Trademark Trial and Appeal Board Electronic Filing System. http://estta.uspto.gov
`ESTTA509362
`ESTTA Tracking number:
`12/06/2012
`
`Filing date:
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`92056524
`Defendant
`Exlusive Supplements Inc.
`
`EXLUSIVE SUPPLEMENTS INC
`3509 FOX CHASE DRIVE
`IMPERIAL, PA 15126
`UNITED STATES
`Motion to Suspend for Civil Action
`Christiane S. Campbell
`ccampbell@duanemorris.com
`/Christiane S. Campbell/
`12/06/2012
`TTAB Motion to Susp for 524 OPTIMUM HEALTH NUTRITION.pdf ( 7 pages
`)(550837 bytes )
`TTAB Exhibits to Motion for Suspension.pdf ( 84 pages )(6776223 bytes )
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`Proceeding
`Party
`
`Correspondence
`Address
`
`Submission
`Filer's Name
`Filer's e-mail
`Signature
`Date
`Attachments
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`

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`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`
`In the matter of
`
`U.S. Trademark Registration No. 3,748,091
`For the trademark
`
`OPTIMUM HEALTH NUTRITION (Stylized)
`Registration Date: February 16, 2010
`
`OPTIMUM HEALTH DISTRIBUTING, INC.,
`
`Petitioner,
`
`CANCELLATION NO. 92056524
`
`V.
`
`EXCLUSIVE SUPPLEMENTS, INC.,
`Respondent.
`
`RESPONDENT’S MOTION TO SUSPEND PROCEEDING IN VIEW OF PENDING
`
`CIVIL ACTION PURSUANT TO TRADEMARK RULE 2.117
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`Respondent, Exclusive Supplements, Inc., (“ES” or “Respondent”) hereby moves for
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`suspension of these proceedings pursuant to Trademark Rule 2.117(a), 37 C.F.R. § 2.1 17(a).
`
`In support of this motion, Respondent submits herewith as Exhibit A, a copy of a
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`Complaint filed on November 8, 2012 by Respondent against, inter alia, Petitioner Optimum
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`Health Distributing, Inc. ( “Petitioner”) in the United States District Court for the Western
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`District of Pennsylvania, identified as Civil Action No. 2:12-cv-01652-CB1 (the “Civil Action”).
`
`A final determination in the Civil Action will have a strong bearing on the issues before the
`
`1 Petitioner’s Cancellation refers to the Civil Action as case 5:12-cv—0l652, however the correct number is 2:12-cv-
`01652.
`
`DM2\1989945.l
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`

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`Board in the subject Petition for Cancellation (“Cancellation”), and may even be dispositive of
`
`the Cancellation because:
`
`a.
`
`b.
`
`c.
`
`Plaintiff in the Civil Action (Respondent herein) asserts the registered
`marks, OPTIMUM HEALTH NUTRITION (Stylized), DEPLETE RAPID
`WEIGHT LOSS (Stylized), and COMPLETE MASS 600 (Stylized),
`covered by registrations nos. 3,748,091; 3,471,731; and 3,559,868; and
`
`Defendant in the Civil Action (Petitioner herein) alleges that the asserted
`registrations are void ab initio, and were obtained through fraudulent
`actions by ES (Defendants’ Opposition to Plaintiff’s Motion for
`Preliminary Injunction is attached hereto as Exhibit B)2; and
`
`Petitioner’s Cancellation claims fraud and abandonment of the subject
`mark. To meet its burden of proving the threshold elements of these
`claims, Petitioner assumes facts that are either inaccurate or unsettled, and
`about which questions are before the court in the Civil Action.
`
`Whenever it comes to the attention of the Board that the parties to a case before it are
`
`involved in a civil action which may be dispositive of the Board case, these proceedings before
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`the Board may be suspended upon final determination of the civil action. TBMP § 510.02(a);
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`General Motors Corp. v. Cadillac Club Fashions Inc., 22 U.S.P.Q.2d 1933, 1936-37 (TTAB
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`1992). However, a civil action need not be dispositive on the issues for the Board to suspend
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`proceedings. Ordinarily, the Board will suspend proceedings in the case before it if the final
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`determination of the other proceeding may have a bearing on the issues before the Board. TBMP
`§ 510.02(a), citing 37 C.F.R. § 2.117(a); see, e.g., New Orleans Louisiana Saints LLC v. Who
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`Dar? Inc., 99 U.S.P.Q.2d 1550, 1552 (TTAB 2011) (civil action need not be dispositive of Board
`
`proceeding, but only needs to have bearing on issues before the Board).
