throbber
4:21-cv-03196 Doc # 1 Filed: 09/24/21 Page 1 of 38 - Page ID # 1
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF NEBRASKA
`
`
`Case No. ___________
`
`
`COMPLAINT
`
`ZO SKIN HEALTH, INC.,
`
`
`Plaintiff,
`
`
`
`
`
`
`v.
`
`SKINCARE MARKET, INC.,
`
`
`Defendant.
`
`Plaintiff, ZO Skin Health, Inc. (“ZOSH”), by and through its counsel of record, for
`
`its Complaint against Defendant Skincare Market, Inc. (“Defendant”), hereby states and
`
`alleges as follows:
`
`THE PARTIES
`
`1.
`
`ZOSH is a California corporation registered to do business in the State of
`
`Nebraska, with its principal place of business located in Irvine, California, and its main
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`distribution center located in Omaha, Nebraska.
`
`2.
`
`Defendant is a California corporation, with its principal place of business
`
`located in Walnut, California.
`
`JURISDICTION AND VENUE
`
`3.
`
`This Court has subject matter jurisdiction over this matter pursuant to 28
`
`U.S.C. §§ 1331 and 1338, 28 U.S.C. § 1367 and 18 U.S.C. § 1964. ZOSH’s federal
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`claims are predicated on 15 U.S.C. § 1114 and 15 U.S.C. § 1125(a) and (c), and its claims
`
`arising under California and Nebraska state law are substantially related such that they
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`form part of the same case or controversy under Article III of the United States
`
`Constitution.
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`

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`4:21-cv-03196 Doc # 1 Filed: 09/24/21 Page 2 of 38 - Page ID # 2
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`4.
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`This Court has personal jurisdiction over Defendant because Defendant has
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`expressly aimed its tortious activities toward the State of Nebraska, purposely availed
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`itself of the privilege of doing business in Nebraska, and engaged in significant contacts
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`with Nebraska, including significant and regular sales, shipments, and distribution of
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`products bearing ZOSH’s trademarks in Nebraska and to Nebraska residents. In addition,
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`upon information and belief, the products at issue in this proceeding originated from
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`ZOSH’s distribution center located in Omaha, Nebraska. Defendant has engaged in
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`tortious activities with the knowledge that ZOSH will be harmed by Defendant’s actions in
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`Nebraska.
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`5.
`
`Given Defendant’s significant activities in Nebraska as outlined herein, the
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`exercise of jurisdiction over Defendant is proper.
`
`6.
`
`ZOSH ensures the quality of its products and polices its trademarks through
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`a network of Authorized Account Customers that operate throughout the United States.
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`7.
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`From 2017 to present, ZOSH has engaged in considerable sales through
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`its Authorized Account Customers, totaling more than two hundred million in sales by said
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`Authorized Account Customers.
`
`8.
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`Venue is proper in this judicial district pursuant to 18 U.S.C. § 1965 and 28
`
`U.S.C. § 1391(b)(2)-(3), because Defendant is subject to personal jurisdiction in this
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`judicial district and a substantial part of the events or omissions giving rise to the claims
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`occurred in this District.
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`2
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`4:21-cv-03196 Doc # 1 Filed: 09/24/21 Page 3 of 38 - Page ID # 3
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`FACTUAL ALLEGATIONS
`Background of ZO Skin Health, Inc.
`
`9.
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`ZOSH researches, develops, designs, manufactures, markets and sells
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`scientifically formulated cosmeceutical products (“ZO Products”). ZO Products are
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`regulated by the U.S. Drug and Food Administration (“FDA”).
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`10. Various ZO Products are medical grade products.
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`11. Pursuant to FDA regulations, only licensed physicians are allowed to
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`prescribe, recommend and sell these medical grade ZO Products. All ZO Products pose
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`a potential risk to individuals who have not sought a consultation from a licensed physician
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`regarding ZOSH’s recommendations for ZO Products and their skin type, and skin care
`
`protocols.
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`12. As such, all ZO Products are exclusively sold through a network of licensed
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`physicians.
`
`13.
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`ZOSH only adds licensed physicians to its network once the licensed
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`physician consents to and signs ZOSH’s Anti-Diversion Policy.
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`14.
