Sensible Foods V World Gourmet

Case3:11-cv-02819-SC Document28 Filed12/01/11 Page1 of 71
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FREDERICK M. RARICK, ESQ. BAR NO.: 111152 Lawjet@aol.com 13 Pinto Lane, Suite OK Rolling Hills Estates, CA. 90274 Tel: (585) 219-4900 Fax: (585) 219-4905 Attorney for Plaintiff
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION
SENSIBLE FOODS, LLC Plaintiff, v.
Case No.: 3:11-cv-02819-SC FIRST AMENDED COMPLAINT FOR:
COMPLAINT FOR BREACH OF IMPLIED CONTRACT, BREACH OF CONTRACT, WORLD GOURMET, INC., HAIN GOURMET, BREACH OF IMPLIED COVENANT OF INC., HAIN CELESTIAL GROUP, INC., GOOD FAITH AND FAIR DEALING, WORLD GOURMET MARKETING, LLC, CONTRIBUTORY INFRINGEMENT, STATE SENSIBLE SNACKS, INC. AND DOES 1-20, LAW UNFAIR COMPETITION & DECEPTIVE TRADE PRACTICES, STATE Defendants LAW FALSE ADVERTISING, FEDERAL TRADEMARK INFRINGEMENT, REVERSE CONFUSION, CANCELLATION OF FEDERAL TRADEMARK REGISTRATION, FEDERAL FALSE ADVERTISING MISREPRESENTATION & UNFAIR COMPETITION, AND COMMON LAW TRADEMARK INFRINGEMENT DEMAND FOR JURY TRIAL
FIRST AMENDED COMPLAINT Case No. 3:11-cv-02819-SC
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Plaintiff, Sensible Foods, LLC, a California Limited Liability Company, alleges against Defendants, and each of them, World Gourmet, Inc., World Gourmet Marketing, LLC; The HainCelestial Group, Inc., Hain Gourmet, Inc., and Sensible Snacks, Inc. and Does 1-20 inclusive as follows: NATURE OF ACTION 1. Plaintiff, Sensible Foods, LLC, is a California Limited Liability Company and is engaged in the development and the sale of a wide range of established products consisting of a full line of gluten-free, organic, healthy and natural dried-fruit and dried-vegetable snacks and related goods, sold worldwide. 2. Plaintiff brings this action to 1) obtain relief and damages from Defendant, Hain-Celestial, Inc.s breaches of contract and the covenant of good-faith and fair dealing and 2) Defendants a) knowing and willful infringement of Plaintiffs registered trademarks, some of which are incontestable, b) trading on and usurping Plaintiffs accumulated goodwill, c) confusing (directly or in reverse) the public in their purchases, d) causing the public to mistake their purchases; e) deceiving the public as to the source of their purchases and the inherent characteristics of the products purchased, e) falsely asserting sponsorship of or affiliation with the Plaintiff or its products, and 3) to enjoin the Defendants ongoing, individual and collective conduct leading to the violations of law in 1) and 2). 3. To protect its rights and enjoin Defendants from further harmful conduct, the Plaintiff brings this action for Breach of Implied Contract, Breach of Contract, Breach of the Implied Covenant of Good Faith and Fair Dealing, unfair competition in violation of Ca. Bus. & Prof. Code 17200 et seq.; deceptive trade practices in violation of Ca. Bus. & Prof. Code 17500 et seq., state law
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false advertising in violation of Ca. Bus. & Prof. Code 17500 et seq., trademark infringement in violation of Sections 32 and 43 of the Trademark Act of 1946 (the Lanham Act), 15 U.S.C. 1051 et. seq.; contributory infringement in violation of 32 of the Lanham Act, as amended 15 U.S.C. 1114; reverse confusion in violation of the Lanham Act, 15 U.S.C 1114, false designation of origin and unfair competition in violation of the Lanham Act, 15 U.S.C. 1125 (a) et. seq., cancellation of certain Defendant trademarks under the Lanham Act 1064 (1), (3), 1119, false advertising, misrepresentation and unfair competition in violation of the Lanham Act 15. U.S.C 1125 (a) et seq, and common law trademark infringement. The Plaintiff seeks, inter alia, preliminary and permanent injunctive relief, as well as full restitution, compensatory, consequential, punitive damages and/or extraordinary remedies under 15 U.S.C. 1117 and consistent with California Civil Code 3294, an account of profits, and disgorgement of all profits and revenues obtained as a result of Defendants' unlawful and deliberate conduct.
PARTIES 4. Plaintiff, Sensible Foods, LLC, is a California Limited Liability Company, (Sensible Foods) and is and was at all times relevant herein a limited liability company duly organized and existing under the laws of the State of California with its principal place of business located in Sonoma County, California. 5. Plaintiff is informed and believes and based upon such information and belief alleges that Defendant, World Gourmet Marketing, LLC, (hereinafter, individually WGM together with WG and SS the Pre-Acquisition Defendants and in its Post-Acquisition capacity, Defendant ) is and was at all relevant times herein a limited liability company with its principle place of
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business located at 49 Lincoln Road, Butler, New Jersey, 07405, United States, organized in New Jersey. 6. Plaintiff is informed and believes and based upon such information and belief alleges that Defendant, World Gourmet, Inc. or its alter ego (hereinafter, individually WG, together with WGM and SS the Pre-Acquisition Defendants and in its Post-Acquisition capacity, Defendant) is and was at all times relevant herein a New Jersey Corporation with its principle place of business located at 49 Lincoln Road, Butler, New Jersey, 07405, United States, organized in New Jersey. 7. On June 26, 2008, Defendant WGM issued a press release titled WORLD GOURMET MARKETING, LLC ACQUIRES RIVARD POPCORN, INC.; stating, among other information: The Rivard acquisition brings additional production including popcorn, caramel corn, air popped technology, as well as fried and baked pellet snacks including vegetable snacks..... The Rivard Business now called Sensible Snacks,[Inc.]. (emphasis added). 8. Plaintiff is informed and believes and based upon such information and belief alleges that the Defendant, Sensible Snacks, Inc. or its alter ego, (hereinafter, individually SS, together with WGM and WG the Pre-Acquisition Defendants and in its Post-Acquisition capacity, Defendant), is and was at all times relevant times herein, a New Jersey Corporation having is principal place of business located at 2870 Yellow Goose Road, Lancaster, PA, 17601-1814. 9. At all relevant times and continuing, Jason Cohen is or was a managing member of WGM, LLC 10. At all relevant times, Jason Cohen is or was a corporate officer in WG, Inc. 11. At all relevant times, Jason Cohen is or was a corporate officer in SS, Inc. 12. At all relevant times, Jason Cohen is or was the alter ego of Sensible Snacks, Inc.
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13. At all relevant times, Jason Cohen is or was the alter ego of World Gourmet, Inc. 14. Plaintiff is informed and believes and based upon such information and belief alleges that Defendant, The Hain Celestial Group, Inc., (hereinafter, individually HC, together with HG the Post-Acquisition Defendants and together with HG, WG, WGM and SS the Defendants,) is and was at all times relevant herein a Delaware Corporation having its principal place of business located at 58 South Service Road, Suite 250, Melville, New York, 11747. 15. Plaintiff is informed and believes and based upon such information and belief alleges that on June 15, 2010 the Defendant, HC, stated in a press release: MELVILLE, N.Y., June 15, 2010 / PRNewswire via COMTEX/ --The Hain Celestial Group, Inc. (Nasdaq: HAIN), a leading natural and organic products company providing consumers with A Healthy Way of Life(TM), today announced the acquisition of the assets and business of World Gourmet Marketing, L.L.C., including its Sensible Portions(R) brand of Garden Veggie Straws(TM), Pita Bites(R) and other snack products. (hereinafter, The Acquisition and June, 15, 2010 the Acquisition Date). 16. Plaintiff is informed and believes and based upon such information and belief alleges that on or around or after the Acquisition Date, Defendant, HC formed Defendant, Hain Gourmet, Inc., (hereinafter, individually HG, together with HC the Post-Acquisition Defendants and together with HC, WG, WGM and SS the Defendants,) who is and was at all times relevant herein a Delaware Corporation having is principal place of business located at 58 South Service Road, Suite 250, Melville, New York, 11747. 17. At all relevant times and continuing, Irwin Simon is the CEO of Hain Celestial Group, Inc. 18. Plaintiff is informed and believes and based upon such information and belief alleges that at all times relevant herein, the Defendants acted as individuals or actual and/or ostensible partners,
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joint venturers, agents, officers, employees, servants or representatives of each other and that each acted, individually or collectively, within the scope of his or its partnership, joint venture, agency, employment or representation as to the acts alleged herein. Plaintiff further alleges, on information and belief, that in doing the acts alleged herein, each and every one of the Defendants and each Defendants designated agents, employees, servants, contractors, independent or representatives were acting within the scope of their authority and with the permission, consent knowledge and or ratification of each of the other Defendants so as to be jointly and severally liable for said acts. 19. Plaintiff is not aware of the true names, capacities of the defendants sued herein under the names Does 1 through 20 inclusive, and therefore refers to said parties by such fictitious names. Plaintiff is informed and believes that each of the named Defendants was in some manner responsible for Plaintiff's damages, whether as an individual or agent, contractor, independent contractor, employee, partner, joint venturer, assignee, successor, subsidiary, parent company, or alter ego to any other defendants or in some other capacity. With leave of Court, Plaintiff will amend this complaint to allege the true names and capacities of the fictitiously named defendants when the same are ascertained. 20. Plaintiff will amend this Complaint when same is known or when and if discovery reveals such other matters. JURISDICTION 21. This Court has jurisdiction under 15 U.S.C. 1121 (action arising under the Lanham Act); 28 U.S.C. 1331 (federal question); 28 U.S.C. 1338 (a) (an Act of Congress relating to trademarks).
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28 U.S.C. 1338 (b) (action asserting claim of unfair competition joined with a substantial and related claim under the trademark laws.); and 28 U.S.C. 1367 (supplemental jurisdiction). 22. Defendant, The Hain Celestial Group, Inc. consented to the jurisdiction of the California Courts and venue in the State of California in the Contract, Exhibit CA, infra, which is one of the subjects of this Complaint. 23. Defendants and each of them were or are engaged in business activities in the State of California, through business locations, advertisements, promotions, sales, marketing, and the internet. 24. Venue is proper in this district pursuant to 18 U.S.C 1965 (a) and 28 U.S.C. 1391(b) because Defendants transact business within this district and a substantial part of the events and omissions giving rise to the claim occurred in this district.
GENERAL ALLEGATIONS 25. Since approximately October 1998, the date of Sensible Foods domain name acquisition, Sensible Foods has continuously used its domain name WWW.SENSIBLEFOODS.COM (Plaintiffs Domain Name), to promote its goods and services through its Internet website (Plaintiffs Website) located at the above domain name. Plaintiff has continuously used its SENSIBLE FOODS MARKS (infra) in U.S. commerce on Plaintiffs Website and elsewhere. 26. The Plaintiff applied for its first federal registration of its SENSIBLE FOODS word and design mark on May 1, 2002 (App. No. 78/125,557, SF App. No. 557)). Sensible Foods subsequently submitted App. Nos. 78/402,771 and 78/499,792 on April 15, 2004 and October 14, 2004; (SF App. No. 771 and SF App. No. 792); respectively, for its SENSIBLE FOODS word marks.
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27. The Commissioner for Trademarks reviewed SF App. Nos. 557, 771 and 792 in the United States Patent and Trademark Office (USPTO) and issued the following registrations to Sensible Foods on July 6, 2004, December 6, 2005 and June 12, 2007; respectively: Registration No. 2,861,273 (SF Reg. No. 273) for the word mark SENSIBLE FOODS & design in IC class 29; dried fruit snacks; Registration. No. 3,024,683 (SF Reg. No. 683) for the word mark SENSIBLE FOODS in IC 29 for dried fruits, dried vegetables and Registration No.3,252,283 (SF Reg. No. 283) for the word mark SENSIBLE FOODS in IC 16, magazines, leaflets, brochures, newsletters featuring food, health and nutrition; catalogs featuring food, snacks, nutritional supplements, and general nutritional products. 28. The Plaintiff also maintains Registration No. 3,383,121 for the mark SNACKS MADE SENSIBLE (SF Reg. No. 121), made under Application No.78/827662 (SF App. No. 662), for Dehydrated fruit snacks; Dried fruit mixes; Dried fruits; Dried soybeans; Dried vegetables; Fruit-based snack food; Vegetable-based snack foods. SF Reg. No. 121 together with the Registrations in paragraph 27 are Sensible Foods Registered Marks (individually a Registration or Registered Mark and collectively Sensible Foods Registered Marks). 29. The Sensible Foods Registrations are valid, subsisting and owned by Sensible Foods, LLC. 30. Sensible Foods Registered marks cover the following products: dried fruit snacks, dried fruits, dried vegetables, magazines, leaflets, brochures, newsletters featuring food, health and nutrition; catalogs featuring food, snacks, nutritional supplements, and general nutritional products, for Dehydrated fruit snacks; Dried fruit mixes; Dried fruits; Dried soybeans; Dried vegetables; Fruitbased snack food; and Vegetable-based snack foods (collectively, Plaintiffs Products).
