S C h Ir] a d e r
`ATTORNEYS AT LAW
`
`ZOOIPENNSYLVANIA AVENUE. NW SUITE 300
`WASHINGTON. DC 20006-1825
`202.419.4200 ux 202.419.3454
`schnader.com
`
`TTAB
`
`BRUCE A. MCDONALD
`PARTNER
`(202) 419-4235
`
`September 21, 2006
`
`VIA CERTIFIED MAIL -
`
`Trademark Trial and Appeal Board
`Madison East
`
`Concourse Level, Room C55
`
`600 Dulany Street
`Alexandria, VA 22314
`
`Re:
`
`Endo Pharmaceuticals Inc. v. Western Holdings LLC, Opposition No. 91167286,
`Application Serial No. 78/547,333 (TM “ENDOTHYL”), Our Ref. 0222552.0023
`
`Dear Sir or Madam:
`
`Enclosed for filing in this matter please find an Opposition to Motion for Suspension of
`
`Proceedings.
`
`BAM:me
`
`Enclosure
`
`Sincerely,
`
`Bruce A. McDonald
`
`cc:
`
`Endo Pharmaceuticals Inc. (w/enc.)
`
`James R. Meyer, Esq. (w/o enc.)
`
`Julie Morriss, Esq., (w/enc.)
`
`t
`
`10_02_2006
`US. Patent & TMOfc/TM Mail Rcpt Dt. #22
`
`NEW YORK
`
`& Lewis up
`Schnader Harrison Segal
`PENNSVLVANIA
`CALIFORNIA WASH|NGTON.DC
`NEW JERSEY
`
`

`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`
`Opposition No.:
`
`91167286
`
`SerialNo.:
`
`78/547,333
`
`MARK:
`
`ENDOTHYL
`
`) )
`
`) )
`
`) )
`
`) )
`
`)
`
`ENDO PHARMACEUTICALS INC.,
`
`Opposer,
`
`v.
`
`WESTERN HOLDINGS, INC.,
`
`Applicant.
`
`OPPOSITION TO MOTION FOR SUSPENSION OF PROCEEDINGS
`
`Endo Pharmaceuticals Inc. opposes Applicant’s Motion for Suspension of Proceedings on
`
`the grounds that the declaratory judgment action filed by Applicant on August 1, 2006, styled
`
`Novex Biotech LLC v. Endo Pharmaceuticals, Civil Action No. 2:06cv00638 (D.Utah), is
`
`frivolous and will be dismissed for the reasons stated in Defendant’s Memorandum in Support of
`
`Motion to Dismiss for Lack of Subject Matter Jurisdiction and Improper Venue, filed by Endo
`
`Pharmaceuticals in that action on September 5, 2006, a copy of which is appended hereto as
`
`Exhibit A.
`
`Respectfiilly submitted,
`
`ENDO PHARMACEUTICALS INC.
`
`
`
`James R. Meyer
`SCHNADER HARRISON SEGAL & LEWIS LLP
`
`2001 Pennsylvania Ave., N.W., Suite 300
`Washington, D.C. 20006
`Tel.:
`(202) 419-4235
`
`

`
`CERTIFICATE OF SERVICE
`
`The undersigned hereby certifies that on September 20, 2006, a copy of the foregoing
`Opposition to Motion for Suspension of Proceedings was served by U.S. mail, first class postage
`prepaid, on counsel of record in an envelope addressed as follows:
`
`Julie K. Morriss, Esq.
`MORRISS O’BRYANT COMPAGNI, P.C.
`136 South Main Street, Suite 700
`Salt Lake City, Utah 84101
`
`Bruce A. McDonald
`
`Attorney
`SCHNADER HARRISON SEGAL & LEWIS LLP
`
`

`
`

`
`Case 2:06-cv-00638—PGC Document 7
`
`Filed 09/05/2006
`
`Page 1 of 30
`
`CHARLES J. VEVERKA (UT Bar No. 7110)
`JANNA J. LEWIS (UT Bar No. 9677)
`WORKMAN NYDEGGER
`
`1000 Eagle Gate Tower
`60 East South Temple
`Salt Lake City, Utah 84111
`Telephone:
`(801) 533-9800
`Facsimile:
`(801) 321-1707
`
`BRUCE A. MCDONALD (D.C. Bar. No. 293753) (Pro hac vice pending)
`SCHNADER HARRISON SEGAL & LEWIS LLP
`
`2001 Pennsylvania Ave, N.W., Suite 300
`Washington, D.C. 20006
`Telephone:
`(202) 419-4235
`Facsimile:
`(202) 419-3454
`
`Attorneys for Defendant Endo Pharmaceuticals Inc.
`
`
`
`IN THE UNITED STATES DISTRICT COURT
`
`FOR THE DISTRICT OF UTAH, CENTRAL DIVISION
`
`NOVEX BIOTECH, L.L.C. and
`WESTERN HOLDINGS, L.L.C.,
`
`Case No. 2: 06 CV 00638 PGC
`
`
`
`
`Plaintiffs,
`
`V.
`
`ENDO PHARMACEUTICALS INC.,
`
`Defendant.
`
`DEFENDANT’S MEMORANDUM IN
`SUPPORT OF MOTION TO DISMISS
`FOR LACK OF SUBJECT MATTER
`
`JURISDICTION AND IMPROPER
`VENUE
`
`