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`The Anti-Diversion Policy prohibits any licensed physician, or anyone
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`associated with the licensed physician, from selling ZO Products online.
`
`15.
`
`16.
`
`ZOSH has the exclusive right to sell ZO Products online.
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`ZOSH devotes a significant amount of time, energy and resources toward
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`protecting the value of the ZOSH brand, products, name and reputation. By distributing
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`ZO Products exclusively through these licensed physicians and its online marketplace,
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`ZOSH is able to ensure the safety and satisfaction of consumers and safeguard the
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`reputation and integrity of ZO Products and the ZOSH brand.
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`3
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`4:21-cv-03196 Doc # 1 Filed: 09/24/21 Page 4 of 38 - Page ID # 4
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`17.
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`In addition, to promote and protect the ZO Skin Health, Inc. brand, ZOSH
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`has registered numerous trademarks with the United States Patent and Trademark Office,
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`including but not limited to ZO and ZO Skin Health (collectively, the “ZO Trademarks”).
`
`18.
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`The registration for the ZO Trademarks are valid, subsisting and in full force
`
`and effect, and constitute prima facie evidence of the validity of the ZO Trademarks and
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`of the registration of the ZO Trademarks, of ZOSH’s ownership of the ZO Trademarks
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`and ZOSH’s exclusive right to use the ZO Trademarks in commerce in connection with
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`the goods specified in the registrations.
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`19.
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`ZOSH actively uses, advertises, and markets all of the ZO Trademarks in
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`commerce throughout the United States.
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`20. Consumers and licensed physicians recognize the ZO Trademarks as being
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`associated with cutting edge, medically advanced cosmeceutical products with
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`unparalleled results.
`
`21. Because of the cutting edge, medically advanced technologies and results
`
`of ZO Products, consumers trust the ZO Skin Health, Inc. brand and associate the ZO
`
`Skin Health, Inc. name with high quality, scientifically formulated and advanced products.
`
`22.
`
`For the above stated reasons, the ZO Trademarks are widely recognized
`
`by the general consumer of the United States, and ZOSH is recognized as the source of
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`products bearing the ZO Trademarks.
`
`23. Due to the superior quality and exclusive distribution of ZO Products, and
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`because ZOSH is recognized as the source of these high quality products, the ZO
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`Trademarks have considerable value.
`
`4
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`4:21-cv-03196 Doc # 1 Filed: 09/24/21 Page 5 of 38 - Page ID # 5
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`24.
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`ZOSH’s ability to exercise these quality controls is essential to the quality,
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`safety and integrity of the ZO Products, as well as the value of the ZO Trademarks and
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`related intellectual property.
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`25. By conducting all sales through licensed physicians and its exclusive online
`
`storefront, ZOSH maintains strict quality controls over its ZO Products.
`
`26.
`
`ZOSH requires the licensed physicians to adhere to ZOSH’s policies,
`
`procedures and agreements (“ZO Policies”).
`
`27.
`
`The ZO Policies govern the manner in which licensed physicians sell ZO
`
`Products. To prevent unauthorized third-parties from acquiring and reselling ZO
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`Products, the ZO Policies achieve objectives of setting prices, prohibiting discounted
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`prices, issuing product protocols, define the guidelines for use of ZO Trademarks and
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`copyrighted materials, and ensure that the seller relationships are consistent and value
`
`based across the supply chain.
`
`28. As part of the ZO Policies, licensed physicians are prohibited from selling
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`ZO Products on any online platform, including third-party marketplaces such as eBay and
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`Amazon.
`
`29. Various measures are taken to track the manner and quantity in which
`
`licensed physicians sell ZO Products. These and other restrictions contained within the
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`ZO Policies allow ZOSH to exercise strict quality controls over the ZO Products. In the
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`event that a quality issue occurs, ZOSH can readily identify the chemical supplier, facility,
`
`distributor and batch of the ZO Products and address any quality issues with parties
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`immediately. Unauthorized resellers pose a significant risk to ZOSH’s quality controls,
`
`since ZOSH cannot trace the ZO Product back to the chemical supplier, facility and/or
`
`5
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`4:21-cv-03196 Doc # 1 Filed: 09/24/21 Page 6 of 38 - Page ID # 6
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`distributor, or determine if the item Unauthorized resellers are selling are genuine ZO
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`Product, preventing ZOSH from issuing a necessary product recall.
