that,
`
`so long as
`
`requested by Orthotec, Defendant would
`
`ship all goods ordered by Orthotec to REO SpineLine, L.L.C.
`
`(“REC
`
`spineLine”), Orthotec's United States distributor of Defendant's
`
`goods,
`
`and for DefendanL to promptly notify Orthotec of all
`
`shipments and all returns. Thereafter, on March 1, 2002, Orthotec
`
`3 and Defendant agreed in writing that effective January 1. 2002,
`
`any payment Orthotec for any invoice shall be due 90 days after
`
`invoice,
`
`instead of the previous 45 days.
`
`7.
`
`Orthotec has performed all conditions, covenants and
`
`promises required by it on its part to be performed in accordance
`
`with the terms and conditions of the Agreement.
`
`8.
`
`on or
`
`about May
`
`17,
`
`2002, Orthotec
`
`received from
`
`Defendant an invoice in the amount of $153,018.72 for Products
`
`sold to Orthotec in 1999, which was
`
`the first
`
`time Defendant
`
`notified orthotec of the existence of this purported debt. on or
`
`about May 21,
`
`2002, without OrthoTec’s knowledge,
`
`and before
`
`Defendant's alleged termination of
`
`the Agreement,
`
`for cause,
`
`Defendant filed and subsequently obtained, on November 19, 2002
`
`under Defendant's name,
`the authorization to commercialize in the
`E USA the
`“ORIA Spinal Clip System,
`spinal
`system which
`is
`
`identical
`
`to the Products
`
`sold and for which Defendant had
`
`granted exclusivity to Orthotec to market and to manufacture in
`
`September 1998.
`
`9.
`
`On or about
`
`June
`
`17,
`
`2002, Defendant delivered to
`
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`
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`
`
`
`alleged 1999 unpaid invoices in the amount of $153,018.72, and
`
`modified its new claim to state that the $153,018.72 obligation
`
`included Products that were sold by Defendant to orthotec in 2000
`
`and 2001.
`
`10.
`
`On or
`
`about
`
`June 28,
`
`2002,
`
`upon
`
`11 days’
`
`advance
`
`written notice (after purportedly supplying documentation of its
`
`charges for the first time on June 17, 2002) Defendant sent by
`
`Federal Express
`
`its notice of
`
`termination of
`
`the Agreement
`
`(received July 1, 2002) by seeking to purchase all of the rights
`
`of orthotec for
`
`the sum of $100 after demanding payment
`
`for
`
`amounts alleged by it to be due for 1999 (and by Defendant's own
`
`5 previous accountings provided to orthotec during the years 2000,
`2001,
`and 2002 acknowledged that no money was owed for 1999).
`
`although the Agreement required at least 45 days’ advance written
`
`notice‘. Within
`
`1
`
`day after Orthotec
`
`received notice
`
`from
`
`Defendant of its attempt
`
`to exercise its option under paragraph
`
`12 of
`
`the Agreement, Orthotec paid, under protest, all amounts
`
`claimed due by Defendant: Orthotec denies that it owed Defendant
`
`such money paid.
`
`11.
`
`From in or about June 2002 and thereafter, Defendant
`
`breached the Agreement by:
`
`(A) Failing to provide to Orthotec information necessary to
`
`permit orthotec to manufacture Defendant's products;
`
`(8) Failing to notify Orthotec of all new products being
`
`manufactured by or for Defendant;
`
`
`
`this term was modified by the
`that
`' Notwithstanding the fact
`5 parties on March 1. 2002. effective January 1, 2002,
`to require
`I payment within 90 days of invoice.
