Case 3:21-cv-11835-RHC-CI ECF No. 28, PageID.977 Filed 11/16/21 Page 1 of 19
`
`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF MICHIGAN
`SOUTHERN DIVISION
`
`BREEZE SMOKE LLC,
`
`Civil Action No. 3:21-cv-11835
`
`Plaintiff/Counter-Defendant,
`
`vs.
`
`Hon. Robert H. Cleland
`Magistrate Judge Curtis Ivy, Jr.
`
`TRUCENTA HOLDINGS LLC,
`
`JURY TRIAL DEMANDED
`
`Defendant/Counter-Plaintiff.
`
`TRUCENTA HOLDING’S
`MOTION FOR LEAVE TO FILE SECOND AMENDED
`COUNTERCLAIMS PURSUANT TO FED. R. CIV. P. 15 (a)(2)
`
`
`
`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF MICHIGAN
`SOUTHERN DIVISION
`
`BREEZE SMOKE LLC,
`
`Civil Action No. 3:21-cv-11835
`
`Plaintiff/Counter-Defendant,
`
`vs.
`
`Hon. Robert H. Cleland
`Magistrate Judge Curtis Ivy, Jr.
`
`TRUCENTA HOLDINGS LLC,
`
`JURY TRIAL DEMANDED
`
`Defendant/Counter-Plaintiff.
`
`TRUCENTA HOLDING’S
`MOTION FOR LEAVE TO FILE SECOND AMENDED
`COUNTERCLAIMS PURSUANT TO FED. R. CIV. P. 15 (a)(2)
`
`
`
`Case 3:21-cv-11835-RHC-CI ECF No. 28, PageID.978 Filed 11/16/21 Page 2 of 19
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`In accordance with Fed. R. Civ. P. 15(a)(2), Trucenta Holdings LLC
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`(“Trucenta Holdings”) moves for leave to file a Second Amended Counterclaim,
`
`as attached hereto as Exhibit 1, to allege a claim that Breeze Smoke LLC
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`(“Breeze Smoke”) committed fraud in connection with filings before the U.S.
`
`Patent and Trademark Office (“USPTO”) and
`
`the Trademark Trial and
`
`Appeal Board (“TTAB”) in connection with seeking to register any of Breeze
`
`Smoke’s marks for its electronic cigarettes and when responding to an
`
`Opposition filed by Trucenta Holdings.
`
`Pursuant to Local Rule 7.1, counsel for Breeze Smoke LLC was contacted
`
`seeking concurrence for the relief requested in this Motion, which concurrence was
`
`not obtained.
`
`Dated: November 16, 2021
`
` /s/ Richard W. Hoffmann
`
`PAUL R. HOFFER (P71460)
`Hoffer Law, PLLC
`32267 Auburn Dr.
`Beverly Hills, MI 48025
`(586) 531-3701
`paul@hofferlawpllc.com
`
`RICHARD W. HOFFMANN (P42352)
`JAMES D. STEVENS, JR. (P82081)
`Reising Ethington PC
`755 W. Big Beaver Road, Suite 1850
`Troy, Michigan 48084
`Telephone: (248) 689-3500
`E-mail: hoffmann@reising.com
`jdsjr@reising.com
`
`
`
`Case 3:21-cv-11835-RHC-CI ECF No. 28, PageID.979 Filed 11/16/21 Page 3 of 19
`
`Attorneys for Defendant Trucenta
`Holdings LLC
`
`
`
`Case 3:21-cv-11835-RHC-CI ECF No. 28, PageID.980 Filed 11/16/21 Page 4 of 19
`
`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF MICHIGAN
`SOUTHERN DIVISION
`
`BREEZE SMOKE LLC,
`
`Civil Action No. 3:21-cv-11835
`
`Plaintiff/Counter-Defendant,
`
`vs.
`
`Hon. Robert H. Cleland
`Magistrate Judge Curtis Ivy, Jr.
`
`TRUCENTA HOLDINGS LLC,
`
`JURY TRIAL DEMANDED
`
`Defendant/Counter-Plaintiff.