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31. Sensible Foods also has substantial rights in common law marks including, but not limited to SNACKING HAS NEVER BEEN MORE SENSIBLE and SNACKING HAS NEVER BEEN SO SENSIBLE (individually SFs Common Law Mark, together with Sensible Foods Registered Marks, the SENSIBLE FOODS MARKS). 32. On or about July 17, 2009, the Plaintiff filed a Combined Declaration of Use and Incontestability under Sections 8 & 15 of the Trademark Act for Registration No. 2,861,273 establishing that for International Class 029, the mark SENSIBLE FOODS (stylized and or with design) has been in use in commerce on or in connection with all of the goods or services listed in the existing registration for this specific class; and the mark has been continuously used in commerce for five (5) consecutive years after the date of registration, July 06, 2004. 33. On or about August 04, 2009, the Commissioner for Trademarks acknowledged the Plaintiffs 8 & 15 Declaration stating: The combined declaration of use and incontestability filed in connection with the registration identified below meets the requirements of Sections 8 and 15 of the Trademark Act, 15 U.S.C. 1058 and 1065. The combined declaration is accepted and acknowledged. The registration remains in force. The finding of the Commissioner represents prima facie evidence that the Plaintiff has the exclusive right to use the marks in commerce for dried fruits and vegetables. 34. On or about December 20, 2010, the Plaintiff filed a Combined Declaration of Use and Incontestability under Sections 8 & 15 of the Trademark Act for Registration No. 3,024,683 establishing that for International Class 029, the mark SENSIBLE FOODS has been in use in commerce on or in connection with all of the goods or services listed in the existing registration
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for this specific class; and the mark has been continuously used in commerce for five (5) consecutive years after the date of registration, December 6, 2005. 35. On or about January 11, 2011, the Commissioner for Trademarks acknowledged the Petitioners 8 & 15 Declaration stating: The combined declaration of use and incontestability filed in connection with the registration identified below meets the requirements of Sections 8 and 15 of the Trademark Act, 15 U.S.C. 1058 and 1065. The combined declaration is accepted and acknowledged. The registration remains in force. REG NUMBER 3,024,683; MARK: SENSIBLE FOODS; Owner: Sensible Foods, LLC. 36. Since the time of their introduction in 1997, Plaintiff has continuously used its SENSIBLE FOODS MARKS in commerce in the United States in connection with Plaintiffs Products. All Plaintiffs Products sold in commerce bear one or more of the SENSIBLE FOODS MARKS. The SENSIBLE FOODS MARKS are inherently distinctive and have acquired secondary meaning in the marketplace. The Plaintiffs Products are high-quality, organic and natural specialty-food snacks that are held in high regard and used regularly by consumers worldwide. 37. Defendants, and each of them, have had constructive knowledge of the SENSIBLE FOODS MARKS since at least May 1, 2002, the date of Plaintiffs first SF App. No. 557 and such knowledge predates any use in US commerce by Defendants of the terms and phrases sensible portions, sensible snack(s) snacking has never been more sensible, and snacking has never been so sensible. (individually Infringing Work; collectively Infringing Works). 38. Since 1997, long prior to the use of the Infringing Works in commerce by Defendants, and each of them, Plaintiff has continuously used the SENSIBLE FOODS MARKS and other marks
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containing the SENSIBLE FOODS MARKS in commerce in connection with its premium, healthy and natural Plaintiffs Products. 39. The Plaintiffs Registrations are valid, subsisting, and in full effect and serve as prima facie evidence of the validity of each mark and of Plaintiffs exclusive right to use the mark in connection with the goods and services identified therein, pursuant to Section 33(a) of the Lanham Act, 15 U.S.C 1115(a). Further, SF Reg. No. 273 and SF Reg. No. 683 have become incontestable under Section 15 of the Lanham Act, 15 U.S.C. 1065. 40. Since long prior to any date upon which Defendants may rely, Plaintiff has used the phrases, SNACKING HAS NEVER BEEN SO SENSIBLE and SNACKING HAS NEVER BEEN MORE SENSIBLE in its product brochures and trade show programs and directories at, among other national food-industry trade shows, New Hope Natural Medias Natural Products Expo East (NPEE), New Hope Natural Medias Natural Products Expo West (NPEW), National Association of Specialty Food Trades (NASFT) Fancy Food Show, as well as numerous regional trade shows. 41. Among other uses, Plaintiff attended New Hope Natural Medias 2005 NPEE trade show at which the Plaintiff used its common law trademark, SNACKING HAS NEVER BEEN SO SENSIBLE!, in the NPEEs New Products Directory. 42. Among other uses, Plaintiff attended New Hope Natural Medias 2008 NPEW trade show and again used its common law trademark SNACKING HAS NEVER BEEN SO SENSIBLE! in the NPEWs New Products Directory. 43. Plaintiff has sold millions of dollars worth of goods in connection with its SENSIBLE FOODS MARKS.
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44. The Plaintiffs products are seen by millions of consumers on nationwide TV, including at least 41 prime-time airings, representing over 200 minutes of actual airtime and exposure of the SENSIBLE FOODS MARKS in connection with Plaintiffs Products. 45. Since its inception in 1997, and long before any date upon which Defendants may rely, Sensible Foods has spent significant sums, devoted significant resources and bargained for significant promotional value in advertising and promoting its SENSIBLE FOODS MARKS worldwide. 46. Due to the popularity of Plaintiffs Products offered in connection with the SENSIBLE FOODS MARKS, their advertising, marketing and promotion, and the unsolicited recognition from awards and published articles regarding the Plaintiffs Products that bear the SENSIBLE FOODS MARKS, Plaintiff has built up and now owns an extremely valuable goodwill, which is symbolized by its SENSIBLE FOODS MARKS. 47. Defendants, and each of them, are a large and powerful combination of companies that have money, power, and influence far greater than Plaintiff and wield their power and influence to the detriment of smaller companies, i.e. Plaintiff, that operate in the processed and packaged-goods industry. Defendant, Hain C, had reported revenues of over $917 million for the fiscal year ended June 30, 2010 and has over 2,000 employees, providing Defendants with nearly unsurmountable bargaining power. 48. On or about January 11, 2005 the Commissioner for the United States Patent and Trademark Office (USPTO) recorded Registration No. 2,917,109 (WGM Reg. 109) on the Principal Register for the mark MAMMAS.
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49. WGM Reg. 109 was issued to WGM for protein based nutrient-dense snack bars soy-based snack foods; potato-based snack foods; snack food dips; potato chips; soy chips; soy nuts in Class 029 (U.S. CL 46) (Mammas Products). 50. WGM claimed a date of FIRST USE of 12-0-2003 and In Commerce 12-0-2003 for the mark MAMMAS for Mammas Products representing one of the thirty-one days of December of 2003 for such date of first use. 51. With the exception of soy-based food bars, Mommas Products are the same products as WGM CL 29 Goods 05-051, infra. 52. On or around October 21, 2005, Jason Cohen and his partner Jerry Bello sold their business, Mamma Says to Nonnis Food Company. 53. Through interviews, online publications and newspaper articles, Jason Cohen and Jerry Bello informed the public that after the sale of Mamma Says, they spent time researching snacks from around the world, especially Europe. 54. A commercially reasonable time before September 10, 2009 Masipack Industria e Comercio shipped from San Paolo, Brazil, freight prepaid, container No. NYKS710030788001 (N Container) weighing 7,986 pounds, containing industrial and commercial equipment, including a packaging machine. 55. The N Containers arrived on or about September 10, 2009 in the New York/Newark Area, Newark, New Jersey under Bill of Lading No. NYKS71006754700. 56. Consignee Sensible Snacks, Inc. paid for the shipping charges for the N Container. 57. A commercially reasonable time before June 23, 2010 Masipack Industria e Comercio shipped from San Paolo, Brazil container Nos.TTNU4066154 and TTNU5795335 (T Containers)
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together weighing 23,901 pounds, containing industrial and commercial equipment, including a packaging machine. 58. The T Containers arrived on or about June 23, 2010 in the New York/Newark Area, Newark, New Jersey under Bill of Lading No. NYKS71006754700. 59. The T Containers were shipped to Consignee, Sensible Snacks, Inc., located at 2870 Yellow Goose Road, Lancaster, PA, 17601-1814. 60. Consignee Sensible Snacks, Inc. paid for the shipping charges for the T Containers
Defendants Wrongful Conduct
61. On or about March 28, 2005, Defendant, World Gourmet Marketing, LLC, (WGM) filed and intent-to-use Application No. 78/596,051 (WGM App. No. 051) for the mark SENSIBLE PORTIONS, under Trademark Act Section 1(b) or 15 U.S.C. 1051(b), under IC Classes 29 and 30 with a description of goods as follows: IC 029. US 046; Protein-based nutrient-dense snack bars, soy-based food bars; soy-based snack foods; potato-based snack foods; snack food dips; potato chips; soy chips; soy nuts. IC 30. US 046; crackers; cookies; corn chips; tortilla chips; bakery goods, ready to eat, cereal derived food bars; granola-based snack bars, chocolate-based ready to eat food bars. (individually WGM CL 29 Goods 05-051 and WGM CL 30 Goods 05-051; respectively, and combined WGM Goods 05-051). 62. With the exception of soy-based food bars, WGM CL 29 Goods 05-051 are the same products as Mommas Products listed for Defendants, WGMs, MAMMAS mark. 63. WGM CL 29 Goods 05-051 listed under WGM App. No 051 do not include vegetable chips; vegetable-based snack foods; pellet snacks, namely, hot air expanded pellet snacks consisting
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primarily of soy, potato or vegetables (collectively, Infringing/Encroaching Vegetable Products). 64. The WGM CL 30 Goods 05-051 listed under WGM App. No 051 do not include corn-based snack foods; pita chips; grain-based snack foods; grain-based chips; rice-based snack foods; pellet snacks, namely, hot air expanded pellet snacks consisting primarily of grains; puffed corn snacks; cheese flavored snacks, namely, cheese curls; cheese flavored puffed corn snacks, (collectively, Infringing/Encroaching Snack Products). 65. WGM Goods 05-051 do not include products that are made from fruit, include fruit, are fruitbased, are dehydrated fruit or have fruit as a significant and inherent characteristic, quality or nature; (collectively, Infringing/Encroaching Fruit Products) nor do WGM Goods 05-051 include Infringing/Encroaching Vegetable Products. 66. In WGM App. No. 051, Jason Cohen, the signatory on the application, declared Intent to use [the mark SENSIBLE PORTIONS]: The Applicant [WGM] has a bona fide intention to use or use through the applicants related company or licensee the mark in commerce on or in connection with the identified goods and/or services. (15 U.S.C. Section 1051(b)). (emphasis added). 67. In the September 21, 2011 TTAB Board Order in the TTAB Proceedings, infra, the Board stated that Post-Acquisition Defendants, Hain Gourmets application Serial No. 78596051 was an intent to use application so there was no requirement that the mark be in use in commerce either prior to or on the filing date. Serial No. 78596051 is WGM App. No. 051 due to the Acquisition and Assignment, with WGM as Assignor and HG as assignee.
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68. In WGM App. No. 051, Jason Cohen further declared under penalties of 18 U.S.C. 1001, that if the application is being filed under 15 U.S.C. 1051(b), he/she believe applicant to be entitled to use such mark in commerce; to the best of his/her knowledge and belief no other person, firm, corporation, or association has the right to use the mark in commerce, either in the identical form thereof or in such near resemblance thereto as to be likely, when used on or in connection with the goods/services of such other persons, to cause confusion, reverse confusion, or to cause mistake, or to deceive; and that all statements made of his/her own knowledge are true. 69. Defendants and each of them had constructive notice of Plaintiffs use of the SENSIBLE FOODS MARKS as early as May, 1, 2002 (SF App. No. 557), well before the Defendants, WGMs, application date of March 28, 2005, which makes the Jason Cohens, March 28, 2005 statements in its declaration false statements under 18 U.S.C. 1001. 70. Defendants and each of them had constructive notice of Plaintiffs continued use of the SENSIBLE FOODS MARKS on April 15, 2004 (SF App. No. 771) and again on October 14, 2004 (SF App. No. 792), well before the Defendants, WGMs, application date of March 28, 2005, which makes the chronological declarations made part of Cohen Decl. 3-28 false statements under 18 U.S.C. 1001. 71. Defendants and each of them had constructive notice of Plaintiffs nationwide priority of use of the SENSIBLE FOODS MARKS on July 6, 2004 when the PTO issued SF Reg. No. 273 well before Defendants application date of March 28, 2005, which makes the Defendants March 28, 2005 statements in its declaration false statements under 18 U.S.C. 1001.
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72. Defendants and each of them had constructive notice of Plaintiffs nationwide priority of use of the SENSIBLE FOODS MARKS on December 6, 2005 when the PTO issued SF Reg. No. 683 well before the Defendants Statement of Use date of August 10, 2006. 73. On July 18, 2006, the USPTO issued a Notice of Allowance to Defendant, WGM, through their attorney stating: ...You have six (6) MONTHS from the ISSUE DATE of this Notice of Allowance (NOA) to file either a Statement of Use, or if you are not yet using the mark in commerce, a Request for Extension of Time to File a Statement of use ("Extension Request"). If you file an extension request, you must continue to file a new request every six months until the Statement of Use is filed. Applicant may file a total of five (5) extension requests. FAILURE TO FILE A REQUIRED DOCUMENT DURING THE APPROPRIATE TIME PERIOD WILL RESULT IN THE ABANDONMENT OF YOUR APPLICATION. (emphasis in original). 74. Nearly eighteen (18) months from the date of WGM App. 051 and one month after the Notice of Allowance, on August 09, 2006, Defendant, WGM, submitted a Statement of Use (SOU) to the USPTO under 15 U.S.C. 1051(d) for WGM App. 051 claiming SPECIMEN DESCRIPTION: Packaging for Goods. The USPTO mail/ create date is August 10, 2006. 75. Pre-Acquisition Defendants did not use the phrase sensible portions on their product Apple Straws on or before the date that WGM filed its SOU for WGM App. No. 051. 76. Pre-Acquisition Defendants did not use the phrase sensible portions on their product Veggie Straws on or before the date that WGM filed its SOU for WGM App. No. 051. 77. Post-Acquisition Defendants did not use the phrase sensible portions on their product Veggie Straws on or before the date that WGM filed its SOU for WGM App. No. 051.