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`30.
`
`ZOSH performs various inspections of ZO Products prior to placing ZO
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`Products into its supply chain, including but not limited to distributors and licensed
`
`physicians. Those inspections, along with ZO Policies, ensure that ZO Products
`
`purchased by consumers are free from defect, damage or other issues by virtue of quality
`
`control that ZOSH is able to perform on the ZO Products. The ZO Policies also set forth
`
`requirements relating to storage, handling, inspection, usage and prescription of the ZO
`
`Products.
`
`31.
`
`ZO Policies provide for inspection of ZO Products by distributors and
`
`licensed physicians for defects in packaging and product, which serves to ensure that
`
`end-user consumers receive genuine ZO Products in conformity with ZOSH’s quality
`
`control standards.
`
`32. As part of the ZO Policies, ZOSH prohibits distributors and/or licensed
`
`physicians from relabeling, repackaging, modifying and/or tampering with ZO Products.
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`Accompanying written information regarding the usage protocols of each ZO Product
`
`and/or administering instructions for medical grade ZO Products are provided to the
`
`licensed physicians. In this way, ZOSH can ensure that end-user consumers receive
`
`genuine and safe products. Licensed physicians must also familiarize themselves, and
`
`in some occasions receive certified training from the developer of ZO Products, Dr. Zien
`
`Obagi, so that they are able to provide a high level of medical care and customer service
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`to consumers.
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`6
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`4:21-cv-03196 Doc # 1 Filed: 09/24/21 Page 7 of 38 - Page ID # 7
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`33.
`
`ZOSH’s quality control measures, including but not limited to, ZO Policies,
`
`are substantial and have been implemented to control the quality of products sold and
`
`manufactured using the ZO Trademarks, which protects licensed physicians, consumers,
`
`and the value and good will associated with ZO Trademarks.
`
`34.
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`ZOSH’s quality control measures and requirements are material, as they
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`are designed to protect consumers and prevent them from receiving poor quality products
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`that may be damaging to their health. Consumers would find it material and relevant to
`
`their purchasing decision to know whether a ZO Product they contemplated buying was
`
`sold by a licensed physician and subject to the ZO Policies and related quality control
`
`measures versus a product sold by an unauthorized seller who is not subject to, and does
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`not abide by, ZOSH’s quality controls and over whom ZOSH is unable to exercise its
`
`quality controls.
`
`35.
`
`Licensed physicians are vetted by ZOSH to ensure that they meet ZOSH’s
`
`standards and criteria for representing and selling ZO Products. Among the criteria
`
`considered, ZOSH confirms the status of the physician’s license, credit, sales history,
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`market, business reviews and related information regarding the licensed physician’s
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`ability to adhere to ZO Policies and quality control requirements.
`
`36.
`
`ZOSH’s overall strategy concerning quality control and protecting value and
`
`goodwill associated with the ZOSH brand are significant and material. These measures
`
`ensure that consumers receive high quality, genuine and safe ZO Products from licensed
`
`physicians.
`
`37.
`
`ZOSH’s ability to exercise quality controls over ZO Products sold turns on
`
`ZOSH’s knowledge of which licensed physician is selling which products. To ensure
`
`7
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`4:21-cv-03196 Doc # 1 Filed: 09/24/21 Page 8 of 38 - Page ID # 8
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`ZOSH’s awareness of this information, consumers must visit a location of one of ZOSH’s
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`Authorized Account Customers to receive a consultation. The products sold by ZOSH’s
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`Authorized Account Customers are tracked by lot and batch numbers. This allows ZOSH
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`to control the distribution of ZO Products and address quality issues that may arise.
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`38. Authorized Account Customers must also adhere to data security,
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`accessibility, and privacy requirements.
`
`39. Authorized Account Customers must also use a tracking mechanism
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`relating to their sale of ZO Products and also have a means to obtain consumer
`
`feedback/reviews. Authorized Account Customers must inform ZOSH of any negative
`
`product reviews or client experiences. This is a key part of the ZO Policies and ZOSH’s
`
`quality-control efforts, as it gives ZOSH a method to address quality issues immediately;
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`this is not possible with unauthorized sellers, such as Defendant.