`
`5
`
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`
`
`
`
`(C)
`
`Failing to notify orthotoc of the correct and verified
`
`amount of all goods acLually delivered to REG spineLine
`
`and all returns thereof;
`
`(D)
`
`Shipping
`
`goods
`
`to
`
`RBO
`
`SpineLine
`
`not
`
`ordered by
`
`Orthotec:
`
`(E)
`
`Demanding money for which it is not entitled, and for
`
`which Orthotec has paid under protest;
`
`(F)
`
`Refusing to sell any further goods
`
`to Orthotec under
`
`the Agreement;
`
`(G)
`
`Terminating or attempting to terminate the Agreement by
`
`demanding
`
`the purchase of all
`
`rights
`
`of orthotec
`
`thereunder for $100;
`
`(H)
`
`Distributing in the United States similar or identical
`
`medical devices manufactured by Defendant which are
`
`commercialized in the United states under the name of
`
`ORIA Spinal Clip System; and
`
`(I)
`
`Filing on May 21. 2002 and subsequently obtaining,
`
`in
`
`November
`
`19,
`
`2002
`
`under Defendant's
`
`name,
`
`Lhe
`
`authorization to commercialize
`
`in the USA the “ORIA
`
`Spinal Clip System, spinal system which is identical to
`
`the Products sold and for which Defendant had granted
`
`exclusivity to Orthotec to market and to manufacture in
`
`September 1998.
`
`12.
`
`The Agreement provides that the prevailing party in any
`
`litigation is entitled to recover its reasonable attorney's fees.
`
`= Additionally,
`
`the Agreement provides
`
`that all
`
`actions
`
`and
`
`Proceedings arising from the Agreement may be litigated in courts
`
`9 afied
`
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`
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`
`
`
`
`
`./\
`
`1; within the County of Los Angeles, California.
`result of
`the aforesaid acts
`
`and
`
`13. As
`a proximate
`3, breaches of the Agreement by Defendant, orthotec has sustained
`damages in excess of $l5,000,000.00, according to proof.
`
`4 L
`
`SECOND CAUSE OF ACTION
`(Restitution of Forfeited Property)
`14. orthotec realleges and incorporates herein by reference
`each and every allegation contained in paragraphs 1
`through 13,
`
`5 6
`
`i
`7:
`8
`9
`
`inclusive, as if set forth in full.
`10
`covenants and
`15.
`orthotec has performed all conditions,
`11.
`12% promises required by it on its part to be performed in accordance
`13! with the terms
`and conditions of
`the Agreement. orthotec is
`14 entitled to all rights granted to it pursuant
`to the Agreement,
`
`15
`16*
`17
`18
`
`19
`
`20
`
`21
`
`i.e., the Property RighLs.
`and Defendant has
`16. orthotec has paid to Defendant,
`accepted said payment, all amounts claimed due by Defendant that
`resulted in Defendant declaring 0rthotec's Property RighLs
`
`forfeited. Despite
`
`said payment by orthotec and Defendant's
`
`acceptance thereof, Defendant refused, and continues to refuse,
`
`to return the Property Rights to orthotec.
`
`17. orthotec seeks restitution of its entire interests in
`
`and to the Property Rights previously granted to it by Defendant.
`
`THIRD CAUSE OF ACTION
`
`(Declaratory Relief)
`
`r‘\
`
`18. Orthotec realleges and incorporates herein by reference
`
`each and every allegation contained in paragraphs 1
`
`through 13,
`
`7
`
`59§V€90S0L8
`
`5ABU3d ‘P TEVHOIW 30 301530 MV1 358 1U°8
`
`
`
`
`
`and 15 through 17,
`
`inclusive, as if set forth in full.
`
`19.
