Trademark Trial and Appeal Board Electronic Filing System. http://estta.uspto.gov ESTTA Tracking number: ESTTA677683 Filing date: 06/11/2015 IN THE UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD Proceeding 92060709 Party Plaintiff Mendes SA Correspondence MICHAEL CULVER Address MILLEN WHITE ET AL 2200 CLARENDON BLVD STE 1400 ARLINGTON, VA 22201 UNITED STATES [email protected], [email protected], [email protected] Submission Motion to Suspend for Civil Action Filer's Name Michael Culver Filer's e-mail [email protected] Signature /michaelculver/ Date 06/11/2015 Attachments Mendes Motion to Suspend.pdf(985670 bytes )
IN THE UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
Mendes SA ) Cancellation No. 92060709 ) ) Reg. No. 2653253 Petitioner ) Mark: VSL#3 ) Reg. No. 3093502 v. ) Mark: VSL ) Reg. No. 3275673 VSL Pharmaceuticals, Inc. ) Mark: VSL#-DS ) Respondent )
PETITIONER’S MOTION TO SUSPEND PROCEEDING IN VIEW OF PENDING CIVIL ACTION
Exhibit A Case 8:15-cv-01356-PWG Document 9 Filed 06/03/15 Page 1 of 112
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND
______) CLAUDIO DE SIMONE,) ) Plaintiff/Counterclaim Defendant,) ) v. ) Case No. 8:15-cv-01356 ) VSL PHARMACEUTICALS, INC.,) ) Defendant/Counterclaim Plaintff, ) ) and ) ) SIGMA-TAU PHARMACEUTICALS, INC., ) ) Defendant, ) ) v. ) ) DANISCO USA INC.,) ) MENDES SA, and ) ) EXEGI PHARMA, LLC, ) ) Third-Party Defendants. ) ______)
DEFENDANT/COUNTERCLAIM PLAINTIFF VSL PHARMACEUTICALS, INC’S ANSWER, AFFIRMATIVE DEFENSES, AND COUNTERCLAIM TO PLAINTIFF/COUNTERCLAIM DEFENDANT CLAUDIO DE SIMONE’S COMPLAINT; AND THIRD-PARTY COMPLAINT AGAINST DANISCO USA INC., MENDES SA, AND EXEGI PHARMA, LLC
Defendant/Counterclaim Plaintiff VSL Pharmaceuticals, Inc. (“VSL”), by counsel, sets forth the
following as its Answer, Affirmative Defenses, and Counterclaim to Plaintiff/Counterclaim Defendant
Claudio De Simone’s (“De Simone”) Complaint; and Third-Party Complaint against Danisco USA Inc.
(“Danisco”), Mendes SA, and ExeGi Pharma, LLC (“ExeGi”): Case 8:15-cv-01356-PWG Document 9 Filed 06/03/15 Page 2 of 112
ANSWER AND AFFIRMATIVE DEFENSES TO COMPLAINT
NATURE OF THE ACTION
1. Paragraph 1 of the Complaint is an introductory paragraph, not directed to VSL, and
therefore does not require a response. To the extent a response is required, VSL denies the allegations in
Paragraph 1 of the Complaint.
2. As to the allegations in Paragraph 2 of the Complaint, VSL admits that De Simone is a
scientist, inventor, and physician in the field of gastroenterology and immunology, and an inventor of
bacterial compositions used in the fields of human and veterinary nutrition and hygiene. VSL is without
sufficient information to admit or deny any remaining allegations contained in Paragraph 2 and, therefore, such allegations are denied.
3. As to the allegations in Paragraph 3 of the Complaint, VSL admits that De Simone entered into a joint venture (the “Joint Venture”) approximately 15 years ago with Claudio and Paolo Cavazza (the
“Cavazzas”). It is further admitted that Claudio Cavazza founded a large conglomerate of successful
pharmaceutical companies based in Italy, known as Sigma-Tau Group. VSL is without sufficient
information to admit or deny any remaining allegations contained in Paragraph 3 and, therefore, such
allegations are denied.
4. As to the allegations in Paragraph 4 of the Complaint, VSL avers that De Simone and the
Cavazzas agreed to create a number of entities, including VSL, to help develop and sell probiotics around
the globe. VSL further avers that De Simone agreed to provide to VSL all intellectual property related to
probiotic medical food, known as “VSL#3,” including pertinent patent and trademark rights and scientific
know-how. In return, De Simone received a cash payment, as well as an equity stake in the Joint Venture, royalties on future sales of the product, the right to be appointed Chief Executive Officer of VSL, and
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guarantees of additional funding for VSL if required. VSL admits that VSL#3 comprises live, freeze-dried, pure lactic acid bacteria, which protects the inner layer of the gut from pathogens. All remaining allegations in Paragraph 4 are denied.
5. As to the allegations in Paragraph 5 of the Complaint, VSL admits that De Simone and the
Cavazzas formed VSL, which would later come to sell VSL#3. VSL avers that it, rather than De Simone, owns the know-how to manufacture VSL#3. Any allegations in Paragraph 5 of the Complaint not specifically admitted herein are denied.
6. VSL admits the allegations in Paragraph 6 of the Complaint.
7. As to the allegations in Paragraph 7 of the Complaint, VSL admits that the friendship and business partnership between De Simone and the Cavazzas deteriorated over time. VSL further admits that the rights between the parties are determined by various agreements. The remaining allegations in
Paragraph 7 of the Complaint are denied.
8. As to the allegations in Paragraph 8 of the Complaint, VSL admits that Claudio Cavazza died in 2011. VSL denies the remaining allegations in Paragraph 8 of the Complaint.
9. VSL denies the allegations in Paragraph 9 of the Complaint.
10. VSL denies the allegations in Paragraph 10 of the Complaint.
11. As to the allegations in Paragraph 11 of the Complaint, VSL admits that De Simone resigned his positions of director and officer of VSL in November 2014 and purported to terminate the 2010
Know How Agreement. VSL further admits that the Patent License Agreement expired by its own terms on February 9, 2015. Any allegations in Paragraph 11 of the Complaint not specifically admitted herein are denied.
12. VSL denies the allegations in Paragraph 12 of the Complaint.
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13. Paragraph 13 of the Complaint is a statement summarizing the relief sought by De Simone in this matter, is not directed to VSL, and therefore does not require a response. To the extent a response is required, VSL denies the allegations in Paragraph 13 of the Complaint and denies that De Simone is entitled to the relief sought in Paragraph 13 of the Complaint.
14. Paragraph 14 of the Complaint is a statement summarizing the relief sought by De Simone in this matter, is not directed to VSL, and therefore does not require a response. To the extent a response is required, VSL denies the allegations in Paragraph 14 of the Complaint and denies that De Simone is entitled to the relief sought in Paragraph 14 of the Complaint.
PARTIES
15. As to the allegations in Paragraph 15, VSL admits that De Simone is a citizen of Italy who resides in Switzerland. Any remaining allegations in Paragraph 15 call for a legal conclusion and, therefore, no response is required.
16. As to the allegations in Paragraph 16, VSL admits that it is a corporation organized and incorporated under the laws of Delaware. The allegations concerning VSL’s citizenship call for a legal conclusion to which no response is required. The remaining allegations in Paragraph 16 of the Complaint are denied.