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`40.
`
`ZOSH’s overall strategy concerning quality control and protecting value and
`
`goodwill associated with the ZO Skin Health, Inc. brand are significant and material.
`
`These measures ensure that consumers receive genuine, high quality ZO Products from
`
`licensed physician sources that adhere to the ZO Policies and related quality-control
`
`measures. Consumers purchasing ZO Products find it relevant to purchasing decisions
`
`to know that the product being purchased is from an Authorized Account Customer that
`
`adheres to ZOSH’s quality controls.
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`41. Additionally, ZO Products purchased from Authorized Account Customers
`
`come with a Limited Warranty (“ZO Warranty”).
`
`42.
`
`The ZO Warranty warrants ZO Products against defects in manufacturing,
`
`workmanship, or materials under normal use and service for the applicable warranty
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`8
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`4:21-cv-03196 Doc # 1 Filed: 09/24/21 Page 9 of 38 - Page ID # 9
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`period, subject to conditions contained therein. The warranty period ranges from one to
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`ten years from the original date of purchase of a ZO Product by an end-user purchaser
`
`from an Authorized Account Customer depending on the product.
`
`43. Under the ZO Warranty, a customer can receive a refund or replacement
`
`product if a ZO Product has a defect in manufacturing, workmanship, or materials under
`
`normal use and service for the applicable warranty period.
`
`44.
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`The ZO Warranty is not available for ZO Products sold by unauthorized
`
`sellers, because ZOSH cannot ensure the quality of products sold by such unauthorized
`
`sellers. Unauthorized sellers, like Defendant, do not comply with ZOSH’s quality controls.
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`This ZO Warranty is a key component of genuine ZO Products, as consumers purchasing
`
`ZO Products with the ZO Warranty have assurances that they are receiving a high quality
`
`product supported by the ZO Warranty if an issue arises.
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`Defendant Is Not an Authorized Account Customer
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`45. Due to risks to consumers and reputational concerns associated with the
`
`illegal sale of products bearing the ZO Trademarks by unauthorized sellers, ZOSH tracks
`
`and polices the sale of its products online.
`
`46.
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`In the course of monitoring unauthorized online sales of ZO Products,
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`ZOSH has discovered products bearing the ZO Trademarks being illegally sold by
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`Defendant.
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`47. On information and belief, Defendant illegally sells products bearing the ZO
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`Trademarks on its affiliated website, www.skincaremarket.net (“Website”), and possibly
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`other online marketplaces.
`
`48.
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`ZOSH has not approved Defendant to sell ZO Products, because Defendant
`
`does not comply with ZOSH’s quality-control measures and ZO Policies.
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`9
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`4:21-cv-03196 Doc # 1 Filed: 09/24/21 Page 10 of 38 - Page ID # 10
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`49. Defendant has not provided ZOSH with business information or an
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`opportunity to evaluate its suitability to meet ZOSH’s high standards set for Authorized
`
`Account Customers.
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`50. Defendant also conducts its illegal sales on its Website, and possibly other
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`online marketplaces, which violates the quality controls implemented by ZOSH. This
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`prevents ZOSH from addressing quality issues or negative reviews that arise out of
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`Defendant’s illegal sales of products bearing the ZO Trademarks. It is also unclear how
`
`or where Defendant has acquired products bearing the ZO Trademarks, which prevents
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`ZOSH from determining if any such products are subject to recall or consumer safety
`
`information efforts.
`
`51. Defendant is infringing the ZO Trademarks by selling products bearing the
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`ZO Trademarks that are not subject to, do not abide by, and interfere with ZOSH’s quality
`
`controls and customer service requirements.
`
`52. Defendant’s illegal conduct fails to meet the quality controls implemented
`
`by ZOSH, which harms the ZO Skin Health, Inc. brand’s goodwill and also circumvents
`
`safeguards intended to protect consumers. Because Defendant’s illegal sales operate
`
`outside of ZOSH’s quality controls, Defendant’s products are materially different from
`
`genuine ZO Products. Thus, Defendant’s products are not genuine ZO Products.