`
`BRIEF IN SUPPORT OF TRUCENTA HOLDINGS’
`MOTION FOR LEAVE TO FILE SECOND AMENDED
`COUNTERCLAIMS PURSUANT TO FED. R. CIV. P. 15(a)(2)
`
`
`
`Case 3:21-cv-11835-RHC-CI ECF No. 28, PageID.981 Filed 11/16/21 Page 5 of 19
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`TABLE OF CONTENTS
`
`I.
`
`II.
`
`Introduction .................................................................................................... 1
`
`Pertinent Facts ............................................................................................... 2
`
`III. Trucenta Holdings Has Sufficient Basis to Seek The Amendment ........... 6
`
`A.
`
`B.
`
`C.
`
`The Rules require that leave to amend shall be freely given .......... 6
`
`There is no undue delay, bad faith or dilatory motive .................... 7
`
`There was no failure to cure the deficiency in the earlier
`amendment and Breeze Smoke is not prejudiced ............................ 8
`
`D.
`
`The amendment is not futile ............................................................... 9
`
`IV. Conclusion .................................................................................................... 13
`
`i
`
`
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`Case 3:21-cv-11835-RHC-CI ECF No. 28, PageID.982 Filed 11/16/21 Page 6 of 19
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`TABLE OF AUTHORITIES
`
`Cases
`
`Belling v. Ennis, Inc., 613 F. App'x 924 (Fed. Cir. 2015) ....................................... 11
`
`Colvin v. Caruso, 605 F.3d 282 (6th Cir. 2010) ....................................................... 7
`
`Crawford v. Roane, 53 F.3d 750 (6th Cir. 1995) ....................................................... 7
`
`Foman v. Davis, 371 U.S. 178 (1962) ....................................................................... 7
`
`Inge v. Rock Finan. Corp., 388 F.3d 930 (6th Cir. 2004).......................................... 7
`
`Jaguar Land Rover Ltd. v. Bombardier Recreational Prod., Inc.,
`
`No. 16-CV-13386, 2018 WL 11352593 (E.D. Mich. Nov. 5, 2018) ...... 11–12
`
`Moore v. City of Paducah, 790 F.2d 557 (6th Cir. 1986) ...................................... 7–9
`
`Statutes
`15 U.S.C. § 1125(a) ................................................................................................... 3
`
`21 U.S.C. § 331 .................................................................................................... 3, 10
`
`21 U.S.C. § 387b .................................................................................................. 3, 10
`
`21 U.S.C. § 387j(c)(1)(A) .................................................................................... 3, 10
`
`Rules
`Fed. R. Civ. P. 9 ....................................................................................................... 12
`
`Fed. R. Civ. P. 15(a)(2) ...................................................................................... 1, 6–7
`
`Other Authority
`TMEP (Trademark Manual of Examining Procedure) §901.04 .............................. 11
`
`
`
`
`
`
`
`
`ii
`
`
`
`Case 3:21-cv-11835-RHC-CI ECF No. 28, PageID.983 Filed 11/16/21 Page 7 of 19
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`I.
`
`
`
`Introduction
`
`In accordance with Fed. R. Civ. P. 15(a)(2), Trucenta Holdings LLC
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`(“Trucenta Holdings”) moves for leave to file a Second Amended Counterclaim, to
`
`allege a claim that Breeze Smoke LLC (“Breeze Smoke”) committed fraud in
`
`connection with filings before the U.S. Patent and Trademark Office (“USPTO”)
`
`and the Trademark Trial and Appeal Board (“TTAB”) in connection with seeking to
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`register any of Breeze Smoke’s marks for its electronic cigarettes and when
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`responding to an Opposition filed by Trucenta Holdings and an Opposition Breeze
`
`Smoke initiated.
`
`
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`Breeze Smoke’s actions are so egregious that they can only be intentional.
`
`Breeze Smoke violated its duty to inform the USPTO and the TTAB (and this Court
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`for that matter) that Breeze Smoke’s applications seeking to register its alleged
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`“Breeze Marks” in connection with electronic cigarettes are fatally flawed because
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`all of Breeze Smoke’s electronic cigarettes, are and always have been, unlawful to
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`be distributed and marketed in interstate commerce.
