throbber
Trademark Trial and Appeal Board Electronic Filing System. https://estta.uspto.gov
`ESTTA1291436
`06/14/2023
`
`ESTTA Tracking number:
`
`Filing date:
`
`Proceeding no.
`
`Party
`
`Correspondence
`address
`
`Submission
`
`Filer's name
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`Filer's email
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`Signature
`
`Date
`
`Attachments
`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`91282029
`
`Plaintiff
`Hanna Carfield
`
`COLIN R HAGAN
`SHLANSKY LAW GROUP LLP
`1 WINNISIMMET ST
`CHELSEA, MA 02150
`UNITED STATES
`Primary email: colin.hagan@slglawfirm.com
`Secondary email(s): katherine.varnum@slglawfirm.com,
`frances.workman@slglawfirm.com
`617-370-8321
`Other Motions/Submissions
`
`Colin R. Hagan
`
`colin.hagan@slglawfirm.com, katherine.varnum@slglawfirm.com,
`frances.workman@slglawfirm.com
`
`/s/ Colin R. Hagan
`
`06/14/2023
`
`Response to May 24 Order 06 14 23.pdf(141739 bytes )
`Exhibit A-1.pdf(2708158 bytes )
`Exhibit A-2.pdf(5163746 bytes )
`Exhibit B.pdf(1209220 bytes )
`Exhibit C.pdf(516504 bytes )
`
`

`

`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE
`TRADEMARK TRIAL AND APPEAL BOARD
`
`
`
`HANNA CARFIELD,
`
` Opposer,
`
`v.
`
`ALEX KWON,
`
` Applicant.
`
`
`
`
`Opposition No. 91282029
`
`Serial No. 90352412
`
`Mark: ADVANCED VAPOR DEVICES
`
`
`RESPONSE TO THE BOARD’S MAY 24, 2023, ORDER
`
`In response to the Trademark Trial and Appeal Board’s Order issued on May 24, 2023,
`
`the undersigned counsel for the parties hereby informs the Board of the following:
`
`1.
`
`The following civil actions involving the parties (or their affiliates) are currently
`
`active:
`
`• Next Level Ventures, LLC v. AVID USA Technologies LLC, Jonathan
`Carfield, and Hanna Carfield, Case No. 2022-0699-MTZ (Del. Ch. Ct. 2022).
`
`Defendant Avid Holdings, Ltd., has moved to dismiss for subject matter jurisdiction.
`
`Plaintiff Next Level Ventures, LLC, has not yet filed any opposition to that motion. The
`
`currently operative pleadings are appended hereto at Exhibit A.
`
`• Next Level Ventures LLC v. AVID Holdings, Ltd., Case 2:22-cv-01083 (W.D.
`Wash. 2022).
`
`Respondent Avid Holdings, Ltd., has moved to appeal the Court’s decision denying
`
`Respondent’s Amended Motion to Vacate Arbitration Award and granting Petitioner Next Level
`
`Ventures, LLC’s Cross-Motion to Confirm Arbitration Award, as well as the Judgment resulting
`
`therefrom. The currently operative pleadings are appended hereto at Exhibit B.
`
`

`

`2.
`
`The parties (or their affiliates) are also currently engaged in an active arbitration
`
`before the American Arbitration Association styled as Avid Holdings Ltd. v. Next Level Ventures,
`
`ICDR-AAA Case No. 01-23-0000-8019. Avid Holdings Ltd. has recently filed its Second
`
`Amended Statement of Claim, appended hereto at Exhibit C. No answer has yet been filed.
`
`3.
`
`There is an anticipated forthcoming civil action to be filed in the United States
`
`District Court for the Central District of California.
`
`
`
`Dated:
`
`SHLANSKY LAW GROUP, LLP
`
`
`
`
`
`
`/s/ Colin R. Hagan
`Colin R. Hagan
`1 Winnisimmet Street
`Chelsea, MA 02150
`Phone: (617) 370-8321
`E-mail:
`Colin.Hagan@slglawfirm.com
`
`Counsel for Hanna Carfield
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`DENTONS DURHAM JONES
`PINEGAR
`
`
`
`/s/ Clinton E. Duke
`Clinton E. Duke
`111 S. Main Street, Suite 2400
`Salt Lake City, UT 84111
`Phone: (801) 297-1327
`E-mail:
`Clinton.Duke@dentons.com
`
`Counsel for Alex Kwon
`
`
`
`2
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`