17. VSL denies the allegations in Paragraph 17 of the Complaint.
18. As to the allegations in Paragraph 18 of the Complaint, VSL admits that Sigma-Tau
Pharmaceuticals, Inc. (“STP Nevada”) is a corporation organized and incorporated under the laws of
Nevada, with its principal place of business located at 9841 Washingtonian Boulevard, Suite 500,
Gaithersburg, MD, 20878. The allegations concerning STP Nevada’s citizenship call for a legal conclusion to which no response is required.
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19. VSL denies the allegations in Paragraph 19 of the Complaint.
JURISDICTION AND VENUE
20. The allegations in Paragraph 20 call for a legal conclusion and, therefore, no response is required.
21. VSL admits the allegations contained in Paragraph 21 of the Complaint.
22. The allegations in Paragraph 22 call for a legal conclusion and, therefore, no response is
required.
23. The allegations in Paragraph 23 call for a legal conclusion and, therefore, no response is
required.
24. The allegations in Paragraph 24 call for a legal conclusion and, therefore, no response is
required.
25. The allegations in Paragraph 25 call for a legal conclusion and, therefore, no response is
required.
FACTS COMMON TO ALL COUNTS
26. VSL admits the allegations in Paragraph 26 of the Complaint.
27. VSL admits the allegations in Paragraph 27 of the Complaint.
28. VSL admits the allegations in Paragraph 28 of the Complaint.
29. VSL is without sufficient information to admit or deny the allegations in Paragraph 29 of the
Complaint and, therefore, such allegations are denied.
30. VSL is without sufficient information to admit or deny the allegations in Paragraph 30 of the
Complaint and, therefore, such allegations are denied.
31. VSL is without sufficient information to admit or deny the allegations in Paragraph 31 of the
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Complaint and, therefore, such allegations are denied.
32. As to the allegations in Paragraph 32 of the Complaint, VSL admits that on February 10,
1998, a U.S. patent (U.S. Patent Number 5,716,615) titled “Dietary and pharmaceutical compositions containing lyophilized lactic bacteria, their preparation and use” was granted (the “‘615 Patent”). VSL further avers that the ‘615 Patent speaks for itself, and denies any allegations in Paragraph 32 of the
Complaint inconsistent therewith. VSL further denies any remaining allegations in Paragraph 32 of the
Complaint.
33. As to the allegations in Paragraph 33 of the Complaint, VSL avers that the ‘615 Patent was originally issued with De Simone, Vesley Cavaliere and Dr. Anna Maria Renata listed as the co-owners.
VSL admits that in 2005 De Simone settled his lawsuit related to the ‘615 Patent. VSL is without sufficient information to admit or deny any remaining allegations in Paragraph 33 of the Complaint and, therefore, such allegations are denied.
34. As to the allegations in Paragraph 34 of the Complaint, VSL admits that the ‘615 Patent reissued as Patent No. RE40,023 E on January 22, 2008. VSL further avers that the patents speak for themselves, and denies any allegations in Paragraph 34 inconsistent therewith.
35. VSL admits the allegations in Paragraph 35 of the Complaint.
36. VSL denies the allegations in Paragraph 36 of the Complaint.
37. VSL denies the allegations in Paragraph 37 of the Complaint.
38. VSL is without sufficient information to admit or deny the allegations in Paragraph 38 of the
Complaint and, therefore, such allegations are denied.
39. VSL is without sufficient information to admit or deny the allegations in Paragraph 39 of the
Complaint and, therefore, such allegations are denied.
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40. As to the allegations in Paragraph 40 of the Complaint, VSL avers that the Option
Agreement speaks for itself, and denies any allegations in Paragraph 40 inconsistent therewith.
41. As to the allegations in Paragraph 41 of the Complaint, VSL avers that the Option
Agreement speaks for itself, and denies any allegations in Paragraph 41 inconsistent therewith.
42. As to the allegations in Paragraph 42 of the Complaint, VSL avers that the Option
Agreement speaks for itself, and denies any allegations in Paragraph 42 inconsistent therewith.
43. As to the allegations in Paragraph 43 of the Complaint, VSL avers that the Option
Agreement speaks for itself, and denies any allegations in Paragraph 43 inconsistent therewith.
44. VSL is without sufficient information to admit or deny the allegations in Paragraph 44 of the
Complaint and, therefore, such allegations are denied.
45. As to the allegations in Paragraph 46 of the Complaint, VSL admits that De Simone and the
Cavazzas formed VSL through various entities they owned, to market and commercialize certain of De
Simone’s probiotic inventions. Any remaining allegations in Paragraph 45 are denied.
46. As to the allegations in Paragraph 46 of the Complaint, VSL admits that Claudio Cavazza owned a Luxembourg company named Taufin International, S.A. (“Taufin”), Paolo Cavazza owned a
Luxembourg company named Sinaf, S.A. (“Sinaf”), and De Simone owned and controlled Mendes, S.r.l., an Italian company (“Mendes Italy”). VSL further admits that De Simone owns and controls another
Luxembourg entity named Mendes International S.A. (“Mendes International”). VSL is without sufficient information to admit or deny the reason why Mendes International was set up and, therefore, such allegation is denied. The remaining allegations in Paragraph 46 of the Complaint are denied.
47. VSL admits that CD International is one third owned by Taufin, Sinaf and Mendes
International, and that CD Investments is a wholly owned subsidiary of CD International. VSL further
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admits that CD Investments owns 99.97 percent of VSL, and that De Simone, Taufin and Sinaf each own .1
percent of such shares. VSL denies the remaining allegations in Paragraph 47 of the Complaint.
48. As to the allegations in Paragraph 48 of the Complaint, VSL admits that the initial directors
of VSL were appointed by De Simone, Taufin and Sinaf. VSL further admits that VSL was incorporated in
Delaware on or about July 11, 2000. VSL denies the remaining allegations of Paragraph 48 of the
Complaint.
49. As to the allegations in Paragraph 49 of the Complaint, VSL admits that the Collaboration
Agreement was entered into on July 11, 2000, the terms of which speak for themselves. VSL denies the
remaining allegations of Paragraph 49 of the Complaint.
50. VSL denies the allegations in Paragraph 50 of the Complaint.
51. As to the allegations in Paragraph 51 of the Complaint, VSL admits that De Simone and
VSL entered into a “Patent Licence [sic] Agreement” on January 30, 2001 (the “Patent License
Agreement”), which speaks for itself, and denies any allegations in Paragraph 51 inconsistent therewith.
Any allegations in Paragraph 51 of the Complaint not specifically admitted herein are denied.
52. VSL denies the allegations of Paragraph 52.
53. As to the allegations in Paragraph 53 of the Complaint, VSL avers that the Patent License
Agreement speaks for itself. The allegations of Paragraph 53 of the Complaint are otherwise denied.
54. As to the allegations in Paragraph 54 of the Complaint, VSL avers that the Patent License
Agreement and Option Agreement speak for themselves. The allegations of Paragraph 54 of the Complaint are otherwise denied.
55. As to the allegations in Paragraph 55 of the Complaint, VSL avers that the Patent License
Agreement speaks for itself. The allegations of Paragraph 55 of the Complaint are otherwise denied.
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56. The allegations in Paragraph 56 of the Complaint are denied.