`
`In conjunction with Motion to Suspend, Respondent (Plaintiff in Civil Action) also filed an Opposition to
`Defendants’ (Petitioner herein) Motion to Stay the Trademark Proceedings in the Civil Action. A copy of
`that Opposition Brief is attached hereto as Exhibit C.
`
`DM2\.1°89945l
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`

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`As noted in Gilson, Trademark Protection and Practice, 1l9.02[3][a] [Vii], suspension of
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`Board proceedings is within the discretion of the TTAB, and will generally be granted when a
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`final decision of the court will likely be controlling on the issues to be decided by the TTAB.
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`See also, The Toro Company v. Hardigg Industries, Inc., 187 U.S.P.Q. 689, 691-692 (TTAB
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`1975) where the Board held that:
`
`[Opposer requests that] proceedings in this case be suspended
`pending the final disposition of a civil action in which the parties
`are involved in the United States District Court for the District of
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`Minnesota, Fourth Division.
`
`Registrant has objected on the grounds, inter alia, that the Patent
`and Trademark Office is the most convenient forum for the
`determination of the rights of the parties; that the Board is already
`very familiar with the background of this litigation; and that the
`Board is the most qualified, because of its experience and general
`expertise in these matters, to determine the controversy between
`the parties.
`
`Registrant is advised that While the decision of the Federal District
`Court would be binding upon the Patent and Trademark Office, a
`decision by the Board would not be binding or res judicta as to the
`issues before the court. [Citations omitted].
`
`In Whopper Burger, Inc. v. Burger King Corp., 171 U.S.P.Q. 805, 807 (TTAB 1971), the
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`Board suspended proceedings, finding that “there can be no doubt
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`that the outcome of the
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`civil action will have a direct bearing on the question of the rights of the parties herein and may
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`in fact completely resolve all the issues.” There can be no doubt that the very issues involved in
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`the Civil Action are involved here. Certainly, in the present case, the outcome of the Civil
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`Action will have direct bearing on the issues before the Board, namely, the Petitioner’s fraud and
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`abandonment claims.
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`

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`The Civil Action has Bearing on Petitioner ’s Fraud Claims
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`In order to succeed on its fraud claims in this Cancellation, Petitioner must plead and
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`prove that,
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`inter alia:
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`1.
`
`2.
`
`3.
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`Representations made by registrant to the United States Patent and
`Trademark Office (“USPTO”) were false and pertained to material facts;
`and
`
`The person making the representation knew that the representation was
`false; and
`
`The representation was made with the intent to deceive the USPTO.
`
`In re Bose Corp., 580 F.3d 1240, 1245, 91 U.S.P.Q.2d 1938 (Fed. Cir. 2009) (holding
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`that a trademark is obtained fraudulently under the Lanham Act only if the applicant or registrant
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`knowingly makes a false, material representation with the intent to deceive the USPTO).
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`In the Cancellation, Petitioner alleges that ES made false representations of material fact
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`with the intent to deceive the USPTO, and that, absent the deception, the subject registration
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`would not have been granted. This is a serious allegation, and assumes that it was ES, or an
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`individual acting in ES ’s interests, making representations to the USPTO. In stark contrast to
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`this allegation, Petitioner’s Civil Action papers state that Baher Abdelgawad, a principal of
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`Petitioner, was at the helm and steering the prosecution of the subject trademark to registration,
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`in ES’s name. (See Exhibit B, Defendant’s Opposition to Plaintiffs Motion for Preliminary
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`Injunction and accompanying Abdel gawad Declaration {H118-21). Surely, Petitioner intentionally
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`omitted these claims from the Cancellation, as they would render the elements of ES’s
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`knowledge and intent impossible for Petitioner to prove without contradicting its own arguments,
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`

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`including those of ownership and use of the subject mark.3 Nevertheless, these claims — and the
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`Western District of Pennsylvania’s disposition on the same — are relevant to, and have significant
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`bearing on, the Cancellation.
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`The Civil Action has Bearing on Petitioner ’s Abandonment Claims
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`In order to succeed on its abandonment claims, Petitioner must plead and prove that ES
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`discontinued use of the subject mark, and that it has no intent to resume use. Trademark Act §
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`45, 15 U.S.C. § 1127. Abandonment is a question of fact; thus, any inference of abandonment
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`must be based on proven fact. Quality Candy Sh0ppes/ Buddy Squirrel of Wisconsin Inc. v.