`

`
`
`
`
`
`CERTIFICATE OF SERVICE
`
`I hereby certify that on June 14, 2023, the foregoing was caused to be served upon
`
`Applicant’s counsel of record via electronic mail, as follows:
`
`
`
`
`
`
`
`
`
`
`
`
`
`/s/ Colin R. Hagan
` Colin R. Hagan
`
`
`
`
`
`Clinton E. Duke
`DENTONS DURHAM JONES PINEGAR
`111 South Main Street, Suite 2400
`Salt Lake City, UT 84111
`Clinton.Duke@dentons.com
`
`Counsel for Hanna Carfield
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`

`

`EXHIBIT A
`
`Currently operative pleadings in Next Level Ventures, LLC v. AVID USA Technologies LLC¸
`Case No. 2022-0699-MTZ (Del. Ch. Ct. 2022)
`
`Please see attached.
`
`
`
`
`
`
`
`

`

`EFiled: Oct 18 2022 03:45PM EDT
`Transaction ID 68270243
`Case No. 2022-0699-MTZ
`IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
`
`
`
`NEXT LEVEL VENTURES, LLC,
`a Washington limited liability company,
`
`
`Plaintiff,
`
`C.A. No. 2022-0699-MTZ
`
`:
`:
`:
`:
`:
`:
`:
`:
`:
`:
`:
`:
`:
`
`
`AVID USA TECHNOLOGIES LLC,
`a Delaware limited liability company,
`JONATHAN CARFIELD, and
`HANNA CARFIELD,
`
`
`v.
`
`Defendants.
`
`
`
`
`
`
`
`
`AMENDED VERIFIED COMPLAINT1
`
`Plaintiff Next Level Ventures, LLC (“NLV”) brings this action for injunctive
`
`relief and damages against AVID USA Technologies LLC (“AVID USA”), Jonathan
`
`Ray Carfield, and Hanna Carfield (collectively, “Defendants”). NLV markets and
`
`sells cannabis vaporization devices and accessories (“VDAs”) in the United States
`
`and Canada, and elsewhere. NLV is also known as “Advanced Vapor Devices” and
`
`“AVD”, and NLV markets and sells its products at the website https://avd710.com
`
`(“avd710.com”). NLV has worldwide exclusive rights to market and sell VDAs and
`
`to use related trademarks under an exclusive distribution agreement (the
`
`
`Pursuant to Court of Chancery Rule 15(aa), attached as Exhibit A hereto is a
`1
`comparison document indicating in what respects the amended complaint differs
`from the original complaint.
`
`

`

`“Distribution Agreement”) with a Hong Kong entity known as AVID Holdings Ltd.,
`
`f/k/a AlderEgo Group, Ltd. (“AVID HK”). (A copy of the Distribution Agreement
`
`is attached as Exhibit 1 to the Original Verified Complaint). The trademarks and
`
`names licensed exclusively to NLV are widely recognized in the market, and include
`
`“Advance Vapor Devices,” “AVD”, and affiliated names and trademarks such as
`
`“Smartpulse,” “Eazy-Press”, and “STIK battery”.
`
`Defendant AVID USA is a Delaware limited liability company that is an alter
`
`ego or successor of AVID HK. In April 2022, NLV vindicated its rights under the
`
`Distribution Agreement with an arbitration award against AVID HK that included
`
`an award of monetary damages and injunctive relief. Defendants were not named
`
`parties to the arbitration agreement and did not participate in the arbitration, and they
`
`have further indicated that they do not believe themselves to be bound by the
`
`arbitration award. Following issuance of that award, NLV learned that AVID USA
`
`has begun marketing and selling “AVID” and “AVD” branded VDAs in violation of
`
`NLV’s exclusive rights, and in direct competition with NLV. AVID USA is using
`
`the name
`
`“AVEO”. AVID USA’s website https://www.aveo710.com
`
`(“aveo710.com”) is used to market its business to the United States of America,
`
`including Delaware. The domain name aveo710.com is nearly identical to the
`
`avd710.com domain name NLV uses for its website. The look and feel of AVID
`
`USA’s website is strikingly similar to NLV’s website, and AVID USA’s website has
`
`2
`
`