57. The allegations in Paragraph 57 of the Complaint are denied.
58. As to the allegations in Paragraph 58 of the Complaint, VSL admits that in or about 2002
Questcor was marketing and selling VSL#3 pursuant to a Promotion Agreement, which speaks for itself,
and denies any allegations in Paragraph 58 inconsistent therewith. VSL further admits that it did not renew
the Promotion Agreement. VSL is without sufficient information to admit or deny any remaining
allegations in Paragraph 58 of the Complaint, and therefore denies same.
59. As to the allegations in Paragraph 59 of the Complaint, VSL admits that on December 1,
2003, VSL entered into a License Agreement with Sigma Tau Pharmaceuticals Inc. (the “2003 VSL-STP
License Agreement”), which speaks for itself. VSL denies any remaining allegations in Paragraph 59 of the
Complaint.
60. As to the allegations in Paragraph 60 of the Complaint, VSL avers that the 2003 VSL-STP
License Agreement speaks for itself. VSL denies any remaining allegations in Paragraph 60 of the
Complaint.
61. As to the allegations in Paragraph 61 of the Complaint, VSL avers that the 2003 VSL-STP
License Agreement speaks for itself. VSL denies any remaining allegations in Paragraph 61 of the
Complaint.
62. As to the allegations in Paragraph 62 of the Complaint, VSL avers that the 2003 VSL-STP
License Agreement speaks for itself. VSL denies any remaining allegations in Paragraph 62 of the
Complaint.
63. As to the allegations in Paragraph 63 of the Complaint, VSL avers that the 2003 VSL-STP
License Agreement speaks for itself. VSL denies any remaining allegations in Paragraph 63 of the
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Complaint.
64. As to the allegations in Paragraph 64 of the Complaint, VSL avers that the 2003 VSL-STP
License Agreement speaks for itself. VSL denies any remaining allegations in Paragraph 64 of the
Complaint.
65. As to the allegations in Paragraph 65 of the Complaint, VSL admits that it obtained a registered trademark for VSL#3. As to the other allegations in Paragraph 65 of the Complaint, VSL avers that the 2003 VSL-STP License Agreement speaks for itself. VSL denies any remaining allegations in
Paragraph 65 of the Complaint.
66. As to the allegations in Paragraph 66 of the Complaint, VSL avers that the 2003 VSL-STP
License Agreement speaks for itself. VSL denies any remaining allegations in Paragraph 66 of the
Complaint.
67. As to the allegations in Paragraph 67 of the Complaint, VSL avers that the 2003 VSL-STP
License Agreement speaks for itself. VSL denies any remaining allegations in Paragraph 67 of the
Complaint.
68. VSL is without sufficient information to admit or deny the allegations contained in
Paragraph 68 of the Complaint.
69. VSL is without sufficient information to admit or deny the allegations contained in
Paragraph 69 of the Complaint.
70. VSL denies the allegations in Paragraph 70 of the Complaint.
71. VSL denies the allegations in Paragraph 71 of the Complaint.
72. In response to Paragraph 72 of the Complaint, VSL is without sufficient information to admit or deny the allegations because the alleged agreement is not appended as an exhibit.
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73. In response to Paragraph 73 of the Complaint, VSL is without sufficient information to
admit or deny the allegations because the alleged agreement is not appended as an exhibit.
74. VSL denies the allegations in Paragraph 74 of the Complaint.
75. VSL denies the allegations in Paragraph 75 of the Complaint.
76. As to the allegations in Paragraph 76 of the Complaint, upon information and belief, VSL
understands that De Simone executed an agreement with Danisco dated June 1, 2008 and denies all
remaining allegations of Paragraph 76. VSL avers that De Simone’s execution of the 2008 De Simone-
Danisco Agreement constituted a breach of his fiduciary duties, and denies that the agreement is valid or
enforceable.
77. As to the allegations in Paragraph 77 of the Complaint, VSL avers that the terms of the 2008
De Simone-Danisco Agreement speak for themselves and denies all remaining allegations of Paragraph 77.
VSL avers that De Simone’s execution of the 2008 De Simone-Danisco Agreement constituted a breach of his fiduciary duties, and denies that the agreement is valid or enforceable.
78. As to the allegations in Paragraph 78 of the Complaint, VSL avers that the terms of the 2008
De Simone-Danisco Agreement speak for themselves and denies all remaining allegations of Paragraph 78.
VSL avers that De Simone’s execution of the 2008 De Simone-Danisco Agreement constituted a breach of his fiduciary duties, and denies that the agreement is valid or enforceable.
79. As to the allegations in Paragraph 79 of the Complaint, VSL avers that the terms of the 2008
De Simone-Danisco Agreement speak for themselves and denies all remaining allegations of Paragraph 79.
VSL avers that De Simone’s execution of the 2008 De Simone-Danisco Agreement constituted a breach of his fiduciary duties, and denies that the agreement is valid or enforceable.
80. As to the allegations in Paragraph 80 of the Complaint, VSL avers that the terms of the 2008
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De Simone-Danisco Agreement speak for themselves and denies all remaining allegations of Paragraph 80.
VSL avers that De Simone’s execution of the 2008 De Simone-Danisco Agreement constituted a breach of
his fiduciary duties, and denies that the agreement is valid or enforceable.
81. As to the allegations in Paragraph 81 of the Complaint, VSL avers that the terms of the 2008
De Simone-Danisco Agreement speak for themselves and denies all remaining allegations of Paragraph 81.
VSL avers that De Simone’s execution of the 2008 De Simone-Danisco Agreement constituted a breach of his fiduciary duties, and denies that the agreement is valid or enforceable.
82. VSL is without sufficient information to admit or deny the allegations in Paragraph 82 of the
Complaint and, therefore, denies the same.
83. VSL is without sufficient information to admit or deny the allegations in Paragraph 83 of the
Complaint and, therefore, denies the same.
84. VSL is without sufficient information to admit or deny the allegations in Paragraph 84 of the
Complaint and, therefore, denies the same.
85. As to the allegations in Paragraph 85 of the Complaint, VSL admits that its corporate
records reflect that a meeting of its board of directors occurred on September 18, 2009. VSL acknowledges
that the purported minutes of that meeting reflect the substance of the allegations contained in Paragraph 85.
All remaining allegations of Paragraph 85 are denied, and VSL avers that De Simone had no proprietary
rights in the VSL#3 formula and, therefore, lacked the capacity to negotiate in the manner that he alleges.
Further any alleged agreement arising from this meeting would be null and void.
86. VSL denies the allegations in Paragraph 86 of the Complaint.
87. VSL denies the allegations in Paragraph 87 of the Complaint and avers that De Simone had
no proprietary rights in the VSL#3 formula and, therefore, lacked the capacity to enter into the Know How
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Agreement. VSL further avers that the January 2010 Know-How Agreement is null and void.
88. VSL denies the allegations of Paragraph 88.
89. As to the allegations in Paragraph 89 of the Complaint, VSL avers that the language of the
January 2010 Know-How Agreement speaks for itself, but denies that the January 2010 Know-How
Agreement itself is valid and enforceable and otherwise denies the allegations of Paragraph 89.
90. As to the allegations in Paragraph 90 of the Complaint, VSL avers that the language of the
January 2010 Know-How Agreement speaks for itself, but denies that the January 2010 Know-How
Agreement itself is valid and enforceable and otherwise denies the allegations of Paragraph 90.
91. As to the allegations in Paragraph 91 of the Complaint, VSL avers that the language of the
January 2010 Know-How Agreement speaks for itself, but denies that the January 2010 Know-How
Agreement itself is valid and enforceable and otherwise denies the allegations of Paragraph 91.