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`Grande Foods, 90 U.S.P.Q.2d 1389, 1393 (TTAB 2007).
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`Like its fraud claims, the Petitioner’s allegations of abandonment of the subject
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`trademark and registration assume facts about the autonomy of Respondent and its current
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`principals in their conduct before the USPTO and in the marketplace. However, Petitioner’s
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`Civil Action filings suggest there was an “arrangement” between the Petitioner and Respondent.
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`(See Exhibit B, Defendant’s Opposition to Plaintiffs Motion for Preliminary Injunction and
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`accompanying Abdelgawad Declaration W18-21). This “arrangement,” as characterized by
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`Petitioner, resembles an agreement between the parties through which Respondent owned the
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`subject mark and corresponding registration, and Petitioner used the mark.
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`The court is charged with examining and determining exactly what arrangement there
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`was (or was not) between the parties. The varying theories of the arrangement may lead to very
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`3 The fiduciary duty owed to ES by Baher Abdelgawad, and Abdelgawad’s questionable actions constituting breach
`of the same, are also at issue before the court in the Civil Action.
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`

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`different conclusions and consequences for the parties, but each indisputably has a strong bearing
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`on the issues before the Board in this proceeding. Specifically, the court’s determination as to
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`whether or not there was an arrangement between the parties — and if so, what affect that
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`arrangement had on use and ownership of the subject trademark — has direct bearing and is
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`indeed controlling on the issue of abandonment before the Board.
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`Conclusion
`
`In View of the fact that the pending Civil Action involves most, if not all, of the same
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`issues which are involved in this proceeding, the determination of these issues will be dispositive
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`of, or will at least have bearing on, this proceeding. Respondent therefore respectfully requests
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`suspension of these proceedings pending a determination of the Civil Action pursuant to
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`Trademark Rule 2.1 l7(a), 37 C.F.R. § 2.1 l7(a).
`
`Respectfully submitted,
`
`Exclusive Supplements, Inc.
`
`Dated: December M , 2012
`
`Amy Joseph Coles
`Gerald J. Schirato
`
`DUANE MORRIS LLP
`
`Attorneys for Respondent
`30 s. 17“ Street
`
`Philadelphia, PA 1 9 l 03
`(215) 979-1817
`ccampbellgmduaneniorris.com
`
`

`
`CERTIFICATE OF SERVICE
`
`I, Christiane S. Campbell, hereby state that a true and correct copy of the foregoing
`Motion to Suspend was mailed Via first-class mail, postage prepaid to counsel of record and
`attorneys for Petitioner as follows this
`day of December, 2012. A copy of the same is also
`being sent to attorneys for Petitioner at
`e e-mail address below.
`
`Cecilia R. Dickson
`
`Randall A. Notzen
`
`Attorneys for Petitioner
`THE WEBB LAW FIRM, P.C.
`
`One Gateway Center
`420 Ft. Duquesne BlVd., Suite 1200
`Pittsburgh, PA 15222
`(t) 412.471.8815
`(D 412.471.4094
`(e) webblaw@webblaw.com
`
`With a courtesy copy, electronically, to:
`David Manes
`david@kisnerlawfirm.com
`
` Christiane S. Cam
`
`Duane Morris LLP
`30 S. 17th Street
`
`Philadelphia, Pennsylvania 19103
`215-979-1817
`
`ccampbell@,duanemorris.com
`
`Attorneys for Respondent
`
`

`
`Exhibit A
`
`DM2LL%994i 1
`
`

`
`Case 2:12—cv—01652—CB Document 1 Filed 11/08/12 Page 1 of 32
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`IN THE UNITED STATES DISTRICT COURT FOR
`THE WESTERN DISTRICT OF PENNSYLVANIA
`
`EXCLUSIVE SUPPLEMENTS, INC.
`
`Plaintiff,
`
`v.
`
`BAHER ABDELGAWAD, KELLY
`JOYCE LONG (also known as Kelly
`Abdelgawad), OPTIMUM HEALTH,
`OPTIMUM HEALTH NUTRITION, and
`OPTIMUM HEALTH DISTRIBUTING
`
`:
`:
`°
`
`CIVIL ACTION
`
`No.