`
`An actual controversy has arisen and now exists between
`
`(A)
`
`On
`
`June
`
`28,
`
`2002, Defendant had no
`
`right
`
`to
`
`exercise the option under paragraph 12 of
`
`the Assignment
`
`Agreement to purchase back its rights thereunder for the sum
`
`of $100 or
`
`that such right
`
`is not enforceable,
`
`in that,
`
`among other things:
`
`(1) on March 1, 2002,
`
`the parties agreed
`
`in writing that payment
`
`for any invoice for
`
`the Products
`
`sold by Defendant
`
`to Orthotec shall be due 90 days after
`
`invoice,
`
`instead
`
`of
`
`the
`
`previous
`
`45
`
`days
`
`payment
`
`requirement,-'
`
`(2) The option price is unconsoionably low
`
`/"X
`
`(inasmuch as the rights owned by Orthotec are worth millions
`
`of
`
`dollars)
`
`and/or
`
`the
`
`option
`
`price
`
`constitutes
`
`an
`
`unenforceable penalty or
`
`forfeiture;
`
`and (3) Even if the
`
`previous
`
`45 days payment
`
`requirement was
`
`in effect,
`
`opposed to the 90 day requirement, Orthotec was not
`
`as
`
`in
`
`breach of
`
`the Agreement
`
`since
`
`it paid Defendant
`
`(and
`
`defendant accepted said payment) within 11 days
`
`following
`
`receipt
`
`or
`
`the
`
`demand
`
`and
`
`the
`
`purported
`
`supporting
`
`documentation for the contested amount of $153,018.72.
`
`(B)
`
`As of
`
`June 28, 2002, Orthotec owed no umney to
`
`Defendant for any purchases made in 1999 by Orthotec from
`
`Defendant
`
`for
`
`the following reasons,
`
`among others;
`
`(1)
`
`in
`
`2000, Orthotec and Defendant entered into an accord and
`
`satisfaction by which it was orally agreed that no amgunt
`
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`
`was further due for purchases made by Orthotec in 1999;
`
`(2)
`
`that OrL1wLe<:’s
`
`payment
`
`in
`
`full
`
`in February
`
`2002
`
`to
`
`Defendant
`
`for all amounts
`
`then due constituted payment
`
`in
`
`full when accepted by Defendant and that Defendant accepted
`
`the same:
`
`(3)
`
`any obligation owed by orthotec to Defendant
`
`for
`
`1999 was barred by
`
`the applicable
`
`statute of
`
`the
`
`limitations and/or by laches;
`
`(4) Defendant was estopped
`
`from demanding or collecting any amount claimed to be due
`
`from Orthotec with respect to purchases made by orthotec in
`
`1999; and (5) Defendant waived any such right.
`
`(C) As of
`
`June 28, 2002, OrLhoLec owed no money to
`
`Defendant
`
`for
`
`any purchases made by Orthotec in 2000 or
`
`2001.
`
`(D)
`
`orthotec is not obligated to pay Defendant for any
`
`goods
`
`shipped by it to REO SpineLine but not ordered by
`
`orthotec or which were defective or which were returned to
`
`Defendant.
`
`(E)
`
`Should it be determined. by the Court
`
`that any
`
`amount was owed by Orthotec to Defendant for any goods sold
`
`in 1999,
`
`that Orthotec should be entitled reimbursement for
`
`the difference between $153,018.72,
`
`the full amount claimed
`
`due by Defendant and paid by Orthotec under protest,
`
`and
`
`such amount,
`
`if any,
`
`the Court determines was then due.
`
`(F) Defendant
`
`is to issue proper credit
`
`to Orthotec
`
`for all goods returned to it by or for Orthotec.
`(G) Orthotec continues to have all of its rights under
`
`the Agreement.
`
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`
`20. Orthotec is informed and believes, and thereon alleges
`
`that, Defendant contends that as of June 28, 2002 and thereafter,
`
`’ Orthotec owed it the sum of $153,018.72 ($129,660.57 for goods it
`
`contends were sold to Orthotec in 1999 and $23,358.15 for 2000
`
`and 2001),
`
`that Orthotec is obligated to pay for goods Defendant
`
`ships to REO SpineLine even though not ordered by Orthotec, and
`
`that Orthotec is not entitled to a set~off or a credit
`
`for
`
`amounts paid or returned against any amounts owed by Defendant to
`
`to purchase
`; Orthotec, and that Defendant has the present right
`all of
`the rights of orthotec, which are worth millions of
`
`dollars, for the sum of $100 after 45 days of invoice.