92. As to the allegations in Paragraph 92 of the Complaint, VSL avers that the language of the
January 2010 Know-How Agreement speaks for itself, but denies that the January 2010 Know-How
Agreement itself is valid and enforceable and otherwise denies the allegations of Paragraph 92.
93. As to the allegations in Paragraph 93 of the Complaint, VSL avers that the language of the
January 2010 Know-How Agreement speaks for itself, but denies that the January 2010 Know-How
Agreement itself is valid and enforceable and otherwise denies the allegations of Paragraph 93.
94. As to the allegations in Paragraph 94 of the Complaint, VSL avers that the language of the
January 2010 Know-How Agreement speaks for itself, but denies that the January 2010 Know-How
Agreement itself is valid and enforceable and otherwise denies the allegations of Paragraph 94.
95. As to the allegations in Paragraph 95 of the Complaint, VSL avers that the language of the
January 2010 Know-How Agreement speaks for itself, but denies that the January 2010 Know-How
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Agreement itself is valid and enforceable and otherwise denies the allegations of Paragraph 95.
96. As to the allegations in Paragraph 96 of the Complaint, VSL avers that the language of the
January 2010 Know-How Agreement speaks for itself, but denies that the January 2010 Know-How
Agreement itself is valid and enforceable and otherwise denies the allegations of Paragraph 96.
97. As to the allegations in Paragraph 97 of the Complaint, VSL avers that the language of the
January 2010 Know-How Agreement speaks for itself, but denies that the January 2010 Know-How
Agreement itself is valid and enforceable and otherwise denies the allegations of Paragraph 97.
98. As to the allegations in Paragraph 98 of the Complaint, VSL avers that the language of the
January 2010 Know-How Agreement speaks for itself, but denies that the January 2010 Know-How
Agreement itself is valid and enforceable and otherwise denies the allegations of Paragraph 98.
99. As to the allegations in Paragraph 99 of the Complaint, VSL avers that the language of the
January 2010 Know-How Agreement speaks for itself, but denies that the January 2010 Know-How
Agreement itself is valid and enforceable and otherwise denies the allegations of Paragraph 99.
100. As to the allegations in Paragraph 100 of the Complaint, VSL admits that it sent a letter to
Sigma-Tau Pharmaceuticals, Inc. at its Gaithersburg, Maryland office, which speaks for itself, and denies any allegations in Paragraph 100 inconsistent therewith.
101. VSL admits the allegations in Paragraph 101 of the Complaint.
102. As to the allegations in Paragraph 102 of the Complaint, VSL admits that it entered into the
2010 VSL-STP License Agreement the language of which speaks for itself. VSL denies any other allegations contained in Paragraph 102.
103. As to the allegations in Paragraph 103 of the Complaint, VSL admits that it entered into the
2010 VSL-STP License Agreement the language of which speaks for itself. VSL denies any other
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allegations contained in Paragraph 103.
104. As to the allegations in Paragraph 104 of the Complaint, VSL admits that it entered into the
2010 VSL-STP License Agreement the language of which speaks for itself. VSL denies any other allegations contained in Paragraph 104.
105. As to the allegations in Paragraph 105 of the Complaint, VSL admits that it entered into the
2010 VSL-STP License Agreement the language of which speaks for itself. VSL denies any other allegations contained in Paragraph 105.
106. VSL admits, upon information and belief, that STP Nevada obtained its supplies of VSL#3 from Danisco. VSL is without sufficient information to admit or deny the remaining allegations of
Paragraph 106 and therefore, such allegations are denied.
107. As to the allegations in Paragraph 107 of the Complaint, VSL admits that it entered into the
2010 VSL-STP License Agreement the language of which speaks for itself. VSL denies any other allegations contained in Paragraph 107.
108. As to the allegations in Paragraph 108 of the Complaint, VSL admits that it entered into the
2010 VSL-STP License Agreement the language of which speaks for itself. VSL denies any other allegations contained in Paragraph 108.
109. As to the allegations in Paragraph 109 of the Complaint, VSL admits that it entered into the
2010 VSL-STP License Agreement the language of which speaks for itself. VSL denies any other allegations contained in Paragraph 109.
110. As to the allegations in Paragraph 110 of the Complaint, VSL admits that it entered into the
2010 VSL-STP License Agreement the language of which speaks for itself. VSL denies any other allegations contained in Paragraph 110.
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111. As to the allegations in Paragraph 111 of the Complaint, VSL admits that it entered into the
2010 VSL-STP License Agreement the language of which speaks for itself. VSL denies any other allegations contained in Paragraph 111.
112. As to the allegations in Paragraph 112 of the Complaint, VSL admits that it entered into the
2010 VSL-STP License Agreement the language of which speaks for itself. VSL denies any other allegations contained in Paragraph 112.
113. As to the allegations in Paragraph 113 of the Complaint, VSL admits that it entered into the
2010 VSL-STP License Agreement the language of which speaks for itself. VSL denies any other allegations contained in Paragraph 113.
114. As to the allegations in Paragraph 114 of the Complaint, VSL admits that it entered into the
2010 VSL-STP License Agreement the language of which speaks for itself. VSL denies any other allegations contained in Paragraph 114.
115. VSL is without sufficient information to admit or deny the allegations contained in
Paragraph 115 and, therefore, such allegations are denied.
116. VSL is without sufficient information to admit or deny the allegations contained in
Paragraph 116 and, therefore, such allegations are denied.
117. VSL is without sufficient information to admit or deny the allegations contained in
Paragraph 117 and, therefore, such allegations are denied.
118. VSL is without sufficient information to admit or deny the allegations contained in
Paragraph 118 and, therefore, such allegations are denied.
119. VSL is without sufficient information to admit or deny the allegations contained in
Paragraph 119 and, therefore, such allegations are denied.
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120. VSL is without sufficient information to admit or deny the allegations contained in
Paragraph 120 and, therefore, such allegations are denied.
121. VSL is without sufficient information to admit or deny the allegations contained in
Paragraph 121 and, therefore, such allegations are denied.
122. VSL is without sufficient information to admit or deny the allegations contained in
Paragraph 122 and, therefore, such allegations are denied.
123. VSL is without sufficient information to admit or deny the allegations contained in
Paragraph 123 and, therefore, such allegations are denied.
124. VSL is without sufficient information to admit or deny the allegations contained in
Paragraph 124 and, therefore, such allegations are denied.
125. VSL is without sufficient information to admit or deny the allegations contained in
Paragraph 125 and, therefore, such allegations are denied.
126. VSL is without sufficient information to admit or deny the allegations contained in
Paragraph 126 and, therefore, such allegations are denied.
127. VSL is without sufficient information to admit or deny the allegations contained in
Paragraph 127 and, therefore, such allegations are denied.
128. VSL is without sufficient information to admit or deny the allegations contained in
Paragraph 128 and, therefore, such allegations are denied.
129. VSL is without sufficient information to admit or deny the allegations contained in
Paragraph 129 and, therefore, such allegations are denied.
130. VSL is without sufficient information to admit or deny the allegations contained in
Paragraph 130 and, therefore, such allegations are denied.
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131. As to the allegations in Paragraph 131 of the Complaint, VSL admits that De Simone was accused of breaching his fiduciary duties to VSL. VSL denies the remaining allegations in Paragraph 131 of the Complaint.