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78. Post-Acquisition Defendants did not use the phrase sensible portions on their product Apple Straws on or before the date that WGM filed its SOU for WGM App. No. 051. 79. Pre-Acquisition Defendants did not use the phrase sensible portions on their product Veggie Crisps or Veggie Chips on or before the date that WGM filed its SOU for WGM App. No. 051. 80. Post-Acquisition Defendants did not use the phrase sensible portions on their product Veggie Crisps or Veggie Chips on or before the date that WGM filed its SOU for WGM App. No. 051. 81. With the SOU, Defendant, WGM, provided two specimens which consists of a mainly blue packaging material with verbiage as examples of its use of the subject mark of WGM App. No. 051. Each specimen clearly indicates the phrase, only 100-calorie portions, a phrase then and still conveying an immediate idea of a quality, characteristic, function, feature, purpose and use of the Defendants Infringing/Encroaching Vegetable, Snack and Fruit Products; namely, a sensible portion, which has been adopted industry wide as 100 calories, which serves a weight-control function. 82. The SOU depicts World Gourmet as the brand on top with sensible portions as a tag line. 83. For the very first time, on August 10, 2006, with the filing of the SOU and its specimens, Plaintiff had the opportunity to have knowledge about Defendants, WGMs, intentional use of the Infringing Work, sensible portions, on WGM Goods 05-051 in commerce, well after the Plaintiffs right to oppose WGM App. No. 051 expired on May 27, 2006. 84. For the very first time, on August 10, 2006, well after the Plaintiffs right to oppose expired on May 27, 2006, Defendant, WGM, declared a date of first use of July 01, 2003, nearly two years prior to its assertions in WGM App. No. 051, filed as an intent-to-use application under 1(b).
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85. On or about January 2, 2007, the Commissioner for Trademarks provided WGM with Registration No. 3,195,083 for the mark SENSIBLE PORTIONS SP Reg. No. 083, detailed in WGM App. No. 051 under the intent-to-use status of section 1(b) of the Trademark Act for WGM Goods 05-051. 86. On or about June 22, 2007, Defendant, WGM, filed with the USPTO, Application No. 77/210,120 (WGM App. No. 120) for the mark SENSIBLE SNACKS, in connection with goods substantially similar to Plaintiffs Products. 87. On September 21, 2007, Pre-Acquisition Defendants were informed of Plaintiffs SENSIBLE FOODS MARKS when the trademark examining attorney mailed an office action to the Defendant, WGM, regarding WGM App. No. 120 for the mark SENSIBLE SNACKS stating among other findings: Registration Refusal Likelihood of Confusion 2(d): The examining attorney refuses registration under Trademark Act Section 2(d), 15 U.S.C. 1052(d), because the applicants mark, when used on or in connection with the identified goods/services, so resembles the marks in U.S. Registration Nos. 3,024,683 and 2,861,273 as to be likely to cause confusion, to cause mistake, or to deceive. TMEP 1207.01 et seq. (U.S. Registration Nos. 3,024,683 and 2,861,273; respectively, Plaintiffs SF Reg. Nos. 683 and 273). 88. The trademark examining attorney continued: Registration Refusal -Similarity of Marks: The Applicants mark is SENSIBLE SNACKS. The registrants marks are SENSIBLE FOODS and SENSIBLE FOODS with a design. The marks are similar in sound, appearance and commercial impression because they each contain the dominant term SENSIBLE. Further, the terms SNACKS and FOODS convey a highly similar commercial impression.
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89. Pre-Acquisition Defendants were informed that their products were similar to Plaintiffs Products sold under SENSIBLE FOODS MARKS, when the trademark examining attorney continued: Registration Refusal -Similarity of Goods/Services: The applicants goods/services are proteinbased nutrient-dense snack bars; soy-based food bars; soy-based snack foods; potato-based snack foods; snack food dips; potato chips; soy chips; soy nuts; [WGM Goods 05051] vegetable-based snack foods; pellet snacks and crackers; cookies; corn chips; tortilla chips; bakery goods; ready to eat, cereal-derived food bars; granola-based snack bars; chocolate-based ready to eat food bars; [WGM CL 30 Goods 05-051] grain-based chips; cheese flavored snacks, namely, cheese curls; corn-based snack foods; popcorn; caramel popcorn; glazed popcorn; pita chips. The registrants goods are Dried Fruits, Dried Vegetables and Dried fruit snacks respectively. The goods are related because these goods are all snack foods which would be marketed and sold to similar consumers using the same channels of trade. 90. The trademark examining attorney continued: Attached are copies of printouts from the USPTO X-Search database, which show third-party registrations of marks used in connection with the same or similar goods and/or services as those of applicant and registrant in this case. These printouts have probative value to the extent that they serve to suggest that the goods and/or services listed therein are of a kind that may emanate from a single source. a. The XSearch copies include third-party registrations, which include Plaintiffs SF Reg. Nos. 273 and 683. 91. The trademark examining attorney continued: Accordingly, registration [77/210,120] is refused under Trademark Act Section 2(d), 15 U.S.C. 1052(d).
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92. Pre-Acquisition Defendants were informed of their legal duty to select a mark which is totally dissimilar to trademarks already being used, in general and Plaintiffs SENSIBLE FOODS MARKS, in particular; namely, SF Reg. Nos. 273 and 683, when the trademark examining attorney continued: The examining attorney must resolve any doubt as to the issue of likelihood of confusion in favor of the registrant and against the applicant who has a legal duty to select a mark which is totally dissimilar to trademarks already being used. Burroughs Wellcome Co. v. WarnerLambert Co., 203 USPQ 191 (TTAB 1979). 93. The trademark examining attorney continued: Although the examining attorney has refused registration, the applicant may respond to the refusal to register by submitting evidence and arguments in support of registration. 94. The trademark examining attorney continued: Prior Pending Application: Information regarding pending Application Serial No. 78827662 is enclosed (SF App. No. 662 and SF Reg. No. 121) for the mark SNACKS MADE SENSIBLE. The filing date of the referenced application precedes applicants filing date. There may be a likelihood of confusion between the two marks under Trademark Act Section 2(d), 15 U.S.C. 1052(d). If the referenced application registers, registration may be refused in this case under Section 2(d). 37 C.F.R. 2.83; TMEP 1208 et seq. Therefore, upon entry of a response to this Office action, action on this case may be suspended pending final disposition of the earlier-filed application. 95. On April 28, 2008 the Commissioner for Trademarks mailed an Abandonment Notice for the mark SENSIBLE SNACKS under WGM App. No 120 stating in part: The trademark application identified below was abandoned in full because a response to the Office Action mailed on Sep 21, 2007 was not received within the 6-month response period.
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96. Although invited by the trademark examining attorney, neither Defendants in general nor WGM in particular sought reversal of the Examining Attorneys findings through any court or board of competent jurisdiction and therefore abandoned its application of the SENSIBLE SNACKS mark which demonstrated to Plaintiff that Defendants were abandoning their attempt to use and perfect rights in the mark SENSIBLE SNACKS and related marks. Defendants were informed that marks related to SENSIBLE SNACKS were likely to cause public confusion, mistake or deception with Plaintiffs SENSIBLE FOODS MARKS. 97. Plaintiff is informed and believes and based upon such information and belief alleges that Defendants exhibited at the New Hope Natural Medias 2008 NPEW under the World Gourmet Marketing name. The NPEW 2008 Program contained the following listing for WGM: Booth 5414, World Gourmet Marketing, LLC, 49 Lincoln Road, Butler, New Jersey, 07405; WWW.SENSIBLEPORTIONS.COM, contact: slauria@wgourmet.com. with the following text: The Next generation in healthy snacking, sensible portions (R) meets the lifestyle demands of healthier eating in a fast-paced world. Products include all natural, baked multi-grain crisps, soy crisps, pita chips, pita crackers, and portion control snacks. The program did not include the following language Snacking has never been more sensible or Snacking has never been so sensible nor did the program include Infringing/Encroaching Vegetable and Fruit Products. 98. Plaintiff is informed and believes and based upon such information and belief alleges from WGMs SOU, that Pre-Acquisition Defendants realized that the world-gourmet market was not as lucrative or trendy as the healthy, natural, food-allergy and portion-control markets so the PreAcquisition Defendants slowly, willfully, incrementally, and maliciously expanded their production of products not listed in WGM Goods 05-051, changing their blue cellophane trade
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dresspackaging; marketing, promoting and selling the Infringing/Encroaching Vegetable, Snack and Fruit Products bearing one or more of the infringing Infringing Works. 99. With each new product introduction, each new packaging design change, and their willful and carefully executed sales, marketing and business plans, Pre-Acquisition Defendants conduct crept closer and closer through progressive encroachment on Plaintiffs Products, trade dress, packaging, channels of distribution, publications, trade-publications, as well as its SENSIBLE FOODS MARKS, and its SNACKING HAS NEVER BEEN SO SENSIBLE and SNACKING HAS NEVER BEEN MORE SENSIBLE common law marks. 100.Prior to the Acquisition, Pre-Acquisition Defendants and after the Acquisition Post-Acquisition Defendants used or continue to conduct their sales and marketing activities in the same channels of distribution, used by Plaintiff. 101.On September 23, 2009, Defendant, WGM, filed application Application No. 77/833,386 (the WGM App. No. 386) in the PTO to register SENSIBLE PORTIONS, which is positioned partially in front of a heart-shaped design (SENSIBLE PORTIONS mark with the design the SENSIBLE PORTIONS Logo Mark), in International Classes 05 and 29 with a description of goods as follows: IC 005; Energy boosting bars for use as a meal substitute; Meal replacement bars; Nutritional energy bars for use as a meal substitute; Nutritionally fortified beverages; Nutritionally fortified water; IC 029. US 046: Cheese; Prepared meat; Processed meat; Yogurts, (WGM Goods 09-386). a. The status of WGM App. No. 386 was Section 1(b) of the Trademark Act. b. On March 21, 2011, the Commissioner for Trademarks mailed an abandonment notice for failure to file a Use Statement stating: Current Status of March 21, 2011
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Abandoned because no Statement of Use or Extension Request was timely filed after Notice of Allowance was issued.. c. On March 28, 2011, Defendant, HG revived WGM App. No 386. 102. On or about September 23, 2009, Defendant, World Gourmet, filed Application No. 77/833,401, seeking registration on the Principal Register of the mark SENSIBLE PORTIONS, which is positioned partially in front of a heart-shaped design (the WGM App. No. 401), in International Classes 29 and 30 with a description of goods as follows: IC 029. US 046: Proteinbased nutrient-dense snack bars; soy-based food bars; soy-based snack foods; potato-based snack foods; snack food dips; potato chips; soy chips; soy nuts; vegetable chips; vegetable-based snack foods; pellet snacks, namely, hot air expanded pellet snacks consisting primarily of soy, potato or vegetables and IC 030. US 046: Crackers; cookies; corn chips; corn-based snack foods; tortilla chips; bakery goods; ready to eat, cereal derived food bars; granola-based snack bars; chocolatebased ready to eat food bars; pita chips; grain-based snack foods; grain-based chips; rice-based snack foods; pellet snacks, namely, hot air expanded pellet snacks consisting primarily of grains; puffed corn snacks; cheese flavored snacks, namely, cheese curls; cheese flavored puffed corn snacks (individually WGM CL 29 Goods 09-401, WGM CL 30 Goods 09-401; respectively, and combined WGM Goods 09-401) a. The status of the WGM App No. 401 Application is Section 1(a) of the Trademark Act. 103.WGM CL 29 Goods 09-401 are the same as WGM CL 29 05-051 Goods plus the Infringing/ Encroaching Vegetable Products; namely, vegetable chips; vegetable-based snack foods and the
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vegetable snacks in pellet snacks, namely, hot air expanded pellet snacks consisting primarily of soy, potato or vegetables. 104.WGM CL 30 Goods 09-401 are the same as WGM CL 30 Goods 05-051 plus pita chips; grainbased snack foods; grain-based chips; rice-based snack foods; pellet snacks, namely, hot air expanded pellet snacks consisting primarily of grains; puffed corn snacks; cheese flavored snacks, namely, cheese curls; cheese flavored puffed corn snacks. 105.WGM Goods 09-401 do not include products that are made from fruit, include fruit, are fruitbased, are dehydrated fruit or have fruit as a significant and inherent characteristic, quality or nature. 106.Based on Assignors and Defendant's, WGMs (Assignee, HGs and Defendants, HGs) sworn declaration in WGM App. Nos. 401 and 386 to the USPTO, Defendants are selling presently in U.S Commerce, among other items listed in its PTO applications, in Class 029, soy-based food bars; soy-based snack foods; potato-based snack foods; soy chips; soy nuts; vegetable chips; vegetable-based snack foods; pellet snacks, namely, hot air expanded pellet snacks consisting primarily of soy, potato or vegetables and IC 030. US 046: corn chips; corn-based snack foods; tortilla chips; grain-based snack foods; rice-based snack foods; pellet snacks, namely, hot air expanded pellet snacks consisting primarily of grains; puffed corn snacks; cheese flavored snacks, namely, cheese curls; cheese flavored puffed corn snacks. 107.On February 16, 2010 the USPTO published for Opposition WGM App. Nos. 386 and 401. 108.On or about and between March 6 and 9, 2010, Pre-Acquisition Defendants announced the release and sale for the first time the following products, Minors Gold, Potato Straws and Apple Straws, each of which bears one or more of the Infringing Works.