`
`(Electronically Filed)
`
`JURY TRIAL DEMANDED
`
`Defendants.
`
`QOMPLAINT
`
`Plaintiff, Exclusive Supplements, Inc. (“Exclusive Supplements”), by and through its
`
`undersigned counsel, Duane Morris LLP, hereby files this Complaint against Defendants, Baher
`
`Abdelgawad, Kelly Joyce Long (also known as Kelly Abdelgawad), Optimum Health, Optimum
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`Health Nutrition, and Optimum Health Distributing (collectively the “Defendants”), seeking
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`injunctive and other relief, and in support thereof avers as follows:
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`INTRQDUCTION
`
`l.
`
`This is an action for injunctive relief and money damages stemming from the
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`Defendants’ unlawful breach of their duties and obligations to Exclusive Supplements, Inc. and
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`their attempts to market and sell products that directly compete with Exclusive Supplements and
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`infringe on those trademarks owned by Exclusive Supplements. The action includes trademark
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`infringement and related claims of unfair competition, false designation of origin, and dilution
`
`arising under the trademark and unfair competition laws of the United States, 15 U.S.C. §§ 1051
`
`et seq.,
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`(also referred to as the “Lanham Act”) and for unfair competition,
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`trademark
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`DMl\359834l.l
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`

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`Case 2:12-cv-01652-CB Document 1 Filed 11/08/12 Page 2 of 32
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`infringement, and unfair and deceptive trade practices under the statutory and common laws of
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`Pennsylvania.
`
`EABTIEQS
`
`2.
`
`Plaintiff, Exclusive Supplements,
`
`Inc.
`
`is
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`a Pennsylvania Corporation that
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`maintains its principal place of business at 3000 Casteel Drive, Coraopolis, PA 15108.
`
`3.
`
`Upon information and belief, Defendant Baher Abdelgawad is an individual
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`residing in Chino Hills, California.
`
`4.
`
`Upon information and belief, Defendant Kelly Joyce Long (also known as Kelly
`
`Abdelgawad) is an individual residing in Chino Hills, California.
`
`5.
`
`Upon information and belief, Defendant Optimum Health is a California company
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`with its principal place of business in Chino Hills, California.
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`6.
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`Upon information and belief, Defendant Optimum Health Nutrition is a California
`
`company with its principal place of business in Chino Hills, California.
`
`7.
`
`Upon information and belief, Defendant Optimum Health Distributing is a
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`California corporation with its principal place of business in Chino Hills, California.
`
`JURISDIQ ;TIQN AN 2 EQNUE
`
`8.
`
`This Court has subject matter jurisdiction over the claims for relief arising under
`
`the Lanham Act, 15 U.S.C. § 1121. The Court has jurisdiction of the unfair competition claims
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`herein under the provisions of 28 U.S.C. §1338(b) in that said claims are joined with a
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`substantial and related claim under the Trademark Laws of the United States, 15 U.S.C. §§ 1051
`
`et seq.
`
`9.
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`This Court has supplemental subject matter jurisdiction over the pendent state law
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`claims under 28 U.S.C. § l367(a) because these claims are so related to Exclusive Supplements’
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`DM1\3598341.l
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`

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`Case 2:12-cv-01652-CB Document 1 Filed 11/08/12 Page 3 of 32
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`claims under federal law that they form part of the same case or controversy and derive from a
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`common nucleus of operative facts.
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`10.
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`This Court has personal jurisdiction over Defendants by virtue of their doing
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`business in this Commonwealth and,
`
`in particular, within this judicial district and/or their
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`commission of tortious acts inside and outside of Pennsylvania that have an effect within this
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`Commonwealth.
`
`11.
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`Venue is proper in this Court under 28 U.S.C. § 1391(b) and (c) because a
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`substantial part of the events giving rise to Exclusive Supplements’ claims occurred in this
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`District and a substantial part of the property,
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`intellectual or otherwise, that
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`is subject to
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`Exclusive Supplements’ claim is situated within this District.
`
`FACTUAL BACKGROUND
`
`Formation of the Business Relationship
`
`12.
`
`Baher Abdelgawad and Kelly Joyce Long (also known as Kelly Abdelgawad)
`
`(collectively the “Abdelgawads”) entered into a formal business relationship with Mark A.
`
`Mangieri (“Mangieri) on or about August 16, 2005, by forming Exclusive Supplements, Inc., a
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`Pennsylvania corporation.