`

`repeatedly used the trademarks that are licensed exclusively to NLV without NLV’s
`
`consent. Defendants have also used the domain name “avd.com” to redirect web
`
`traffic to AVID USA’s aveo710.com website.
`
`Defendants Jonathan Carfield and Hanna Carfield, who are a married couple
`
`(collectively the “Carfields”) are the managers of AVID USA or direct, control, or
`
`participate materially in the management of AVID USA and its operations, including
`
`AVID USA’s wrongful conduct at issue in this complaint. Defendants have violated
`
`their obligations under the law, and NLV will be irreparably harmed without the
`
`relief it seeks in this action.
`
`PARTIES
`
`1.
`
`NLV is a Washington limited liability company with its principal place
`
`of business in King County, Washington.
`
`2.
`
`AVID USA Technologies, LLC (AVID USA) is a Delaware limited
`
`liability company, and it is believed that its principal place of business is:
`
`AVID USA Technologies LLC
`c/o AVID Technology (SZ) Limited
`Room 2702, Unit 1, Block A, Building 5, Gangxia Center Tianyuan Phase 2,
`No.2005, Shennan Avenue, Futian District, Shenzhen, Guangdong, China.
`
`3.
`
`AVID USA is an alter ego or affiliate of AVID Holdings Ltd. f/k/a
`
`AlderEgo Group, Ltd. (AVID HK), a Hong Kong limited liability company with its
`
`principal place of business in Wan Chai, Hong Kong, China.
`
`3
`
`

`

`4.
`
`Jonathan Ray Carfield is an individual and United States Citizen whose
`
`current residence is believed to be in Thailand. Mr. Carfield is a manager of AVID
`
`USA or directs, controls or participates materially in the management of AVID USA.
`
`5.
`
`Hanna Carfield is an individual and United States Citizen whose current
`
`residence is believed to be in Thailand. Ms. Carfield is a manager of AVID USA or
`
`directs, controls or participates materially in the management of AVID USA.
`
`6.
`
`Jonathan Ray Carfield and Hanna Carfield are a married couple and are
`
`believed to be residents of Thailand.
`
`JURISDICTION
`
`7.
`
`This Court has subject matter jurisdiction pursuant to 10 Del. C. § 341
`
`because NLV is seeking equitable relief and has no adequate remedy at law.
`
`8.
`
`This Court has personal jurisdiction over Defendants because AVID
`
`USA is a Delaware limited liability company, and Jonathan Carfield and Hanna
`
`Carfield are alter egos of AVID USA and are managers of AVID USA or direct,
`
`control, or participate materially in the management of AVID USA within the
`
`meaning of 6 Del. C. § 18-109. Personal jurisdiction over the Defendants is also
`
`appropriate on conspiracy grounds, as further alleged below.
`
`
`
`
`
`4
`
`

`

`FACTUAL BACKGROUND
`
`9. Mr. Carfield is the co-founder and Chief Executive Officer (CEO) of
`
`AVID HK.
`
`10. Ms. Carfield is the co-founder and Chief Operating Officer (COO) of
`
`AVID HK.
`
`11.
`
`In addition to managing all of the operations of AVID HK, the Carfields
`
`direct, control, or participate materially in the management of AVID USA and
`
`personally directed all of the operations of AVID USA, including its formation in
`
`Delaware and the wrongful conduct of AVID USA complained of herein.
`
`12. Upon information and belief, the Carfields are the principles and
`
`owners of both AVID HK and AVID USA and all businesses operated under those
`
`entities and names.
`
`13. The Carfields have incorporated and registered various affiliated and
`
`shell entities and companies within the United States and abroad in connection with
`
`their businesses and in a continuing effort to conceal their dealings.
`
`14. The Carfields formed Carfield Family, Inc. d/b/a AlderEgo Wholesale
`
`(“AlderEgo Wholesale”) in February 2014 then AlderEgo Holdings, Inc.
`
`(“AlderEgo Holdings”) in March 2016, both in the state of Washington.
`
`5
`
`

`

`15. The Carfields formed AVID HK as “AlderEgo Group Limited”
`
`(“AEG”) in Hong Kong on April 25, 2018, and later changed the name to AVID
`
`Holdings Limited, as of July 29, 2021.
`
`16. Mr. Carfield solicited investments in the Carfields’ businesses from
`
`several investors in December 2015 and March 2016 by offering to exchange
`
`investment funds for a promissory note with AlderEgo Wholesale and stock in
`
`AlderEgo Holdings.
`
`17. After investors made investments that were not repaid, Mr. Carfield
`
`stopped responding to investors’ requests for payment.
`
`18. The Washington State Department of Financial Institutions Securities
`
`Division subsequently investigated Mr. Carfield and his companies.
`
`19. On October 3, 2018, the state of Washington charged Mr. Carfield and
`
`AlderEgo Holdings with violations of the Washington Securities Act in a document
`
`entitled “Statement of Charges and Notice of Intent to Issue an Order to Cease and
`
`Desist, Impose Fines, and Charge Costs”, Order Number S-17-2257-18-SC01 (the
`
`“Statement of Charges”). (A copy of the Statement of Charges is attached as Exhibit
`
`2 to the Original Verified Complaint).
`
`20. The Statement of Charges details how Carfield raised over $150,000 by
`
`selling a promissory note and stock to five investors, acted as an unregistered broker-
`
`6
`
`

