Trademark Trial and Appeal Board Electronic Filing System. http://estta.uspto.gov
`
`ESTTA Tracking number:
`
`ESTTA847302
`
`Filing date:
`
`09/20/2017
`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`
`Proceeding
`
`92066374
`
`Party
`
`Correspondence
`Address
`
`Submission
`
`Filer's Name
`
`Filer's email
`
`Signature
`
`Date
`
`Defendant
`Wholesale Moissanite, LLC
`
`GERALD P SCHNEEWEIS
`CLARK HILL LLP
`ONE AMERICA PLAZA, 600 WEST BROADWAY, SUITE 500
`SAN DIEGO, CA 92101
`UNITED STATES
`Email: gschneeweis@clarkhill.com, mtofflemire@clarkhill.com, aocon-
`nor@clarkhill.com
`
`Motion to Suspend for Civil Action
`
`Gerry P. Schneeweis
`
`gschneeweis@clarkhill.com, aoconnor@clarkhill.com
`
`/Gerry P. Schneeweis/
`
`09/20/2017
`
`Attachments
`
`Motion to Suspend TTAB Proceeding.PDF(1529562 bytes )
`
`

`

`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`
`Cancellation No.: 920663 74
`
`In the matter of Registration No.: 5,079,587
`For the Mark: NEO MOISSANITE
`
`Date of Registration: November 8, 2016
`
`)
`
`) )
`
`) )
`
`Serenity Aryamond, LLC,
`Petitioner,
`
`V.
`
`)
`Wholesale Moissanite, LLC,
`Respondent. )
`
`REGISTRANT’S MOTION TO SUSPEND PROCEEDING BASED ON CO-
`
`PENDENCY OF RELATED U.S. DISTRICT COURT ACTION
`
`Respondent and Registrant Wholesale Moissanite, LLC, (“Registrant”) by
`
`and through its undersigned counsel, hereby moves for a suspension of this
`
`proceeding, which arose from Serenity Aryamond, LLC’s (“Petitioner”) Petition
`
`for Cancellation (“Petition”), based on the co—pending action between Registrant
`
`and Petitioner in the United States District Court for the Central District of
`
`California (the “District Court Action”), Case no. 5:17-cv-01628-DMG-SP, before
`
`the Honorable Dolly M. Gee. Suspension of this proceeding is authorized by
`
`Trademark Trial & Appeal Board (“TTAB”) Practices and Procedures section
`
`3 :26, and is appropriate because the judgment rendered in the District Court Action
`
`will dispose of all claims before the TTAB and Will be binding on the TTAB as a
`
`matter of law. Further, suspension is warranted in the interests of judicial economy
`
`and the preservation of the parties’ resources.
`
`

`

`I.
`
`Suspension of this proceeding is expressly authorized by TTAB
`
`Practices and Procedures section 3:26 because there is co-pending civil
`
`action that will dispose of the issues before the TTAB.
`
`Section 3:26 of the
`
`TTAB Practices and Procedures provides “that
`
`Whenever it comes to the attention of the Board that the parties to the Board case
`
`are engaged in a civil action that may be dispositive of the Board case, the Board
`
`may suspend action on its proceeding pending termination of the civil action.”
`
`Trademark Trial & App. Board Prac. & Proc. § 3:26.
`
`Attached hereto as EXHIBIT 1 is a true and correct copy of the Complaint
`
`filed by Registrant in the co-pending District Court Action. When a co-pending
`
`action in US. District Court “could be dispositive of the registrability questions
`
`before the Board, the Board will suspend action on the opposition or cancellation
`
`proceeding pending final disposition of the civil action.” Id. (Emphasis added.)
`
`Per section 3:26, “the rationale for suspension of the Board case is that the federal
`
`court’s determination is binding on the Board, whereas the Board's decision is not
`
`binding on the court.” See also New Orleans Louisiana Saints LLC & NFL
`
`Properties LLC, 99 U.S.P.Q.2d 1550 (T.T.A.B. July 22, 2011) (“A decision by the
`
`district court may be binding on the Board Whereas a determination by the Board
`
`as to a defendant's right to obtain or retain a registration would not be binding or
`
`res judicata in respect to the proceeding pending before the court. Whopper-
`
`Burger, Inc. V. Burger King Corp., 171 USPQ 805, 807 (TTAB 1971).”)
`
`Registrant is aware of B&B Hardware, Inc. v. Hargis Industries, Inc., 135
`
`US. 1293 and its discussion of preclusion, but Registrant notes that B&B
`
`Hardware, Inc. has n_ot changed the TTAB position on favoring suspension of
`
`proceedings when, as here, the co-pending District Court case involves the same
`
`

