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Quantum, Inc. v. Akeso Health Sciences, LLC

United States District Court, D. Oregon

August 2, 2017

QUANTUM, INC., an Oregon corporation Plaintiff, Counterclaim Defendant,
v.
AKESO HEALTH SCIENCES, LLC, a California corporation, Defendant, Counter-Claimant.

          Jon P. Stride, Steven Olson, Sarah Einowski Tonkon Torp LLP Attorneys for Plaintiff/Counterclaim Defendant

          Aaron M. Brian, Staci Jennifer Riordan Nixon Peabody LLP Attorneys for Defendant/Counter-Claimant

          FINDINGS OF FACT, CONCLUSIONS OF LAW, OPINION AND ORDER

          John Jelderks, U.S. Magistrate Judge

         Akeso Health Sciences, LLC is a California limited liability company and is the successor in interest to PR-Osteo (collectively referred to as "Akeso"). Akeso is in the business of developing and selling nutritional supplements. Curt Hendrix is the Chief Science Officer and primary spokesperson for Akeso, Quantum is an Oregon corporation based in Eugene, Oregon that is in the business of selling natural health products. Its president and primary spokesperson is David Shaw.

         This case involves numerous claims and counterclaims brought by Plaintiff/Counter-Defendant Quantum and Defendant/ Counter-Claimant Akeso relating to their long-term business relationship involving the sale and distribution of a natural migraine relief formula. For ease of reference, the claims and counterclaims are listed below.

         Claims and Counterclaims

         I. Quantum's Claims

         Claim One seeks a declaration under the Declaratory Judgment Act that the 2002 Contract between the parties expired on October 31, 2004.

         Claim Two:

         Count One: Trademark Infringement of the MigreLief trademark under 15 U.S.C. §1114.

         Count Two: Unfair Competition in violation of 15 U.S.C. § 1125(a). Quantum alleges Akeso's use of the MigreLief trademark after its right to do so terminated has caused and will continue to cause customer confusion.

         Count Three: Common law trademark infringement and unfair competition through Akeso's wrongful use of the MigreLief trademark.

         II. Akeso's Counterclaims

         Count 1: Declaratory Relief under the Declaratory Judgment Act that the 2002 Contract is valid and enforceable.

         Count 2: Breach of Contract/Specific Performance. Akeso seeks an Order that Quantum sell to Akeso the MigreLief trademark and any common law trademark rights to MigreLief for the price of $25, 000.

         Count 3: Breach of contract through sales to improper accounts.

         Count 4: Breach of implied covenant of good faith and fair dealing through failure to honor the 2002 Contract and the trademark purchase provisions therein.

         Count 5: Promissory Estoppel. Akeso alleges Quantum failed to fulfill promises with respect to Akeso's right to purchase the MigreLief trademark for $25, 000 or a later agreement to transfer the trademark to Akeso at no cost. Akeso seeks an Order that Quantum specifically perform in conformity with the terms of the 2002 Contract or in an alternative manner deemed equitable by the Court. Akeso alternatively asks the Court to grant it the right to continue using the MigreLief trademark and/or transfer to Akeso the MigreLief trademark, the trademark application, any common law trademark rights and the goodwill attached.

         Count 6: Equitable Estoppel. Akeso asks the Court to order that Quantum specifically perform in conformity with the terms of the 2002 Contract or in an alternative manner deemed equitable by the Court with respect to Akeso's right to purchase or receive the MigreLief trademark. Akeso alternatively asks the Court to grant it the right to continue using the MigreLief trademark and/or transfer to Akeso the MigreLief trademark, the trademark application, any common law trademark rights and the goodwill attached.

         Count 7: Cancellation of MigreLief trademark. Akeso alleges that Quantum has not engaged in substantially exclusive use or controlled the quality of the use of the MigreLief trademark and has not had the use in commerce required to support the trademark registration. Akeso asks the Court to cancel and invalidate the MigreLief trademark or, alternatively, to grant Akeso the right to continue using the trademark due to its invalidity.

         Count 8: Cancellation of MigreLief trademark application. Akeso alleges Quantum has filed a second application for the MigreLief trademark, It seeks a declaration that Quantum's continuing efforts to register the MigreLief trademark are an infringement of Akeso's rights and seeks an Order enjoining Quantum from fding further documents with the USPTO to complete or sustain registration of the MigreLief trademark.

         Count 9: Breach of Implied Contract/Specific Performance. Akeso seeks an Order compelling Quantum to sell or transfer to Akeso the MigreLief trademark, any common law trademark rights and the goodwill attached.

         Count 10; Breach of Implied Contract through sales to improper accounts. Akeso alleges Quantum breached the parties' implied contract by selling MigreLief tablets outside the agreed upon sales channels.

         Count 11: Federal Trademark Infringement of the MigreLief trademark. Akeso alleges that it is the rightful owner of the MigreLief trademark. It further alleges that Quantum is selling under the MigreLief trademark and with the same or similar packaging, marketing and sales materials, a tablet containing an alternate formula to the Patented Formula.

         Count 12: Akeso alleges Quantum engaged in unfair competition in violation of 15 U.S.C. §1125(a) through use of the MigreLief trademark on tablets containing the Alternate Formula.

         Count 13: Akeso asserts common law trademark infringement and unfair competition claims regarding use of the MigreLief trademark on Alternate Formula tablets.

         Count 14: Akeso alleges Quantum violated state unfair and deceptive trade practices laws through its alleged use of the MigreLief trademark.

         Count 15: Federal Trademark Infringement of the PURACOL trademark. Akeso alleges Quantum is using Akeso's PURACOL trademark to sell migraine relief tablets similar to what Akeso sells using the same trademark.

         Count 16: Akeso alleges Quantum engaged in unfair competition in violation of 15 U.S.C. § 1125(a) with respect to the use of Akeso's PURACOL trademark.

         Count 17: Akeso asserts common law trademark infringement and unfair competition claims I regarding Quantum's alleged use of the PURACOL trademark.

         Count 18: Akeso alleges Quantum violated state unfair and deceptive trade practices laws through its alleged use of the PURACOL trademark.

         Count 19: Akeso seeks injunctive relief.

         Procedural Background

         On March 31, 2017, Quantum filed a motion for summary judgment which this Court granted in part and denied in part by Opinion and Order dated June 5, 2017. (Dkt. #122). The Court's Order resolved in Quantum's favor Quantum's Claim One and Akeso's Counterclaims 1, 2, 3, 4, 6, 11, 12, 13, 14, and 19. The Court then decided that trial on the remaining ...


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