`

`dealer or seller of securities, and violated the anti-fraud provision of the Washington
`
`Securities Act. See id.
`
`21. Fearing the legal consequences of these charges, the Carfields fled the
`
`United States and moved to Hong Kong, China.
`
`22.
`
`In Hong Kong, the Carfields formed AVID HK, which has engaged in
`
`the business of manufacturing, importing, selling for importation and after
`
`importation cannabis vaporization devices and accessories (VDAs) under
`
`trademarks and names that include, without limitation, “Advanced Vapor Devices”,
`
`“AVD” and other related trademarks and tradenames.
`
`23. NLV began its business of marketing and selling VDAs in 2018, and
`
`shortly thereafter NLV began working with the Carfields.
`
`24.
`
`In January 2019, NLV entered into a distribution agreement with the
`
`Carfields through their Chinese company AVID HK.
`
`25. At all material times, NLV’s dealings with AVID HK were with either
`
`or both of the Carfields.
`
`26.
`
`In April 2020, NLV and AVID HK entered into an Amended and
`
`Restated Exclusive Distribution Agreement (the Distribution Agreement) effective
`
`as of April 20, 2020. (See Exhibit 1 to the Original Verified Complaint).
`
`
`
`
`
`7
`
`

`

`NLV’s Exclusive Distribution Agreement with AVID HK
`
`27. The Distribution Agreement provides that AVID HK would sell to
`
`NLV VDAs, and NLV would enjoy an exclusive right to market and resell VDAs
`
`(collectively, the “Goods”) worldwide and would have an exclusive license to use
`
`all of the related trademarks, including, but not limited to, “Advance Vapor
`
`Devices,” “AVD”, and affiliated names and trademarks such as “Smartpulse,” and
`
`“Eazy-Press” (collectively, the “Trademarks”). (See Distribution Agreement §§ 1.1
`
`and 6).
`
`28. Under the Distribution Agreement, AVID HK and the Carfields are not
`
`allowed to “directly or indirectly through any Person, agents, representatives, or
`
`distributors, except through [NLV] hereunder, sell or distribute” the Goods in the
`
`entire world. (Id. § 1.1.).
`
`29. Section 6 of the Distribution Agreement provides NLV with a world-
`
`wide and prospective “sublicensable, exclusive, non-transferable license” for NLV
`
`“to use all [the Trademarks] for the Goods, whether registered or unregistered,
`
`including the listed registrations and applications and any registrations, which may
`
`be granted pursuant to such applications.” (Id. § 6).
`
`30. Section 6 further provides that AVID HK “shall not use any of the
`
`trademarks licensed to [NLV] under this Distribution Agreement in any
`
`8
`
`

`

`promotional, advertising or marketing materials or content, or other public-facing
`
`content,” world-wide, “without the prior written consent” of NLV. (Id. § 6).
`
`31. Pursuant to the Distribution Agreement, NLV is the exclusive licensee
`
`of the Trademarks and all products sold under the Distribution Agreement, which
`
`include, without limitation “Advanced Vapor Devices,” “AVD”, and affiliated
`
`names and trademarks such as “Smartpulse,” and “Eazy-Press”, as well as all other
`
`marks subject to the Distribution Agreement. (Id. § 6).
`
`32. AVID HK’s website is or was available at https://www.avd.com/
`
`(avd.com) and appeared substantially as follows at the time of the filing of this
`
`lawsuit:
`
`
`
`9
`
`

`

`
`
`
`
`33. Under NLV’s Distribution Agreement with AVID HK, NLV has
`
`invested substantial time, money, and resources in marketing, advertising, and
`
`promoting the VDAs subject to that agreement (the Goods) and the associated
`
`10
`
`