`
`Case 2:06-cv-00638-PGC Document 7
`
`Filed 09/05/2006
`
`Page 2 of 30
`
`I.
`
`II.
`
`III.
`
`IV.
`
`VI.
`
`Table of Contents
`
`Page
`
`Statement of the Case .................................................................................................... .. 1
`
`Statement of Undisputed Facts ...................................................................................... .. 1
`
`A.
`
`The Parties ......................................................................................................... .. 1
`
`1.
`
`2.
`
`3.
`
`Western Holdings, L.L.C ........................................................................ .. 1
`
`Novex Biotech, L.L.C. ........................................................................... .. 2
`
`Endo Pharmaceuticals Inc ....................................................................... .. 3
`
`B.
`
`Events Leading to this Action ............................................................................ .. 3
`
`1.
`
`2.
`
`3.
`
`4.
`
`5.
`
`6.
`
`7.
`
`Western Holdings’ “ENDOTHYL” Trademark Application ................... .. 4
`
`Defendant’s Letter Dated April 8, 2005 .................................................. ..4
`
`Western Holdings’ Response to Defendant’s April 8 Letter .................... .. 5
`
`Subsequent Trademark Applications Filed by Western Holdings ............ .. 6
`
`The PTO Opposition Proceedings ........................................................... .. 8
`
`The Settlement Agreement ..................................................................... .. 8
`
`The Declaratory Judgment Action ........................................................ .. 11
`
`Statement of Facts in Dispute ...................................................................................... .. 11
`
`Statement of the Issues ................................................................................................ .. 12
`
`Standard of Review ..................................................................................................... .. 13
`
`Argument .................................................................................................................... .. 13
`
`A.
`
`The Court Lacks Declaratory Jurisdiction. ....................................................... .. 14
`
`1.
`
`2.
`
`Plaintiffs Had No Reasonable Apprehension of Litigation .................... .. 14
`
`Plaintiffs Are Not Even Using the Multiplicity of Trademarks Pleaded in
`Their Complaint. .................................................................................. .. 15
`
`

`
`Case 2:06—Cv—O0638-PGC Document 7
`
`Filed 09/05/2006
`
`Page 3 of 30
`
`B.
`
`Even if There is a Case or Controversy, the Court Should Exercise its Statutory
`Discretion to Dismiss Plaintiffs’ Action. .......................................................... .. 16
`
`1.
`
`2.
`
`3.
`
`Plaintiffs Are Engaged in Forum Shopping........................................... .. 17
`
`In Light of the Pending Settlement Agreement, Exercising Jurisdiction
`Over Plaintiffs’ Declaratory Action Would Discourage Parties from
`Attempting to Resolve Disputes Prior to Initiating Litigation................ .. 18
`
`The PTO is a Preferable Forum for Determining the Merits of Plaintiffs’
`Intent-to-Use Trademark Applications.................................................. .. 19
`
`C.
`
`D.
`
`Plaintiffs’ Action is Subject to Dismissal for Improper Forum Pursuant to
`Fed.R.Civ.P. l2(b)(3) ....................................................................................... .. 20
`
`If The Court Does Not Dismiss Plaintiffs’ Action, the Court Should Transfer it to
`the Eastern District of Pennsylvania Pursuant to 28 U.S.C. § 1406(a) ............... .. 22
`
`VII.
`
`Conclusion .................................................................................................................. .. 22
`
`