`
`53. Defendant’s unauthorized sale of products bearing the ZO Trademarks is
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`likely to, and does, create customer confusion because customers who purchase
`
`products from Defendant believe they are purchasing genuine ZO Products, when in fact,
`
`they are not.
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`10
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`4:21-cv-03196 Doc # 1 Filed: 09/24/21 Page 11 of 38 - Page ID # 11
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`54. Defendant’s unauthorized sale of products bearing the ZO Trademarks
`
`infringes on the ZO Trademarks and diminishes their value.
`
`55. Defendant has sold and continues to sell products bearing the ZO
`
`Trademarks without ZOSH’s consent.
`
`56. On information and belief, through its Website, and possibly other online
`
`marketplaces, Defendant has advertised and marketed infringing products bearing the
`
`ZO Trademarks to consumers in Nebraska.
`
`57. On information and belief, Defendant has accepted and fulfilled significant
`
`orders of infringing products bearing the ZO Trademarks from consumers in Nebraska.
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`58. On information and belief, Defendant has shipped significant amounts of
`
`infringing products bearing the ZO Trademarks to Nebraska.
`
`59. As described herein, genuine ZO Products purchased from ZOSH and its
`
`Authorized Account Customers that comply with ZOSH’s quality controls come with the
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`ZO Warranty.
`
`60. Because Defendant is not an Authorized Account Customer of ZO Products
`
`and does not comply with the related quality controls, the products it sells bearing the ZO
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`Trademarks do not come with the ZO Warranty.
`
`61. Due to the lack of the ZO Warranty on Defendant’s products, the products
`
`it sells bearing the ZO Trademarks are materially different from genuine ZO Products.
`
`62. Defendant’s unauthorized sale of products bearing the ZO Trademarks is
`
`likely to, and does, create customer confusion because customers who purchase
`
`products from Defendant believe they are purchasing genuine ZO Products when, in fact,
`
`they are not.
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`11
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`4:21-cv-03196 Doc # 1 Filed: 09/24/21 Page 12 of 38 - Page ID # 12
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`63. Defendant’s unauthorized sale of products bearing the ZO Trademarks
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`infringes on the ZO Trademarks and diminishes their value.
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`64. Defendant has sold and continues to sell products bearing the ZO
`
`Trademarks through its Website, and possibly other online marketplaces, without ZOSH’s
`
`consent.
`
`65. Defendant is engaging in false advertising by falsely representing that the
`
`products it sells come with the ZO Warranty.
`
`66. On information and belief, Defendant’s unauthorized listings of products
`
`bearing the ZO Trademarks purport to be covered by the ZO Warranty; Defendant also
`
`represents that the unauthorized products sold bearing the ZO Trademarks are “new.”
`
`67.
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`To the contrary, products sold by Defendant bearing the ZO Trademarks do
`
`not come with the ZO Warranty. By making such inaccurate representations to
`
`consumers, Defendant is falsely advertising the products that it sells.
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`68. On information and belief, Defendant has acquired ZO Products, in whole
`
`or in part, from ZOSH’s Authorized Account Customers for purposes of unlawfully
`
`infringing upon and materially damaging the value of the ZO Trademarks by reselling the
`
`products online.
`
`69.
`
`The ZO Policies and related quality controls prohibit ZOSH’s Authorized
`
`Account Customers from selling ZO Products to third parties who intend to resell the
`
`products.
`
`70. By acquiring ZO Products from Authorized Account Customers for purposes
`
`of resale, Defendant is causing a breach of the agreement between ZOSH and Authorized
`
`12
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`4:21-cv-03196 Doc # 1 Filed: 09/24/21 Page 13 of 38 - Page ID # 13
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`Account Customers. Defendant is also interfering with ZOSH’s agreements and business
`
`relationships. Defendant’s tortious interference continues to this day.
`
`71. On information and belief, Defendant has willfully and knowingly induced
`
`presently unknown Authorized Account Customers to breach their agreements with
`
`ZOSH, so that Defendant can acquire ZO Products and unlawfully infringe on the ZO
`
`Trademarks by reselling those products.
`
`ZOSH Has Suffered Significant Harm Due to Defendant’s Conduct
`
`72. Defendant’s unauthorized resale of products bearing the ZO Trademarks
`
`through unauthorized resellers has caused significant harm to the ZO Skin Health, Inc.