`

`Trademarks, and has thereby developed extensive recognition and valuable goodwill
`
`in the Goods and Trademarks.
`
`34. NLV’s main website is found at avd710.com, and appears substantially
`
`as follows:
`
`35. NLV’s business has focused primarily on promoting and facilitating
`
`
`
`worldwide distribution of the Goods.
`
`NLV v. AVID HK Arbitration
`
`36.
`
`In the fall of 2021, AVID HK breached the Distribution Agreement by
`
`refusing to fill certain purchase orders and refusing to accept new purchase orders,
`
`by refusing to indemnify NLV for NLV’s costs and expenses incurred in defending
`
`a patent proceeding brought by third parties in the United States International Trade
`
`11
`
`

`

`Commission (“ITC”), and subsequently by breaching the Distribution Agreement’s
`
`exclusivity provision.
`
`37. The Distribution Agreement required all claims between NLV and
`
`AVID HK relating to the Distribution Agreement be resolved by arbitration
`
`administered by the American Arbitration Association (“AAA”) in King County,
`
`Washington. (Distribution Agreement § 30).
`
`38. NLV initiated arbitration by submitting its Demand for Arbitration and
`
`Statement of Claims, which was filed with the International Centre for Dispute
`
`Resolution (“ICDR”) on October 5, 2021 (the “Arbitration”). The ICDR is the
`
`international division of the AAA responsible for administering international
`
`arbitrations.
`
`39. Defendants were not named parties to the Distribution Agreement, and
`
`they have no signed arbitration agreement with Plaintiff NLV. Defendants did not
`
`participate in the Arbitration.
`
`40. NLV’s operative claims were set forth in the Amended Statement of
`
`Claims (“ASOC”), which was filed with the ICDR on October 22, 2021. In the
`
`ASOC, NLV alleged that AVID breached the Distribution Agreement and sought
`
`relief including money damages and declaratory relief.
`
`12
`
`

`

`41. The Arbitration was conducted in accordance with the AAA
`
`Commercial Arbitration Rules as required by Section 30 of the Distribution
`
`Agreement.
`
`42. Counsel for an entity related to AVID HK appeared at the initial
`
`conference with the AAA, but that attorney had no further participation in the
`
`Arbitration.
`
`43. Despite being provided with notice of the Arbitration and confirmed
`
`delivery of all filings by NLV, the ICDR, the AAA, and the arbitrator, AVID HK
`
`chose not to participate in Arbitration.
`
`44. On April 22, 2022, following the scheduled arbitration hearing, the
`
`Arbitrator issued the Final Award in the Arbitration. (A copy of the Final Award is
`
`attached as Exhibit 3 to the Original Verified Complaint).
`
`45. Under the Final Award, the Arbitrator awarded damages to NLV in the
`
`amount of US $892,020.25 and provided, among other things, the following
`
`declaratory relief:
`
`a.
`
`AVID is in breach of the Distribution Agreement for (1) failing
`
`to ship substantially all of the VDAs specified in unfilled
`
`purchase orders, (2) failing to indemnify and defend NLV against
`
`claims in the ITC Proceedings, and (3) interfering with NLV’s
`
`exclusivity rights under the Distribution Agreement;
`
`13
`
`

`

`b.
`
`NLV performed all of its obligations under the Distribution
`
`Agreement;
`
`c.
`
`There is no “cause” that would allow AVID HK to terminate the
`
`Distribution Agreement as of April 22, 2022, and the
`
`Distribution Agreement remains in full force and effect;
`
`d.
`
`NLV is entitled to receive the full benefit of its bargain under the
`
`Distribution Agreement;
`
`e.
`
`AVID HK is required, pursuant to Section 15.2 of the
`
`Distribution Agreement, to indemnify, hold harmless and defend
`
`NLV against the losses, damages and injuries incurred by NLV
`
`arising from the claims asserted against NLV in the ITC
`
`Proceedings;
`
`f.
`
`NLV is entitled to exercise its rights under Sections 4.2 and 6 of
`
`the Distribution Agreement, including (i) the right to continue to
`
`engage in self-help by obtaining substitute Goods from the
`
`original manufacturer of the Goods (Section 4.2) and (ii) the right
`
`to continue with the worldwide exclusive use of all AVID HK’s
`
`trademarks licensed to NLV under the Distribution Agreement
`
`(Section 6);
`
`14
`
`