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109.Apple Straws are not a product covered under the list of goods, WGM Goods 05-051 for SP Reg. No. 083, nor included under WGM Goods 09-401, the subject of the TTAB Proceedings. 110.On or about March 15, 2010, a mere week after the launch of Pre-Acquisition Defendants Infringing Product, Apple Straws, and a full three months before the Acquisition, Plaintiff filed with the USPTO a timely request for extension to Oppose WGM App. No. 401 and 386 and the USPTO granted the extension. 111.On or about June 12, 2010, Plaintiff timely filed with the Trademark Trial and Appeal Board (TTAB) Opposition No. 91195262 (the Opposition, together with the Cancellation, the TTAB Proceedings). 112.On or about June 15, 2010, the Acquisition Date, HC first publicized the Acquisition creating Pre-Acquisition Defendants and Post-Acquisition Defendants. 113.On or about June 23, 2010, Plaintiff filed a Motion to Amend Opposition No. 91195262 to include Cancellation No. 92053083 (the Cancellation, together with the Opposition, the TTAB Proceedings). 114.On or around and between June 23, 2010 and August 11, 2010, Plaintiff conducted discussions with WGMs Counsel regarding the TTAB Proceedings. 115. On or about August 13, 2010, after the parties agreed to among other terms, to find a business solution to the issues in the TTAB Proceedings, Plaintiff and HC stipulated to a Motion to Suspend the TTAB Proceedings. 116. On October 4, 2010, in an Order, the TTAB approved the parties request for a stay and provided that the TTAB Proceedings would resume automatically under a new trial schedule as set forth in the Order.
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117.On November 25, 2010, within the trial schedule set forth by the TTAB, Plaintiff filed its Combined Notice of Opposition and Petition for Cancellation, Nos. 91195262 and 92053083, respectively. 118.In the TTAB Proceedings, Plaintiff Filed a Motion to Strike Certain Applicant/Respondent Affirmative Defenses. On September 21, 2011, The TTAB issued a Board Order on Sensible Foods, LLCs, opposer/petitioners, Motion to Strike Certain applicant/assignees, Defendant HGs Defenses in the TTAB Proceedings stating: Second Affirmative Defenses: Laches, Waiver and Estoppel; Third Affirmative Defense, Unclean Hands and Fourth Affirmative Defense: Accord and Satisfaction. The Board finds that these defenses are insufficient inasmuch as they are vague, conclusory and lack specificity. Accordingly, Sensible Foods motion is granted and Hain Gourmets second, third and fourth affirmative defenses are hereby stricken, with leave to amend with requisite particularity, if appropriate. 119.Plaintiff is informed and believes and based upon such information and belief alleges that PostAcquisition Defendants, one or more of them, attended the KeHe Distributor Show, Dallas Texas on February 7 & 8, 2011 at which Pre-Acquisition Defendants and each of them make a virtually identical use of Plaintiffs SNACKING HAS NEVER BEEN SO SENSIBLE and SNACKING HAS NEVER BEEN MORE SENSIBLE common law marks by using the phrase SNACKING HAS NEVER BEEN MORE SENSIBLE in connection with the sale, promotion and marketing of the Infringing Products. 120.Plaintiff is informed and believes and based upon such information and belief alleges that Preand Post-Acquisition Defendants, and each of them have used and continue to use willfully, knowingly, maliciously and unlawfully the Infringing Works to market, sell and distribute in U.S.
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commerce the Infringing/Encroaching Vegetable, Snack, and Fruit Products. Such use is improper and unlawful as against Plaintiffs legal and equitable rights in its SENSIBLE FOODS MARKS, is without Plaintiffs authorization and includes, among other uses: (i) use of the Infringing Works as business names, on packaging, and in trade literature, (ii) use of the Infringing Works to sell, market, and distribute the Infringing/Encroaching Vegetable, Snack, and Fruit Products; (iii) use of the Infringing Works on building signage, contracts and letterhead, (iv) use of the Infringing Works in its internet domain names and/or searches, (v) use of the Infringing Works on websites, and (vi) use of the Infringing Works in advertising, trade, and promotional materials. 121.Plaintiff is informed and believes and based upon such information and belief alleges that the Plaintiffs present and targeted customer bases overlap with the present and targeted customer bases of Defendants. 122.Plaintiff is informed and believes and based upon such information and belief alleges that the Plaintiffs present and targeted channels of distribution are the same as the present and targeted channels of distribution of Defendants, including store placement. 123.The unauthorized use of the Infringing Works in connection with the Infringing/Encroaching Vegetable, Snack, and Fruit Products marketed and sold by Defendants in U.S. commerce has irreparably injured Plaintiff by confusing consumers, distributors and trade participants and by diverting sales. If permitted to continue, the willful, malicious and unlawful actions of defendants will continue to irreparably injure Plaintiff, its reputation and goodwill, as well as the public interest in being free from confusion, reverse confusion, mistake or deception.
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124. The use of Infringing Works by the Defendants on their inferior products erodes the Plaintiffs goodwill created in the SENSIBLE FOODS MARKS as used on the Plaintiffs products and has caused and will continue to cause confusion, reverse confusion, mistake, or deception as to the nature and inherent qualities of the Infringing Products sold by Defendants under the Infringing Works, thereby injuring the Plaintiff and the public. 125. Plaintiff is informed and believes and based upon such information and belief alleges that in or around October 18, 2002, Defendant, WGM registered the domain name WWW.SOYCRISPS.COM (WGMs SC Domain Name) and subsequently posted an Internet website at that address (WGMs SC Website). The content of WGMs SoyCrisps Website clearly indicates that Defendants are responsible for its posting. Now, the public is redirected to WWW.SENSIBLEPORTIONS.COM when WGMs SC Domain Name is entered into an internet browser. 126. Plaintiff is informed and believes and based upon such information and belief alleges that in or around September 14, 2005, Defendant, WGM, registered the domain name WWW.WGOURMET.COM (WGMs Domain Name), and subsequently posted an Internet website at that address (WGMs Website). The content of WGMs Website clearly indicates that Defendants are responsible for its posting and now the public is redirected to WWW.SENSIBLEPORTIONS.COM when WGMs Domain Name is entered into an internet browser. 127. Plaintiff is informed and believes and based upon such information and belief alleges that in or around September 14, 2005, Defendants registered the confusingly-similar domain name WWW.SENSIBLEPORTIONS.COM (Defendants' Domain Name, together with
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WWW.SOYCRISPS.COM and WWW.WGOURMET.COM, Defendants Websites ), and subsequently posted an Internet website at that address (Defendants' Website together with WGMs SoyCrisps Website and WGMs Website Pre-Acquisition Defendants Websites). The content of Pre-Acquisition Defendants' Websites clearly indicate that the Pre-Acquisition Defendants were responsible for their postings. 128. Prior to the Acquisition, Pre-Acquisition Defendants' Websites used and incorporated Infringing Works, marks and designs that were confusingly similar to Plaintiffs SENSIBLE FOODS MARKS. 129. Prior to the Acquisition date, Pre-Acquisition Defendants or one of them operated the PreAcquisition Defendants Websites in which WG was claimed the copyright holder for the content of the websites, which also contained information that Sensible Snacks, Inc. is the manufacturer of among other products Veggie Straws and Apple Straws. 130. After the Acquisition and as late as November 23, 2011, Post-Acquisition Defendants or one of them operated the Pre-Acquisition Defendants Website at www.sensibleportions.com, which stated and continues to state that Sensible Snacks, Inc. is the manufacturer of among other products Veggie Straws, Veggie Crisps, Veggie Chips, and Apple Straws. 131. On or about and between the dates April 19, 2007 and March 19, 2008, Defendants conducted a recall of their products, which has led to extensive damage to and confusion with the Plaintiffs goodwill and reputation and goods; respectively. Subsequent to the recall, on or about September 18, 2009, Plaintiff received an email from a consumer confusing the source of the defective Garden Veggie Chips sold by Defendants and complaining to Plaintiff of a yellow cheesey looking substance on it that was covered in MOLD. The confusion with and
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association to Defendants defective product(s) seriously injured and could likely further injure the reputation and consumer trust that Plaintiff has established in its organic, natural and healthy dried fruit and vegetable snacks sold in connection with the SENSIBLE FOODS MARKS. 132. On October 5, 2010, WGM assigned the entire interest in WGM App. No. 386, WGM App. No. 051 and SP Reg. No. 083 to HG as per the USPTO website (Trademark Assignment Abstract of Title; Reel/Frame: 4290/0117). 133.Defendants sell the Infringing/Encroaching Vegetable, Snack and Fruit Products, which are the same as or similar to many products sold under the Plaintiffs SENSIBLE FOODS MARKS through the same channels of distribution, using a combination of words, terms, designs, logos, fonts, wording, trade names, descriptions, trademarks and other expressive means on its packaging and trade dress, as well as in public advertising and other forms of written, visual, design and business and trade communications; hereinafter referred to as the Infringing Works in a manner confusingly similar to and in some instances identical to that used by Plaintiff. Pre and Post-Defendants conduct is without Plaintiffs authorization and has been in bad faith and with full knowledge and awareness of Plaintiffs rights in its SENSIBLE FOODS MARKS. PreAcquisition Defendants adopted and used and Post-Acquisition Defendants continue to use the Infringing Works in a manner which is either in identical form or such near resemblance and strikingly similarity to the Plaintiffs SENSIBLE FOODS MARKS as to cause confusion, reverse confusion, or mistake and or to deceive the public. Defendants use of the Infringing Works, presented in a manner virtually identical to, or at a minimum, confusingly similar to those used by Plaintiff and has inevitably led to confusion and or reverse confusion and constitutes a willful and
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blatant disregard and violation of Plaintiffs rights under applicable trademark, unfair competition, and false advertising laws.
REPRESENTATIVE ACTUAL CONFUSION 134. On or about April 1, 2008, right before the Defendant, WGM, abandoned their App. No. 77/210120 on April 28, 2008, a Media Consultant for the Working Media Group, wrote an email to the Defendants, WGMs, officer, Jason Cohen, using the Plaintiffs domain name; namely, jason@sensiblefoods.com, regarding their services: We are media planners and buyers working with small to medium size businesses. 135. On April 1, 2008, Mr. Baxes, President of Plaintiff, called the media consultant to discuss the email to Jason Cohen, WGMs president. During the conversation, the media consultant confused Sensible Foods with Sensible Portions, writing in her follow-up email: I know that we can help you...in developing an advertising campaign for Sensible Foods, not to be confused with Sensible Portions as I Did. 136. On July 24, 2008, Monel, Inc. of Miami, Florida, issued Inv. No. WEB2008 to Sensible Portions an invoice for web fees associated with the inclusion of vendor products on the MONELGOURMET.COM web site, such invoice amounting to $325. 137. On September 17, 2008, unbeknownst to Plaintiff at the time, a representative of Monel, Inc. of Miami, Florida wrote an email to themselves and presumably to many of Monels clients, one of which was Shawn Sweeney, Senior Vice President of Sales for World Gourmet/Sensible Portions. The Subject was Americas Food and Beverage Show. Said email requested a $400 Contribution to show interested clients products at the trade show.
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138. On September 19, 2008, Shawn Sweeney (shawn@wgourmet.com) responded, We would love to do it. Please showcase the 5oz. Pita Bites boxed Crackers. Thanks. Shawn. 139. Nearly ten months after the email exchange between Monel and Shawn Sweeney, Plaintiff, also a vendor with Monel, Inc. received Check No. 087942 for $756.76 made out to Sensible Foods, LLC, with deductions for the July 24, 2008 Web Invoice in the amount of $325 and the $400 contribution for the Americas Food and Beverage Show both of which were one or more of the Pre-Acquisition Defendants charges. 140. Plaintiff is informed and believes and based upon such information and belief that one or more of the Pre-Acquisition Defendants were aware of the public confusion and or reverse confusion mounting from their use of the Infringing Works and Infringing Products in U.S. commerce. 141. On or around April, 2009, the Defendant, WGM, placed an ad in both The New Seasons Markets circular and its online website at NewSeasonsMarket.com for one or more of the PreAcquisition Defendants Multigrain Crisps product for the week of May 13 - May 19, 2009. 142. On May 12, 2009, New Seasons Market issued Invoice No. 051309G-19 to Dynamic Presence, Inc., 5100 South Dawson Street Suite 103, Seattle, WA 98108 (Dynamic) for: Item No.: GRINS600; Description/Comments: Sensible Portions Snacks Ad; Quantity: 1; Unit Price: $600; Amount: $600, said invoice also stating that Past Due invoices may be deducted through UNFI or JC Wright. (UNFI is United Natural Foods, Inc. (UNFI)) 143. On a template letter created on or about March 31, 2008, the date of which was never changed, a representative of the New Seasons Market authorized the distributor, United Natural Foods, Inc. (UNFI), to deduct the past-due invoice for one or more of the Pre-Acquisition Defendants ad, including a 2.5% processing fee.
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144. Resolution of the New Seasons Late invoice. On October 1, 2009, UNFI deducted from check no. 105586 the amount of one or more of Pre-Acquisition Defendants Inv. 051309G-19 ($600) plus the 2.5% processing fee ($15) for a total of $615 from the PLAINTIFFs accounting. Said deduction for $615 is represented on United Natural Foods West, Inc. accounting on September 22, 2009 Invoice No. NSEA051309G19SEP09, which represents the deduction authorized by New Seasons Markets Inv. No. 0513009G-19 for one or more of the Pre-Acquisition Defendants advertisement. 145. In or around June through August, 2009, Shawn Sweeney authorized discounts on behalf of World Gourmet Sensible Portions for its Broker, True North Marketing in regards to 2009 CAW, (Customer Appreciation Weekend trade show operated by Tree of Life). 146. On September 23, 2009, Tree of Life Corporate, a natural-products distributor of St. Augustine Florida faxed an invoice WM09132 to Plaintiff for one or more of the Pre-Acquisition Defendants obligation in an amount of $450 for MW CAW Booth Show for which Shawn Sweeney authorized show discounts. 147. On October 9, 2009, Tree of Life of St. Augustine Florida issued check No. 00414741 to Sensible Foods in the amount of $479.48 with deductions for Inv. No. MW09132: MW CAW Booth & Show Fees. 148. On or about October 7, 2009, Plaintiff received a letter addressed to Mr. Jason Cohen, [President of Defendant, WGM] Sensible Foods LLC, 782 Thompson Lane, Petaluma, CA 94952 from Step Strategy of Los Angeles, CA.