`

`parties and issues. In fact, Trademark Trial & Appeal Board Manual ofProcedure
`
`section510.02(a) (June 2017) expressly address 3853 Hardware, Inc. and states
`
`that “[a]lthough the Supreme Court held that issue preclusion can be based on a
`
`decision by the Board in a case in which the ordinary elements of issue preclusion
`
`are met,
`
`the Board's policy to suspend in favor of a civil action has not
`
`changed. A civil action may involve other matters outside Board jurisdiction and
`
`may consider broader issues beyond right to registration and, therefore, judicial
`
`economy is usually served by suspension.” (Emphasis added.)
`
`II.
`
`The co-pending District Court Action will be dispositive of all
`
`issues before the TTAB in this cancellation proceeding.
`
`a. The parties in this TTAB proceeding are also parties in the
`
`co-pending District Court Action.
`
`In New Orleans Louisiana Saints LLC, supra, the Court stated that “[i]f the
`
`parties to an opposition are involved in a district court action involving the same
`
`mark or the opposed application, the Board will scrutinize the pleadings in the civil
`
`action to determine if the issues before the court may have a bearing on the
`
`Board’s decision in the opposition.” The TTAB has even suspended proceedings
`
`before the TTAB when the co-pending action was in a foreign court and involved
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`only one of the parties before TTAB proceeding, because the determination of the
`
`court
`
`in the foreign ciVil action would have had a bearing on the TTAB
`
`proceeding. See Marie Claire Album S.A., 29 U.S.P.Q.2d 1792 (T.T.A.B. Nov. 16,
`
`1993)
`
`(“‘Therefore,
`
`it
`
`is appropriate to suspend this proceeding pending the
`
`determination of the German civil action concerning the validity of the foreign
`
`registration”)
`
`The analysis of the parties involved here is straightforward - the defendants
`
`in the District Court Action are Petitioner Serenity Aryamond, LLC, Serenity
`
`

`

`Technologies Incorporated, and Does 1
`
`through 20;
`
`the plaintiff is Registrant
`
`Wholesale Moissanite, LLC. Every party in this TTAB cancellation proceeding is
`
`also a party in the co-pending District Court Action. Accordingly,
`
`the TTAB
`
`should consider the allegations and causes of action in the Compliant filed by
`
`Registrant in District Court Action to determine if they have a bearing on the
`
`Board’s decision in this TTAB proceeding. See also Forest Laboratories Inc. v.
`
`GD. Searle & Co., 52 USPQ2d 1058, 1061 (TTAB 1999).
`
`b. The issues in the District Court Action have a bearing on
`
`the Board’s decision in this TTAB proceeding and suspension
`
`of the TTAB proceeding is proper.
`
`When the issues in the civil action bear on the issues before the TTAB, the
`
`Board’s general policy is to suspend the TTAB proceeding. See Boyds Collection
`
`Ltd, 65 U.S.P.Q.2d 2017 (T.T.A.B. Jan. 16, 2003) (“As petitioner correctly argues,
`
`it would appear that the civil action in question “may have a bearing on [this]
`
`case,” inasmuch as it involves the same parties and the same marks. Further, it is
`
`generally the Board‘s policy to suspend when the parties are engaged in such a civil
`
`action”)
`
`Registrant’s complaint in the District Court Action asserts causes of action
`
`for (1) Federal Trademark Infringement, (2) Federal Unfair Competition,
`
`(3)
`
`California Statutory Unfair Competition,
`
`(4) California Common Law Unfair
`
`Competition, (5) Breach of Oral Contract, (6) Breach of Written Contract, and (7)
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`Declaratory Relief. Count One (I) in the District Court Action’s is for Lanham Act
`
`Trademark Infringement. Exh. 1,
`
`1111 47-52. The trademark at issue in the co-
`
`pending District Court Action is the same trademark that Petitioners seek to cancel
`
`in this TTAB proceeding, namely the “NBC MOISSANITE” mark, Registration
`
`No. 5079587, with a registration date of November 8, 2016. Exh. I, 11 36.
`
`