`

`g.
`
`AVID HK and its affiliates are not entitled to use any of the
`
`trademarks licensed to NLV under the Distribution Agreement,
`
`including those referenced [in the Distribution Agreement], in
`
`any promotional, advertising or marketing materials or content
`
`of, on or relating to Goods, or other public-facing content
`
`anywhere in the world without the prior written consent of NLV;
`
`h.
`
`AVID HK and its affiliates are not entitled to publish statements
`
`that interfere with NLV’s exclusivity rights under Section 1.1 of
`
`the Distribution Agreement; and
`
`i.
`
`AVID HK and its affiliates are prohibited from interfering with
`
`NLV’s exclusivity rights under Section 1.1 of the Distribution
`
`Agreement by engaging with third parties to manufacture,
`
`market, promote, distribute or sell the Goods.
`
`(See Final Award ¶ 115).
`
`46. On August 3, 2022, NLV initiated an action in the United States District
`
`Court for the Western District of Washington to confirm the Final Award in the
`
`Arbitration as a judgment against AVID HK under the Federal Arbitration Act (the
`
`“Confirmation Action”), which action remains pending. Defendants have indicated
`
`that they do not believe they are bound by the results of the Arbitration, including
`
`the Final Award.
`
`15
`
`

`

`AVID USA’S FORMATION AND WRONGFUL CONDUCT
`
`47. On or before September, 2021, the Carfields approached William “Bill”
`
`Sweedler and his son Zach Sweedler (collectively, the “Sweedlers”) and initiated a
`
`business relationship whereby the Sweedlers would fund and participate in the VDA
`
`business that the Carfields were operating through AVID HK and other entities,
`
`including a new “AVID” entity that was to be formed in the United States.
`
`48. The Sweedlers’ role in funding the enterprise is evidenced in part by a
`
`June 28, 2022 email from Zach Ryan to Bill Sweedler, Jonathan Carfield, and others
`
`discussing the “repayment plan” Jonathan Carfield was to present to the Sweedlers’
`
`entity
`
`or
`
`entities
`
`known
`
`as
`
`“Windsong Global”
`
`(as
`
`found
`
`at
`
`https://www.windsongglobal.com). (A copy of that June 28, 2022 email from Zach
`
`Ryan to Bill Sweedler, Jonathan Carfield, and others is attached as Exhibit B).
`
`49. According to the records of the Delaware Secretary of State, AVID
`
`USA was formed by Bill Sweedler on September 23, 2021, with the initial name
`
`“AVD Technologies USA LLC”. This entity formation occurred after disputes arose
`
`between NLV and the AVID HK/the Carfields and less than two weeks before NLV
`
`initiated the Arbitration against AVID HK in Washington state.
`
`50. AVID USA was formed to assist the Carfields and AVID HK in
`
`avoiding the potential negative consequences of the Arbitration, discussed above,
`
`and the Carfields were already making contingency plans to continue their and
`
`16
`
`

`

`AVID HK’s business operations as usual without using the AVID HK entity that
`
`was the respondent in the Arbitration.
`
`51. As outlined by Jonathan Carfield in his January 14, 2022 email to Zach
`
`Sweedler, the Carfields’ plan was for the Carfields and Sweedlers to operate AVID
`
`USA as a “joint venture” between the Sweedlers and the Carfields (through their
`
`respective entities), which was to be responsible for “all business operations” by the
`
`Carfields and AVID HK “outside of China”:
`
`
`(A copy of the January 14, 2022 email from Jonathan Carfield to Zach Sweedler is
`
`attached as Exhibit C).
`
`52. Zach Sweedler changed the name of AVID USA to “AVID USA
`
`Technologies LLC” on February 14, 2022.
`
`17
`
`

`

`53. The Carfields knowingly and intentionally caused the Sweedlers to
`
`form AVID USA in Delaware for the purpose of continuing the business of AVID
`
`HK and in an attempt to avoid the consequences of any adverse result in the
`
`Arbitration between NLV and AVID HK, and to otherwise commit wrongful
`
`conduct under the AVID USA moniker and as a Delaware limited liability company.
`
`54. On or about April 20, 2022, Jonathan Carfield signed a “Limited
`
`Liability Company Agreement of AVID USA Technologies LLC”, dated April 20,
`
`2022 (the “AVID USA Agreement”) and emailed that document to Bill Sweedler.
`
`Mr. Carfield signed as “Manager” of AVID USA, both in his individual capacity and
`
`in his representative capacity on behalf of his entity Carfield Family Ventures LLC,
`
`which, upon information and belief is a company owned and controlled by the
`
`Carfields to hold equity in AVID USA for the benefit of the Carfields. (A copy of
`
`the April 20, 2022 AVID USA Agreement signed by Jonathan Carfield is attached
`
`as Exhibit D).
`
`55. On May 7, 2022, Bill Sweedler received the AVID USA Agreement
`
`signed by Mr. Carfield and responded to the Carfields: “Let’s get rolling!!”. (A copy
`
`of the May 7, 2022 email from Bill Sweedler to the Carfields is attached as Exhibit
`
`E).
`
`56. AVID USA is currently conducting business using the name “AVEO”
`
`name while using the same VDAs and Trademarks that are exclusively licensed to
`
`18
`
`