`
`21.
`
`orthoLec desires a judicial determination of its rights
`
`and duties and a declaration that on June 28, 2002, Defendant had
`
`af-".
`
`no
`
`right
`
`to exercise the option under paragraph 12 of
`
`the
`
`g Assignment Agreement to purchase back its rights there under for
`the sum of $100.00 since:
`(a) orthotec never refused to pay
`the
`
`invoices (in the aggregate amount of $153,018.72 ) allegedly due
`
`by Orthotec to Defendant, but requested supporting documentation
`
`to support Defendant's new demand,
`
`(b) said invoice was paid by
`
`Orthotec under protest
`
`in a
`
`timely fashion (i.e. within the
`
`contractual
`
`90 or even the previously existing 45 day’ period
`
`after
`
`receipt of
`
`an
`
`incomplete
`
`and inconsistent
`
`accounting)
`
`within 11 days of
`
`the demand and delivery of
`
`the purported
`
`supporting documentation for Defendant's new demand,
`
`(c)
`
`said
`
`amount of $153,018.72 is not reflected in the official books and
`
`records of Defendant
`
`(as audited by an affiliate of Deloitte &
`
`Touche) which never claimed that such amount was due until 2002,
`
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`
`after Orthotec refused the merger demanded by Defendant,
`(d)
`the
`Agreement does not contains a “Time of the Essence” clause, and
`(e)
`the option price unconscionably low (inasmuch as the rights
`
`owned by Orthotec are worth millions of dollars)
`
`and /or the
`
`option price constitutes an unenforceable forfeiture of rights.
`22.
`A judicial declaration is necessary and appropriate at
`
`this time under
`
`the circumstances
`
`in order
`
`that OrLhotec and
`
`Defendant may ascertain their rights and duties pursuant
`: Agreement.
`I
`
`EOURIH CAUSE 02 Action
`
`to the
`
`(Accounting)
`
`23. Orthotec realleges and incorporates herein by reference
`
`each and every allegation contained in paragraphs 1
`
`through 13.
`
`15 through 17, and 19 through 22,
`
`inclusive, as if set forth in
`
`full.
`
`24. Orthotec is informed and believes and thereon alleges
`
`that at all
`
`times
`
`from in or
`
`about
`
`1999
`
`to the present,
`
`Defendant:
`
`(a)
`
`shipped Products ordered by Orthotec directly to
`
`R80 SpineLine;(b) shipped Products directly to REO SpineLine not
`
`ordered by Orthotec;
`
`(c)
`
`certain goods were
`
`returned by REO
`
`spineLine to Defendant:
`
`and
`
`(d) other goods were
`
`incorrectly
`
`invoiced as to item type, quantity or price when shipped,
`
`such
`
`that Orthotec cannot determine exactly how much,
`
`if anything, it
`
`owes to Defendant or Defendant owes to Orthotec.
`
`25.
`
`As a result of the allegations set forth hereinabove,
`
`.’
`
`‘,
`
`Orthotec is informed and believes and thereon alleges that it has
`
`1 overpaid Defendant for Products sold by it to Orthotec.
`
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`26.
`
`The amount of money due from Defendant
`
`is unknown to
`
`E Orthotec and cannot be ascertained without an accounting of the
`
`goods sold by Defendant to Orthotec and actually delivered to REO
`
`SpineLine and the goods returned by REO SpineLine to Defendant.
`
`27. Orthotec has demanded an accounting of
`
`the aforesaid
`
`items from Defendant and payment to Orthotec of the amount found
`
`FIFTH CAUSE OF ACTION
`
`(Injunction)
`
`28. Orthotec realleges and incorporates herein by reference
`
`each and every allegation contained in paragraphs 1
`
`through 13,
`
`15 through 17, 19 through 22, and 24 through 27,
`
`inclusive, as if
`
`set forth in full.