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149. Plaintiff is informed and believes and based upon such information and belief alleges that Defendants were aware of the public confusion, reverse confusion, mistake and Defendants deception mounting from Defendants use of the Infringing Works in U.S. commerce. 150. Plaintiff is informed and believes and based upon such information and belief alleges that at all relevant times herein, Stephanie Galliano was an agent, representative, contact or employee of Defendants responsible for among other duties and activities, purchasing booth space at The National Confectioners Associations (NCA) Sweets & Snacks Expo (NCASSE) held between May 25-27, 2010 at McCormick Place in Chicago, IL. 151. Plaintiff is informed and believes and based upon such information and belief alleges that Defendants chose or were assigned Booth No. 466 at NCASSE. 152. In or around January 29, 2010, Plaintiff received the PAST DUE invoice No. 7781 for $6,800.00 with an amount due of $2,800.00, addressed to Stephanie Galliano, SENSIBLE FOODS (emphasis added), P.O Box 750832, Petaluma, CA 94975-0832 the Final Installment of Two for 2010 ACE 10 X 20 Booth Space No. 466 ordered on May 21, 2009, Order No. 21899, under Account No. 75091. 153. In or around February 4, 2010, David Baxes, President of Plaintiff, called an accountant of NCA to discuss NCAs Invoice No. 7781. 154. On February 4, 2010, an accountant for the NCA wrote an email to Plaintiff regarding Mr. Baxes phone call stating: David, Thank you for your recent call. Please accept my sincere apologies for the mix up with invoice #7781 that was sent to Sensible Foods in error. It should have gone to Sensible Portions in [B]utler, NY and I inadvertently keyed in Sensible Foods.
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Please disregard the invoice and I have made the correction on my end. Thank you for your understanding. 155. Plaintiff is informed and believes and based upon such information and belief that Defendants were aware of the public confusion, reverse confusion, mistake and Defendants deception mounting from Defendants use of the Infringing products and Infringing Works in U.S. commerce. 156. On February 23, 2010, Plaintiff received an email from the Senior Account Manager at New Hope Natural Media with the subject: Expo West-Confusion with Company Name that stated: ...I received a marketing contract from you and wanted to make sure that it was not a duplicate. Little did I know that the account that i was looking at was Sensible Portions. Luckily, as I was speaking with Donny [VP Sales, Sensible Foods], I realized that you were an entirely different company (Sensible Foods, LLC), were in different states, etc. Again I apologize. You are all set with your Product Showcase and we look forward to seeing you at Expo West. 157. On May 11, 2010, Linda Pearl, Retail Account Manager for Sensible Foods, LLC, wrote an email to David Baxes, President of Plaintiff, with the subject: Customer Calling for Sensible Portions, stating: On Monday May 3, 2010, there was a message over the weekend from a customer wanting to change their order with us. I returned a call to [customer name] at [phone number]. She wanted to change her veggie chips flavor. I told her that we didnt sell veggie chips, was she sure that Sensible Foods [.com] was how she placed her order. She assured me yes....that was the company. When I asked her if Sensible Portions was the product she wanted....again she said yes. I then told her we were two separate companies. She apologized and said a quick good-by.
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158. On May 24, 2010, a representative from Rhoads & Smith, Inc., of Mountville, PA wrote an email to jmoran@sensiblefoods.com, presumably meant for John Moran, VP of Marketing, World Gourmet Marketing, LLC offering custom POP displays. 159. Between June, 2010 and November 2010, Plaintiff received the following emails all of which demonstrate the publics confusion and mistake with respect to the source of Plaintiffs and Defendants products: a. We had your [Plaintiffs] company in error on sourcing and item. We ultimately found that it was Sensible Portions that we were sourcing. b. I have had a hard time finding the veggie straws. Are you going to offer them online anytime soon to purchase. c. Plaintiffs internal email memorializing caller from National PKU News: She confused Sensible Portions with us and asked for the nutritional information on the apple straws that Sensible Portions makes. 160. On Monday January 3, 2011, a prospective employee of Defendants, sent a message to Plaintiff using the Plaintiffs contact form at http://sensiblefoods.com/contact stating: I would like to have information on employment opportunities and how i can apply for the Lancaster, PA location [phone number]. (Location for Sensible Snacks, Inc.). 161. On Monday February 4, 2011, a customer of the Defendant sent a message using the Plaintiffs contact form at http://sensiblefoods.com/contact stating: I just wanted to share with you that we tried your product for the very first time at Meijers today (sweet bbq potato straws) and my kids loved them...Good job, since my one is a very, very picky eater!
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162. On March 7, 2011 a Senior Resolutions Coordinator for Global Experience Specialists (GES), wrote an email to Plaintiff regarding the near disaster that resulted from the confusion, reverse confusion, and mistake related to the logistics and delivery of trade-show supplies to the Plaintiffs and Defendants trade-show booths, No. 526 and No. 117; respectively, for the 2011 KeHE Summer Selling Show held in Dallas, Texas on February 7 & 8, 2011. In said email, the coordinator states: I have been in my position for 4 years and i have never spoken with an exhibitor that has experienced this type of confusion at a show. GES informed Plaintiff that its booth had arrived on the trade-show floor when in fact it had not arrived because GES confused the delivery of Defendants trade-show supplies (the Defendants booth) with delivery of Plaintiffs trade-show supplies (the Plaintiffs booth). The confusion and mistake nearly caused Plaintiff to forfeit (due to set-up time deadlines) Plaintiffs right to exhibit, as well as all of the normal fees, costs, resources and financial outlays associated with exhibition. 163. Post-Acquisition Defendants sell and market among other products, Veggie Straws, through a vending-machine and packaged-goods distributor, Vistar. 164. Vistar maintains a distribution hub in Bellevue, Michigan. 165. Within a commercially reasonable time before August 3, 2011, one or more of the PostAcquisition Defendants received an order/purchase order from Vistar for the Post-Acquisition Defendants Sensible Portions Veggie Straw Snacks Product (Vistar SP Order). 166. Shortly after receiving Vistar SP Order, Defendant, HC, HG, WG, WGM, SS or Does 1-20 shipped Vistar SP Order via United Parcel Service Freight (UPS) to Vistars Bellevue, MI distribution hub.
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167. On or about August 3, 2011 Plaintiff received an order from Vistar for Plaintiffs Products (Vistar SF Order). 168. On or about August 5, 2011, Plaintiff shipped Vistar SF Order via UPS to Vistars Bellevue, MI distribution Hub. 169. On or around August 17, 2011, UPS informed Defendant HC, HG, WG, WGM, SS or Does 1-20 that part of Vistar SP Order; namely, 4 Master Cases, were damaged, rejected and would be returned to Defendant, HC, HG,WG, WGM, SS or Does 1-20. 170. On or around August 17, 2011 UPS informed Plaintiff that part of Vistar SF Order; namely, a mistaken 4 Master cases and not the true 3 Master Cases, was damaged, rejected, and would be returned to Plaintiff. 171. On or around August 24, 2011, UPS mistakenly delivered to Plaintiff, Post-Acquisition Defendants Product, the 4 Master Cases from Vistar SP Order; namely, Sensible Portions Veggie Straw Snacks. 172. On or around August 24, 2011, UPS mistakenly delivered Plaintiffs Product, the 3 Master Cases from the Vistar SF Order; namely, Sensible Foods Sweet Corn Crunch Dried Veggie Snack, to Defendant HC, HG,WG, WGM, SS or Does 1-20. 173. Within a commercially reasonably time of August 26, 2011 and after UPS delivered to Plaintiff the mistaken, but rejected portion of Vistar SP Order, Vistar representatives contacted Plaintiff stating that part of the mistaken Vistar SP Order was damaged and Vistar rejected the damaged portion, refused delivery and released the damaged portion of Vistar SP to UPS for return to Plaintiff.
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174. Within a commercially reasonably time of August 26, 2011 and after UPS delivered to Defendant, HC, HG, WG, WGM, SS or Does 1-20 the mistaken, but the rejected portion of Vistar SF Order, Vistar representatives contacted Defendant, HC, HG, WG, WGM, SS or Does 1-20 stating that part of the Vistar SF Order was damaged and Vistar rejected the damaged portion, refused delivery and released the damaged portion of Vistar SF to UPS for return to appropriate Defendant. 175. On or about September 12, 2011, Plaintiff returned to UPS for delivery to one of the Defendants, the rejected portion of Vistar SP Order that was mistakenly delivered to Plaintiff. 176. On or about September 28, 2011 after Plaintiff investigated the matter with the help of UPS, UPS informed Plaintiff that Defendant, HC, HG, WG, WGM, SS or Does 1-20 by and through their agent Tom Heck at Sensible Snacks/Sensible Portions ,who was slow to return UPS telephone calls, eventually confirmed that he had received the rejected portion of Vistar SF Order, consisting of 3 master cases and he disposed of them. 177. On June 8, 2011 Plaintiff received an e-mail from Defendants customer at http:// sensiblefoods.com/contact with the subject line reading: 'multi-grain crackers, stating "Recently my husband opened a packaged bag of crackers to find that half of the crackers were missing. The crackers were in a v shape jammed right the center of the package. So half of the crackers were missing. Kind of hard to imagine that half were gone. Kinda feel cheated in paying price." 178. On August 30, 2011 Plaintiff received an e-mail from Defendants customer at http:// sensiblefoods.com/contact with the subject line: How are your Veggie Straws made? stating Dear Sir/Madam, My girlfriend and I are having an argument over how your delicious treats are made. Can you settle this dispute for us? Thank you, customer x
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a.
Plaintiffs representative Linda Pearl responded with an e-mail: " We want to answer your question properly, which brand are you referring to Sensible Portions or Sensible Foods?
b.
Defendants Customer replied, stating: Thanks for responding, Linda We're asking about the Sensible Portions Veggie Straws with sea salt.
179. On October 7, 2011 Plaintiff received an email from Defendants customer at http:// sensiblefoods.com/contact with the subject line: veggie straws asking the question: the veggie straws were stale awful what to do
CAUSES OF ACTION FIRST CAUSE OF ACTION Breach of Implied Contract as against HC
180. Plaintiff re-alleges each and every allegation set out above in this Complaint. 181. Plaintiff initiated the TTAB Proceedings on June 13, 2010 and amended them on June 23, 2010. 182. Between about June 23, 2010 and August 11, 2010, Plaintiff discussed the TTAB Proceedings with WGM Counsel Vanessa Iganacio, ultimately arranging a conference call with HC. 183. On or about August 12, 2010, Plaintiffs representatives participated in a conference call with Irwin Simon, CEO of HC, Denise Faltischeck, HCs legal counsel, Vanessa A. Ignaccio WGMs legal counsel for the TTAB Proceedings. 184. Mr. Simon specifically stated that he would not give-up use of the SENSIBLE PORTIONS mark, the product name, and other Infringing Works regardless of the adverse impact on and damage to Plaintiff, in total disregard of Plaintiffs rights.
FIRST AMENDED COMPLAINT Case No. 3:11-cv-02819-SC 41
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185. In response to Plaintiffs contention that the issue between the parties was likelihood-ofconfusion, as well as the increasing actual confusion, Mr. Irwin asked whether Plaintiff was an attorney. Plaintiff responded, No. 186. Mr. Irwin represented, which was reinforced by Denise Faltischeck, HCs legal counsel, that HC did not want to resort to a legal action, but preferred to find a business solution. 187. After tense negotiation, Mr. Irwin stated that he would discontinue the use of the phrases sensible snack or sensible snacks (sensible snack(s)), in order to redress the past confusion of Pre-Acquisition Defendants use of the phrases and eliminate the ongoing actual confusion generated by the Post-Acquisition Defendants continuing use of the Infringing Works; namely, sensible snack(s) However, Defendants conduct continues unabated causing ongoing damage to Plaintiff. 188. HC agreed to discontinue the use of sensible snack(s), the subject of Defendants, WGMs, rejected application No. 77/210,120 (WGM App. No. 120), which Pre-Acquisition Defendants abandoned on or about April 28, 2008. 189. After abandoning WGM App. No. 120, Pre-Acquisition Defendants defied the findings of the TTAB in the prosecution of WGM App. No. 120 and willfully continued the use of the phrases sensible snack(s) causing the exact confusion experience by the public that the TTAB predicted. 190. As a result of HCs promise to redress the past confusion of Pre-Acquisition Defendants use of the Infringing Work, sensible snacks and eliminate the confusion generated by PostAcquisition Defendants use of the phrase sensible snack(s), Plaintiff, in an attempt to create good faith, follow fair dealing practices and seek a business solution, agreed to stay the TTAB
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Proceedings, which was accomplished on August 13, 2010 and by formal Board Order on October 4, 2010. 191. HC and SF demonstrated their agreement for HC to 1) redress and discontinue the use of sensible snack(s) and to eliminate the confusion associated therefrom and 2) enter purchase discussions for the Plaintiff for both of which Plaintiff agreed to stay the TTAB Proceedings. 192. The purpose of the purchase discussions was to address the exact same issues raised with Defendants Pre- and Post-Acquisition use of sensible snack(s); namely, the use of the Infringing Work, sensible portions, the subject of the WGM App. Nos. 386 and 401 and the parallel TTAB Proceedings. 193. The parties demonstrated the above agreement cited in 191 by actualizing the purchase discussions, which required the signing a Confidentiality Agreement (Exhibit CA, infra.) 194. By agreeing to negotiate the purchase of Plaintiff and take the first step, signing the CA, HC knew that SFoods agreed to stay the TTAB proceedings and in return HC would redress the past confusion of Pre-Acquisition Defendants use and eliminate the ongoing confusion resulting from the Post-Acquisition Defendants use of the phrases sensible snack(s). 195. Not only did HC not discontinue using sensible snacks, HC through HG, WGM, WG, and SS intensified the use of sensible snack(s) as a business, on Defendants Websites, in promotional material, in trade publications, in trade-show literature and in advertisements creating more confusion in the marketplace denying Plaintiff the benefit of his bargain and further damaging Plaintiff.