`

`NLV, including without limitation the “AVID” and “AVD” trademarks and related
`
`tradenames.
`
`57. Although Jonathan Carfield signed the AVID USA Agreement as
`
`manager and manages AVID USA, Hanna Carfield also manages AVID USA.
`
`58.
`
`In this lawsuit, Jonathan Carfield provided a sworn declaration stating:
`
`“I did not form AVID USA . . ., and I have no current affiliation or involvement with
`
`that entity.” He also stated: “I am not a manager of AVID USA. I am also not an
`
`officer or owner of AVID USA, nor have I ever been.” (August 17, 2022 Affidavit
`
`of Jonathan Carfield).
`
`59. Mr. Carfield also averred that he intended to enter a joint venture with
`
`a “prospective partner” who formed AVID USA, but that “the joint venture never
`
`came to fruition and we did not pursue that relationship or otherwise have any
`
`relationship with AVID USA.” (See id.).
`
`60. On May 2, 2022, Hanna Carfield sent an email to various recipients
`
`reporting on a management meeting between the Carfields, the Sweedlers, and
`
`others, whether the topic was “Communicating expectations as we begin Avid
`
`USA”. Ms. Carfield concluded the email by stating: “Jonathan and I are extremely
`
`humbled and excited to rebuild with such supportive and passionate partners. May
`
`this meeting be the first step as a unified team to conquer the cannabis industry!” (A
`
`19
`
`

`

`copy of the May 2, 2022 email from Hanna Carfield to various recipients is attached
`
`as Exhibit F).
`
`61.
`
`In this lawsuit, Hanna Carfield provided a sworn declaration stating: “I
`
`did not form AVID USA . . ., and I have no current affiliation or involvement with
`
`that entity.” She also stated: “I am not a manager of AVID USA. I am also not an
`
`officer or owner of AVID USA, nor have I ever been.” (August 17, 2022 Affidavit
`
`of Hanna Carfield).
`
`62. Under the direction of the Carfields, the Carfields and the Sweedlers,
`
`specifically Zach Sweedler, worked to build the aveo710.com website, as shown in
`
`part by various Monday.com messages sent between the Sweedlers and Carfields.
`
`(A copy of the June 30, 2022 email from Zach Sweedler to Jonathan Carfield
`
`(showing Monday.com messaging regarding details of additions and revisions to
`
`AVID USA’s aveo710.com website) is attached as Exhibit G).
`
`63.
`
`In late June, 2022, NLV learned that the Carfields had launched the
`
`aveo710.com website to market and sell goods throughout the United States,
`
`including in Delaware, in competition with NLV. As of the initiation of this lawsuit,
`
`that website appeared substantially as follows:
`
`20
`
`

`

`*=
`\"
`|
`
`a
`
`CANNABIS
`;
`VAPOR.
`DEVICES ==
`
`SCROLL
`
`
`
`NOBODY MAKESVAPE
`DEVICESFOR
`CANNABIS THE WAY
`WE DO.PERIOD.
`
`a TRADECRAFT=G@@yur= «RRA windsong
`
`
`
`
`
`
`
`
`@winssrg=FTL TRADECRAFT=G@®a UTE
`
`
`
`
`
`
`
`21
`21
`
`

`

`PROVEN
`
` WE'RE
`
`Were the founders of Advanced Vapor Devices
`(AVD). We've managed the production of over 40M
`(Cartridges and produce the lowestfailure rates and
`Cleanest lest results, Many teading brands use our
`hardware with countless industry awards,
`
`We're the founders of Advanced Vapor Devices
`
`(AVD). We've managed the production of over 40M
`
`cartridges and produce the lowestfailure rates and
`
`cleanest test results. Many leading brands use our
`
`hardware with countless industry awards.
`
`
`
`BASES
`
`Eazy Press™
`
`The Eazy Press™ was our very first design that was released
`in 2079 combining a glass tank and a tow torque presson
`eapping solutton that didn’t require additional equipment(|e,
`arbor press,| This design has been adopted by many af
`today's leading vape brand manufacturers seeking maximum
`workflow elficiency, the purity af glass and child resistance,
`
` Tech Specs +
`
`th
`
`22
`22
`
`
`
`
`
`