`
`
`
`In accordance with the liberal pleading allowance under Fed. R. Civ. P.
`
`15(a)(2), Trucenta Holding’s Motion to file a Second Amended Counterclaim should
`
`be granted.
`
`
`
`1
`
`
`
`Case 3:21-cv-11835-RHC-CI ECF No. 28, PageID.984 Filed 11/16/21 Page 8 of 19
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`II. Pertinent Facts
`
`
`
`1.
`
` Breeze Smoke filed the present action against Trucenta Holdings on
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`August 6, 2021, asserting, inter alia, that certain of its alleged marks having a Breeze
`
`component in connection with electronic cigarettes (vaping products) have been
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`used in United States commerce. [See, e.g., ECF 1 at ¶¶ 9-15].
`
`
`
`2.
`
`Breeze Smoke filed a Motion for Preliminary Injunction against
`
`Trucenta Holdings seeking to enjoin Trucenta Holdings’ use of Trucenta Holdings’
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`Breeze marks. [ECF. 7]. The primary basis for Breeze Smoke’s motion were
`
`assertions by Breeze Smoke that it has valid trademark rights in its Breeze Marks
`
`while Trucenta Holdings is prohibited from asserting trademark rights for its Breeze
`
`Marks due to Trucenta Holdings’ marijuana products being unlawful under federal
`
`law and therefore could not support any claim for trademark rights. [Id. at pp. 11-
`
`13]
`
`
`
`3.
`
`The Court held an in-person Status Conference on September 22, 2021.
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`During that conference, Breeze Smoke vehemently asserted that Trucenta Holdings
`
`cannot possess any trademark rights because Trucenta Holdings’ use of its Breeze
`
`Marks was only in connection with its marijuana products which are illegal under
`
`federal law. Trucenta Holdings counsel informed this Court that Trucenta Holdings
`
`uses and has used their Breeze Marks in connection with products that are lawful
`
`under federal law, identifying, for example, Trucenta Holdings’ CBD products.
`
`
`
`2
`
`
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`Case 3:21-cv-11835-RHC-CI ECF No. 28, PageID.985 Filed 11/16/21 Page 9 of 19
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`
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`4.
`
`At that same conference, counsel for Trucenta Holdings informed the
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`Court that it intended to file a first amended pleading (which it did, ECF 19) to allege
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`a violation of Section 43(a) of the Lanham Act. 15 U.S.C. § 1125(a) because Breeze
`
`Smoke was representing that its vaping products were approved by the Federal Food
`
`and Drug Administration (“FDA”) when they were not.
`
`
`
`5.
`
`Since that time, Trucenta Holdings has learned of new and critical facts
`
`intentionally withheld by Breeze Smoke:
`
`
`
`
`
`a) Under Federal Law and absent a Marketing Granted Order pursuant
`
`to 21 U.S.C. § 387j(c)(1)(A), all of Breeze Smokes ENDS products are adulterated
`
`tobacco products as defined in 21 U.S.C. § 387b and are prohibited from being
`
`marketed, nor can they be introduced or delivered for introduction into interstate
`
`commerce under 21 U.S.C. § 331.
`
`
`
`
`
`b) Breeze Smoke does not have and never has had Premarket
`
`Authorization nor a Marketing Granted Order from the FDA for any of its vaping
`
`products.
`
`
`
`
`
`c) As of September 22, 2021, the date of the status conference, not only
`
`did Breeze Smoke not have Premarket Authorization or a Marketing Granted Order,
`
`it had already received a Marketing Denial Order from the FDA which was issued
`
`
`
`3
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`
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`Case 3:21-cv-11835-RHC-CI ECF No. 28, PageID.986 Filed 11/16/21 Page 10 of 19
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`on September 16, 2021 (Ex. A). Breeze Smoke failed to inform this Court of these
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`critical facts.1
`
`
`
`
`
`d) Breeze Smoke’s principal, Steven Haddad, knew Breeze Smoke’s
`
`vaping products are and always have been prohibited by federal statute from
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`introduction or delivery for introduction into interstate commerce. (Ex. B Haddad
`
`Decl. to Sixth Circuit, ¶ 1) (“I also must stay informed regarding regulatory decisions
`
`and analyze how those decisions impact Breeze Smoke’s financial outlook”)
`
`
`
`
`
`e) The Marketing Denial Order specifically informed Breeze Smoke
`
`that it could not introduce nine (9) of the ten (10) electronic cigarettes they applied
`
`for into interstate commerce. (“Therefore, you cannot introduce or deliver for
`
`introduction these products into interstate commerce in the United States.
