Trademark Trial and Appeal Board Electronic Filing System. http://estta.uspto.gov
`ESTTA509367
`ESTTA Tracking number:
`12/06/2012
`
`Filing date:
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`92056529
`Defendant
`Exclusive Supplements, Inc.
`
`EXCLUSIVE SUPPLEMENTS INC
`3000 CASTEEL DRIVE
`CORAOPOLIS, PA 15108
`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 529 COMPLETE MASS 600.pdf ( 7 pages )(549483
`bytes )
`TTAB Exhibits to Motion for Suspension.pdf ( 84 pages )(6776223 bytes )
`
`Proceeding
`Party
`
`Correspondence
`Address
`
`Submission
`Filer's Name
`Filer's e-mail
`Signature
`Date
`Attachments
`
`

`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`
`In the matter of
`
`U.S. Trademark Registration No. 3,559,868
`For the trademark
`
`COMPLETE MASS 600 (Stylized)
`Registration Date: January 13, 2009
`
`OPTIMUM HEALTH DISTRIBUTING, INC.,
`
`CANCELLATION NO. 92056529
`
`. I
`
`Petitioner,
`
`V.
`
`EXCLUSIVE SUPPLEMENTS, INC.,
`Respondent.
`
`RESPONDENT’S MOTION TO SUSPEND PROCEEDING IN VIEW OF PENDING
`
`CIVIL ACTION PURSUANT TO TRADEMARK RULE 2.117
`
`I 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 l7(a).
`
`In support of this motion, Respondent submits herewith as Exhibit A, a copy of a
`
`Complaint filed on November 8, 2012 by Respondent against, inter alia, Petitioner Optimum
`
`Health Distributing, Inc. ( “Petitioner”) in the United States District Court for the Western
`
`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: l2—cv—0l652, however the correct number is 2:l2—cv—
`01652.
`
`DM2\l989945.l
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`

`
`Board in the subj ect 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 A
`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 Plaintiffs 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);
`
`General Motors Corp. v. Cadillac Club Fashions Inc., 22 U.S.P.Q.2d 1933, 1936-37 (TTAB
`
`1992). However, a civil action need not be dispositive on the issues for the Board to suspend
`
`proceedings. Ordinarily, the Board will suspend proceedings in the case before it if the final
`
`determination of the other proceeding may have a bearing on the issues before the Board. TBMP
`
`§ 510.02(a), citing 37 C.F.R. § 2.1l7(a); see, e.g., New Orleans Louisiana Saints LLC v. Who
`
`Dal‘? 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.
`
`DLzI2S.l989945 1
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`

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`As noted in Gilson, Trademark Protection and Practice, 119.02[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.
`
`See also, The Toro Company v. Hardigg Industries, Inc., 187 U.S.P.Q. 689, 691-692 (TTAB
`
`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
`
`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
`
`Board suspended proceedings, finding that “there can be no doubt
`
`that the outcome of the
`
`civil action willhave a direct bearing on the question of the rights of the parties herein and may
`
`in fact completely resolve all the issues.” There can be no doubt that the very issues involved in
`
`the Civil Action are involved here. Certainly, in the present case, the outcome of the Civil
`
`Action will have direct bearing on the issues before the Board, namely, the Petitioner’s fraud and
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`abandonment claims.
`
`

`
`The Civil Action has Bearing on Petitioner ’s Fraud Claims
`
`In order to succeed on its fraud claims in this Cancellation, Petitioner must plead and
`
`prove that,
`
`inter alia:
`
`l.
`
`2.
`
`3.
`
`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
`
`knowingly makes a false, material representation with the intent to deceive the USPTO).
`
`In the Cancellation, Petitioner alleges that ES made false representations of material fact
`
`with the intent to deceive the USPTO, and that, absent the deception, the subject registration
`
`would not have been granted. This is a serious allegation, and assumes that it was ES, or an
`
`individual acting in ES ’s interests, making representations to the USPTO. In stark contrast to
`
`this allegation, Petitioner’s Civil Action papers state that Baher Abdelgawad, a principal of
`
`Petitioner, was at the helm and steering the prosecution of the subject trademark to registration,
`
`in ES’s name. (See Exhibit B, Defendant’s Opposition to Plaintiffs Motion for Preliminary
`
`Injunction and accompanying Abdelgawad Declaration W18-21). Surely, Petitioner intentionally
`
`omitted these claims from the Cancellation, as they would render the elements of ES’s
`
`knowledge and intent impossible for Petitioner to prove without contradicting its own arguments,
`
`

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

`
`different conclusions and consequences for the parties, but each indisputably has a strong bearing
`
`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.
`
`Conclusion
`
`In View of the fact that the pending Civil Action involves most, if not all, of the same
`
`issues which are involved in this proceeding, the determination of these issues will be dispositive
`
`of, or will at least have bearing on, this proceeding. Respondent therefore respectfully requests
`
`suspension of these proceedings pending a determination of the Civil Action pursuant to
`
`Trademark Rule 2.117(a), 37 C.F‘.R. § 2.117(a).
`
`Respectfully submitted,
`
`F11>40Ff‘C59<(D U3£1
`
`(DB("DE“U:
`
`r—<
`
`E
`
`
`Chr'
`'
`S.
`pbe
`Amy Joseph Coles
`Gerald J. Schirato
`
`DUANE MORRIS LLP
`
`Attorneys for Respondent
`30 s. 17”‘ Street
`
`Philadelphia, PA 191 03
`(215) 979-1817
`ccampbel1@duanemorris.com
`
`Dated: December 9 , 2012
`
`DM.2Sl°8994‘.1
`
`