`
`Case 2:06—cv-00638—PGC Document 7
`
`Filed 09/05/2006
`
`Page 4 of 30
`
`TABLE OF AUTHORITIES
`
`FEDERAL CASES
`
`Page
`
`A.L. Mechling Barge Lines v. United States, 368 U.S. 324 ...................................................... .. 14
`
`Aetna Life Ins. Co. v. Haworth, 300 U.S. 227 .......................................................................... .. 16
`
`Agriaj/ne Techs., Inc. v. WR. Grace & Co.-Conn., 863 F.Supp. 1522 ................................ .. 14, 20
`
`Am. Bakeries Co. v. Pan-0-Gold Baking C0,, 650 F _Supp. 563 ......................................... .. 19, 20
`
`Am. Pioneer Tours, Inc. v. Suntrek Tours, Ltd, 46 U.S.P.Q.2d 1779 ................................. .. 13, 15
`
`Arrowhead Indus. Water, Inc. v. Ecolochem, Inc., 846 F.2d 731 .............................................. .. 16
`
`BASF Corp. v. Symington, 50 F.3d 555 ................................................................................... .. 18
`
`Bausch &Lomb Inc. v. CIBA Corp., 39 F.Supp.2d 271 ..................................................... .. 16, 19
`
`Buzas Baseball, Inc. v. Bd. ofRegents, No. 98-4098, 1999 U.S.App. LEXIS 21630 ................ .. 17
`
`C-Cure Chem. Co., Inc. v. Secure Adhesives Corp., 571 F .Supp. 808 ...................................... .. 19
`
`PHC, Inc. v. Pioneer Healthcare, Inc., 75 F.3d 75 .................................................................. .. 19
`
`Cash v. Brooks, 906 F .Supp. 450 ............................................................................................ .. 19
`
`Cedars-Sinai Med. Ctr. v. Watkins, 11 F.3d 1573, cert. denied, 512 U.S. 1235 ........................ .. 13
`
`Cf Goodyear Tire & Rubber Co. v. Releasomers, Inc., 824 F.2d 953 ...................................... .. 16
`
`Citicasters Co. v. Country Club Commc’ns, No. 97-0678, 1997 U.S.Dist. LEXIS 17238 ......... .. 19
`
`Cont ’l Cas. Co. v. Am. Nat ’lIns. Co., 417 F.3d 727 ................................................................ .. 20
`
`Driving Force, Inc. v. Manpower, Inc., 498 F .Supp. 21 ..................................................... .. 19, 20
`
`Dunn Comp. Corp. v. Steelcloud, 133 F.Supp.2d 823 ........................................................ .. 14, 15
`
`EMC Corp. v. Norand Corp., 89 F.3d 807 ............................................................................... .. 19
`
`Fightfor Children, Inc. v. Fight Night, Inc., No. 96-1818, 1997 U.S.Dist. LEXIS 24020 ........ .. 19
`
`Forschner Group, Inc. v. B-Line A.G., 943 F.Supp. 287 .......................................................... .. 19
`
`iii
`
`

`
`Case 2:06—cv—00638-PGC Document 7
`
`Filed 09/05/2006
`
`Page 5 of 30
`
`Fresenius USA, Inc. v. Transonic Sys., Inc., 207 F.Supp.2d 1009 ............................................ .. 19
`
`Genentech, Inc. v. Eli Lilly and Co., 998 F.2d 931 .................................................................. .. 16
`
`Grivin v. Hammer Galleries, 793 F.Supp. 233 ......................................................................... .. 18
`
`Hanes Corp. v. Millard, 531 F.2d 585 ..................................................................................... .. 18
`
`Hanlon Chem. Co., Inc. v. Dymon, Inc., No. 90-2056, 1991 U.S.Dist. LEXIS 1345 ................ .. 19
`
`Idaho Potato Comm ’n v. Wash. Potato Comm ’n, 410 F.Supp. 171 .......................................... .. 21
`
`Int ’l Soc. for Krishna Consciousness of W Penn. v. Stadium Auth., 479 F.Supp. 792 .............. .. 21
`
`Intralox, L.L. C. v. Habasit Belting, Inc., No. 04-840, 2004 U.S.Dist. LEXIS 12417 ................ .. 15
`
`KerotestMfg. Co. v. C-0-Two Fire Equip. Co., 342 U.S. 180 ................................................. .. 14
`
`Krause Int ’I, Inc. v. Reed Elsevier, Inc., 866 F.Supp. 585 ........................................................ .. 19
`
`Lujan v. Defenders of Wildlife, 504 U.S. 555 ........................................................................... .. 21
`
`Mfrs. Hanover Corp. v. Maine Sav. Bank, 225 U.S.P.Q. 525 ................................................... .. 15
`
`MCA, Inc. v. Mid-Cont. Adjustment Co._, No. 87-C-5377, 1988 U.S.Dist. LEXIS 10502 .......... .. 20
`
`Maritz v. Cybergold, Inc., 947 F .Supp. 1328 ........................................................................... .. 19
`
`Md. Cas. Co. v. Pac. Coal & Coil Co., 312 U.S. 270 ............................................................... .. 14
`
`McGuire v. Regents of the Univ. ofMich., No. 2:99-CV-1231, 2000 U.S.Dist. LEXIS
`21615 ...................................................................................................................................... .. 19
`
`Mission Ins. Co. v. Puritan Fashions Corp., 706 F.2d 599 ...................................................... .. 16
`
`NSI Corp. v. Showco, Inc., 843 F .Supp. 642 ............................................................................ .. 18
`
`Nat ’l Mktg. Consultants, Inc. v. Blue Cross Blue Shield Ass ’n, No. 87-C-7161, 1987
`U.S.Dist. LEXIS 10840 ........................................................................................................... .. 19
`
`Nat. Gas Pipeline Co. v. Union Pac. Res. Co., 750 F.Supp. at 314 ..................................... .. 17,19
`
`Public Aflairs Assoc., Inc. v. Rickover, 369 U.S. 111 ............................................................... .. 16
`
`Quabaug Rubber Co. v. Fabiano Shoe Co., 567 F.2d 154 .....
`
`................................................ .. 21.
`
`
`
`iv
`
`