`

`Count Seven (VII) in the District Court Action is for Declaratory Relief, and
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`Registrant requests therein a judicial declaration of the rights, responsibilities and
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`obligations of the parties with respect to the creation and ultimate rights of
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`ownership to the NEO MOISSANTTE trademark, Registration No. 5079587. Exh.
`
`I , W 81-84. Again, this is the same mark at issue in this cancellation proceeding.
`
`The judgment rendered in the District Court Action will dispose of all issues
`
`that are before the TTAB in this cancellation proceeding. Suspension of this TTAB
`
`proceeding is warranted by the express provisions of the Trademark Trial &
`
`Appeal Board Practices and Procedures, by case law, and by the general policies of
`
`the Board.
`
`III. Conclusion.
`
`Registrant respectfully requests that the TTAB grant Registrant’s Motion to
`
`Suspend this TTAB proceeding pending a final determination in the co—pending
`
`District Court Action.
`
`Dated this 20th day of September, 2017.
`
`5/ Gerald P. Schneeweis
`
`Gerald P. Schneeweis, Esq.
`CLARK HILL LLP
`
`One America Plaza
`
`600 West Broadway, Ste 500
`San Diego, CA 92101
`Tel; (619) 557-0404
`Fax: (619) 557-0460
`GSchneeweisQi),clarkhill.com
`
`

`

`EXHIBIT 1
`
`

`

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`
`Case 5:17-cv—Ol628 Document 2 Filed 08/14/17 Page 1 of 21 Page ID #:43
`
`Gerald P. Schneeweis, Esrgs$133212g? 1)
`Adam P. O’Connor, Esq.
`CLARK HILL LLP
`One America Plaza
`600 West Broadway, Suite 500
`San Diego, Califorma 92101
`Telephone:
`619 557-0404
`Facmmile:
`619 557-0460
`GSchneeweis
`carkhill.com
`ODDOI' car
`1
`.COl’l’l
`
`Michael P. Purcell (ISBN 229506)
`CLARK HILL LL
`One Embarcadero Center, Suite 400
`San Francisco, California 94111
`Telephone:
`415 984-8500
`FaCSImile:
`415 984-8599
`MPurcell@clarkhill.com
`
`Attorne s for Plaintiff
`WHOL SALE MOISSANITE LLC
`a North Carolina Limited Liability Company
`
`UNITED STATES DISTRICT COURT
`
`CENTRAL DISTRICT OF CALIFORNIA
`
`WHOLESALE MOISSANITE LLC, a
`North Carolina Limited Liability
`Company
`
`Plaintiff,
`
`V.
`
`SERENITY TECHNOLOGIES
`INCORPORATED, an Ore on
`YAMOND
`Cor oration; SERENITY
`.
`.
`LL , a Delaware Limited Liabllity
`Company; and DOES 1 through 20,
`incluswe,
`
`Case No.
`
`COMPLAINT FOR DAMAGES AND
`PERMANENT INJUNCTION:
`
`1.
`
`99'1“?!"
`
`7.
`
`FEDERAL TRADEMARK
`INFRINGEMENT
`FEDERAL UNFAIR
`COMPETITION
`CALIFORNIA STATUTORY
`UNFAIR COMPETITION
`CALIFORNIA COMMON LAW
`UNFAIR COMPETITION
`BREACH OF ORAL
`CONTRACT
`BREACH OF WRITTEN
`CONTRACT
`DECLARATORY RELIEF
`
`Defendants.
`
`DEMAND FOR JURY TRIAL
`
`1
`COMPLAINT FOR DAMAGES AND PERMAENT INJUNCTION
`
`