`
`29. Orthotec is informed and believes and thereon alleges
`
`that
`
`inasmuch
`
`as Defendant has
`
`breached the Agreement
`
`and
`
`unlawfully recovered the rights it granted to Orthotec under the
`
`a
`
`result
`
`thereof will not
`
`sell Products
`
`put out of business. Unless and until Defendant is enjoined and
`
`ordered. by this Court
`
`to prohibit Defendant
`
`from selling, or
`
`causing to be sold, whether directly or
`
`indirectly, any of
`
`the
`
`Products and/or any spinal medical devices including, but not
`
`limited to, oria Spinal Clip System, within the Territory
`
`- designated in the Agreement except
`
`to Orthotec,
`
`the wrongful
`
`conduct of Defendants,
`
`of each of
`
`them, will cause great and
`
`12
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`irreparable injury to Orthotec in that Orthotec will have no
`
`§'products to sell and will be immediately put out of business.
`
`30. Orthotec has no adequate remedy at law for the injuries
`
`SIXTH CAUSE OF ACTION
`
`(Conversion)
`
`31.
`
`Orthotec
`
`realleges
`
`and
`
`incorporates
`
`herein
`
`by
`
`reference each and every allegation contained in paragraphs
`
`1
`
`through 13, 15 through 17, 19 through 22, 24 through 27, and 29
`
`13
`
`32.
`
`On or about June 28, 2002, Defendant
`
`took the Property
`
`33.
`
`On or about July 1, 2002, Orthotec demanded,
`
`in writing,
`
`and refused,
`
`and continues to fail and refuse,
`
`to return the
`
`Property Rights to Orthotec.
`
`34.
`
`A3
`
`a
`
`proximate
`
`result
`
`of
`
`defendant's
`
`conversion,
`
`Orthotec
`
`has
`
`suffered which
`
`damages
`
`that
`
`are
`
`the natural,
`
`reasonable, and proximate results of the
`
`conversion, all to it's
`
`damage in the sum of no less than $15,000,000, according to proof
`
`at time of trial.
`
`35. Between
`
`the
`
`time of defendant's
`
`conversion of
`
`the
`
`26 Property Rights to its own use and the filing of
`
`this action,
`
`27 Orthotec has properly expended in pursuit of
`
`the converted
`
`28
`
`,
`
`13
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`
`Property Rights, all to its further damage in the sum of to be
`
`proven at time of trial.
`
`36.
`
`Orthotec
`
`is entitled to an
`
`award of punitive and
`
`exemplary damages based on such intentional, willful, malicious,
`
`; despicable,
`
`fraudulent and oppressive conduct
`
`in an amount
`
`to be
`
`: determined at time of trial.
`
`SEVENTH CAUSE OF ACTION
`
`(Intentional Interference with Contract)
`
`37. Orthotec realleges and incorporates herein by reference
`
`each and every allegation contained in paragraphs 1 through 13,
`
`15 through 17, 19 through 22, 24 through 27, 29 through 30, and
`
`32 through 36,
`
`inclusive, as if set forth in full.
`
`38.
`
`on or about June 28, 2002, Defendant notified Orthotec
`
`by Federal Express
`
`(received July 1, 2002),
`
`that it was seeking
`
`to acquire all rights under the Agreement
`
`from Orthotec for the
`
`sum of $100 and thereafter Defendant refused to honor all further
`
`' purchases
`
`of
`
`goods
`
`from Orthotec. Defendant's
`
`actions were
`
`without any right or justification or privilege.
`
`39. Orthotec is informed and believes and thereon alleges
`
`that DeIendanL demanded payment of
`
`the sum of $153,418.72 for
`
`goods it claims it sold to Orthotec either knowing that the same
`
`was untrue or having no reasonable grounds for believing that the
`
`same was true, but instead for the purpose of contriving grounds
`
`for terminating the Agreement and of wrongfully taking over
`
`the
`
`distribution network for the Products that Orthotec created and
`
`./""‘\
`
`developed since 1998.