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`13.
`
`On August 16, 2005,
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`the Abdelgawads and Mangieri also entered into a
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`Shareholder Agreement concerning ownership of Exclusive Supplements (the “Shareholder
`
`Agreemen ”). A copy of the Shareholder Agreement is attached as Exhibit 1.
`
`14.
`
`The Shareholder Agreement provides Mangieri ownership of sixty-five (65)
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`shares of stock and Kelly Joyce Long (“Long”) ownership of thirty-five (35) shares of stock.
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`15.
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`The Shareholder Agreement also names Mangieri as “President” and Long as
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`“Secretary” of Exclusive Supplements.
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`DMl\359834l.l
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`Case 2:12-cv-01652-CB Document 1 Filed 11/08/12 Page 4 of 32
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`16.
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`Abdelgawad acted, at all relevant times, as both a Shareholder and Director of
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`Exclusive Supplements.
`
`17.
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`Abdelgawad was involved in the day-to-day decision-making activities of
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`Exclusive Supplements. He participated in strategic company decisions including which
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`products Exclusive Supplements would advertise, market, and sell to the public.
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`18.
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`Abdelgawad also provided input and made decisions for Exclusive Supplements
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`related to contractual relationships with salespersons, distributors, and customers.
`
`19.
`
`In his role as both a Director and Shareholder, Abdelgawad had access to
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`Exclusive Supplements’ most sensitive proprietary information, including, but not limited to,
`
`financial
`
`records, growth strategies, market
`
`strategies,
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`intellectual property (including
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`trademarks), and customer lists.
`
`20.
`
`Abdelgawad’s positions with Exclusive Supplements also provided him with
`
`channels through which to contact the company’s salespersons, distributors, and customers.
`
`21.
`
`Upon information and belief, Abdelgawad also does business under the fictional
`
`and untraceable name “John D.” (short for “John Doe”).
`
`Exclusive Supplements’ Business
`
`22.
`
`Exclusive Supplements is a privately held company in the dietary and nutritional
`
`supplement industry.
`
`It currently markets, distributes, and sells dietary and other nutritional
`
`supplements and relatedproducts to consumers throughout the country.
`
`23.
`
`Exclusive Supplements is best known for its BIORhythm product line, which
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`features a product known as “AfterGlow”, that appears on the shelves of many General Nutrition
`
`Center (“GNC”) stores. The BIORhythm product line is Exclusive Supplements’ premier
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`DMl\3598341.l
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`4
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`

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`Case 2:12-cv-01652-CB Document 1 Filed 11/08/12 Page 5 of 32
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`product line, typically consisting of dietary and nutritional supplements that customers are
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`willing to pay a premium to attain.
`
`24.
`
`In addition to its BIORhythm product
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`line, Exclusive Supplements has also
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`marketed and sold dietary and nutritional supplements under its Optimum Health product line.
`
`The Optimum Health line of products marketed and sold by Exclusive Supplements consists of
`
`mid-level priced supplements that are less expensive than those found in the BIORhythm line.
`
`25.
`
`In accordance with the Food & Drug Administration’s (“FDA’s”) current Good
`
`Manufacturing Practices (“cGMP”), Exclusive Supplements undertakes significant efforts to
`
`ensure thequality, integrity, and safety of its products.
`
`In particular, and pursuant to the cGMP,
`
`Exclusive Supplements undertakes responsibility for (a) the master formula of its products by
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`batch and lot numbers; (b) testing of certain ingredients; and (c) microbiological analysis and
`
`heavy metals testing by batch.
`
`The Trademarks
`
`26.
`
`Exclusive Supplements owns many trademarks,
`
`and corresponding U.S.
`
`Trademark Registrations, including, among others, U.S. Trademark Registrations Nos. 3,559,868
`
`(“COMPLETE MASS 600 (Stylized”); 3,471,731 (“DEPLETE RAPID WEIGHT LOSS
`
`(Stylized)”); and 3,748,09l1 (“OPTIMUM HEALTH NUTRITION”) (collectively the “Marks”
`
`or “OH Marks”). Information about the Marks is provided in Exhibit 2.
`
`27.
`
`Exclusive Supplements has been selling, in U.S. commerce, products bearing the
`
`Marks, since at least as early as 2005. Large scale distribution of products bearing the Marks
`
`began in January 2006.