`

`Case 5:17-CV-01628 Document 2 Filed 08/14/17 Page 2 Of 21 Page ID #144
`
`For
`
`its Complaint
`
`against Defendants
`
`SERENITY TECHNOLOGIES
`
`INCORPORATED, and SERENITY ARYAMOND LLC (collectively, “Defendants”)
`
`Plaintiff WHOLESALE MOISSANITE LLC (“Plaintiff’, “Wholesale Moissanite”, or
`
`“WM”) alleges as follows.
`
`JURISDICTION AND VENUE
`
`1.
`
`This15 an action under the trademark laws of the United States, 15 U. S. C.
`
`§1051 et seq., for trademark infringement and unfair competition pursuant to Sections
`
`32 and 43 (a) of the Trademark Act of 1946 (the Lanham Act) as amended, 15 U. S.C. §
`
`1114 and 1125(a), common law and related state law claims as hereinafter more fully
`
`appear. JurisdictionIS based upon 15 U. S. C. § 1121, 28 U. S. C. §§ 1331 and 1338 and
`
`the doctrine of supplemental jurisdiction, 28 U. S. C. § 1367.
`
`2.
`
`Jurisdiction is also based upon diversity of citizenship under 28 U. S. C.
`
`§ 1332, in that Plaintiff1s a North Carolina limited liability company with its principal
`
`place of business1n Garner, North Carolina, Defendant SERENITY TECHNOLOGIES
`
`INCORPORATED is an Oregon corporation with its principal place of business in
`
`Temecula, California, and Defendant SERENITY ARYAMOND LLC is a Delaware
`
`limited liability company with its principal place of business1n Temecula, California,
`
`and the amount in controversy exceeds $75,000, exclusive of interest and costs. This
`
`Court has personal jurisdiction over the Defendants as, on information and belief,
`
`Defendants are residents of California, have transacted business in this District,
`
`directly or through intermediaries, and/or committed acts of infringement
`
`in this
`
`District. Venue is proper in this district under 28 U. S C. §§ 1391 and 1400 Plaintiff
`
`demands atrial byJury 1n this case under Fed R. Civ. P. 38.
`
`THE PARTIES
`
`3.
`
`Plaintiff WHOLESALE MOISSANITE LLC is
`
`a limited liability
`
`company with its principal place of business in Garner, North Carolina. Plaintiff'IS
`
`engaged in the business of selling moissanite gems throughout the United States.
`
`Products sold by Plaintiff are offered for sale and sold in this District. Wholesale
`
`________—2____—__
`COMPLAINT FOR DAMAGES AND PERMANENT INJUNCTION
`
`\DOOQQUI-lk
`
`10
`
`11
`
`12
`
`13
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`14
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`15
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`16
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`1.8
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`19
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`2o
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`21
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`22
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`23
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`24
`
`25
`
`26
`
`27
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`

`

`Case 5:17-cv-01628 Document 2 Filed 08/14/17 Page 3 of 21 Page ID #245
`
`Moissanite is the owner of the federally-registered “NEO MOISSANITE” trademark
`
`bearing registration number 5079587. (Exhibit 1.) The registration of Wholesale
`
`Moissanite’s mark was
`
`issued on November 8, 2016; Wholesale Moissanite’s
`
`application for registering the mark in the USPTO was on Devember 3, 2015, and its
`
`first use of the mark in commerce was on October 17, 2015.
`
`4.
`
`Defendant SERENITY TECHNOLOGIES INCORPORATED, upon
`
`information and belief, is a corporation organized under the laws of Oregon with its
`
`principal place of business in Temecula, California, which is part of this District.
`
`5.
`
`Defendant SERENITY ARYAMOND LLC,
`
`is a Delaware limited
`
`liability company with a principal place of business in Temecula, California, which is
`
`part of this District.
`
`6.
`
`Wholesale Moissanite is informed and believes, and based thereon allege,
`
`that for all times herein mentioned, Defendants, and each of them, including DOES 1
`
`through 20, inclusive, were the agents, servants, parent corporation, other affiliated
`
`business entities,
`
`shareholders, employees and/or
`
`joint venturers of the other
`
`Defendants and were, as such, acting within the scope, course and authority of that
`
`agency, employment and/or joint venture, and that each and every Defendant, when
`
`acting as a principal, was negligent in the selection and hiring of each other Defendant
`
`as the agent, servant, employee, and/or joint venturer, and that each and every
`
`Defendant, while acting as a manager, director, and/or officer authorized, ratified or
`
`otherwise approved the acts of its agents, employees and/0r representatives as alleged
`
`herein.
`
`Common Allegations
`
`7.
`
`In or around September of 2015,
`
`the members of WHOLESALE
`
`MOISSANITE LLC, Guy Stimpson and Steve Johns,
`
`identified an opportunity to
`
`develop and sell moissanite, which is found naturally in the craters of meteors which
`
`have collided with the Earth but which is most commonly a man-made material formed
`
`by the combination of silicon and carbide, and which, when cut and finished,
`
`
`3
`COMPLAINT FOR DAMAGES AND PERMANENT INJUNCTION
`
`.33
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`\DOO\]O\U1
`
`10
`
`11
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`12
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`13
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`14
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`15
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`16
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`18
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`19
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`20
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`21
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`22
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`23
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`24
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`25
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`26
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`27
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`28
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`