`
`40. At
`
`the time
`
`that Defendant
`
`sought
`
`to terminate the
`
`3:
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`14
`
`
`
`SL
`
`Agreement and acquire all of the rights of Orthotec thereunder,
`
`Defendants were each aware of the contractual relationship that
`
`existed and does now exist between Orthotec and REG SpineLine and
`
`were
`
`aware
`
`that
`
`if Orthotec
`
`could not
`
`acquire
`
`goods
`
`from
`
`Defendant, Orthotec would be out of business,
`
`thereby resulting
`
`in loss of millions of dollars in business to Orthotec.
`
`41. Defendants knew or reasonably should have known that by
`
`the said acts of Defendant, said Defendants, and each of them,
`
`would,
`
`and did,
`
`interfere with the contractual
`
`relationship
`
`between Orthotec and REO SpineLine.
`
`42. As a result of
`
`the aforementioned acts of Defendants,
`
`Orthotec has and will continue to suffer loss of business in an
`
`amount no less than $7,500,000 according to proof at
`
`time of
`
`.-’-"M
`
`trial.
`
`43.
`
`orthotec
`
`is entitled to an
`
`award of punitive
`
`and
`
`exemplary damages based on such intentional, willful, malicious,
`
`despicable,
`
`fraudulent and oppressive conduct
`
`in an amount
`
`to be
`
`determined at time of trial.
`
`EIGHTH CAUSE OF ACTION
`
`(Negligent Interference with Contract)
`
`44. Orthotec realleges and incorporates herein by reference
`
`each and every allegation contained in paragraphs 1
`
`through 13,
`
`15 through 17,
`
`19 through 22, 24 through 27, 29 through 30,
`
`32
`
`through 36,
`
`and 38
`
`through 42,
`
`inclusive,
`
`as
`
`if set forth in
`
`full.
`
`45. Defendants, and each of them, owed Orthotec a duty to
`
`exercise reasonable care and to refrain from taking action that
`
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`
`9L
`
`would,
`
`without
`
`justification,
`
`interfere with Orthotec's
`
`contractual
`
`relationship,
`
`by
`
`virtue
`
`of
`
`the
`
`contractual
`
`relationship between Orthotec and Defendant hereinabove alleged.
`
`46. Despite the above-mentioned knowledge of Defendants,
`
`’ and
`
`each
`
`of
`
`them, Defendants
`
`negligently
`
`interfered
`
`with
`
`orthotec’s contractual relationship by terminating the Agreement
`
`mmnh-mun
`
`- without any right,
`
`justification, or privilcgc.
`
`47.
`
`By
`
`reason of Defendants‘
`
`conduct,
`
`as alleged herein,
`
`orthotec's
`
`contractual
`
`relationship with
`
`REO
`
`Spineline was
`
`disrupted and
`
`said conduct disrupted Orthotec's
`
`ability to
`
`generate income, all
`
`to its damages
`
`in an amount no less than
`
`$7,500,000, according to proof at time of trial.
`
`NINTH CAUSE OF ACTION
`
`(Breach of Written Contract)
`
`48. Orthotec realleges and incorporates herein by reference
`
`‘each and every allegation contained in paragraphs 1 through 13,
`
`15 through 17, 19 through 22,
`
`24 through 27, 29 through 30,
`
`32
`
`through 36,
`
`38 through 42,
`
`and 45 through 47,
`
`inclusive, as if
`
`set forth in full.
`
`49.
`
`In or about April 2001,
`
`Defendant and orthotec entered
`
`into another written contract written contract entitled “Contrat
`
`Partenariat"
`
`(hereinafter
`
`the “Partnership Agreement”)
`
`by the
`
`terms of which,
`
`among other
`
`things,
`
`Defendant agreed to pay
`
`$15,000 per month for a period of
`
`twelve months
`
`in order
`
`for
`
`Orthotec to engage in a znmwer of promotional and development
`
`.-*\_
`
`activities, as specified therein.