`
`1 The application that proceeded to registration no. 3,748,091 names “Exclusive Supplements,
`Inc.” as the owner. This is not a discrepancy in ownership, but rather the result of a
`typographical error made in filing (z'.e., the omission of the letter “c” in the word “Exclusive”).
`The correct owner name should be “Exclusive Supplements, Inc.”
`
`DMl\359834l.l
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`Case 2:12—cv—01652-CB Document 1 Filed 11/08/12 Page 6 of 32
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`28.
`
`In all, Exclusive Supplements sold over two million dollars in revenue in
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`Optimum Health products, or approximately 8.4% of Exclusive Supplements’ total sales during
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`that same time period.
`
`29.
`
`30.
`
`The Marks were featured on products sold by Exclusive Supplements nationwide.
`
`Exclusive Supplements distributed products bearing the Marks continuously and
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`exclusively beginning at least as early as 2005. Applications to register the Marks were filed on
`
`August 9, 2007 (OPTIMUM HEALTH NUTRITION) and December 10, 2007 (COMPLETE
`
`MASS 600 and DEPLETE RAPID WEIGHT LOSS). The applications were filed in Exclusive
`
`Supplements’ name based on its actual use of the Marks in U.S. commerce, under Trademark
`
`Act Section 1(a), 15 U.S. C. § l05l(a).
`
`Indeed, the specimens of use filed to substantiate the
`
`Section 1(a)
`
`filing basis are digital photographs of the products offered by Exclusive
`
`Supplements under the Marks. True and correct copies of the official applications filed with the
`
`USPTO are attached hereto as Exhibit 3.
`
`31.
`
`The applications to register the Marks were filed by counsel on Exclusive
`
`Supplements’ behalf, at Abdelgawad’s direction.
`
`32.
`
`As a result of Exclusive Supplements’ longstanding and continuous use of the
`
`Marks to identify its Optimum Health line of products, Exclusive Supplements’ customers have
`
`come to identify Exclusive Supplements as the exclusive source of those goods.
`33.
`Exclusive Supplements has maintained and continues to maintain the highest
`
`standards of quality of its products marketed, distributed and sold under its trademarks.
`
`34.
`
`The Marks appear in print and electronic advertisements and other promotional
`
`materials. The advertisements and other promotional materials are distributed nationally, and
`
`accessible globally, over the Internet, including at “ohnutrition.com.”
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`DM1\359834l.l
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`Case 2:12—cv—O1652-CB Document 1 Filed 11/08/12 Page 7 of 32
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`35.
`
`As a Shareholder and Director in Exclusive Supplements, Abdelgawad was aware
`
`that Exclusive Supplements owns and has federally registered a number of trademarks for dietary
`
`and/or nutritional supplements, including the Marks.
`
`In fact, he instructed counsel with respect
`
`to registering the Marks on behalf of Exclusive Supplements.
`
`36.
`
`As a Shareholder and Corporate Officer in Exclusive Supplements, Long was
`
`aware that Exclusive Supplements owns and has federally registered a number of trademarks for
`
`dietary and/or nutritional supplements, including the Marks.
`
`Abdelgawad and Long Do Business As, Or Through, Optimum Health
`In Direct Competition With Exclusive Supplements.
`
`37.
`
`In 2011, Exclusive Supplements made a strategic decision to emphasize the
`
`marketing, distribution, and sale of its BIORhythm line of supplements. The intent was to focus
`
`the company’s energy, finances, and attention on its premium BIORhythm line. Abdelgawad
`
`was aware of (and, in fact, participated in) relevant strategic decisions.
`
`38. With knowledge of Exclusive Supplements’ increased focus on its BIORhythm
`
`line, and with knowledge of Exclusive Supplements’ Marks, Abdelgawad and Long began a
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`campaign of deception against Exclusive Supplements.
`
`39.
`
`Upon information and belief, after Exclusive Supplements made the business
`
`decision to increase the focus on its BIORhythm line, Abdelgawad and Long either formed or
`
`did business as Optimum Health, Optimum Health Nutrition, and Optimum Health Distributing
`
`(collectively “Optimum Health”) and continued to advertise, promote, distribute, offer for sale
`
`and sell dietary and/or nutritional supplements bearing the Marks owned by Exclusive
`
`Supplements.
`
`40.
`
`Optimum Health offered and continues to offer for sale products to the same
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`customers and through the same channels of trade as Exclusive Supplements.