`

`Case 5:17—CV-01628 Document 2 Filed 08/14/17 Page 4 0f 21 Page ID #246
`
`OKOOOQQUIAWNl—t
`
`._.
`
`resembles diamonds and other precious and semi-precious gems. Its lower price makes
`
`moissanite an attractive alternative to diamonds and other precious gems.
`
`In
`
`September of 2015, a single company had the exclusive patent to facet moissanite
`
`gemstones. This patent would expire in the United States in November 2015. In order
`
`to be prepared to enter the market at the earliest opportunity, Wholesale Moissanite
`
`had been actively seeking suppliers of moissanite gemstones.
`
`8.
`
`Wholesale
`
`Moissanite
`
`identified
`
`Defendant
`
`SERENITY
`
`TECHNOLOGIES INCORPORATED as a potential supplier of moissanite.
`
`Its
`
`principal, Guy Stimpson, contacted the principals of Serenity Technologies, Jay Neogi
`
`and Suneeta Neogi, and set up a meeting to discuss the opportunity. On September 21,
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`2015, Stimpson and Johns met with the Neogis at Serenity Technologies offices in
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`Temecula, California.
`
`9.
`
`Upon information and belief, Defendant SERENITY ARYAMOND LLC
`
`was formed on September 1, 2015 and was registered as a business in California on
`
`September 3, 2015.
`
`10. At the meeting in Temecula, the parties discussed a potential business
`
`venture where in the parties would work together to establish a new moissanite
`
`business. At that meeting, the Neogis explained the faceting process by which they
`
`produced moissanite. At that time,
`
`the Neogis identified their product as “white
`
`moissanite” and “superwhite moissanite”.
`
`11.
`
`Stimpson and Johns, who had considerable experience marketing and
`
`selling moissanite and were well-known within the industry, informed the Neogis that
`
`the product needed to be branded in order for the joint venture between the companies
`
`to be successful. As Serenity Technologies only processed the raw material moissanite
`
`and had no real experience or knowledge as to how the product could be marketed or
`
`sold, Wholesale Moissanite and Serenity Technologies agreed that Wholesale
`
`Moissanite would develop the brand for the moissanite, create a market and name
`
`recognition, and be responsible for selling the product.
`
`4
`COMPLAINT FOR DAMAGES AND PERMANENT INJUNCTION
`
`

`

`Case 5:17-cv—01628 Document 2 Filed 08/14/17 Page 5 of 21 Page ID #247
`
`12.
`
`By agreeing to proceed in this manner, with Serenity Technologies buying
`
`moissanite and processing it, and Wholesale Moissanite handling the marketing,
`
`advertising, and sale of the product, Wholesale Moissanite and Serenity Technologies
`
`agreed to act as a de facto joint venture.
`
`13. During this time, Wholesale Moissanite made purchases of Serenity’s
`
`moissanite gems. On all invoices and shipping materials, the product was identified as
`
`“white” or “superwhite”.
`
`14.
`
`Johns and Stimpson began developing and building a brand and a market
`
`for the moissanite. On September 21, 2015, at the meeting with the Neogis at Serenity
`
`Technologies’ offices, Stimpson and Johns of Wholesale Moissanite came up with the
`
`idea for using the name “NEO” and the slogan “NEO THE O
`
`” to identify the
`
`moissanite product, and communicated this to the Neogis. On September 25, 2015,
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`four days after meeting with the Neogis, Stimpson wrote to the Neogis and
`
`recommended that. the parties use the NEO concept that he had developed as the mark
`
`for the joint venture’s moissanite product.
`
`15.
`
`Two days later, on September 27, 2015, Suneeta Neogi of Serenity
`
`Technologies wrote to Wholesale Moissanite to discuss a number of issues related to
`
`the venture.
`
`In this email, Neogi advised Wholesale Moissanite that Serenity was
`
`“considering the NEO brand name and are in discussion with our partner at Serenity
`
`Aryamond to finalize”. Prior to this email, Serenity Technologies had not used the
`
`term “NEO” in any discussion with Wholesale Moissanite or to refer to moissanite it
`
`was planning to process or sell.
`
`In fact, up until this point Serenity Aryamond had
`
`only referred to its moissanite product as “Serenity Moissanite”, “white” moissanite or
`
`“superwhite” moissanite. Further, this was the first time that “Serenity Aryamond”
`
`was
`
`identified in any of Serenity Technologies’ discussions with Wholesale
`
`Moissanite.
`
`16.
`
`The parties decided that Stimpson’s creation “NEO MOISSANITE”
`
`would be the mark to brand and identify the product that would be sold to Wholesale
`
`5
`COMPLAINT FOR DAMAGES AND PERMANENT INJUNCTION
`
`