`
`brand.
`
`73. When a consumer receives one of Defendant’s products from an
`
`unauthorized reseller that lacks the ZO Warranty, the consumer associates that negative
`
`experience with ZOSH and the ZO Skin Health, Inc. brand. Defendant’s ongoing sale of
`
`unauthorized products bearing the ZO Trademarks causes substantial harm to the ZO
`
`Skin Health, Inc. brand.
`
`74.
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`ZOSH has suffered and will continue to suffer significant monetary harm as
`
`a direct result of Defendant’s misconduct, including, but not limited to, loss of sales,
`
`damage to reputation, erosion of intellectual property rights, and damage to existing and
`
`prospective business relationships.
`
`75.
`
`ZOSH has suffered and will continue to suffer irreparable harm to its
`
`reputation, goodwill, business and customer relationships, intellectual property rights, and
`
`brand integrity.
`
`76.
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`ZOSH is entitled to injunctive relief, because Defendant will continue to
`
`unlawfully resell products bearing the ZO Trademarks and infringe on the ZO
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`13
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`4:21-cv-03196 Doc # 1 Filed: 09/24/21 Page 14 of 38 - Page ID # 14
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`Trademarks, causing continued irreparable harm to ZOSH’s reputation, goodwill,
`
`relationships, intellectual property, and brand integrity.
`
`77. Defendant’s conduct was intentional, willful, knowing, malicious, wanton,
`
`and in violation of applicable laws.
`
`FIRST CAUSE OF ACTION
`Trademark Infringement
`15 U.S.C. §§ 1114, 1125(a)(1)(a)
`
`78.
`
`ZOSH hereby restates and incorporates by reference the allegations
`
`contained in the preceding paragraphs as though set forth fully herein.
`
`79.
`
`80.
`
`ZOSH is the owner of the ZO Trademarks.
`
`ZOSH has registered the ZO Trademarks with the United States Patent and
`
`Trademark Office.
`
`81.
`
`The ZO Trademarks are valid and subsisting trademarks in full force and
`
`effect.
`
`82. Defendant unlawfully, willfully, and knowingly used and continues to use the
`
`ZO Trademarks in interstate commerce for purposes of selling products bearing the ZO
`
`Trademarks without ZOSH’s consent.
`
`83.
`
`The products sold by Defendant bearing the ZO Trademarks are not
`
`authorized for sale by ZOSH.
`
`84.
`
`The products sold by Defendant bearing the ZO Trademarks do not come
`
`with the ZO Warranty.
`
`85.
`
`ZOSH has established and implemented substantial and material quality
`
`controls with which genuine ZO Products must comply.
`
`86.
`
`ZOSH abides by these quality controls, and requires all of its Authorized
`
`Account Customers to abide by these quality controls.
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`4:21-cv-03196 Doc # 1 Filed: 09/24/21 Page 15 of 38 - Page ID # 15
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`87.
`
`ZOSH’s quality controls are material, as they protect consumers and
`
`prevent them from receiving low quality, damaged, and defective products.
`
`88.
`
`The products sold by Defendant bearing the ZO Trademarks are not subject
`
`to, do not abide by, and interfere with ZOSH’s quality controls and customer service
`
`requirements.
`
`89. Since products sold by Defendant bearing the ZO Trademarks do not come
`
`with the ZO Warranty and are not subject to, do not abide by, and interfere with ZOSH’s
`
`quality controls and customer service requirements, Defendant’s products are materially
`
`different from genuine ZO Products.
`
`90.
`
`Thus, Defendant’s products are not genuine ZO Products.
`
`91. Defendant’s unauthorized sale of products bearing the ZO Trademarks
`
`interferes with ZOSH’s quality controls and ability to exercise quality control over products
`
`bearing the ZO Trademarks.
`
`92. Defendant’s unauthorized sale of products bearing the ZO Trademarks is
`
`likely to cause confusion, cause mistake, or deceive consumers, because Defendant’s
`
`conduct suggests that the products Defendant offers come with the ZO Warranty and are
`
`subject to and abide by ZOSH’s quality controls when, in fact, they do not.