132. VSL is without sufficient information to admit or deny the allegations contained in
Paragraph 132 and, therefore, such allegations are denied.
133. As to the allegations in Paragraph 133 of the Complaint, VSL admits that Taufin, Sinaf, and
CD Investments made demands on De Simone, as VSL’s CEO, to inspect VSL’s books and records in or around the summer of 2014. VSL further admits that De Simone, on behalf of VSL, refused these demands. Any remaining allegations in Paragraph 133 call for a legal conclusion and, therefore, no response is required.
134. As to the allegations in Paragraph 134 of the Complaint, VSL admits that, on or about
September 4, 2014, CD Investments adopted a written consent changing certain of VSL’s Bylaws and adding James Brady as a new director of VSL. VSL further avers that the written consent speaks for itself, and denies any allegations in Paragraph 134 inconsistent therewith. Any remaining allegations in
Paragraph 134 call for a legal conclusion and, therefore, no response is required.
135. As to the allegations in Paragraph 135 of the Complaint, VSL admits that, on or about
September 10, 2014, CD Investments and Sinaf filed suit against VSL in the Delaware Chancery Court to enforce previous demands for the inspection of VSL’s books and records (the “CD/Sinaf/VSL Lawsuit”).
VSL further avers that the Verified Complaint in the CD/Sinaf/VSL Lawsuit speaks for itself, and denies any allegations in Paragraph 135 inconsistent therewith.
136. As to the allegations in Paragraph 136 of the Complaint, VSL avers that the Verified
Complaint in the CD/Sinaf/VSL Lawsuit speaks for itself, and denies any allegations in Paragraph 136
18 Case 8:15-cv-01356-PWG Document 9 Filed 06/03/15 Page 19 of 112
inconsistent therewith.
137. As to the allegations in Paragraph 137 of the Complaint, VSL admits that, on or about
September 29, 2014, James Brady sent a written demand for the inspection of VSL’s books and records, the content of which speak for itself, and VSL denies any allegations in Paragraph 137 inconsistent therewith.
138. As to the allegations in Paragraph 138 of the Complaint, VSL admits that De Simone and his agents, on behalf of VSL, refused James Brady’s demands. VSL is without sufficient information to admit or deny the remaining allegations contained in Paragraph 138 and, therefore, such allegations are denied.
139. As to the allegations in Paragraph 139 of the Complaint, VSL admits that, on or about
October 10, 2014, James Brady filed suit against VSL in the Delaware Chancery Court seeking an order compelling the inspection of VSL’s books and records (the “Brady/VSL Lawsuit”). VSL further avers that the Verified Complaint in the Brady/VSL Lawsuit speaks for itself, and denies any allegations in Paragraph
139 inconsistent therewith.
140. As to the allegations in Paragraph 140 of the Complaint, VSL admits that, on or about
October 15, 2014, James Brady sent a letter to De Simone, Beth Park, Henry Gallagher, and M. Angela
Castille, the content of which speak for itself, and VSL denies any allegations in Paragraph 140 inconsistent therewith.
141. As to the allegations in Paragraph 141 of the Complaint, VSL avers that VSL’s Bylaws speak for themselves, and denies any allegations in Paragraph 141 inconsistent therewith.
142. VSL admits the allegations in Paragraph 142 of the Complaint.
143. VSL denies the allegations in Paragraph 143 of the Complaint.
144. VSL is without sufficient information to admit or deny the allegations contained in
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Paragraph 144 and, therefore, such allegations are denied.
145. As to the allegations in Paragraph 145 of the Complaint, VSL admits that, on or about
November 14, 2014, De Simone sent a letter to Sinaf, Taufin, James Brady, and CD Investments, the
content of which speak for itself. By admitting to the existence of the letter, VSL in no way admits to the
correctness or accuracy of its contents, or that the January 2010 Know-How Agreement is valid and enforceable.
146. As to the allegations in Paragraph 146 of the Complaint, VSL admits that, on or about
November 14, 2014, De Simone sent a letter to Sinaf, Taufin, James Brady, and CD Investments, the content of which speak for itself.
147. VSL is without sufficient information to admit or deny the allegations contained in
Paragraph 147 and, therefore, such allegations are denied.
148. VSL is without sufficient information to admit or deny the allegations contained in
Paragraph 148 and, therefore, such allegations are denied.
149. VSL is without sufficient information to admit or deny the allegations contained in
Paragraph 149 and, therefore, such allegations are denied.
150. VSL denies the allegations in Paragraph 150 of the Complaint.
151. VSL denies the allegations in Paragraph 151 of the Complaint.
152. VSL denies the allegations in Paragraph 152 of the Complaint.
153. As to the allegations in Paragraph 153 of the Complaint, VSL avers that the Verified
Complaints in the CD/Sinaf/VSL Lawsuit and Brady/VSL Lawsuit speak for themselves, and denies any allegations in Paragraph 153 inconsistent therewith. VSL denies the remaining allegations in Paragraph
153 of the Complaint.
20 Case 8:15-cv-01356-PWG Document 9 Filed 06/03/15 Page 21 of 112
154. As to the allegations in Paragraph 153 of the Complaint, VSL admits that Actial
Farmaceutica LDA (“Actial”), a subsidiary of CD Investments, filed suit against De Simone in the High
Court of London in the United Kingdom. VSL avers that the pleadings associated with such litigation speak for themselves. VSL further admits that CD International is one third owned by Taufin, Sinaf and
Mendes International, and that CD Investments is a wholly owned subsidiary of CD International. VSL
denies the remaining allegations in Paragraph 154 of the Complaint.
155. The allegations contained in Paragraph 155 of the Complaint are argumentative and require no response. To the extent a response is required, the allegations in Paragraph 155 of the Complaint are denied.
156. As to the allegations in Paragraph 156 of the Complaint, VSL admits that on in or about
January 2015, a petition was filed by Mendes SA, an entity owned or controlled by De Simone, with the
U.S. Trademark Trial and Appeal Board. VSL denies Mendes is entitled to the relief sought in the petition.
157. As to the allegations in Paragraph 157 of the Complaint, VSL admits that, on or about
March 30, 2015, VSL filed an answer to the petition, which speaks for itself, and denies any allegations in
Paragraph 157 in consistent therewith.
158. VSL denies the allegations in Paragraph 158 of the Complaint.
COUNT I Declaratory Judgment
159. As to the allegations in Paragraph 159 of the Complaint, VSL restates and incorporates by
reference its answers to the foregoing paragraphs as if set forth fully in response to Count I.
160. In response to the allegations contained in Paragraph 160 of the Complaint, VSL admits that
it is disputing De Simone’s intellectual property rights regarding VSL#3. VSL denies any remaining
allegation contained in Paragraph 160.
21 Case 8:15-cv-01356-PWG Document 9 Filed 06/03/15 Page 22 of 112
161. VSL admits the allegations in Paragraph 161 of the Complaint.
162. As to the allegations in Paragraph 162 of the Complaint, VSL admits that the ‘615 Patent was issued on February 10, 1998, and reissued as Patent No. RE40,023 E on January 22, 2008. VSL further avers that the patents speak for themselves, and denies any allegations in Paragraph 162 inconsistent therewith.
163. VSL denies the allegations in Paragraph 163 of the Complaint.
164. VSL denies the allegations in Paragraph 164 of the Complaint.
165. As to the allegations in Paragraph 165 of the Complaint, VSL avers that the Mendes Patent
Assignment of September 18, 2000 speaks for itself, and denies any allegations in Paragraph 165 inconsistent therewith.