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196. Since the date of the implied contract, the confusion escalated culminating in the most recent egregious confusion regarding the mistakenly returned product to the opposing parties under this complaint from which the Post-Acquisition Defendants disposed of Plaintiffs Product. 197. As a direct and proximate result of HCs breaches, Plaintiff has been damaged in an amount not yet ascertained. Due to the particular nature of Defendants breaches and all of the Defendants financial gain, Plaintiffs damages cannot be determined at this time, and will be determined after Plaintiff has completed discovery and discerned the full nature and scope of Defendants breaches and Plaintiffs damages. 198. Defendants actions demonstrate willful misconduct, malice, fraud, wantonness, oppression or that entire want of care which would raise the presumption of conscious indifference to consequence, rendering Defendants liable to Plaintiff for additional punitive damages over and beyond Plaintiffs actual damages 199. As a direct and proximate result of HCs representations, actions, and the breaches, Plaintiff has incurred damages and is therefore entitled to recover compensatory and other damages in an mount to be determined at trial and consistent with California Civil Code 3294.
SECOND CAUSE OF ACTION Breach of Contract --Confidentiality Agreement (CA)-- as against HC
200. Plaintiff re-alleges each and every allegation set out above in this Complaint. 201. After HC agreed to discontinue using the Infringing Work(s), sensible snack(s), and Plaintiff agreed to the suspension of the TTAB Proceedings, HC drafted a confidentiality agreement.
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202. On August 16, 2010, Plaintiff and Defendant, HC, signed the CA. a true and correct copy of the Agreement is attached hereto as Exhibit CA and incorporated herein by this reference as though fully set forth at length below. 203. The CA provides that any information not generally known to the public will be deemed Confidential. In addition, any information provided to HC will be deemed Confidential. Further, the CA provides that Confidential Information means among other items detailed in the CA, financial information, performance results, and trade secrets. 204. The CA further provides among other provisions that HC will limit access to its (Representatives) who have a need to know such Confidential Information and only for the Permitted Purposes. 205. Plaintiff and Defendant, HC, entered into the CA agreement to protect Plaintiffs financial status, trade secrets, other proprietary information, and data from unwanted public disclosure and improper uses not consistent with the CA. 206. The confidentiality agreements are valid and enforceable contracts supported by adequate consideration; namely, Plaintiffs profitability. 207. Plaintiff performed all conditions, covenants and promises required of it in accordance with the terms of the CA. 208. Based upon HCs representations of their intention to purchase Plaintiff, Plaintiff and HC conducted numerous conference calls and Plaintiff provided HC with extensive financial, business, marketing, supply-chain and distribution information most of which was clearly marked confidential and covered under the subject matter of the CA.
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209. On or about October 5, 2010, Defendant, WGM (here an Assignor), assigned its entire interest in the SENSIBLE PORTION mark, the subject of the TTAB Proceedings to HG (here Assignee), a wholly owned subsidiary of HC. (from USPTO website; Assignment #3 Reel/ Frame: 4290/0117). 210. On or around October 13, 2011, HC agents and representatives visited Plaintiffs facilities gathering additional confidential information regarding Plaintiffs business, operations and expansion plans. 211. On or about November 25, 2010 after the breakdown in negotiations and having no other recourse, Plaintiff renewed the TTAB Proceedings as per Board Order (dated October 4, 2010) and filed its Combined Notice of Opposition and Petition for Cancellation Nos. 91195262 and 92053083. (TTAB Proceedings). 212. On December 29, 2010, HG as Assignee and or Defendant WGM (purchased on June 15, 2010 by HC), filed an answer (TTAB Answer) in the TTAB Proceedings. 213. In the TTAB Answer, Defendant HC through WGM/HG, revealed Plaintiffs confidential information. 214. WGM and HG are under the control of HC. 215. HC violated the CA by providing information to Representatives who disclosed the information in the TTAB Answer which is inconsistent with Permitted Purposes, infra, of the CA. 216. HC through HG and WGM used the information for purposes other than the Permitted Purposes allowed under the CA; namely, solely to facilitate the Recipents consideration, evaluation, and internal approval of the Transaction (the Permitted Purposes).
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217. Defendant, HC, failed to keep Plaintiffs information confidential as per the CA and did not perform all of the conditions, covenants and promises required of them under the CA, including, but not limited to, not disclosing all or a portion of Plaintiffs Confidential Information without the express or implied consent of Plaintiff as required by the CA. 218. By failing to abide by the terms of the Confidentiality Agreement, Defendant breached that agreement and caused Plaintiff irreparable harm and damages. 219. As a direct and proximate result of HCs breaches, Plaintiff has been damaged in an amount not yet ascertained. Due to the particular nature of Defendants breaches and all of the Defendants financial gain, Plaintiffs damages cannot be determined at this time, and will be determined after Plaintiff has completed discovery and discerned the full nature and scope of Defendants breaches and Plaintiffs damages. 220. Defendants actions demonstrate willful misconduct, malice, fraud, wantonness, oppression or that entire want of care which would raise the presumption of conscious indifference to consequence, rendering Defendants liable to Plaintiff for additional punitive damages over and beyond Plaintiffs actual damages. 221. As a direct and proximate result of HCs representations, actions, and the breaches, Plaintiff has incurred damages and is therefore entitled to recover compensatory and other damages in an mount to be determined at trial and consistent with California Civil Code 3294.
THIRD CAUSE OF ACTION Breach of the Implied Covenant of Good Faith and Fair Dealing against HC 222. Plaintiff re-alleges each and every allegation set out above in this Complaint.
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223. After signing the CA, in a follow-up conversation with HC and after Plaintiff sent it samples of Plaintiffs Products, Mr. Simon represented to Plaintiff, that its products were excellent and as a business solution to the TTAB Proceedings that he wanted to purchase Plaintiff and said he will pay a fair price for your company. 224. In a follow-up conversation with John Carroll, President/Officer of HC, who continued the purchase discussions, stated that HC considered a fair price to be the equivalent of 6-to-7 times EBITDA. 225. During their discussions from around June 23, 2010 until their termination on or around October 4, 2010, HC and Plaintiff had 1) an implied agreement that HC would discontinue the use of the phrase, sensible snack(s), to eliminate the resulting public confusion and Plaintiff would agree to stay the TTAB Proceedings, 2) a written agreement for HC only to provide Plaintiffs Confidential Information to Representatives concerned with the Transaction and to further the fair and orderly purchase of Plaintiff by HC, 3) an oral agreement to facilitate the purchase of Plaintiff by HC to eliminate the additional and mounting confusion generated by the Defendants use of the Infringing Works. 226. HC knew from the receipt of Plaintiffs Confidential Information, discussions, emails, site visits and the contracts that Plaintiff altered and delayed its plans relying on the representations Irwin Simon made to Plaintiff regarding HCs desire to execute a fair business resolution to the increasing confusion with Plaintiffs SENSIBLE FOODS MARKS in the marketplace caused by Pre- and Post-Acquisition Defendants use of the Infringing Works on the Infringing/ Encroaching Vegetable, Snack and Fruit Products.
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227. Plaintiff relied on HC representations and delayed its imminent business decisions regarding expansion, moving, leasing, and location, given HC the benefit of having flexibility with the decision making process in executing imminent expansion and moving plans to fit its business and Plaintiff-integration goals. 228. Plaintiff relied on HCs representation of a good faith desire to actually purchase Plaintiff so it delayed important business decisions. 229. Plaintiff accommodated and complied with all of HCs requests for information, site visits and other due diligence requests. 230. Plaintiff anticipated fulfillment of Irwin Simons representation that he would make the Transaction work. 231. Contrary to representation made by Irwin Simon, HC through HG, WGM, WG, and SS increased the Post-Acquisition use in U.S. commerce of the Infringing Works on the Infringing/ Encroaching Vegetable, Snack and Fruit Products, thereby increasing confusion in the marketplace, as well as frustrating Plaintiffs receipt of its bargained-for benefit of having less confusion in the public for having entered into the agreements. 232. HCs failure to discontinue using, in commerce, on the Infringing/Encroaching Vegetable, Snack and Fruit Products, products that are not covered under SP Reg. No. 083 or WGM Goods 05-05, increased confusion and continues to create new and expanding instances of confusion. 233. HC through HG, WG, WGM and or SS also deliberately destroyed Plaintiffs products (damaged portion of Vistar SF Order, supra) that came into one or more of their possessions through the very confusion, caused by the Defendants use of the Infringing Works, that are
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confusingly similar to the SENSIBLE FOODS MARKS and that Plaintiff sought to eliminate by entering into the Implied and CA agreements. 234. Plaintiff had a reasonable expectation that HC would take concrete steps to discontinue at least the use of sensible snack(s) and help reduce similar confusion generated by the other Infringing Works; however, HC through HG, WG, WGM and or SS caused more confusion in the public, destroyed product and unfairly interfered with Plaintiffs receipt of the benefit of less public confusion and business interruption. 235. Plaintiff was deprived of the benefits of the Implied and CA agreements to eliminate the confusion and execute a fair transaction. 236. HC though its representative John Carroll represented that HC paid between 6 and 7 times EBITDA (purchase price multiples), but contrary to HCs stated purchase price multiples, HC reneged on its promise to pay a fair price and instead insisted on a purchase price of merely 3 times, exposing HCs lack of good faith and demonstrating their lack of intent to fulfill their promises under the Implied Contract. 237. By 1) expanding and continuing the use of the Infringing Works on the Infringing/Encroaching Vegetable, Snack and Fruit Products, in the exact same distribution channels serving a very similar target customer base, 2) releasing Plaintiffs Confidential Information 3) negotiating in bad faith and 4) garnering significant business time to develop and execute an expanded sales, marketing and promotional campaigns that increased public confusion, HC frustrated Plaintiffs reasonable expectation in the combined agreements to eliminate the confusion related to the Defendants use of the Infringing Works on the Infringing/Encroaching Vegetable, Snack and
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Fruit Products, through either a purchase or by discontinuing Post-Acquisition Defendants use of the Infringing Works on the Infringing/Encroaching Vegetable, Snack and Fruit Products. 238. Plaintiff received none of the benefits HC promised to it for Plaintiffs agreement to stay the TTAB Proceedings and foster a smooth business integration by and through a fair transaction. 239. By releasing the Plaintiffs Confidential Information, HC frustrated Plaintiffs reasonable expectation of having its information remain confidential. 240. HC violated the covenant of good faith and fair dealing when it used its disparate bargaining power to misrepresent its intentions to purchase Plaintiff. 241. Plaintiff and HC had an implied covenant of good faith and fair dealing in their relationship with each other, which was violated when HC used its disparate bargaining power and assurances to Plaintiff that it would in fact purchase Plaintiff; however, Defendant violated the Implied Contract and CA and destroyed Plaintiffs right to receive the fruits of the Implied Contract and Confidentiality Agreement. 242. As a direct and proximate result of HCs breaches, Plaintiff has been damaged in an amount not yet ascertained. Due to the particular nature of Defendants breaches and all of the Defendants financial gain, Plaintiffs damages cannot be determined at this time, and will be determined after Plaintiff has completed discovery and discerned the full nature and scope of Defendants breaches and Plaintiffs damages. 243. Defendants actions demonstrate willful misconduct, malice, fraud, wantonness, oppression or that entire want of care which would raise the presumption of conscious indifference to consequence, rendering Defendants liable to Plaintiff for additional punitive damages over and beyond Plaintiffs actual damages
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244. As a direct and proximate result of HCs representations, actions, and the breach of the covenant of good faith and fair dealing, Plaintiff has incurred damages in an amount not yet ascertained and is therefore entitled to recover compensatory and other damages in an mount to be determined at trial and consistent with California Civil Code 3294.