`
`93. Defendant’s unauthorized sale of products bearing the ZO Trademarks is
`
`likely to cause confusion, cause mistake, or deceive consumers because Defendant’s
`
`conduct suggests that the products Defendant offers for sale are genuine ZO Products
`
`when, in fact, they are not.
`
`94. Defendant’s unauthorized sale of products bearing the ZO Trademarks is
`
`likely to cause confusion, cause mistake, or deceive consumers because Defendant’s
`
`15
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`4:21-cv-03196 Doc # 1 Filed: 09/24/21 Page 16 of 38 - Page ID # 16
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`conduct suggests that the products Defendant offers for sale are otherwise related to
`
`ZOSH when, in fact, they are not.
`
`95. Defendant’s unauthorized use of the ZO Trademarks has infringed upon
`
`and materially damaged the value of the ZO Trademarks, and also cause significant
`
`damage to the ZO Skin Health, Inc. brand and ZOSH’s business relationships.
`
`96. As a proximate result of Defendant’s misconduct, ZOSH has suffered and
`
`continues to suffer immediate and irreparable harm. ZOSH has also suffered and
`
`continues to suffer damages, including but not limited to loss of business, goodwill,
`
`reputation, and profits in an amount to be proven at trial.
`
`97.
`
`ZOSH is entitled to recover its damages caused by Defendant’s
`
`infringement of the ZO Trademarks, and disgorge Defendant’s profits from its willfully
`
`infringing sales and unjust enrichment.
`
`98.
`
`ZOSH is entitled to injunctive relief under 15 U.S.C. § 1116, because it has
`
`no adequate remedy at law for Defendant’s infringement; unless Defendant is
`
`permanently enjoined, ZOSH will suffer irreparable harm.
`
`99.
`
`ZOSH is entitled to enhanced damages and attorney fees under 15 U.S.C.
`
`§ 1117(a) as this is an exceptional case, because Defendant willfully, intentionally, and
`
`maliciously infringed on the ZO Trademarks in bad faith.
`
`SECOND CAUSE OF ACTION
`False Advertising
`15 U.S.C. § 1125(a)(1)(b)
`
`100. ZOSH hereby restates and incorporates by reference the allegations
`
`contained in the preceding paragraphs as though set forth fully herein.
`
`101. ZOSH is the owner of the ZO Trademarks.
`
`16
`
`

`

`4:21-cv-03196 Doc # 1 Filed: 09/24/21 Page 17 of 38 - Page ID # 17
`
`102. ZOSH has registered the ZO Trademarks with the United States Patent and
`
`Trademark Office.
`
`103. The ZO Trademarks are valid and subsisting trademarks in full force and
`
`effect.
`
`104. Defendant has willfully, intentionally, and knowingly used, and continues to
`
`use, the ZO Trademarks in interstate commerce for purposes of advertising, marketing,
`
`promoting, and selling Defendant’s products bearing the ZO Trademarks without ZOSH’s
`
`consent.
`
`105. Defendant’s advertising, marketing, and promotional efforts regarding its
`
`products unlawfully use the ZO Trademarks, and has been disseminated to the relevant
`
`purchasing public, including Nebraska consumers.
`
`106. Defendant has used and continues to use the ZO Trademarks to falsely
`
`advertise by implication that the products it sells come with the ZO Warranty when, in
`
`fact, they do not.
`
`107. ZO Products purchased from ZOSH and its Authorized Account Customers
`
`who comply with ZOSH’s quality controls come with the ZO Warranty.
`
`108. ZOSH cannot exercise quality controls over products sold by unauthorized
`
`sellers, such as Defendant. Thus, products bearing the ZO Trademarks that are sold by
`
`unauthorized sellers who do not comply with ZOSH’s quality controls do not come with
`
`the ZO Warranty.
`
`109. The products sold by Defendant bearing the ZO Trademarks are not
`
`authorized for sale by ZOSH.
`
`17
`
`

`

`4:21-cv-03196 Doc # 1 Filed: 09/24/21 Page 18 of 38 - Page ID # 18
`
`110. The products sold by Defendant bearing the ZO Trademarks do not come
`
`with the ZO Warranty.