`
`Doing so is a prohibited act under section 301(a) of the FD&C Act, the violation
`
`of which could result in enforcement action by the FDA”) (Ex. A. emphasis in
`
`original). The remaining applied-for-product was to be under further review by the
`
`FDA and continues to lack Premarket Authorization or a Marketing Granted Order.
`
`
`1 Breeze Smoke filed an appeal in the 6th Circuit, Case No. 21-3902 seeking a stay
`of the Marketing Denial Order that was issued against it, which reads in part:
`“…your products are misbranded under section 903(a)(6) of the FD&C Act and are
`adulterated under section 902(6)(A) of the FD&C Act. Failure to comply with the
`FD&C Act may result in FDA regulatory action without further notice. These
`actions may include, but are not limited to, civil money penalties, seizure, and/or
`injunction. The stay was denied. (Ex. C)
`4
`
`
`
`
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`Case 3:21-cv-11835-RHC-CI ECF No. 28, PageID.987 Filed 11/16/21 Page 11 of 19
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`
`
`
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`f) Breeze Smoke alleges that it owns, inter alia: i) Trademark
`
`Application No. 90/012,117 for the mark Breeze Smoke for disposable electronic
`
`cigarettes, based on actual use in commerce [ECF 7 Memorandum in Support at p.
`
`3, see also ECF 7-6]; ii) Trademark Application No. 90/246,820 for the mark Breeze
`
`Plus for disposable electronic cigarettes, based on actual use in commerce [Id., see
`
`also ECF 7-7]; iii) Trademark Application No. 90/555,765 for the mark Breeze Pro
`
`for disposable electronic cigarettes, an intent-to-use application; [Id. at 4] and iv)
`
`Trademark Application No. 90/650997 for the mark Breeze Palm for cigarette
`
`wraps, pre-rolling papers, wraps in the nature of tobacco wraps, tobacco wraps, pre-
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`rolled smoking cones; rolling paper cones, an intent to use application. Id.
`
`
`
`
`
`g) In connection with its preliminary injunction filing, particularly ECF
`
`7-6 and 7-7], Breeze Smoke omitted the fact that at the time their applications were
`
`filed its counsel signed declarations swearing that the marks were lawfully used in
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`commerce. See Exs. D and E respectively.
`
`
`
`
`
`h) Breeze Smoke has never informed the USPTO that its disposable
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`electronic cigarettes are not lawfully used in interstate commerce.
`
`
`
`
`
`i) Breeze Smoke asserted its alleged trademark rights in at least two
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`other Courts in this district in Case Nos. 5:20-cv-12944 and 2:20-cv-13413. In each
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`of those cases, Breeze Smoke failed to inform the respective court that its electronic
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`cigarette products were unlawfully introduced into interstate commerce and could
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`
`
`5
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`
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`Case 3:21-cv-11835-RHC-CI ECF No. 28, PageID.988 Filed 11/16/21 Page 12 of 19
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`not support claims for trademark rights. Breeze Smoke obtained injunctive relief
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`based on its alleged trademark rights – which it knew it did not possess. One of the
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`parties in Case No. 5:20-cv-12944 filed for bankruptcy, apparently as a result of the
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`injunction.
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`
`
`
`
`j) Some of Trucenta Holdings’ trademark applications, including but
`
`not limited to, Serial No. 90256675 (Ex. F) and 90292582 (Ex. G) are being held up
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`by the USPTO, at least in part as a direct result of Breeze Smoke’s trademark
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`applications. These Breeze Smoke applications are actual use based and are
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`premised upon Breeze Smoke’s false representations that it has valid trademark
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`rights are lawfully used in interstate commerce and are prior filed in time to Trucenta
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`Holdings’ applications in connection with marks that include a “Breeze” component.