FOURTH CAUSE OF ACTION Contributory Infringement 245. Plaintiff re-alleges each and every allegation set out above in this Complaint. 246. Prior to the Acquisition Date, WGM induced WG, SS, or one or more Does 1-20 1) to print packaging and promotional material using the Infringing Works, 2) make Infringing/ Encroaching Vegetable, Snack and Fruit Products that bear the Infringing Works, and 3) place the materials and products into U.S. commerce. 247. WGM knew from the Commissioner of TMs rejection of WGM App. No 120 that the use of the phrase sensible snacks would result in a likelihood of confusion with Plaintiffs SENSIBLE FOODS MARKS which is the basis for trademark infringement. 248. WGM caused or induced SS to purchase equipment for the manufacture and distribution of Infringing/Encroaching Vegetable, Snack and Fruit Products, outside the scope of its SP Reg. No. 083, bearing the Infringing Works. SS produced the Infringing Products bearing the Infringing Works and distributed the Infringing/Encroaching Vegetable, Snack and Fruit Products in U.S. commerce. 249. Despite WGM knowledge that using sensible snack(s) infringed Plaintiffs SENSIBLE FOODS MARKS, WGM intentionally induced WG, SS and or Does 1-20 to infringe SENSIBLE FOODS MARKS by manufacturing Infringing/Encroaching Vegetable, Snack and
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Fruit Products bearing the Infringing Works that are confusingly similar to Plaintiffs SENSIBLE FOODS MARKS. 250. By agreement or arrangement and transfer, WGM, obtained profit from WG, SS and or Does 1-20. 251. After the Acquisition Date, HC induces HG, WGM, WG, SS and or one or more Does 1-20 to print packaging, advertising, marketing and promotional materials using the Infringing Works, make Infringing/Encroaching Vegetable, Snack and Fruit Products that bear the Infringing Works, and place the materials and the Infringing/Encroaching Vegetable, Snack and Fruit Products into U.S. commerce. 252. HC knew from the Commissioner of TM rejection of WGM App. No 120 that the use of the phrase sensible snacks leads to a likelihood of confusion which is the basis for trademark infringement as well as from Plaintiff provided examples in the creation and execution of the Implied Contract and the CA> 253. Despite HCs knowledge that using sensible snack(s) infringed Plaintiffs SENSIBLE FOODS MARKS, HC intentionally induced and continues to induce WGM, WG, SS and or Does 1-20 to infringe the SENSIBLE FOODS MARKS by manufacturing Infringing/Encroaching Vegetable, Snack and Fruit Products bearing the Infringing Works. 254. By agreement, HC, obtains profit from one or more of HC, WGM, WG, SS and or Does 1-20. 255. Plaintiff is informed and believes and based upon such information and belief alleges that Defendants, and each of them, contract with and induce others; namely one or more Does 1-20, to perform among other activities, manufacture, package, store, promote and ship Defendants, HC, HG, and or WGM products.
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256. By engaging in the conduct set forth above, Defendants, HC and WGM, have contributed, aided and/or encouraged other Defendants and Does 1-20 to infringe the SENSIBLE FOODS MARKS to promote, market, distribute and/or sell the Infringing Products using the Infringing Works. 257. Plaintiff is informed and believes that HCs and WGMs, acts contribute to, aid and/or encourage non-HC-WGM defendants to infringe the SENSIBLE FOODS MARKS; to promote, market, distribute and/or sell HCs and WGMs products, including, but not limited to the Infringing/Encroaching Vegetable, Snack and Fruit Products; that such acts were committed with full knowledge of and disregard for Plaintiffs rights, including Plaintiffs national market rights with respect to the sale of Plaintiffs Products under its protected SENSIBLE FOODS MARKS; and with the intent to cause confusion, reverse confusion, mistake, and/or to deceive. 258. As a result of HCs and WGMs acts alleged herein, Plaintiff has suffered and will continue to suffer damage to its business, reputation, goodwill and the lost of sales and profits Plaintiff would have made but for HCs and WGMs acts in an amount according to proof but in excess of the jurisdictional minimum of this Court. 259. Defendants actions demonstrate willful misconduct, malice, fraud, wantonness, oppression or that entire want of care which would raise the presumption of conscious indifference to consequence, rendering Defendants liable to Plaintiff for additional punitive damages over and beyond Plaintiffs actual damages. 260. Defendants threaten to continue to do the acts complained of herein, and unless restrained and enjoined, will continue to do so to Sensible Foods irreparable damage. It would be difficult to ascertain the amount of compensation that could afford Plaintiff adequate relief for such
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continuing acts. Plaintiffs remedy at law is inadequate to compensate it for the injuries threatened by Defendants continuing conduct, and it is therefore entitled to injunctive relief.
FIFTH CAUSE OF ACTION Unfair Competition under California Law (Cal. Bus. & Prof. Code 17200 et seq.) 261. Plaintiff re-alleges each and every allegation set out above in this Complaint. 262. Defendants' wrongful acts as described herein constitute unlawful, unfair, and/or fraudulent business practices in violation of Section 17200 et seq. of the California Business and Professions Code and California common law, including, without limitation, palming off and or reverse confusion. 263. As a direct and proximate result of Defendants' wrongful acts, Plaintiffs have suffered and will continue to suffer substantial pecuniary losses and irreparable injury. As such, a remedy at law is not adequate to compensate for injuries inflicted by Defendants. Accordingly, Plaintiffs are entitled to temporary, preliminary and permanent injunctive relief. 264. As a proximate result thereof, Plaintiff has been damaged in an amount not yet ascertained, but not less that the jurisdictional minimum of this Court and is therefore entitled to recover compensatory and other damages in an mount to be determined at trial and consistent with California Civil Code 3294.
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SIXTH CAUSE OF ACTION Deceptive Trade Practices under California Law (Cal. Bus. & Prof. Code 17500 et seq.) 265. Plaintiff re-alleges each and every allegation set out above in this Complaint. 266. Defendants' acts, as set forth herein, constitute deceptive trade practices under Cal. Bus. & Prof. Code 17500 et seq., all to the damage of Plaintiff, as previously alleged attaching the all legal and equitable relief sought by Plaintiff.
SEVENTH CAUSE OF ACTION (State False Advertising) (Cal. Bus. & Prof. Code 17500 et seq.) 267. Plaintiff re-alleges each and every allegation set out above in this Complaint. 268. Pre-Acquisition Defendants sold and Post-Acquisition Defendants sell Apple Straws, Veggie Straws, Veggie Chips and Veggie Crisps (together FA Products). 269. The ingredients for Veggie Crisps are: Potato Flakes, Rice Flour, Potato Starch, Yellow Corn Meal, Spinach Powder, Carrot Powder, Salt, Mono Glycerides (A Processing Aid) Wheat and Eggs. 270. Veggie Crisps are not covered under the products listed in WGM App. 051, SP Reg. No. 083, nor WGM App. Nos. 386 or 401. 271. The ingredients for Apple Straws are: Corn Flour, Rice/Whole Rice Flour, Sunflower Oil, Whole Wheat Flour, Sugar, Whole Oat Flour, Seasonings Blend (Sugar, Cinnamon, Maltic Acid,
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Salt, Natural Apple Flavor), Whole Barley Flour, Potato Fiber, Apple Puree, Salt, Natural Apple Flavor. 272. Apple Straws are not covered under the products listed in WGM App. 051, SP Reg. No. 083, nor WGM App. Nos. 386 or 401. 273. The ingredients for Veggie Straws are: Potato Flour (Potato Flakes and Potato Starch), Canola Oil and/or Safflower Oil and/or Sunflower Oil, Corn Starch, Tomato Paste, Spinach Powder, Sea Salt, Sugar, Beetroot Powder (color), and Turmeric. 274. Veggie Straws are not covered under the products listed in WGM App. 051, under SP Reg. No. 083, or WGM App. No. 386. 275. The ingredients for Veggie Chips are Potato Flour (Potato Flakes and Potato Starch), Sunflower Oil, Wheat Starch, Tomato, Puree, Spinach Powder, Salt, Sugar, and Turmeric. 276. Veggie Chips are not covered under the products listed in WGM App. 051, under SP Reg. No. 083, or WGM App. No. 386. 277. Since around 2005, Pre-Acquisition Defendants, under their Mammas and World Gourmet brands and after on around March 6 and 9, 2010 for the FA Products under the Sensible Portions brand, promoted the consumption of their products to consumers as better-for-you products having the right ingredients giving the consumers the same satisfaction they crave from unhealthier products. 278. Pre- and or Post-Acquisition Defendants promoted and continue to promote on the PostAcquisition Defendants Websites the consumption of their products Minors Gold, Potato Straws and Apple Straws as the next generation in unique and better-for-you snacks, guilt free, and heart healthy.
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279. Pre- and Post-Acquisition Defendants promoted and continue to promote on the Defendants Websites the consumption of their product Apple Straws by stating [c]lose your eyes and imagine fresh apples delicately seasoned with cinnamon because thats just what this fun-shaped straws tastes like, which falsely suggests that Apple Straws are made from apples, when in fact they are made primarily from potatoes. 280. The Pre-Acquisition Defendants expended significant resources on sales, promotional and advertising materials in an effort to influence the purchase of Veggie Straws, Veggie Crisps, Veggie Chips and Apple Straws based upon the consumers mistaken belief, created by Defendants, that the products are made of vegetables or apples; respectively, when in fact, the dominant inherent characteristic of the FA Products is potatoes and other significant ingredients. 281. The Post-Acquisition Defendants have expended and continue to expended significant resources in an effort to influence the purchase of Veggie Straws, Veggie Crisps, Veggie Chips and Apple Straws based upon the consumers mistaken belief that the products are made of vegetables or apples; respectively, when in fact, the dominant inherent characteristic of the products is potatoes and other significant ingredients. 282. The use of the term veggie to describe a primarily potato product is a literal falsity. 283. The use of the term apple to describe a primarily potato product is a literal falsity. 284. The Pre-Acquisition Defendants claimed and the Post-Acquisition Defendants claim on the Defendants Websites and in their promotional materials that the FA Products are the next generation in healthy foods. 285. The Pre-Acquisition Defendants used and the Post-Acquisition Defendants use the terms veggie and apple to describe and represent the contents of the FA Products products, but in
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fact they misrepresent the primary content of their products, which is potato and specifically not veggies or apples, respectively. 286. The price point per quantity of FA Products is very low, but the margin is much higher by using potato as the primary ingredient rather than vegetables or apples. 287. The combination of a low price point associated by misrepresentation with premium product features or ingredients like vegetables and fruit and the use of the cheaper and significantly so, primary ingredient, potatoes, deceives the purchasing public. 288. The purchasing public believes they are purchasing a high-value good (veggies or apples) for a low price, when in fact they are getting a low-valued good, primarily potatoes, in its place. 289. The perceived presence of vegetables and fruits in the FA Products influences the relevant purchasing public to purchase the FA Products. 290. The relevant purchasing public thinks that FA Products are merely dehydrated vegetables and apples; respectively. 291. The relevant purchasing public thinks that FA Products are healthy; for example, Veggie Straws, because they think that they are getting the nutrients from natural vegetables, but in fact, Veggie Straws only contain 0% vitamin A, 0% calcium, 2% vitamin C, 2% iron, and 1 g. fiber; which misrepresents their healthy character and deceives the public. 292. The FA Products, bearing the false descriptions of primary ingredients as well as its website, advertisements, promotions, marketing and trade literature function in interstate commerce, including all fifty-two states and territories of the U.S. 293. On or around June 14, 2011, the Center for Environmental Health (CEH), a California based environmental watchdog, named Hain Celestial in a class-action lawsuit (CEH Lawuit) filed
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in Alameda County Superior Court, California alleging that HC, specifically, mislabels their products using the term organic. 294. By using the term organic, HC profited and benefitted from an increase in the price, return or margin, and prestige of the brands without having to pay the premium for organic ingredients, especially in child, organic products. 295. Subsequent to the CEH lawsuit Hain Celestial announced an update to the product list for among other brands JASON, Zia natural skincare, and Alba Botanica. (together CEH Products). 296. HC changed the packaging to comply with California State Law. 297. HC changed the packaging to comply with NSF/ANSI 305 certification specifications for made with organic- labeled products; namely, specifically identifying which ingredients are organic and deemphasizing the relationship of the term organic to non-organic ingredients. 298. In todays health conscious environment and in particular healthy foods, HC knows the value of associating, representing, marketing, and selling products with premium product features like, organic, healthy, natural, fruit, and vegetable, and at the same time substituting less valuable/ higher margin ingredients; specifically, non-organic and potatoes in CEH Products and FA Products; respectively. 299. Defendants' wrongful acts as described herein and publicly disseminated constitute false or misleading advertising which Defendants knew, or should have known, to be untrue or misleading in violation of Section 17500 et seq. of the California Business and Professions Code and California common law.
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300. As a direct and proximate result of Defendants' wrongful acts, Plaintiffs have suffered and will continue to suffer substantial pecuniary losses and irreparable injury. As such, a remedy at law is not adequate to compensate for injuries inflicted by Defendants. Accordingly, Plaintiffs are entitled to temporary, preliminary and permanent injunctive relief. 301. As a proximate result thereof, Plaintiff has been damaged in an amount not yet ascertained, but not less that the jurisdictional minimum of this Court and is therefore entitled to recover compensatory and other damages in an mount to be determined at trial and consistent with California Civil Code 3294.
EIGHTH CAUSE OF ACTION Federal Trademark Infringement (Lanham Act Violations - 15 U.S.C. 1051 et seq.)
302. Plaintiff re-alleges each and every allegation set out above in this Complaint. 303. Plaintiff owns the Sensible Foods Registrations for the SENSIBLE FOODS MARKS and its common law marks SNACKING HAS NEVER BEEN MORE SENSIBLE and SNACKING HAS NEVER BEEN SO SENSIBLE. 304. Plaintiffs' Marks are distinctive and have been used in commerce worldwide. 305. Defendants actions are likely to cause confusion, reverse confusion, and or mistake and to deceive potential customers and the general purchasing public as to the source, origin and/or sponsorship of Defendants products marketed under the Infringing Works, and are likely to deceive the public into believing that such products are made, provided, authorized, endorsed or sponsored by Plaintiff, thereby damaging Plaintiffs reputation, goodwill, and sales.
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306. As a direct and proximate result of Defendants' unlawful actions, Plaintiffs have suffered and will continue to suffer irreparable injury. 307. The aforementioned wrongful acts of Defendants constituted intentional wrongful conduct with the intention on the part of Defendants of thereby depriving Plaintiff of property, legal rights or otherwise causing injury and was despicable conduct that subjected Plaintiff to cruel and unjust hardship and conscious disregard of its rights, so as to justify an award of exemplary and punitive damages.