`

`Case 5:17—cv-01628 Document 2 Filed 08/14/17 Page 6 of 21 Page ID #:48
`
`Moissanite’s customers. Over the next several weeks, Wholesale Moissanite engaged
`
`in extensive efforts and significant expense to develop the NBC brand.
`
`17. As part of its effort to develop the NEO brand, Wholesale Moissanite
`
`engaged a local graphic design firm in North Carolina, Stimpson Reid, to develop the
`
`“NBC” concept. One of the owners of Stimpson Reid is Ben Stimpson, Guy
`
`Stimpson’s brother. This firm developed and provided a number of potential design
`
`concepts for the “NEO MOISSANITE” and “NEO THE ONE” marks. Wholesale
`
`Moissanite provided various designs, logos, and slogans,'including “NEO THE 0
`
`”
`
`to the Neogis so that the Neogis, Stimpson and Johns could decide which design to use
`
`for the NEO mark. (Exhibit 2.) These included the stylized version of the word “NEO”
`
`— in which the “E” consists of only 3 horizontal lines which Defendants, have now
`
`used as their purported stylized mark, to which Serenity Aryamond unsuccessfully
`
`sought registration in February 2017.
`
`18.
`
`On September 28, 2015, Wholesale Moissanite bought
`
`the website
`
`“Moissaniteneocom” to use in the branding and registration of the product.
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`19.
`
`In addition to creating, designing and developing the mark,
`
`from
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`September 2015 through November 2015, entirely through its own significant effort
`
`and expense, Wholesale Moissanite prepared the product for distribution by, among
`
`other things, paying for, designing and building the website, designing and creating
`
`marketing brochures, trade advertisements to over 20,000 retail jewelers, and preparing
`
`branded packaging, certification and warranty materials.
`
`20. During September and October 2015, Wholesale Moissanite purchased
`
`moissanite gems from Serenity Technologies.
`
`The first such purchase was on
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`September 21, 2015, after Stimpson and John met with Serenity Technologies
`
`principals, Jay and Suneeta Neogis. Stimpson paid for a tray of moissanite gems with
`
`a credit card but did not receive an invoice at that time. Wholesale Moissanite did not
`
`receive an invoice for that purchase until October 13, 2015, after Stimpson and Johns
`
`had returned to North Carolina. That invoice and others from Serenity Aryamond for
`
`6
`COMPLAINT FOR DAMAGES AND PERIVIANENT INJUNCTION
`
`