`
`The parties to this case are also currently in an Opposition No. 91267970 (Breeze
`
`Smoke’s Answer is attached at Ex. H, see pp. 7-10)
`
`III. Trucenta Holdings Has Sufficient Basis to Seek The Amendment
`
`
`
`
`
`
`
`A.
`
`The Rules require that leave to amend shall be freely given
`
`Federal Rule of Civil Procedure 15 provides in pertinent part:
`
`(a) Amendments Before Trial.
`(2) Other Amendments. In all other cases, a party may amend
`its pleading only with the opposing party’s written consent or
`the court’s leave. The court should feely give leave when
`justice so requires.
`
`6
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`
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`Case 3:21-cv-11835-RHC-CI ECF No. 28, PageID.989 Filed 11/16/21 Page 13 of 19
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`
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`Foman v. Davis, 371 U.S. 178 (1962) discusses the standard for allowing
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`amendments to a complaint under Rule 15.
`
`
`
`Pursuant to Rule 15, when a party can no longer amend the pleadings as a
`
`matter of right, a party must seek the court’s leave or the written consent of the
`
`opposing party. However, "[t]he court should freely give leave [to amend] where
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`justice so requires." Fed. R. Civ. P. 15(a)(2). Rule 15 encompasses a liberal policy
`
`in favor of granting amendments and "reinforce[s] the principle that cases 'should be
`
`tried on their merits rather than the technicalities of pleadings.'" Inge v. Rock Finan.
`
`Corp., 388 F.3d 930, 936 (6th Cir. 2004) (quoting Moore v. City of Paducah, 790
`
`F.2d 557, 559 (6th Cir. 1986)). Leave to amend may not be appropriate under Rule
`
`15 "if the amendment is brought in bad faith, for dilatory purposes, results in undue
`
`delay or prejudice to the opposing party, or would be futile." Colvin v. Caruso, 605
`
`F.3d 282, 294 (6th Cir. 2010) (quoting Crawford v. Roane, 53 F.3d 750, 753 (6th
`
`Cir. 1995)).
`
`
`
`
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`B.
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`There is no undue delay, bad faith or dilatory motive
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`The present Motion does not suffer from undue delay. Trucenta Holdings
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`only recently became of aware of the fact that Breeze Smoke’s products are unlawful
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`in interstate commerce. Upon learning that fact, Trucenta Holdings investigated
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`Breeze Smokes’ filings with the USPTO, TTAB and other Courts in this District,
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`and saw that Breeze Smoke failed to inform each of these tribunals of this critical
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`
`
`7
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`
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`Case 3:21-cv-11835-RHC-CI ECF No. 28, PageID.990 Filed 11/16/21 Page 14 of 19
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`fact. Shortly thereafter, counsel for Trucenta Holdings arranged a call with counsel
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`for Breeze Smoke to inform them that Trucenta Holdings wanted to file a second
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`amended counterclaim. Upon the completion of its investigation, Trucenta Holdings
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`moved for leave to file a second amended Counterclaim.
`
`
`
`Trucenta Holdings is not bringing the present motion in bad faith and no
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`dilatory motive exits on the part of Trucenta Holdings. The underlying facts here
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`are and have been uniquely in the possession of Breeze Smoke and they failed to
`
`inform the Court, the USPTO, and Trucenta Holdings that all of Breeze Smoke’s
`
`electronic cigarettes are unlawfully in interstate commerce.
`
`C.
`
`There was no failure to cure the deficiency in the earlier
`amendment and Breeze Smoke is not prejudiced
`
`Trucenta Holdings has amended its counterclaims once already as a matter of
`
`
`
`
`right. At the time of that amendment, Trucenta Holdings was not aware that all of
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`Breeze Smoke’s electronic cigarettes were unlawful in interstate commerce nor that
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`Breeze Smoke failed to inform the USPTO, TTAB, other courts in this District, and
`
`this Court of that pertinent and material fact. Breeze Smoke never offered that
`
`information. Thus, there has been no repeated failure to cure the deficiency by
`
`previously allowed amendments.