NINTH CAUSE OF ACTION Reverse Confusion (Lanham Act 15 U.S.C. 1114 et. seq.) 308. Plaintiff re-alleges each and every allegation set out above in this Complaint. 309. Defendants used and still use the Infringing Works without the consent of the Plaintiff in a manner that has caused confusion, mistake and deception and is likely to cause confusion, mistake or to deceive ordinary purchasers as to the source of the goods. 310. Defendants actions have led and are likely to lead the public to conclude, incorrectly, that Plaintiff's goods originate from Defendants, which will damage both Plaintiff and the public. 311. Defendants unauthorized use of the Infringing Works and Infringing Products in U.S. interstate commerce as described above constitutes reverse-confusion trademark infringement under 15 U.S.C. 1114(1) and is likely to cause consumer confusion, mistake, or deception.
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312. As a direct and proximate result of Defendant's reverse-confusion trademark infringement, Plaintiff has suffered and will continue to suffer loss of income, profits and good will and Defendants have and will continue to unfairly acquire income, profits and good will. 313. Defendants acts of reverse-confusion trademark infringement will cause further irreparable injury to Plaintiff if Defendants are not restrained by this Court from further violation of Plaintiff's rights. Plaintiff has no adequate remedy at law.
TENTH CAUSE OF ACTION (Cancellation of Federal Trademark Registration) COUNT I (Fraud on the Trademark Office) 314. Plaintiff re-alleges each and every allegation set out above in this Complaint. 315. This claim for cancellation is brought pursuant to the Lanham Act, 15 U.S.C. 1064 (3), 1119. 316. Plaintiff is informed and believes and based upon such information and belief alleges that the Defendants statements to the PTO were false at the time the were made, the statements were material to the issuance of SP Reg. No. 083, and Defendants intended to mislead the PTO.
COUNT II (Lack of Distinctiveness) 317. Plaintiff re-alleges each and every allegation set out above in this Complaint. 318. This claim for cancellation is brought pursuant to the Lanham Act, 15, U.S.C. 1064 (1), 1119. 319. Defendants SENSIBLE PORTIONS mark is descriptive and lacked acquired distinctiveness at the time SP Reg. No. 083 issued.
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320. Defendant lacked sufficient exclusivity, manner and length of use of the mark, amount and manner of advertising, amount of sales and number of customers prior to issuance of Defendant's registrations to permit its marks to create in the minds of consumers the impression that Defendants marks denote a single thing coming from a single source. 321. Accordingly, Defendants SENSIBLE PORTIONS mark was ineligible for registration pursuant to 15 U.S.C. 1052(e) and its SENSIBLE PORTIONS and design mark was ineligible for registration without a disclaimer of the descriptive wording SENSIBLE PORTIONS apart from the mark as shown, 15 U.S.C. 1056(a). 322. Defendants Registration No. 3,195,083 is therefore invalid and unenforceable, and Plaintiff is entitled to a judgment canceling the Registration.
COUNT III (Defendants Mark is Generic) 323. Plaintiff re-alleges each and every allegation set out above in this Complaint. 324. This claim for cancellation is brought pursuant to the Lanham Act, 15, U.S.C. 1064 (3), 1119. 325. Defendants purported mark contains or consists of a generic term or defines a quality or characteristic of the products as used in the United States in connection with the Infringing Products because the phrase sensible portion is merely a description of a generic terms wellknown in the consumer packaged goods industry; namely, a portion with 100 calories. On information and belief, all of Defendants Infringing Products with the phrase sensible portions contain the text and design elements pointing to text that reads this is sensible, this is your portion 38 straws or as in the SOU Only 100 calories per pack. The phrase sensible
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portions is perceived by the relevant consuming public to mean a product that contains 100 calories or less. 326. As a generic term or quality or characteristic of the products, except for any stylized elements, Defendants mark and registration enumerated above is unenforceable and invalid, and therefore subject to cancellation under 15 U.S.C. 1064. 327. Defendants Registration No. 3,195,083 is therefore invalid and unenforceable, and Plaintiff is entitled to a judgment canceling the Registration.
ELEVENTH CAUSE OF ACTION False Advertising, Misrepresentation, & Unfair Competition (Lanham Act Violations - 15 U.S.C. 1125 (a) et seq. 328. Plaintiff re-alleges each and every allegation set out above in this Complaint. 329. Plaintiff specifically re-alleges each and every claim under Plaintiffs SEVENTH CAUSE OF ACTION; namely, 268-298. 330. Defendants knew, or should have known, to be untrue or misleading their misrepresentations and statements and Defendants conduct, activities and campaigns were intentionally designed to influence, with a high-degree of success, the purchasing decisions of the recipients of the misrepresentations and statements and so deceives the public into purchasing veggie and apple products, when in fact they are made primarily from potatoes. 331. Defendants aforementioned misrepresentations regarding the quality, nature and characteristics of their products as well as the aforementioned statements in commercial advertising, marketing or promotion concerning the FA Products and the Defendants commercial activities is intended to deceive their recipients and the public, which constitutes False Advertising,
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Misrepresentation, and Unfair Competition in violation of 43 (a)(1)(b) of the Lanham Act, 15. U.S.C. 1125(a)(1)(B). 332. Defendants misrepresentations and false advertising are in direct competition with Plaintiff. 333. Defendants are attempting to palm off' their goods and services as those of Plaintiffs, and they are attempting to misrepresent Defendants as those of Plaintiffs Products. 334. Defendants unlawful actions alleged herein were made in commerce through the Defendants Websites and their advertising, marketing, promotional and trade materials. 335. Defendants unlawful actions injured, or are likely to injure, Plaintiffs in an amount exceeding the minimum jurisdictional requirements of this Court. 336. As a direct and proximate result of Defendants' unlawful actions, Plaintiffs have suffered and will continue to suffer irreparable injury. 337. The aforementioned wrongful acts of Defendants constituted intentional wrongful conduct with the intention on the part of Defendants of thereby depriving Plaintiff of property, legal rights or otherwise causing injury and was despicable conduct that subjected Plaintiff to cruel and unjust hardship and conscious disregard of its rights, so as to justify an award of exemplary and punitive damages. TWELFTH CAUSE OF ACTION (Trademark Infringement- Common Law) 338. Plaintiff re-alleges each and every allegation set out above in this Complaint. 339. Plaintiff has valid and protectable common law rights in the SENSIBLE FOODS MARKS. Plaintiff started to use this mark well prior to Defendant's first use of the Infringing Works.
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340. The acts of Defendant described above constitute infringement of Plaintiffs common law rights in the SENSIBLE FOODS MARKS 341. Defendants use of the Infringing Works is likely to cause confusion as to the origin of Defendants products and is likely to cause others to believe that there is a relationship between Defendant and Plaintiff, particularly as Defendant is marketing its Infringing Works and Infringing Products in the same fashion that Plaintiff markets its products, with references to sensible snacking. 342. Defendants infringing acts will permit Defendant to capitalize on the strength of Plaintiffs success, goodwill, and reputation in promoting its own products. 343. As a direct and proximate result of Defendant's wrongful conduct, Plaintiff will be deprived of the value of, among other things, its common law SENSIBLE FOODS MARKS as an asset. 344. As a direct and proximate result of Defendants wrongful conduct, Plaintiff has been damaged by Defendants wrongful acts, and such damage will continue unless the Court enjoins Defendants acts. Plaintiff has no adequate remedy at law for Defendants continuing violation of the SENSIBLE FOODS MARKS. 345. As a proximate result thereof, Plaintiff has been damaged in an amount not yet ascertained, but not less than the jurisdictional minimum of this Court and is therefore entitled to recover compensatory other damages in an mount to be determined at trial and consistent with California Civil Code 3294.
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WHEREFORE, Plaintiff prays that this Court enter judgment for Plaintiff on each of its claims as follows: 1. Directing that Defendants, their officers, directors, agents, representatives, successors or assigns, and all persons acting in concert or in participation with any of them, be immediately and permanently enjoined pursuant to 15 U.S.C 1116 from: a. infringing the SENSIBLE FOODS MARKS; b. falsely designating the origin, sponsorship, or affiliation of their business, goods, or services; c. using, on or in connection with the promotion, advertisement, marketing, sales, offering for sale, distribution of any goods and services relating to the SENSIBLE PORTION Mark, the SENSIBLE SNACKS term, SNACK SENSIBLY, SNACKING HAS NEVER BEEN MORE SENSIBLE, SNACKING HAS NEVER BEEN SO SENSIBLE or any derivation or colorable imitation of the SENSIBLE FOODS MARKS, or any name or mark that is confusingly similar to the SENSIBLE FOODS MARKS (collectively, the Prohibited Marks), on or in connection with Defendants goods or services; d. making further attempts to register the SENSIBLE PORTIONS Marks or any derivation or colorable imitation of the SENSIBLE FOODS MARKS, or any name or mark that is confusingly similar to the SENSIBLE FOODS MARKS, including but not limited to the Prohibited Marks; e. making or employing any other commercial use of any of the Prohibited Marks; f. making or displaying any statement or representation that is likely to lead the public or the trade to believe that Defendant's goods or services are in any manner associated or affiliated with or made, approved, endorsed, licensed, sponsored, authorized, or franchised by or are otherwise connected with Sensible Foods; g. using any other false designation of origin or any other thing calculated or likely to cause confusion or mistake in the mind of the trade or public or to deceive the trade or public into believing that Defendant's products or activities are in any way made, sponsored, licensed, endorsed, or authorized by, or affiliated or connected with Plaintiff, or originate from Plaintiff; h. doing any other acts or things calculated or likely to cause confusion, mistake, or deception in the mind of the public and trade or to lead purchasers or consumers or investors into the belief that the products or services promoted, offered, or sponsored by Defendant emanate from or originate with Plaintiff or its licensees, or are somehow sponsored, licensed,
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endorsed, or authorized by, or affiliated or connected with Plaintiff, or originate from Plaintiff; i. engaging in any other activity constituting unfair competition with Sensible Foods; j. further diluting and/or infringing Plaintiff's SENSIBLE FOODS MARKS and damaging Plaintiff's goodwill; k. using or registering any of the Prohibited Marks as part of any domain name, regardless of country-code TLD or generic TLD; l. purchasing any of the Prohibited Marks in connection with any sponsored advertising on the Internet or using any of the Prohibited Marks in any source code or otherwise using the Prohibited Marks such that a search for Plaintiff on the Internet will cause any domain name or website of Defendant to appear in search results; and m. aiding, assisting, or abetting any other party in doing any act prohibited by sub-paragraphs (a) through (m) above. 2. Under 15, U.S.C. 1119, declaring that Defendant has no right to the registration applied for in WGM App. No. 051 which gave rise to SP Reg. No. 3,195,083, and certifying the Court's order to the Director of the Patent and Trademark Office for cancellation of the SENSIBLE PORTIONS mark. 3. Directing that Defendant be required to voluntarily and expressly abandon or cause to be voluntarily and expressly abandoned, with prejudice, all applications to register the Prohibited Marks, including Registration No. 3,195,083 pursuant to 37 C.F.R. 2.68. 4. Directing that Defendant deliver up to Sensible Foods for destruction all products, labels, signs, stationery, prints, packages, promotional and marketing materials, advertisements, and other materials (a) currently in its possession or under its control or (b) recalled by Defendant pursuant to any order of the Court or otherwise, incorporating, featuring, or bearing the Prohibited Marks or any other simulation, reproduction, copy, or colorable imitation thereof. 5. Directing that Defendant file with the Court and serve upon Sensible Foods within thirty (30) days after entry of judgment a report in writing under oath, setting forth in detail the manner and form in which it has complied with the above. 6. Awarding Sensible Foods such damages, including lost profits and Defendants unjust enrichment, in an amount to be determined at trial but in excess of the jurisdictional amount of this Court it has sustained or will sustain by reason of Defendants acts of trademark infringement and unfair competition and that such sums be trebled pursuant to 15 U.S.C. 1117 and California Civil Code 3294.
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7. Awarding Sensible Foods restitution, including Defendant's profits, under Cal. Bus. & Prof. Code 17200 et seq. 8. Awarding Sensible Foods all other recoverable gains, profits, property, and advantages derived by Defendant from its unlawful conduct and unjust enrichment. 9. Awarding to Sensible Foods exemplary and punitive damages to deter any further willful infringement as the Court finds appropriate. 10.Awarding to Sensible Foods its costs and disbursements incurred in this action, including the equivalent of reasonable attorneys' fees pursuant to 15 U.S.C. 1117 (a), Cal. Bus. & Prof. Code 17200 et seq. , 17500 et. seq. , and under any other California law. 11.An Award of Plaintiffs reasonable expenses, including attorneys fees and costs of this action, as permitted by law and Cal. Civ. Code Section 3426. 12.Awarding Sensible Foods interest, including pre-judgment interest on the foregoing sums. 13.Awarding to Sensible Foods such other and further relief as the Court may deem just and proper. Respectfully submitted,
December 1 , 2011
Frederick M. Rarick, Esq. /s/ Frederick M. Rarick Attorney for Plaintiff
Pursuant to Rule 38(a) of the Fed. R. Civ. Pro, Plaintiff demands a Jury Trial.
December 1 , 2011
Frederick M. Rarick, Esq. /s/ Frederick M. Rarick Attorney for Plaintiff
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ATTESTATION PURSUANT TO GENERAL ORDER 45 X.A. I, Frederick M. Rarick, am the ECF User whose ID and password are being used to file this FIRST AMENDED COMPLAINT.
December 1, 2011
/s/ Frederick M. Rarick FREDERICK M. RARICK Lawjet@aol.com 13 Pinto Lane Suite OK Rolling Hills Estates, CA 90274 Telephone: (585) 219-4900 Facsimile: (585) 219-4905 Attorney for Plaintiff Sensible Foods, LLC
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Sensible Foods V World Gourmet

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Case3:11-cv-02819-SC Document28 Filed12/01/11 Page1 of 71

SENSIBLE FOODS, LLC Plaintiff, v.

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