`
`111. Defendant falsely advertises by implication that the products it sells bearing
`
`the ZO Trademarks come with the ZO Warranty. This representation is false because the
`
`products sold by Defendant bearing the ZO Trademarks do not come with the ZO
`
`Warranty.
`
`112. Defendant’s use of the ZO Trademarks in connection with unauthorized
`
`advertising, marketing, promotion, and sale of products bearing the ZO Trademarks
`
`misrepresents the nature, characteristics, qualities, and origin of Defendant’s products,
`
`because it suggests that the products come with the ZO Warranty when, in fact, they do
`
`not.
`
`113. Defendant’s use of the ZO Trademarks in connection with unauthorized
`
`advertising, marketing, promotion, and sale of products bearing the ZO Trademarks is
`
`likely to cause confusion, cause mistake, or deceive because such use suggests that the
`
`products Defendant sells are genuine ZO Products that come with the ZO Warranty when,
`
`in fact, they are not.
`
`114. Defendant’s use of the ZO Trademarks in connection with unauthorized
`
`advertising, marketing, promotion, and sale of products bearing the ZO Trademarks is
`
`likely to cause confusion, cause mistake, or deceive because such use suggests that the
`
`products Defendant sells are sponsored by, authorized by, or otherwise connected with
`
`ZOSH when, in fact, they are not.
`
`115. Defendant’s unauthorized and deceptive use of the ZO Trademarks is
`
`material and likely to influence consumers to purchase the products it sells, as consumers
`
`18
`
`

`

`4:21-cv-03196 Doc # 1 Filed: 09/24/21 Page 19 of 38 - Page ID # 19
`
`are likely to believe that products Defendant advertises using the ZO Trademarks are
`
`genuine ZO Products that come with the ZO Warranty when, in fact, they are not genuine
`
`ZO Products and do not come with the ZO Warranty.
`
`116. Defendant’s unauthorized use of ZO Trademarks in advertising and the like
`
`infringes on the ZO Trademarks.
`
`117. As a proximate result of Defendant’s misconduct, ZOSH has suffered and
`
`will continue to suffer damage to its business, goodwill, reputation, and profits in an
`
`amount to be proven at trial.
`
`118. ZOSH is entitled to recover its damages caused by Defendant’s false
`
`advertising and infringement of the ZO Trademarks and disgorge Defendant’s profits from
`
`its willfully infringing sales and unjust enrichment.
`
`119. ZOSH is entitled to injunctive relief under 15 U.S.C. § 1116, because it has
`
`no adequate remedy at law for Defendant’s false advertising and infringement, and unless
`
`Defendant is permanently enjoined, ZOSH will suffer irreparable harm.
`
`120. ZOSH is entitled to enhanced damages and attorney fees under 15 U.S.C.
`
`§ 1117(a) as this is an exceptional case, because Defendant has willfully, intentionally,
`
`maliciously, and in bad faith infringed on the ZO Trademarks.
`
`THIRD CAUSE OF ACTION
`Unfair Competition
`15 U.S.C. § 1125(a)
`
`121. ZOSH hereby restates and incorporates by reference the allegations
`
`contained in the preceding paragraphs as though set forth fully herein.
`
`122. ZOSH is the owner of the ZO Trademarks.
`
`123. ZOSH has registered the ZO Trademarks with the United States Patent and
`
`Trademark Office.
`
`19
`
`

`

`4:21-cv-03196 Doc # 1 Filed: 09/24/21 Page 20 of 38 - Page ID # 20
`
`124. The ZO Trademarks are valid and subsisting trademarks in full force and
`
`effect.
`
`125. Defendant has willfully, intentionally, and knowingly used, and continues to
`
`use, the ZO Trademarks in interstate commerce for purposes of advertising, marketing,
`
`promoting, and selling Defendant’s products bearing the ZO Trademarks without ZOSH’s
`
`consent.
`
`126. The products Defendant advertises and sells bearing the ZO Trademarks
`
`are not authorized for sale by ZOSH.
`
`127. The products Defendant advertises and sells bearing the ZO Trademarks
`
`do not come with the ZO Warranty.
`
`128. ZOSH has established and implemented legitimate and substantial quality
`
`controls covering and applicable to all genuine ZO Products.
`
`129.

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