`
`Case 2:06-cv-00638-PGC Document 7
`
`Filed 09/05/2006
`
`Page 6 of 30
`
`Silverstar Enters., Inc. v. Aday, 537 F.Supp. 236 ..................................................................... .. 21
`
`Skelly Oil Co. v. Phillips Petroleum C., 339 U.S. 667 .............................................................. .. 13
`
`State Farm Fire & Cas. Co. v. A/Ihoon, 31 F.3d 979 .................................................... .. 16, 17, 19
`
`Topp-Cola Co. v. Coca-Cola Co., 314 F.2d 124 ...................................................................... .. 15
`
`Tripp Mfg. Co. v. Am. Power Conversion Corp., 46 F.3d 624 .................................................. ,. 14
`
`Ultrapure Sys., Inc. v. Hamlet Group, 921 F.Supp. 659 ........................................................... .. 21
`
`Unique Indus., Inc. v. Lisa Frank, Inc., No. 93 Civ. 8037, 1994 U.S.Dist. LEXIS 13590 ......... .. 22
`
`United States v. Hays, 515 U.S. 737 ........................................................................................ .. 21
`
`Ven-Fuel, Inc. v. Dep ’t of the Treasury, 673 F.2d 1194 ........................................................... .. 18
`
`W & G Tenn. Imp., Inc. v. Esselte Pendaflex Corp., 769 F .Supp. 264 ...................................... .. 20
`
`White v. Nat ’l Union Fire Ins. Co., 913 F.2d 165 .................................................................... .. 14
`
`Windsurfing Int 'l Inc. v. AMF Inc., 828 F .2d 755 .................................................................... .. 14
`
`FEDERAL STATUTES
`
`15 U.S.C. § 1063 ....................................................................................................................... ..8
`
`28 U.S.C. § 1404 ..................................................................................................................... ..22
`
`28 U.S.C. § 1406 .................................................................................................... ..13, 20, 22, 24
`
`28 U.S.C. §2201 ..................................................................................................................... ..13
`
`Fed. R. Civ. P. 18 ...................................................................................................................... ..1
`
`Fed. R. Civ. P. 12 .............................................................................................................. ..13, 20
`
`15 U.S.C. § 1051(1)(b) ........................................................................................................... ..1,6
`
`

`
`Case 2:06-cv—00638—PGC Document 7
`
`Filed 09/05/2006
`
`Page 7 of 30
`
`I.
`
`Statement of the Case
`
`This is an action by Western Holdings, L.L.C. (“Western Holdings”) seeking a
`
`declaration that its use of the trademark “ENDOTI-I[L-CR” for dietary supplements does not
`
`infringe Defendant’s family of federally registered “ENDO” trademarks for prescription
`
`pharmaceuticals in violation of the Federal Trademark Act of 1946, as amended (the “Lanham
`
`Act”), 15 U.S.C. § 1051 et seq. Citing the “liberal joinder” provisions of Fed. R. Civ. P. 18(a),
`
`Western Holdings also seeks an advisory opinion that its fiiture use of multiple additional
`
`“ENDO” marks, if commenced, will not constitute an infringement.
`
`H.
`
`Statement of Undisputed Facts
`
`A.
`
`The Parties
`
`1.
`
`Western Holdings, L.L.C.
`
`Plaintiff Western Holdings is a Wyoming corporation located in Cheyenne, Wyomingl
`
`Western Holdings sells dietary supplements using the trademark “ENDOTHIL”2 and is the
`
`owner of the trademark applications pleaded in Plaintiffs’ Complaint. While the Complaint cites
`
`multiple additional “ENDO” trademarks that Western Holdings has applied to register at the U.S.
`
`Patent and Trademark Ofi'1ce(PTO),3 the only trademark allegedly used by either Plaintiff is
`
`“ENDOTHIL.”
`
`‘
`
`Compl., ‘H 2.
`
`Id. at 1] 10. The Complaint attributes this activity to “Novex.” However, the trademark
`2
`application for “ENDOTHIL” contains a sworn representation by Western Holdings that the latter is using the mark
`and makes no reference to “Novex Biotech.” See Declaration of Bruce A. McDonald (“McDonald Decl.”), Ex. G.
`Moreover, in the fifteen months of communications between the parties leading to this action, opposing counsel
`never mentioned any company named “Novex” or “Novex Biotech.” See Declaration of James R. Meyer, Ex. F
`(copies of e-mail correspondence April 2005 — July 2006). Western Holdings is the real party in interest.
`
`3
`
`Compl., 11 6.
`
`