`
`50.
`
`From in or about April 2001 and thereafter,
`
`Defendant
`
`16
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`
`
`U-
`
`breached the Partnership Agreement by,
`
`inter alia, failing to pay
`
`Orthotec the sum of $15,000 per month for twelve months, except
`
`for the sum of $31,342.31.
`
`51. Orthotec has performed all conditions,
`
`covenants and
`
`: promises required by it on its part to be performed in accordance
`with the terms and conditions of the Agreement.
`
`52. As a result of the aforesaid acts and breaches of the
`
`Partnership Agreement
`
`by Defendant, Orthotec
`
`has
`
`sustained
`
`damages in excess of $130,000 according to proof at time of trial
`
`TENTH CAUSE OF ACTION
`
`(Unfair.Competition-Business
`& Professions Code Section 17200, et seq.)
`
`53. Orthotec realleges and incorporates herein by reference
`
`each and every allegation contained in paragraphs 1
`
`through 13,
`
`15 through 17,
`through 36,
`38
`
`19 through 22, 24 through 27, 29 through 30,
`32
`through 42,
`45 through 47,
`and 49 through 52,
`
`inclusive, as if set forth in full.
`
`54. Beginning in or about May 2002, Defendant committed
`
`acts of unfair competition, as defined by California Business &
`
`Professions Code section 17200 et seq., by engaging in unfair,
`
`unlawful, and fraudulent business activities.
`
`55. Orthotec has expended large resources in time, efforts,
`
`and money developing and marketing the Products throughout
`
`the
`
`western hemisphere,
`
`including the United States, Mexico,
`
`and
`
`Canada.
`
`As
`
`a consequence of Orthotec‘s expenditure of
`
`time,
`
`energy and money, as aforesaid,
`
`in developing their clientele,
`
`Orthotec acquired a preeminent position in the sale of
`
`the
`
`17
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`
`Products throughout
`
`the western hemisphere.
`
`In addition, orthotec
`
`expended large sums of time and monies to obtain United states
`
`Food
`
`and Drug Administration
`
`(“FDA”)
`
`clearance
`
`to sell
`
`the
`
`Products throughout
`
`the United States by means of an FDA 510K
`
`approval certification for each of the Products. Said FDA 510K's
`
`are a necessary prerequisite for the legal distribution of
`
`the
`
`Products inLo the United States.
`
`56.
`
`Since May 2002, Defendant,
`
`without Orthotec’s consent,
`
`unlawfully and illegally misappropriated and utilized Orthotec’s
`
`: name, Property Rights, FDA 510K's,
`
`trademarks, and trade names to
`
`import and sell
`
`the Products throughout
`
`the United States and
`
`elsewhere.
`
`In addition,
`
`on or
`
`about May
`
`21,
`
`2002, without
`
`OrthoTec's knowledge, and in breach of the Agreement and prior to
`
`its termination by Defendant, Defendant filed and by subsequently
`
`obtained,
`
`in November
`
`19,
`
`2002 under
`
`Defendant's
`
`name,
`
`the
`
`authorization to commercialize in the USA the “ORIA spinal Clip
`
`System, spinal system which is identical
`
`to the spinal system(s)
`
`sold and for which Defendant had granted Orthotec exclusivity to
`
`‘ Market and to manufacture in September 1998.
`
`57.
`
`The acts of Defendants, and each of them,
`
`in importing
`
`counterfeits
`
`of
`
`the
`
`Products
`
`utilizing Orthotec’s
`
`Property
`
`Rights,
`
`FDA 510K's, Trademarks,
`
`and Trade Names
`
`for
`
`their own
`
`benefit are likely to deceive and did mislead and actually have
`
`deceived and continue to deceive prospective purchasers of
`
`the
`
`Products and cause them to purchase the Products from Defendant
`
`and/or
`
`their co-venturers instead of Orthotec. Defendants,
`
`and
`
`each of them, have also misapp
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