`
`
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`Breeze Smoke will not suffer any prejudice, much less “undue prejudice,” if
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`Trucenta Holdings is allowed to amend its counterclaims again. In Moore v. City
`
`
`
`8
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`
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`Case 3:21-cv-11835-RHC-CI ECF No. 28, PageID.991 Filed 11/16/21 Page 15 of 19
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`of Paducah, 790 F.2d 557, 559-562 (6th Cir. 1986), the Sixth Circuit held that in
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`order to deny leave to amend, the district court must find both undue delay by the
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`party seeking the amendment and a substantial prejudice to the non-movant if
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`leave is granted.
`
`
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`Here, Breeze Smoke, through its managing member, has always been aware
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`that it has no trademark rights because it has always been aware of the federal
`
`regulations of electronic nicotine delivery systems (electronic cigarettes), that its
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`products have not received a Premarket Authorization from the FDA, and ultimately
`
`that its products are not lawfully in interstate commerce. Breeze Smoke has
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`repeatedly pressed trademark rights it does not have and withheld these critical facts
`
`from any and all tribunals it has been before. While it is true that Breeze Smoke will
`
`have to defend against the claims, there is no prejudice in allowing Trucenta
`
`Holdings to amend its counterclaims under these circumstances.
`
`
`
`
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`D.
`
`The amendment is not futile
`
`Trucenta Holdings’ amendment is not futile. The amendment seeks to add a
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`count of fraud based on Breeze Smoke’s failure to disclose to the USPTO, including
`
`the TTAB that it has no lawful use in commerce of its electronic cigarettes and by
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`signing declarations of actual use in its use-based applications.
`
`
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`Breeze Smoke argued in its Brief in Support of its Motion for a Preliminary
`
`Injunction that “only lawful use in commerce can give rise to trademark priority.”
`
`
`
`9
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`
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`Case 3:21-cv-11835-RHC-CI ECF No. 28, PageID.992 Filed 11/16/21 Page 16 of 19
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`[ECF 7, Memorandum at p. 11]. Breeze Smoke also cited this law before the TTAB
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`in Opposition No. 91267970, Ex. H and Opposition No. 91267970 (Ex. I, Breeze
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`Smoke’s Motion to Suspend, see Ex. D thereto.)
`
`
`
`Breeze Smoke’s evidence (Ex. I to this Brief at Ex. D thereof) is particularly
`
`telling. Breeze Smoke sent a cease and desist letter to SD Import, LLC. In that letter
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`Breeze Smoke’s counsel quoted the applicable law and then blatantly misrepresented
`
`that Breeze Smoke was in compliance:
`
`Furthermore, on 09 September 2020, the U.S. Food and
`Drug Administration (“FDA) requires all new tobacco
`products on the market to have premarket authorization
`prior to any sale of the tobacco product. Those deemed
`new tobacco products still on the market that do not have
`premarket applications submitted by 09 September 2020,
`will be the subject to FDA compliance and enforcement
`actions. Any authentic/real product purchased from an
`authorized Breez Smoke distributor does have this
`premarket authorization… (emphasis added)
`Id. at p 2 of 3.
`
`
`
`Ironically, Breeze Smoke has no lawful use in commerce of its electronic
`
`cigarettes. Under Federal Law and absent a Premarket Authorization or a Marketing
`
`Granted Order pursuant to 21 U.S.C. § 387j(c)(1)(A), all vaping products (including
`
`Plaintiff’s electronic cigarettes) are adulterated tobacco products as defined in 21
`
`U.S.C. § 387b and are prohibited from introduction or delivery for introduction into
`
`interstate commerce under 21 U.S.C. § 331 until a Marketing Granted Order issues.