`
`Case 2:06-Cv—00638-PGC Document 7
`
`Filed 09/05/2006
`
`Page 8 of 30
`
`2.
`
`Novex Biotech, L.L.C.
`
`Plaintiff Novex Biotech, L.L.C., is a shell corporation lacking any commercial presence
`
`or substantial connection to this State. The company is allegedly located at 5742 West Harold
`
`Gatty Drive, Salt Lake City, Utah.4 However, directory assistance for Salt Lake City has no
`
`listing for it,5 and U.S. business databases have no record of any company named “Novex
`
`Biotech” located anywhere.6 Although the Utah Secretary of State confirms that Novex Biotech
`
`was incorporated in Utah on January ll, 2005, the corporate registration indicates that the
`
`company is controlled by an entity named “PC Management, Inc,” located at 9 E. Loockerman
`
`St., Suite 1B, Dover, DE 19901.7 However, directory assistance for Dover has no listing for a
`
`“PC Management, Inc.,” and neither the Delaware Secretary of State nor commercially available
`
`business databases have any record of a company named “PC Management, Inc.” incorporated
`
`or located in Delaware.8
`
`Defendant’s investigation establishes that Novex Biotech is an alter ego of Western
`
`Holdings located at the premises of Western Holdings in Cheyenne, Wyoming. Thus, the
`
`Internet domain name for the website at www.novotexbiotech.com is owned by Western
`
`Holdings at 1821 Logan Avenue, Cheyenne, Wyoming 82001;9 and an application to register
`
`“
`
`5
`
`5
`
`7
`
`3
`
`9
`
`Compl., 11 1.
`
`See Deal. of Bruce A. McDonald (“McDonald Decl.”), 1] 2.
`
`Id. at 11 3.
`
`See Novex Biotech Corporate Registration, McDonald Dec1., Ex. C.
`
`McDonald Decl., 111] 7-9.
`
`See “WhoIs” print-out for NOVEXBIOTECH. COM, McDonald Decl., Ex. E.
`
`

`
`Case 2:06-Cv—00638-PGC Document 7
`
`Filed 09/05/2006
`
`Page 9 of 30
`
`“NOVEX BIOTECH” as a trademark for cosmetics and dietary supplements was filed at the
`
`PTO on January 13, 2005, also by Western Holdings at its Wyoming address.”
`
`The Complaint does not allege that Novex Biotech has any ownership interest in the
`
`“ENDOTHlL” trademark. On the contrary, Western Holdings has filed multiple applications at
`
`the PTO alleging that Western Holdings is sole Owner Of the mark.“ While the Complaint states
`
`that Novex Biotech uses the “ENDOTI-TH.” trademark, it does not indicate whether Novex
`
`Biotech is an exclusive licensee of Western Holdings, nor does the Complaint identify Novex
`
`Biotech’s interest in the other multiple “ENDO” marks that Western Holdings has applied to
`
`register at the PTO.”
`
`3.
`
`Endo Pharmaceuticals Inc.
`
`Defendant Endo Pharmaceuticals is a Delaware corporation with headquarters in Chadds
`
`Ford, Pennsylvania.” Defendant produces and sells prescription pharmaceuticals under a family
`
`of “ENDO” trademarks including “ENDO, “ENDOCET,” “ENDODAN,” “ENDO GENERIC
`
`PRODUCTS,” “ENDO LABORATORIES,” and “ENDOCODONE.”‘4
`
`B.
`
`Events Leading to this Action
`
`The Complaint alleges that Defendant’s conduct placed Western Holdings in
`
`apprehension of litigation. 15 However, it is undisputed that litigation between the parties was
`
`never directly or indirectly threatened, discussed, or implied at any time prior to the filing of this
`
`‘°
`
`“
`
`l 2
`
`‘3
`
`‘4
`
`‘5
`
`See U.S. Application Serial No. 78/547,328, McDonald Decl., Ex. F.
`
`See Trademark applications filed by Western Holdings, McDonald Decl., Ex. G
`
`Comp1., 11 3.
`
`Id. at 1] 15.
`
`Compl.,1l1l 18, 27, 31, 35 and 40.
`
`