`
`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- lass mail, postage prepaid to counsel of record and
`
`attorneys forPetitioner as follows this ‘Qlay ofDecember, 2012. A copy ofthe same is also
`
`being sent to attorneys for Petitioner at t 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
`(f) 412.471.4094
`(e) webb1aw@webblaw.com
`
`With a courtesy copy, electronically, to:
`David Manes
`
`daVid@kisnerlawf1rm.com
`
`
`
`
`
`Duane Morris LLP
`3 0 s. 17“‘ Street
`
`Philadelphia, Pennsylvania 1 91 03
`215-979-1817
`
`ccampbe1l@duanemorris.com
`
`Attorneys for Respondent
`
` 5J
`
`

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

`
`Case 2:12—cv—01652—CB Document 1 Filed 11/08/12 Page 1 of 32
`
`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
`
`Health Nutrition, and Optimum Health Distributing (collectively the “Defendants”), seeking
`
`injunctive and other relief, and in support thereof avers as follows:
`
`INTRQDUCTION
`
`l.
`
`This is an action for injunctive relief and money damages stemming from the
`
`Defendants’ unlawful breach of their duties and obligations to Exclusive Supplements, Inc. and
`
`their attempts to market and sell products that directly compete with Exclusive Supplements and
`
`infringe on those trademarks owned by Exclusive Supplements. The action includes trademark
`
`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.,
`
`(also referred to as the “Lanham Act”) and for unfair competition,
`
`trademark
`
`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
`
`a Pennsylvania Corporation that
`
`maintains its principal place of business at 3000 Casteel Drive, Coraopolis, PA 15108.
`
`3.
`
`Upon information and belief, Defendant Baher Abdelgawad is an individual
`
`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
`
`with its principal place of business in Chino Hills, California.
`
`6.
`
`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
`
`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
`
`herein under the provisions of 28 U.S.C. §1338(b) in that said claims are joined with a
`
`substantial and related claim under the Trademark Laws of the United States, 15 U.S.C. §§ 1051
`
`et seq.
`
`9.
`
`This Court has supplemental subject matter jurisdiction over the pendent state law
`
`claims under 28 U.S.C. § l367(a) because these claims are so related to Exclusive Supplements’
`
`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
`
`common nucleus of operative facts.
`
`10.
`
`This Court has personal jurisdiction over Defendants by virtue of their doing
`
`business in this Commonwealth and,
`
`in particular, within this judicial district and/or their
`
`commission of tortious acts inside and outside of Pennsylvania that have an effect within this
`
`Commonwealth.
`
`11.
`
`Venue is proper in this Court under 28 U.S.C. § 1391(b) and (c) because a
`
`substantial part of the events giving rise to Exclusive Supplements’ claims occurred in this
`
`District and a substantial part of the property,
`
`intellectual or otherwise, that
`
`is subject to
`
`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
`
`Pennsylvania corporation.
`
`13.
`
`On August 16, 2005,
`
`the Abdelgawads and Mangieri also entered into a
`
`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)
`
`shares of stock and Kelly Joyce Long (“Long”) ownership of thirty-five (35) shares of stock.
`
`15.
`
`The Shareholder Agreement also names Mangieri as “President” and Long as
`
`“Secretary” of Exclusive Supplements.
`
`DMl\359834l.l
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`3
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`

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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.
`
`Abdelgawad acted, at all relevant times, as both a Shareholder and Director of
`
`Exclusive Supplements.
`
`17.
`
`Abdelgawad was involved in the day-to-day decision-making activities of
`
`Exclusive Supplements. He participated in strategic company decisions including which
`
`products Exclusive Supplements would advertise, market, and sell to the public.
`
`18.
`
`Abdelgawad also provided input and made decisions for Exclusive Supplements
`
`related to contractual relationships with salespersons, distributors, and customers.
`
`19.
`
`In his role as both a Director and Shareholder, Abdelgawad had access to
`
`Exclusive Supplements’ most sensitive proprietary information, including, but not limited to,
`
`financial
`
`records, growth strategies, market
`
`strategies,
`
`intellectual property (including
`
`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
`
`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
`
`DMl\3598341.l
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`4
`
`

`
`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
`
`willing to pay a premium to attain.
`
`24.
`
`In addition to its BIORhythm product
`
`line, Exclusive Supplements has also
`
`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
`
`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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`5
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`

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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
`
`Optimum Health products, or approximately 8.4% of Exclusive Supplements’ total sales during
`
`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
`
`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.”
`
`DM1\359834l.l
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`6
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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
`
`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
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`(collectively “Optimum Health”) and continued to advertise, promote, distribute, offer for sale
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`and sell dietary and/or nutritional supplements bearing the Marks owned by Exclusive
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`Supplements.
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`40.
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`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,
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`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.
`
`47.
`
`Defendants continued to use Exclusive Supplements’ salespersons in this manner
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`even after Abdelgawad represented to Exclusive Supplements that he had not spoken to one such
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`salesperson, Donald Grace (“Grace”), for months.
`
`48.
`
`Indeed, Exclusive Supplements specifically sought the advice of Abdelgawad
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`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
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`competed with Exclusive Supplements, including, inter alia, products bearing the Marks and
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`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
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`Health products, including products bearing the Marks, and Intek for their own benefit and to the
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`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
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`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’
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`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