`
`
`
`10
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`
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`Case 3:21-cv-11835-RHC-CI ECF No. 28, PageID.993 Filed 11/16/21 Page 17 of 19
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`
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`Breeze Smoke and its representatives have in at least two different trademark
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`applications and two trademark Oppositions, as well as a filing in this case, relied
`
`on a date of first use for its electronic cigarettes. But as set forth above, Breeze
`
`Smoke and its representatives knew that only lawful use in commerce can establish
`
`trademark rights and a date of first use. While Breeze Smoke and its representatives
`
`knew both the law requiring lawful use in commerce and that their electronic
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`cigarettes were not lawful in interstate commerce, they have never once divulged
`
`this critical fact to this Court, the other Courts in this District, or the USPTO. When
`
`filing a use-based trademark application with the PTO, it is the responsibility of the
`
`applicant and the applicant’s attorney to determine whether an assertion of use in
`
`commerce is supported by the relevant facts. This is because the validity of an
`
`applicant’s assertion of use in commerce generally does not arise in ex parte
`
`examination. TMEP (Trademark Manual of Examining Procedure) §901.04. The
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`trademark examining attorney assigned to the application usually does not
`
`investigate an applicant’s claim that the mark is lawfully used in commerce. Here
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`Plaintiff abdicated that responsibility.
`
`One who wishes to challenge an applied-for or registered trademark with the
`
`TTAB based on a claim of fraud “must prove with clear and convincing evidence
`
`that the applicant knowingly made a false, material representation, with the intent
`
`to deceive the PTO. It is not enough that the applicant should have known the
`
`
`
`11
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`
`
`Case 3:21-cv-11835-RHC-CI ECF No. 28, PageID.994 Filed 11/16/21 Page 18 of 19
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`statement was misleading.” Belling v. Ennis, Inc., 613 F. App'x 924, 925–26 (Fed.
`
`Cir. 2015). Jaguar Land Rover Ltd. v. Bombardier Recreational Prod., Inc., No.
`
`16-CV-13386, 2018 WL 11352593, at *8 (E.D. Mich. Nov. 5, 2018).
`
`Trucenta Holdings’ Proposed Second Amended Counterclaim pleads fraud
`
`with particularity as required by Fed. R. Civ. P. 9. Breeze Smoke and its
`
`representatives knowingly made a false, material representation, namely that
`
`Breeze Smoke’s electronic cigarettes are lawfully in interstate commerce. Breeze
`
`Smoke or its representatives intended to deceive the USPTO because it was fully
`
`apprised of the law regarding the unlawfulness of its electronic cigarettes, knew the
`
`TMEP requirement to disclose that a product is unlawfully in commerce, and even
`
`submitted sworn declarations in its use-based applications that Breeze Smoke’s use
`
`was lawful when it was not, Exs. D and E. The Trademark Examining Attorneys in
`
`each respective application relied upon the misrepresentations by Breeze Smoke’s
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`counsel of record as evident by a lack of Office Actions issued by the Examining
`
`Attorneys in the prosecution histories of the applications raising the issue of
`
`lawfulness and the eventual publishing of these applications for opposition.
`
`Finally, Trucenta Holdings is damaged by all of Breeze Smoke’s false
`
`representations. For example, the USPTO has suspended the prosecution of some
`
`of Trucenta Holdings’ trademark applications for its Breeze marks due to the use-
`
`based trademark applications filed by Breeze Smoke that were premised on the
`
`
`
`12
`
`
`
`Case 3:21-cv-11835-RHC-CI ECF No. 28, PageID.995 Filed 11/16/21 Page 19 of 19
`
`knowingly material misrepresentation that its use in connection with their
`
`electronic cigarettes was lawful in interstate commerce.
`
`For all of these reasons, Trucenta Holdings’ proposed Second Amended
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`Counterclaim is not futile.
`
`IV. Conclusion
`
`For all of the reasons stated above, Trucenta Holdings’ Motion for Leave to
`
`File Second Amended Counterclaims should be granted.
`
`Dated: November 16, 2021
`
` /s/ Richard W. Hoffmann
`
`PAUL R. HOFFER (P71460)
`Hoffer Law, PLLC
`32267 Auburn Dr.
`Beverly Hills, MI 48025
`(586) 531-3701
`paul@hofferlawpllc.com
`
`RICHARD W. HOFFMANN (P42352)
`JAMES D. STEVENS, JR. (P82081)
`Reising Ethington PC
`755 W. Big Beaver Road, Suite 1850
`Troy, Michigan 48084
`Telephone: (248) 689-3500
`E-mail: hoffmann@reising.com
`jdsjr@reising.com
`
`Attorneys for Defendant Trucenta
`Holdings LLC
`
`13
`
`
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