`
`Case 2:06—cv-00638-PGC Document 7
`
`Filed 09/05/2006
`
`Page 10 of 30
`
`action. 16 While Defendant had filed opposition proceedings against Western Holdings’
`
`applications to register “ENDOTHYL” and “ENDOTH[L” at the PTO, the parties subsequently
`
`agreed to a settlement proposed by Western Holdings, and were in agreement as recently as
`
`July 19, 2006, when they consented to a suspension of proceedings at the PTO on the grounds
`
`that settlement was imminent.”
`
`1.
`
`Western Holdings’ “ENDOTHYL” Trademark Application
`
`On January 13, 2005, Western Holdings filed an intent-to-use trademark application at
`
`the PTO seeking registration of “ENDOTHYL” in connection with dietary supplements.” Upon
`
`learning of Western Holdings’ application, Defendant’s counsel reported the matter to Defendant
`
`and was instructed to communicate with Western Holdings as appropriate to convey Defendant’s
`
`concerns and persuade Western Holdings to abandon or amend its trademark application to
`
`exclude registration in connection with prescription pharmaceutical products. 19
`
`2.
`
`Defendant’s Letter Dated April 8, 2005
`
`On April 8, 2005, Defendant’s counsel directed a letter to Western Holdings, a copy of
`
`which is appended as Exhibit A to Plaintiffs’ Complaint. The letter does not threaten litigation
`
`directly or indirectly, and states instead:
`
`
`
`15
`
`17
`
`See Decl. of James R. Meyer (“Meyer Decl.”), 1] 2 et seq.
`
`Id at 1] 26; see motions to suspend filed July 19, 2006, Meyer Decl., Exhibits A and B.
`
`Meyer Decl., 1] 5. Paragraph 11 of Plaintiffs’ Complaint incorrectly states that “[i]n or about 2003,
`18
`Plaintilis [plural] filed an application
`for the trademark, ‘Endovaxm’ to brand and promote its [sic]
`dietary supplements and cosmetic products.” Use of the word “Plaintiffs” in the plural is misleading
`because Novex Biotech, has never filed any application for registration of any trademark or service mark at
`the PTO. Meyer Decl., 1] 6. Moreover, PTO records fail to reveal any application filed by Western
`Holdings in 2003. Id. The only “ENDOVAX” application on record with the PTO was filed by Western
`Holdings (not Novex Biotech) on July 18, 2005, seeking registration in connection with cosmetics and
`cleaning products. 1d.
`
`19
`
`Meyer Decl., 11 7.
`
`

`
`Case 2:06-cv-00638—PGC Document 7
`
`Filed 09/05/2006
`
`Page 11 of 30
`
`For present purposes we are assuming that your company did [not] intend to
`create any public confusion by selection, adoption and use of the ENDOTHYL mark and
`that your company will be sensitive to the concerns stated in this letter. We assume
`likewise that your company will cooperate with our client in voluntarily withdrawing
`Application SN 78/54 7,333.
`
`We anticipate and appreciate your consideration in this matter. Please feel free
`to contact the undersigned if you have any questions. Otherwise please confirm your
`receipt of this letter and your agreement to proceed as requested above.
`
`3.
`
`Western Holdings’ Response to Defendant’s April 8 Letter
`
`On April 29, 2005, Defendant’s counsel received a call from Western Holdings’ counsel,
`
`Julie Morriss, at which time he reiterated his client’s concerns.” An amicable discussion ensued
`
`in which Ms. Morriss described Western Holdings’ “ENDOTHYL” product as a dietary
`
`supplement for bodybuilding sold over the Internet and distributed at retail through General
`
`Nutrition Center (GNC) outlets. At no time during this conference or at any time thereafter did
`
`Defendant’s counsel threaten litigation or intimate that Defendant was considering litigation.”
`
`Defendant’s counsel subsequently received a letter from Ms. Morriss dated May 3, 2005,
`
`offering to amend her client’s “ENDOTHYL” application to read “over-the-counter dietary
`
`supplements.”22
`
`On May 25, 2005, Ms. Morriss called to report that her client desired to register and use
`
`the trademark “ENDOTHIL” in lieu of “ENDOTHYL” and sought assurances from Endo
`
`Pharmaceuticals that this would be acceptable provided that her client’s registration and use of
`
`
`
`2°
`
`21
`
`22
`
`Meyer Decl., 1] 9.
`
`Id.
`
`Id. at'[[ 10.
`
`