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`Case 2:12—cv—01652—CB Document 1 Filed 11/08/12 Page 8 of 32
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`41.
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`The supplements sold and being sold by Defendants were, and are, identical With,
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`or at least highly related to, those of Exclusive Supplements.
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`42.
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`Exclusive Supplements did not license or otherwise authorize Defendants’ use of
`
`the Marks to promote Defendants’ own products.
`
`43.
`
`Defendants did not seek authorization or consent from Exclusive Supplements to
`
`use the Marks or to directly compete against Exclusive Supplements in the marketplace. In fact,
`
`upon information and belief, rather than seeking a license or other authorization from Exclusive
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`Supplements to use the Marks, Defendants purposefully took measures to hide from Exclusive
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`Supplements its use of the Marks and sale of products in direct competition with Exclusive
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`Supplements.
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`44.
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`In addition to the products bearing the Marks, Defendants also distribute and sell
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`a product line called “lntek.” Intek offers a lower-priced version of products similar to those
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`sold by Exclusive Supplements in its BIORhythm line. Defendants initially proposed the Intek
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`line to Exclusive Supplements as a product line to be distributed to a limited number of stores in
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`a pocket of Southern California where BIORhythm was not being offered, so as not to compete
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`with Exclusive Supplements.
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`45.
`
`Upon information and belief, Defendants are selling and distributing Intek Well
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`beyond the agreed-upon geographical confines of Southern California, and in direct competition
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`with Exclusive Supplements’ product line.
`
`46.
`Upon information and belief,
`the Defendants’
`deception of Exclusive
`Supplements included the use of Exclusive Supplements’ salespersons and distributors to
`
`advertise, market, and sell Optimum Health and Intek products to Exclusive Supplements’
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`Case 2:12-cv-01652-CB Document 1 Filed 11/08/12 Page 9 of 32
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`customers, including products bearing the Marks, while those salespersons and distributors were
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`making customer visits or calls paid for solely by Exclusive Supplements.
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`47.
`
`Defendants continued to use Exclusive Supplements’ salespersons in this manner
`
`even after Abdelgawad represented to Exclusive Supplements that he had not spoken to one such
`
`salesperson, Donald Grace (“Grace”), for months.
`
`48.
`
`Indeed, Exclusive Supplements specifically sought the advice of Abdelgawad
`
`when it suspected that Grace was selling products that competed with Exclusive Supplements.
`
`49.
`
`Abdelgawad intentionally misrepresented that he had not spoken to Grace for
`
`months and encouraged Exclusive Supplements to keep Grace on staff, all while Abdelgawad
`
`was using Grace, at the expense of Exclusive Supplements, to market and sell products that
`
`competed with Exclusive Supplements, including, inter alia, products bearing the Marks and
`
`Intek.
`
`50.
`
`In short, Abdelgawad and Long used Exclusive Supplements’
`
`financial and
`
`business resources behind the back of Exclusive Supplements to promote and sell Optimum
`
`Health products, including products bearing the Marks, and Intek for their own benefit and to the
`
`detriment of Exclusive Supplements.
`
`51.
`
`To date, Exclusive Supplements has not received any funds from the Defendants’
`
`unauthorized use of company resources for their own individual benefit nor has Exclusive
`
`Supplements received remuneration from the unauthorized sale of goods under the Marks.
`
`52.
`
`Exclusive Supplements has no control over either the quality of the goods being
`
`sold by the Defendants or Defendants’ use of the Marks.
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`Case 2:12—cv—O1652—CB Document 1 Filed 11/08/12 Page 10 of 32
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`53.
`
`Exclusive Supplements cannot subject the goods bearing trademarks registered to
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`Exclusive Supplements to the FDA’s cGMP standards to ensure quality, integrity and safety of
`
`the goods.
`
`54.
`
`Actual confusion occurred, and relevant consumers complained to Exclusive
`
`Supplements about problems with the Optimum Health supplements and Intek products being
`
`marketed and sold by Defendants. These consumers believed that the goods originated with
`
`Exclusive Supplements.
`
`55.
`
`Actual consumer confusion demonstrates that Defendants’ use of the Marks is
`
`likely to continue to cause confusion among consumers and potential consumers concerning the
`
`source or sponsorship of the goods.
`
`56.
`
`Indeed, current and prospective consumers are likely to believe that Optimum
`
`Health’s business or goods are somehow related, affiliated or connected with Exclusive
`
`Supplements or that Exclusive Supplements otherwise sponsors Optimum Health’s activities,
`
`which it does not.