166. VSL denies the allegations in Paragraph 166 of the Complaint.
167. VSL denies the allegations in Paragraph 167 of the Complaint.
168. As to the allegations in Paragraph 168 of the Complaint, VSL admits that it is the owner of all intellectual property and proprietary and confidential information related to VSL#3. Any allegations in
Paragraph 168 of the Complaint not specifically admitted herein are denied.
169. The allegations in Paragraph 169 are not directed at VSL, and as such no response is required. To the extent a response is required, VSL denies that De Simone is correct in his position.
170. The allegations in Paragraph 170 call for a legal conclusion and, therefore, no response is required.
171. The allegations in Paragraph 171 call for a legal conclusion and, therefore, no response is required.
172. The allegations in Paragraph 172 call for a legal conclusion and, therefore, no response is
22 Case 8:15-cv-01356-PWG Document 9 Filed 06/03/15 Page 23 of 112
required.
COUNT II Breach of Contract
173. As to the allegations in Paragraph 173 of the Complaint, VSL restates and incorporates by reference its answers to the foregoing paragraphs as if set forth fully in response to Count II.
174. The allegations in Paragraph 174 call for a legal conclusion and, therefore, no response is required.
175. VSL denies the allegations in Paragraph 175 of the Complaint.
176. As to the allegations in Paragraph 176 of the Complaint, VSL avers that the Patent License
Agreement speaks for itself, and denies any allegations in Paragraph 176 inconsistent therewith.
177. VSL denies the allegations in Paragraph 177 of the Complaint.
178. VSL denies the allegations in Paragraph 178 of the Complaint.
COUNT III Unjust Enrichment
179. As to the allegations in Paragraph 179 of the Complaint, VSL restates and incorporates by reference its answers to the foregoing paragraphs as if set forth fully in response to Count III.
180. VSL denies the allegations in Paragraph 180 of the Complaint.
181. VSL denies the allegations in Paragraph 181 of the Complaint.
182. VSL denies the allegations in Paragraph 182 of the Complaint.
183. VSL denies the allegations in Paragraph 183 of the Complaint.
184. VSL denies the allegations in Paragraph 184 of the Complaint.
185. VSL denies the allegations in Paragraph 185 of the Complaint.
186. VSL denies the allegations in Paragraph 186 of the Complaint.
23 Case 8:15-cv-01356-PWG Document 9 Filed 06/03/15 Page 24 of 112
187. VSL denies the allegations in Paragraph 187 of the Complaint.
COUNT IV Unjust Enrichment
188. As to the allegations in Paragraph 188 of the Complaint, VSL restates and incorporates by reference its answers to the foregoing paragraphs as if set forth fully in response to Count IV.
189. As to the allegations in Paragraph 189 of the Complaint, VSL admits the allegations as they apply to VSL, but deny same as they apply to De Simone.
190. VSL admits the allegations in Paragraph 190 of the Complaint.
191. VSL denies the allegations in Paragraph 191 of the Complaint.
192. As to the allegations in Paragraph 192 of the Complaint, VSL avers that the 2010 VSL-STP
License Agreement speaks for itself, and denies any allegations in Paragraph 192 inconsistent therewith.
193. VSL denies the allegations in Paragraph 193 of the Complaint.
194. VSL is without sufficient information to admit or deny the allegations contained in
Paragraph 194 and, therefore, such allegations are denied.
195. VSL admits the allegations in Paragraph 195 of the Complaint.
196. VSL admits the allegations in Paragraph 196 of the Complaint.
197. VSL denies the allegations in Paragraph 197 of the Complaint.
198. VSL denies the allegations in Paragraph 198 of the Complaint.
199. VSL denies the allegations in Paragraph 199 of the Complaint.
200. VSL denies the allegations in Paragraph 200 of the Complaint.
201. VSL denies the allegations in Paragraph 201 of the Complaint.
202. VSL denies the allegations in Paragraph 202 of the Complaint.
COUNT V
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Civil Conspiracy
203. As to the allegations in Paragraph 203 of the Complaint, VSL restates and incorporates by reference its answers to the foregoing paragraphs as if set forth fully in response to Count V.
204. VSL denies the allegations in Paragraph 204 of the Complaint.
205. VSL denies the allegations in Paragraph 205 of the Complaint.
206. VSL denies the allegations in Paragraph 206 of the Complaint.
207. VSL denies the allegations in Paragraph 207 of the Complaint.
208. VSL denies the allegations in Paragraph 208 of the Complaint.
209. VSL denies any allegations in the “Wherefore” clause of the Complaint, including paragraphs A–G, and denies that De Simone is entitled to the relief sought therein.
210. VSL denies that it is indebted to De Simone for any reason or in any amount.
211. VSL reserves the right to alter, enlarge, modify or amend its Answer at any time prior to the entry of a final order in this matter.
AFFIRMATIVE DEFENSES
1. De Simone’s claim is barred by the equitable doctrine of estoppel.
2. De Simone’s claims are barred, in part, by the failure of consideration.
3. De Simone’s claims are barred, in part, by illegality.
4. De Simone’s claims are barred, in part, by fraud.
5. De Simone’s claims are barred, in part, by his breach of fiduciary duty.
6. De Simone’s claims are barred, in part, by his unclean hands.
7. De Simone’s claims are barred for the reasons set forth in VSL’s Counterclaim and
Third-Party Complaint.
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8. VSL reserves the right to assert additional affirmative defenses when and if such defenses become known during discovery and through the trial of this matter.
WHEREFORE, Defendant, VSL Pharmaceuticals, Inc., by counsel, respectfully requests that the
Complaint be dismissed, along with such other and further relief as the Court deems appropriate.
COUNTERCLAIM/THIRD-PARTY COMPLAINT
Defendant/Counterclaim Plaintiff VSL asserts the following in support of its Counterclaim and
Third-Party Complaint for injunctive, declaratory, and other relief against Claudio De Simone (“De
Simone”), Danisco USA Inc. (“Danisco”), Mendes SA, and ExeGi Pharma, LLC (“ExeGi”):1
INTRODUCTION
1. These Counterclaims are necessary because VSL has recently discovered that De Simone, the former CEO and Chairman of the Board of VSL, has spent at least the last several years engaged in self-dealing and deceit in order to implement a scheme to defraud VSL, divert its corporate assets, and usurp every available opportunity from VSL for his own benefit.
2. In the 1990’s, De Simone helped develop the scientific formulation for a probiotic medical food, which eventually became the product sold under the federally registered trademark
“VSL#3” owned throughout all relevant times herein by VSL. Lacking the financial, logistical, and regulatory resources to bring the product to market, De Simone entered into a joint venture in 2000 with brothers Paolo Cavazza and Claudio Cavazza (the “Cavazza Brothers”), the owners of an Italian conglomerate who held a portfolio of successful pharmaceutical businesses and investments (the “Joint
1 To the extent any defined terms found in the Counterclaim/Third-Party Complaint conflict with defined terms in the Answer to the Complaint, the defined terms in the Counterclaim/Third-Party Complaint shall control for the purposes of the Counterclaim/Third-Party Complaint. 26 Case 8:15-cv-01356-PWG Document 9 Filed 06/03/15 Page 27 of 112
Venture”). The plan was to use the Cavazza Brothers’ financial backing, distribution network,
pharmaceutical manufacturing capabilities and industry expertise to launch VSL#3 in various markets around the world.