`

`Case 5. 17-cv-01628 Document 2 Filed 08/14/17 Page 7 of 21 Page ID #:49
`
`additional purchases did not refer to the product as “NEO” moissanite until October
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`23, 2015, nearly a month after Stimpson had created the mark1n connection with the
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`moissanite product, and had informed Serenity Technologies of that fact. “(Exhibit 3,
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`whichIS comprised of four separate invoices to Wholesale Moissanite dated 9/21/15 or
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`10/13/15, and which bear the heading “Serenity Aryamond Moissanite. ”) None of
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`these invoices refer in any way to “NEO” moissanite or to “NEO THE ONE”
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`moissanite. Instead, they referred to “SERENITY ARYAMOND MOISSANITE” with
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`a stylized triangle shape between the words Serenity and Aryamond. The first SA
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`invoice to WM which referred to “NEO” or “NEO THE ONE” moissanite was dated
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`October 23,2015 (Exhibit 4). An examination of that 10/23/15 invoice shows that the
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`invoice was for “NBC THE ONE” Moissanite, (with the words “MOISSANITE”
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`positioned above the words “SERENITY ARYAMOND”). While Defendants
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`certainly came up with the “Serenity Aryamond Moissanite and stylized triangle” name
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`shown in Exhibit 3, they did not come up with the idea, or use in commerce, the
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`“NEO” or “NEO THE ONE” marks to describe the moissanite that was to be sold and
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`marketed by Wholesale Moissanite. Those were created by Stimpson and Johns of
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`Wholesale Moissanite.
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`21.
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`In addition to the contributions above, Wholesale Moissanite provided
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`quality control for the product. The principals of Wholesale Moissanite had extensive
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`experience in the moissanite industry including the relevant markets expectations
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`regarding the quality of moissanite gems, including color, clarity, and other features
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`that would make “NEO MOISSANITE” a valuable brand.
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`22. Wholesale Moissanite also created a website and process by which
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`purchasers of “NEO MOISSANITE” could register their warranty and certification
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`number of the NBC MOISSANITE gems on the website as a way of further
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`26 l distinguishing the product.
`27 i
`23.
`The first two or three batches of products that Serenity delivered to
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`28 Wholesale Moissanite were of good quality and were received well by the jewelry
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`'1'
`COMPLAINT FOR DAMAGES AND PERMANENT INJUNCTION
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`Case 5:17-cv-01628 Document 2 Filed 08/14/17 Page 8 of 21 Page ID #250
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`dealer customers to Whom Wholesale Moissanite sold them.
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`24. At the same time that Wholesale Moissanite was creating the brand and
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`marketing and selling the product,
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`the principals of Wholesale Moissanite were
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`negotiating a written distributor
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`agreement with the principals of Serenity
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`Technologies, Jay and Suneeta Neogi.
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`25.
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`On November 30, 2015, a written agreement was finalized. However, the
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`agreement was between Wholesale Moissanite and Serenity Aryamond,
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`instead of
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`Serenity Technologies. Serenity never advised Wholesale Moissanite that this was a
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`different entity, nor did Wholesale Moissanite attach, any significance to the new entity
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`name. (A true and correct copy of the contract is attached as Exhibit 5.)
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`26.
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`In the contract, Wholesale Moissanite expressly states that it “will develop
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`pay for and own the rights to any creative promotional materials” it creates”.
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`27.
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`Further, the agreement states that “nothing contained in the Agreement
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`shall give S-A any rights in allowing any added/new distributors use of Distributors
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`‘creations,” created and paid for by Distributor. Including all print marketing designs,
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`logos, advertising; print, television or radio, branding creative, brochures websites and
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`warranty cards” or “any DISTRIBUTOR “creations” related to the NEO product
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`lines.”
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`28.
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`In late November to early December 2015, Serenity provided further
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`shipments of gems to Wholesale Moissanite. After conducting spot checks of the
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`shipment (and having initially received good quality product from Serenity) Wholesale
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`Moissanite sold some gems to its jewelry dealer customers and immediately started
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`receiving returns of the gems by customers. In order to further ensure the quality of the
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`NEO MOISSANITE brand, Wholesale Moissanite increased its inspection of product
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`received from Serenity. The principals of Wholesale Moissanite, Stimpson and Johns,
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`spent approximately forty hours a week inspecting all of the Serenity products from
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`these shipments and rejected a substantial amount of products that would have
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`negatively affected the NEO brand. Wholesale Moissanite then determined that the
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`COMPLAINT FOR DAMAGES AND PERMANENT INJUNCTION
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`Case 5:17-cv-01628 Document 2 Filed 08/14/17 Page 9 of 21 Page ID #:51
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`quality of many of the gems that had been provided by Serenity was so poor that it
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`could not sell them to its customers. Wholesale Moissanite advised Serenity of the
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`poor quality of the shipments they had received.
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`29.
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`On or about December 29, 2015, Wholesale Moissanite returned the poor
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`quality moissanite to Serenity and advised that a large portion of the moissanite could
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`not be sold. Wholesale Moissanite further informed the Neogis that it could not sell
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`moissanite processed by Serenity until the quality substantially improved.
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`30.
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`Following this notification Wholesale Moissanite received no further
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`communications from Defendants for several months. Wholesale Moissanite then
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`contacted Serenity to replace the rejected product and was advised that Defendants had
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`a very limited amount of the product remaining. Wholesale Moissanite is informed
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`and believes that Serenity sold product as “NEO” branded moissanite to third party
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`distribution without Wholesale Moissanite’s consent during this time.
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`31.
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`In April 2016, Defendants provided Wholesale Moissanite with some
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`moissanite to replace the previously rejected product, but did not provide any further