`
`57.
`
`By using the Marks without a license, authorization, or Exclusive Supplements’
`
`express consent,
`
`the Defendants are infringing the Marks and trading upon Exclusive
`
`Supplements’ reputation and goodwill.
`
`58.
`
`Exclusive Supplements’ reputation and goodwill have already been damaged in
`
`the marketplace and will continue to be damaged so long as the Defendants continue to infringe
`
`the Marks.
`
`59.
`
`On or about October 19, 2012, a short time after learning Defendants were
`
`infringing the Marks, Exclusive Supplements, through its counsel, sent Defendants a letter
`
`demanding that Defendants immediately discontinue their use of the Marks, and, further,
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`Case 2:12—cv-01652-CB Document 1 Filed 11/08/12 Page 11 of 32
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`demanded that Defendants account to Exclusive Supplements for the damages it has incurred as
`
`the result of Defendants’
`
`intentional
`
`infringement of Exclusive Supplements’
`
`registered
`
`trademarks (the “October 19 Letter”). A copy of the October 19 Letter is attached as Exhibit 4.
`
`60.
`
`Defendants failed to respond to the October 19, 2012 Letter.
`
`61.
`
`In addition to the October 19 Letter, Exclusive Supplements has reached out to
`
`the Defendants on multiple occasions, both personally and through counsel, requesting that the
`
`Defendants cease and desist both their use of the Marks and their actions in competing directly
`
`with Exclusive Supplements in the marketplace. Exclusive Supplements’ efforts have been
`
`unsuccessful.
`
`62.
`
`In conjunction with the October 19 letter requesting that Defendants immediately
`
`discontinue their unauthorized use of the Marks, Exclusive Supplements also notified Mr. Grace
`
`(Defendants’ salesman who previously worked for Exclusive Supplements) via letter dated
`
`October 22, 2012 of the infringing conduct by Defendants and requested that Mr. Grace
`
`immediately discontinue any distribution, sales, advertising and promotion of products bearing
`
`the Marks. A copy of the October 22, 2012 letter to Mr. Grace is attached as Exhibit 5.
`
`63.
`
`In response to the October 22, 2012 letter, on October 29, 2012, counsel for Mr.
`
`Grace advised that Mr. Grace would “agree to stop selling [Optimum Health Nutrition] products
`
`until further notice. See October 29, 2012 letter on behalf of Mr. Grace, attached hereto as
`
`Exhibit 6. Therein, Mr. Grace admitted having sold Optimum Health products in the past, but
`
`states that “Mr. Grace is and was completely unaware of [Exclusive Supplements’] ownership of
`
`the registered trademarks identified in your letter and would never knowingly infringe on
`
`another’s rights.” Id.
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`Case 2:12-cv-01652-CB Document 1 Filed 11/08/12 Page 12 of 32
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`64.
`
`Defendants have violated (indeed, by Mr. Grace’s admission), are violating and,
`
`upon information and belief, intend to continue to violate Exclusive Supplements’ rights, both
`
`directly and over the Internet using electronic means, and employ the Internet to purposefully
`
`reach out
`
`into the Commonwealth of Pennsylvania, advertise and offer such sales within
`
`Pennsylvania twenty-four hours a day, seven days a week. Such conduct constitutes tortious
`
`conduct within the Commonwealth of Pennsylvania, as well as tortious conduct outside of
`
`Pennsylvania causing harm within the Commonwealth of Pennsylvania.
`
`Abdelgawad Is Removed As A Director For Exclusive Supplements
`
`65.
`
`Exclusive Supplements held a special meeting of its shareholders on October 12,
`
`2012, to address, among other issues, the unlawful and improper conduct of Abdelgawad and
`
`Long (the “Shareholders Meeting”).
`
`66.
`
`David Manes, Esquire, Abdelgawad’s attorney,
`
`represented Abdelgawad’s
`
`interests at the Shareholders Meeting as Abdelgawad’s proxy for the thirty-five (35) shares of
`
`stock provided to Long in the Shareholders Agreement. A copy of the October 12, 2012
`
`Shareholder Meeting Minutes is attached at Exhibit 7. Mr. Manes presented a proxy signed by
`
`Mr. Abdelgawad at the meeting so Manes could participate on Abdelgawad’s behalf.
`
`67.
`
`A