`

`The Eazy Press™ was our very first design that was released
`
`in 2019 combining a glass tank and a low torque press on
`
`capping solution that didn't require additional equipment(i.e.
`
`arbor press.) This design has been adopted by many of
`
`today's leading vape brand manufacturers seeking maximum
`
`workflow efficiency, the purity of glass and child resistance.
`
`wea
`
`BATTERY
`
`STIK-B
`
`
`
`
`
`=
`
`
`
`lll
`ee
`SMARTPULSE™
`
`
`
`23
`23
`
`

`

`
`
`
`64. As is apparent from the screenshots from its own website, AVID USA
`
`has used the Trademarks in connection with the advertising, promotion and sale of
`
`the VDAs that are subject to the Distribution Agreement (Goods), all of which is
`
`prohibited by the Distribution Agreement and the Final Award.
`
`65. According to Defendants’ own website, AVID USA was selling such
`
`VDAs to multiple sub-distributors (the “Sub-distributors”), including without
`
`limitation Fifty Shot, Unite Vapeware, TradeCraft Origin, Outwest Essentials, Grow
`
`Cargo, and 510 Supply Co., without NLV’s authorization and in violation of NLV’s
`
`exclusive rights.
`
`24
`
`

`

`66. Each of the Sub-distributors are entities that NLV could have and likely
`
`would have entered into distribution relationships with NLV, and therefore NLV had
`
`a reasonable expectation that these Sub-distributors would have been customers of,
`
`and sub-distributors for, NLV.
`
`67. On June 29, 2022, AVID USA posted the following on the popular
`
`business networking social media site LinkedIn.com, referring to itself as the
`
`“manufacturer”, which it is not, NLV (as the “US-based distributor”, “seller” or
`
`“former distributor”), and the claimant in the ITC proceeding (“Smoore”):
`
`25
`
`

`

`| AVEOVapor Devices
`
`BS foligiwers
`LAY ® ®
`
`What is AVEO? Why a new brand?
`
`+ Follow <**
`
`It's been a lang time coming to share some perspective regarding the world o7
`vape devices for cannabis.
`
`In 2018, our founders moved from Seattle. WA to Shenzhen, China to make the
`best vape hardware based on their perspective of being former cannabis
`operators of cultivation, extraction and distribution.
`
`Advanced Vapor Devices (AVD) was barn and throughout the past years, AVD has
`been a success due to simple and thoughtful innovation, insane precision and
`overall reliability - earning the trust of many brands today.
`
`In 2021, a major disruption would shake the care of AVD asit was listed as a
`leading brand being targeted by Smoore in an ITC complaint regarding potential
`IP infringement.
`
`As the manufacturer, it was always our goal to comply with any potential concerns
`as we believe respecting intellectual property of those who developed innovation
`is Simply good business practice.
`
`Unfortunately, our US-based distributor didn't feel the same and has continued
`using our Registered Trademark (AVD) and marketing and selling designs accused
`by Smoore without our consent and permission - leading to a split between
`manutacturer and seller.
`
`
`
`26
`26
`
`

`

`68. By posting this on LinkedIn.com the Defendants specifically directed
`
`their statements to persons in Delaware as well as to the general public across the
`
`United States.
`
`
`
`27
`
`

`

`69. This post is false and misleading for at least the following reasons:
`
`a.
`
`The post falsely characterizes AVID USA as “the manufacturer”,
`
`but AVID USA has never been a manufacturer, nor have the
`
`Carfields or their Chinese company AVID HK. All the VDAs
`
`Defendants have ever marketed or sold by Defendants have been
`
`purchased from manufacturers in China.
`
`b.
`
`The post falsely characterizes NLV as Defendants’ “US-based
`
`distributor” or a mere “seller” when NLV is the exclusive
`
`worldwide distributor under the Distribution Agreement with
`
`AVID HK, yet the post omits any discussion of that Distribution
`
`Agreement or the Final Award.
`
`c.
`
`The post falsely states that NLV is using Defendants’
`
`“Registered Trademark (AVD) and marketing and selling
`
`designs . . . without [Defendants’] consent and permission”,
`
`which is not true because of NLV’s exclusive rights under the
`
`Distribution Agreement, vindicated by the Final Award, and
`
`falsely implies that required “consent and permission” is absent.
`
`d.
`
`The post falsely states that NLV “has had to position themselves
`
`[sic.] as the owner and manufacturer of our AVD brand”, but that
`
`28
`
`

`

`is not true because it is NLV, and

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