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`shipment of products.
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`32. On April 25, 2016, Stimpson, Johns and the Neogis had a telephone call
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`to discuss the relationship. The Neogis advised Wholesale Moissanite that they were
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`negotiating agreements to sell the product to other companies, but that Wholesale
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`Moissanite could still buy directly from them.
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`33. However, on June 21, 2016, Wholesale Moissanite placed an order with
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`Serenity Aryamond — through Serenity Technologies” email address — and transmitted
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`funds to cover the price. Defendants refused to sell
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`the product
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`to Wholesale
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`Moissanite.
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`In late July 2016, Wholesale Moissanite learned for the first time that
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`Serenity was selling Moissanite product to third parties (as opposed to sending it to
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`Wholesale Moissanite) using the name ”NBC” and the slogan ”NEO TI-HE ONE” in
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`connection with the sale.
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`34. Defendants had breached their agreements with Wholesale Moissanite,
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`COMPLAINT FOR DAMAGES AND PERMANENT INJUNCTION
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`Case 5:17-cv-01628 Document 2 Filed 08/14/17 Page 10 of 21 Page ID #:52
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`#9319
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`and had no right to use the “NBC” name, the “NEO THE ONE” slogan or any other
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`creations of Wholesale Moissanite for Defendants’ products. Defendants also had no
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`right to sell NEO branded products through other distributors without Wholesale
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`Moissanite’s consent.
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`35. Wholesale Moissanite is informed and believes that Defendants continue
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`to market and sell product utilizing the word “NBC” and the phrase “NEO THE 0
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`”,
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`despite the fact that Wholesale Moissanite is the registered owner of the “NBC
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`MOISSANITE” mark and is the owner of the “N130 THE ONE” slogan and mark, and
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`has not consented to this use, and expressly reserved the use of its creations in its
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`- written agreement with Serenity Aryamond.
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`MARKS
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`36.
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`Following its creation of the “NEO” mark, Wholesale Moissanite
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`expressly advised Jay and Suneeta Neogi that
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`it was essential
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`that the mark be
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`registered in order to protect the NBC brand and to minimize the chance that some
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`third party might try to use the word “NEO” with a mark for moissanite gems.
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`Accordingly, and with knowledge of the Defendants that they would be filing an
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`application for
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`registration of
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`the
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`“NEO MOISSANITE” mark, Wholesale
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`Moissanite’s members Stimpson and Johns applied for registration of its trademark on
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`December 3, 2015. The Mark is registered on the Principal Register of the United
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`States Patent and Trademark Office:
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`Mark
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`Registration No. Registration date
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`NEO MOISSANITE
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`5079587
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`November 8, 2016
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`(Exhibit 2.) This registration is in full force and effect. The mark was originally
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`registered in the name of Wholesale Moissanite’s principals, but has since been
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`assigned to Wholesale Moissanite, as reflected in the USPTO database.
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`(Exhibit 6.)
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`This mark along with the slogan and mark “NEO THE ONE” has become identified
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`with Wholesale Moissanite’s products through widespread and favorable public
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`acceptance and recognition, an asset of substantial value as a symbol in the moissanite
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`Case 5:17-cv-01628 Document 2 Filed 08/14/17 Page 11 of 21 Page ID #253
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`National Advertising and Promotion
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`industry.
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`l 2
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`37.
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`Since the Fall of 2015, Wholesale Moissanite has promoted its NEO
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`brand products through national, regional and local advertisements and promotions that
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`prominently feature the N130 name and reach over 20,000 retail
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`jewelers and
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`wholesalers.
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`38.
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`In particular, Wholesale Moissanite has become known as and remains
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`known to its customers as the seller of “NEO MOISSANITE”. Wholesale Moissanite
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`has expended significant resources advertising these promotions since 2015, including
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`through intemet and in-person marketing and other trade channels.
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`DEFENDANTS’ INFRINGING ACTIVITIES
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`39. Defendants, despite Wholesale Moissanite’s registered mark and prior
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`use, continue to market and sell Defendants’ product under the brand name NEO.
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`These activities directly infringe the well-known mark created by and identified with
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`Wholesale Moissanite.
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`40.
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`As a result of their prior relationship, Defendants were well-aware of
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`Wholesale Moissanite’s creation of and rights in the “NEO MOISSANITE” trademark
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`and slogan “NEO THE ONE”.
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`41.
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`On February 13, 2017, Wholesale Moissanite’s attorney sent a demand
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`letter to Serenities attorney concerning the use of the “NEO” mark pointing out that
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`Wholesale Moissanite’s prior
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`rights
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`and had federal
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`registration for “NEO
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`MOISSANITE” mark and that Sereneties’ use of the mark had created confusion and
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`resulted in damages to Wholesale Moissanite. Serenity refused to cease using the
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`“NBC” mark.
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`42.
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`Following the cease and desist letter, Defendants not only refused to
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`cease their
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`infringing activities, but actually increased them.
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`These infringing
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`activities are evidenced by the following examples of the Defendants’ acts:
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`a.
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`On February