`
`Case 2:06-cv—00638-PGC Document 7
`
`Filed 09/05/2006
`
`Page 12 of 30
`
`“ENDOTI-I[L” was limited to over-the-counter products. Defendant’s counsel stated that he
`
`believed this would be acceptable and would report it to his client.”
`
`4.
`
`Subsequent Trademark Applications Filed by Western Holdings
`
`On June 23, 2005, Western Holdings filed a use-based application at the PTO to register
`
`“ENDOTHIL” for dietary supplements.“ The application contains no limitation to over-the-
`
`counter products.” In July and September 2005, Western Holdings filed the following
`
`additional applications for trademark registrations at the PTO:
`
`0
`
`0
`
`0
`
`0
`
`0
`
`0
`
`0
`
`0
`
`“ENDOSLIM,” Intent-to-Use Application Serial No. 78/672,382, filed July 18,
`2005, for cosmetics and cleaning preparations;
`
`“ENDOLEAN,” Intent-to-Use Application Serial No. 78/672,394, filed July 18,
`2005, for cosmetics and cleaning preparations;
`
`“ENDOTHIN,” Intent-to-Use Application Serial No. 78/672,417, filed July 18,
`2005, for cosmetics and cleaning preparations;
`
`“ENDOTRIM,” Intent-to-Use Application Serial No. 78/672,432, filed July 18,
`2005, for cosmetics and cleaning preparations;
`
`“ENDOTHOL,” Intent-to-Use Application Serial No. 78/672,602, filed July 18,
`2005, for cosmetics and cleaning preparations;
`
`“ENDOLOSS,” Intent-to-Use Application Serial No. 78/672,699, filed July 18,
`2005, for cosmetics and cleaning preparations;
`
`“ENDOVAX,” Intent-to-Use Application Serial No. 78/672,718, filed July 18,
`2005, for cosmetics and cleaning preparations;
`
`“ENDODRENE,” Intent-to-Use Application Serial No. 78/722,694, filed
`September 28, 2005, for cosmetics and cleaning preparations; and
`
`Meyer Decl., 1112; copies of Western Holdings’ pending trademark applications are appended to
`24
`the McDonald Declaration as Exhibit G. All of Western Holdings’ applications except “ENDOTHIL” are based on
`intent to use pursuant to Section 1(b) of the Lanham Act, 15 U.S.C. § 1051(b).
`
`25
`
`See Meyer Decl., Ex. E.
`
`

`
`Case 2:06-CV-O0638—PGC Document 7
`
`Filed 09/05/2006
`
`Page 13 of 30
`
`o
`
`“ENDOVAL,” Intent-to-Use Application Serial No. 78/722,779, filed
`September 28, 2005, for dietary supplements.“
`
`Defendant’s trademark watch service reported Western Holdings’ new “ENDO” filings to
`
`Defendant’s counsel and the latter informed his client.” At Defendant’s instruction, counsel
`
`telephoned Ms. Morriss on September 22, 2005. She assured Defendant’s counsel that the new
`
`trademarks would be limited to use in connection with over-the-counter nutritional products for
`
`weight loss."
`
`Defendant’s counsel called Ms. Morriss the next day, September 23, 2005, and had
`
`another amicable discussion.” Defendant’s counsel explained his client’s concern that the
`
`applications filed by Western Holdings did not contain any limitation restricting usage to over-
`
`the-counter products, so that conceivably such products might be sold with a prescription, which
`
`would be adverse to Defendant’s claim of exclusive right to registration and use of “ENDO” in
`
`connection with prescription pharmaceutical preparations.
`
`Counsel also explained Defendant’s concern that Western Holdings appeared to be
`
`creating a family of “ENDO” marks which could be damaging to Defendant’s family of
`
`“ENDO” marks in connection with prescription pharmaceutical.”
`
`To address these concerns, Defendant’s counsel proposed an agreement pursuant to
`
`which Western Holdings would (a) amend the recitation of goods in its applications for
`
`registration of “ENDOTHYL” and “ENDOTI-HL” restricting the registration of such marks to
`
`
`26
`
`27
`
`28
`
`29
`
`3°
`
`Meyer Decl., 1] 13; see McDonald Dec1., Ex. G.
`
`Id. at1l14.
`
`1d., Decl.,1l 15.
`
`Id.
`
`7
`
`