3. Although the details of the Joint Venture are extremely complex (with agreements and licenses running between various entities that were formed to market the product globally), the basics of the deal were rather simple. The parties agreed to create a number of entities, including VSL, to help develop and sell probiotics around the globe. De Simone agreed to provide to VSL all intellectual property related to VSL#3, including pertinent patent and trademark rights and scientific know-how. In return, De Simone received a cash payment, as well as an equity stake in the Joint Venture and royalties on future sales of the product. De Simone was also given the opportunity to run the day-to-day operations of the Joint Venture, and was appointed as the chief executive and a board member of various entities formed to carry out the Joint Venture’s mission, including VSL. The hope was that, with De
Simone at the helm, and with the financial backing, logistical experience, and extensive network of the
Cavazza Brothers, the parties could turn VSL#3 into another pharmaceutical success story, thereby bringing VSL#3 to market around the globe.
4. When the product began to truly take off, however, De Simone decided that he was not content to allocate any portion of profits with those who helped make the product commercially viable.
Instead, De Simone wanted to reclaim ownership of VSL#3 for himself. Rather than negotiating with the Cavazza Brothers to purchase exclusive rights to the product, De Simone opted to employ nefarious means to achieve his goals. Through a systematic course of self-dealing, fiduciary misconduct, and outright deceit, De Simone set out to “unwind” the transfer of his intellectual property to the Joint
Venture. De Simone surreptitiously entered into agreements with Danisco—the only manufacturer of
27 Case 8:15-cv-01356-PWG Document 9 Filed 06/03/15 Page 28 of 112
the product in the world—to insert himself into VSL’s supply chain and give himself the purported ability to interrupt or even cancel Danisco’s sale of VSL#3 to VSL and the other affiliates formed as part of the Joint Venture.
5. De Simone also abused his position as CEO of VSL by entering into contracts on behalf of VSL that actually furthered his own self-interests and/or were detrimental to VSL. As one example, within the last year De Simone negotiated a fifteen-year contract in which he obligated VSL to sell
VSL#3 to a distributor in China, a subsidiary of Johnson & Johnson, for approximately half of what it costs VSL to have the product manufactured by Danisco. Thus, on his way out the door of the company,
De Simone carefully placed landmines that would seriously undermine VSL’s ability to continue as a
viable going concern.
6. De Simone did not do this alone. He hand-picked a Chief Operating Officer for VSL, Bo
Young “Beth” Park (“Park”), and paid her an exorbitant salary to assist him in his efforts to wrest
control and ownership over the rights to VSL#3 from the Joint Venture. With Park’s conspiratorial
assistance and consent, De Simone was able to obscure the true nature of his self-dealing,
misappropriation, and usurpation of corporate opportunities; thereby giving his misconduct an
appearance of legitimacy. Outside of De Simone and Park, none of the self-serving agreements entered
into by De Simone were reported to anyone else involved with the Joint Venture. All other directors,
shareholders, and employees were unaware that their trust in De Simone was being betrayed.
7. While laying the groundwork to cripple VSL with burdensome contracts and
interruptions in its supply chain, De Simone also formed his own entities to sell the product upon the
expiration of the patent covering VSL#3 in February 2015. He did this while still acting as VSL’s Chief
28 Case 8:15-cv-01356-PWG Document 9 Filed 06/03/15 Page 29 of 112
Executive Officer. Through one of these entities (Mendes SA), De Simone even sought to register the confusingly similar trademarks “VSL#3 BY DE SIMONE” and “VSL3TOTAL.”
8. The framework of De Simone’s plan has only now become clear: upon the expiration of the patent covering VSL#3 in early 2015, De Simone would be positioned to use his illicit personal agreements with Danisco to wrest control of the VSL#3 trade secrets from VSL and disrupt its supply chain, thereby causing VSL to breach various contracts with its distributors and destroying its market share to the ultimate and crippling detriment of VSL’s business. As VSL would be struggling to cope with these numerous issues, De Simone would use his newly-formed entities to step in and fill the void
in the market caused by his interference with VSL’s manufacturing and distribution network.
9. In 2014, as the expiration date for the patent covering VSL#3 began to draw near, and his
Joint-Venture partners began asking questions about the future plans for VSL#3, De Simone took steps
to conceal his conduct from his colleagues. De Simone refused to comply with numerous formal
demands by VSL’s shareholders and directors for information related to VSL. Those shareholders and
directors thereafter filed suit against VSL in the Delaware Court of Chancery to enforce their right to
information that De Simone had withheld from them, but it was not until the eve of trial in November
2014 that De Simone finally capitulated and promised to produce some of the requested materials. See
CD Investments SRL, et al. v. VSL Pharmaceuticals, Inc., Case No. 10126-VCG (consolidated with Case
No. 10225).
10. Immediately upon reaching that agreement, however, De Simone resigned as CEO and
director of VSL. To date, De Simone has not returned VSL’s documents and information that are in his
possession.
29 Case 8:15-cv-01356-PWG Document 9 Filed 06/03/15 Page 30 of 112
11. Perhaps even worse, there is ample evidence suggesting that De Simone misappropriated,
converted, and/or destroyed documents and records related to the Joint Venture that belonged to an
Italian affiliate of VSL known as CD Investments, Inc. Forensic examination of the affiliate’s
computers shows that after downloading information to a “dropbox” owned by De Simone, someone
erased or “wiped” all of the computers belonging to CD Investments. It appears that De Simone has gone to great lengths to hide not only his deceit, but the scientific information, business records, and trade secrets that VSL rightfully owns and needs in order to continue supplying VSL#3 to patients
around the world.
12. If De Simone is allowed to retain and use the proprietary information and know-how
required to produce VSL#3—intellectual property rights that he long ago transferred to VSL—the
impact to VSL will be ruinous. De Simone’s goal is not just to compete with VSL, but to drive it out of
the market altogether. Should he succeed, he will have dispatched his primary competition (and former
backers), positioning his new wholly-owned entities to reap the rewards of VSL’s demise.
PARTIES
13. VSL is a Delaware Corporation with a principal place of business in Virginia. VSL’s
primary and only profitable product is a proprietary probiotic medical food sold under the registered
trademark “VSL#3.”
14. De Simone is an Italian citizen who resides in Switzerland. Prior to November 14, 2014,
De Simone was the CEO of VSL and the Chairman of its board of directors.
15. Mendes SA is a Switzerland Société Anonyme with its principal place of business in
Lugano, Switzerland.
30 Case 8:15-cv-01356-PWG Document 9 Filed 06/03/15 Page 31 of 112
16. Danisco is a Missouri Corporation with its principal place of business in New Century,
Kansas.
17. ExeGi is a New York Limited Liability Company with its principal place of business in
Gaithersburg, Maryland.
JURISDICTION AND VENUE
18. This Court has original jurisdiction over this civil action pursuant to the Declaratory
Judgment Act, 28 U.S.C. §§ 2201, 2202.
19. This Court also has original jurisdiction over the subject matter of this action pursuant to
15 U.S.C. § 1121(a) and 28 U.S.C. §§ 1331, 1338(a), 1338(b), and 1367(a), including because this is a
civil action for trademark infringement arising under the laws of the United States, and for substantially
related claims under the laws of the State of Maryland.