`
`Case 2:06—cv—0O638-PGC Document 7
`
`Filed 09/05/2006
`
`Page 14 of 30
`
`over-the-counter products and (b) abandon the remainder of its “ENDO” applications.
`
`Defendant’s counsel explained that his client’s primary goal was to protect its position in other
`
`third-party matters in which Defendant has asserted, and would assert in the fixture, a claim of
`
`substantial exclusivity to a family of “ENDO” trademarks in connection with prescription
`
`pharmaceuticals. Defendant’s counsel assured Ms. Morriss that any outcome which
`
`accommodated these basic concerns would be acceptable to Defendant. Again there was never
`
`any talk or suggestion of litigation. Defendant’s counsel followed up with an e-mail dated
`
`September 23, 2006.3‘
`
`5.
`
`The PTO Opposition Proceedings
`
`On October 19 and 20, 2005, to preserve Defendant’s position in view of pending
`
`deadlines,” Defendant filed Notices of Opposition against Western Holdings’ applications to
`
`register “ENDOTHYL” and “ENDOTHIL,” respectively.”
`
`6.
`
`The Settlement Agreement
`
`On October 26, 2005, Defendant’s counsel received a settlement offer from Ms. Morriss
`
`in the form of an e-mail stating in relevant part:
`
`As I indicated to you earlier, it has been my client's repeated experience to have
`competitors in the dietary supplement industry use and/or attempt to register marks that
`are very similar to a particular product name that my client has adopted; therefore,
`they try to head off their competitors by applying to register similar marks to their own
`brand product. That is the genesis for the numerous filings of marks incorporating the
`
`Id. That e-mail appears among the record of e-mail communications between the parties’ counsel
`3‘
`appended to the Meyer Declaration collectively as Exhibit F.
`
`Section l3(a) of the Lanham Act provides that “[a]ny person who believes that he would be
`32
`damaged by the registration of a mark. ..may. . .file an opposition in the Patent and Trademark Office. . .within thirty
`days after the publication
`of the mark sought to be registered.” 15 U.S.C. § 1063 (a)(emphasis added). Western
`Holdings’ applications for registration of “ENDOTHYL” and “ENDOTHIL” were published on October 11 and 18,
`2005, respectively.
`
`33
`
`Id. ant 16.
`
`

`
`Case 2:06—cv-00638—PGC Document 7
`
`Filed 09/05/2006
`
`Page 15 of 30
`
`ENDO word. It is not my client's wish to establish a family of "ENDO: [sic] marks, and
`certainly not with the intent to compete with your client since their goods are entirely
`different.
`
`The foregoing being said, my client has indicated that they will be focussing [sic] their
`products on the marks ENDOTHIL and ENDODRENE. They will withdraw or abandon
`all other pending applications infavor of those two marks, and are hopeful that your
`client will concede to allowing my client to register those two marks without opposition.
`Again, the products, channels of trade and end consumer are entirely different from those
`of your client and its products, and we do not believe that there should be any problem
`with use and registration of those two marks. My client will not seek to register other
`ENDO marks, but would remain hopeful that in the interest of both our clients, your
`client would cooperate in policing others from attempting to register marks that are
`confilsingly similar with ENDOTHIL and ENDODRENE [Emphasis added.]
`
`Please consult with your client and advise us if there is a possiblity [sic] for
`reaching an amicable resolution. 34
`
`On November 11, 2005, Defendant’s counsel received instructions from Defendant to
`
`settle the PTO oppositions, which counsel communicated to Western Holdings in a voicemail
`
`message to Ms. Morriss on November 23, 2005, after receiving the following e-mail message
`
`from her on that date reiterating the proposal in her e-mail dated October 26, 2005:
`
`[W]e inquire whether you have had a chance to discuss with your client the proposal set
`forth in my e-mail message of October 26 (below). We are aware that oppositions were
`filed against the marks ENDOTHIL and ENDOTHYL the day following my e-mail to
`you of October 26. In the interest of attempting to settle these issue before the deadline
`for filing answers to the oppositions, I reiterate my client's proposal that they will
`withdraw all applications except for ENDOTHIL and ENDODRENE, which are the only
`two marks that they wish to proceed with, and my client agrees not to apply to register
`any other marks beginning with the ENDO prefix. The description of goods in the two
`applications they wish to pursue (i.e., ENDOTHIL and ENDODRENE) will be amended
`as necessary to distinguish my client's goods over yours by adding the phrase "over the
`counter" or "OTC", as was previously agreed to.”
`
`
`