20. This Court also has jurisdiction over this civil action pursuant to 15 U.S.C. § 1119
because the action involves federally registered trademarks and federal applications for trademarks that
are likely to cause confusion with such registered trademarks.
21. This Court has personal jurisdiction over De Simone because De Simone has submitted to the jurisdiction of this Court by filing the Complaint.
22. This Court has personal jurisdiction over ExeGi because, upon information and belief,
ExeGi has substantial contacts in the District of Maryland by, among other things, maintaining a principal place of business at 312 Main Street, Suite 200, Gaithersburg, Maryland 20878, and purposefully availing itself of the benefits and protections of Maryland law by regularly conducting business in Maryland. In addition, ExeGi also has engaged in acts in Maryland sufficient to permit exercise of personal jurisdiction.
31 Case 8:15-cv-01356-PWG Document 9 Filed 06/03/15 Page 32 of 112
23. This Court also has personal jurisdiction over Mendes SA because, upon information and
belief, Mendes SA has substantial contacts in the District of Maryland by, among other things,
purposefully availing itself of the benefits and protections of Maryland law by selling and/or inducing the sale of infringing products within Maryland.
24. This Court also has personal jurisdiction over Danisco because, upon information,
Danisco has substantial contacts in the District of Maryland by, among other things, purposefully availing itself of the benefits and protections of Maryland law by selling products within Maryland and
by entering into the contracts giving rise to these Counterclaims with VSL, whose principal place of
business at the time of execution was located in Maryland. Danisco has also engaged in acts in
Maryland sufficient to permit the exercise of personal jurisdiction.
25. Venue is proper in this district pursuant to 28 U.S.C. §§ 1391(b) and (c) because De
Simone has filed the Complaint in this Court, because a substantial part of the events giving rise to the
claims arose within this judicial district, and because ExeGi resides, and is subject to personal
jurisdiction, in this district.
FACTS
VSL’S FORMATION
26. De Simone is a professor of gastroenterology and immunology and an inventor of
bacterial compositions used in the fields of human and veterinary nutrition and hygiene focusing on “gut
health.”
27. On May 24, 1995, De Simone, along with Vesley Cavaliere and Dr. Anna Maria Renata
(the “Co-Owners”) filed a patent application for claims covering the product that is now marketed under
VSL’s federally registered trademark “VSL#3.”
32 Case 8:15-cv-01356-PWG Document 9 Filed 06/03/15 Page 33 of 112
28. In addition to being a “medical food,” VSL#3 is clinically proven to be successful in the
treatment of serious medical conditions, including Crohn’s disease. It is available over the counter and
by prescription.
29. The VSL#3 product comprises live, freeze-dried, pure lactic acid bacteria. It includes
eight proprietary strains of live bacteria and is superior to other available probiotic products because it
has the highest available concentration of beneficial bacteria when compared with other products. It has
been successfully used in over 107 studies published in the last 12 years, which were funded by VSL.
30. On February 10, 1998, De Simone and his colleagues were granted a U.S. patent covering
VSL#3, U.S. Patent Number 5,716,615, titled “Dietary and pharmaceutical compositions containing lyophilized lactic bacteria, their preparation and use” (the “‘615 Patent”).
31. The ‘615 Patent expired on February 9, 2015.
32. Sigma-Tau Group (“Sigma Tau”) is a large conglomerate of successful pharmaceutical companies based in Italy. It was founded by Claudio Cavazza (now deceased) in 1957.
33. De Simone did not have the financial or logistical wherewithal to bring probiotic
products to market on his own. Therefore, in or around 1999, De Simone began searching for investors
and business partners to help him develop and distribute what would be called “VSL#3” and other
probiotic medical-food products across the world. Because of their experience and success with various
pharmaceutical ventures through Sigma-Tau, and because Paolo Cavazza and De Simone were good
friends and associates at the time, De Simone approached the Cavazza Brothers. The parties explored a
joint venture in which the Cavazza Brothers would contribute considerable financial backing,
professional and regulatory experience, as well as their well-developed logistical and distribution
network, to assist De Simone with the commercialization of VSL#3.
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34. The parties eventually agreed to enter into the Joint Venture, under which they would create a number of new entities to help develop and sell probiotics around the globe. VSL was the principal entity formed as a result of the Joint Venture.
35. Under the Joint Venture, the parties agreed that Professor De Simone would contribute
to VSL all of his inventions, intellectual property, and expertise regarding VSL#3 and other probiotic
products. For their part, the Cavazza Brothers would provide the funding and the extensive distribution
and sales network required to successfully bring VSL#3 and other probiotic products to market
throughout the world.
36. In order to memorialize their Joint Venture, on July 11, 2000, De Simone and the
Cavazza Brothers entered into a Product Development and Collaboration Agreement (the “Product
Development and Collaboration Agreement,” attached as Exhibit 1).
37. The Product Development and Collaboration Agreement included five parties:
a. De Simone;
b. Mendes International SA (“Mendes Luxembourg”)—a Luxembourg entity that is, upon information and belief, owned and controlled by De Simone;
c. Mendes Srl (“Mendes Italy”)—an Italian entity that is, upon information and belief, owned and controlled by De Simone;
d. Sinaf SA (“Sinaf”)—a Luxembourg entity that is owned by Paolo Cavazza; and
e. Taufin International SA (“Taufin”)—a Luxembourg entity that is owned by the beneficiaries of the estate of Claudio Cavazza.
38. In the Product Development and Collaboration Agreement, De Simone transferred all of
his and his companies’ intellectual property rights in the field of pharmaceutical and nutritional
compositions to a new entity, VSL, as set out in the appendices to the agreement.
34 Case 8:15-cv-01356-PWG Document 9 Filed 06/03/15 Page 35 of 112
39. The Cavazza Brothers, for their part, agreed to provide through their corporate entities initial funding of $3,000,000.00 to VSL. They also agreed to provide additional funding to VSL over the next four years of up to $5,000,000.00.
40. Professor De Simone further agreed that:
Professor Claudio De Simone shall transfer free of charge to VSL Pharmaceuticals, Inc. all the rights relating to the inventions made by him in the field of pharmaceutical nutritional compositions and active principles for human and animal use since the incorporation of VSL Pharmaceuticals Inc. and as long as he owns, directly or indirectly, 4.99% or more of the voting stock of VSL Pharmaceuticals, Inc.
(Prod. Coll. Agmt. § 5.3).
41. As contemplated in the Product Development and Collaboration Agreement, the Cavazza
Brothers and De Simone formed VSL on July 11, 2000.
42. Since its incorporation, VSL has had the following stockholders:
1. CD Investments, Srl (“CD Investments”), which owns 99.7% of VSL;
2. Taufin, which owns .1% of VSL;
3. Sinaf, which owns .1% of VSL; and,
4. De Simone, who owns .1% of VSL.
43. CD Investments is, in turn, owned by CD International SA (“CD International”), which is owned equally by Sinaf, Taufin, and Mendes Italy.
44. Accordingly, through their related entities, the Cavazza Brothers own approximately 66% of VSL, and De Simone owns approximately 33%.
45. Upon information and belief, Mendes Italy’s share of CD International was previously owned by Mendes Luxembourg, which was recently dissolved. Upon dissolution, Mendes Luxembourg transferred its share of CD International to Mendes Italy.
35 Case 8:15-cv-01356-PWG Document 9 Filed 06/03/15 Page 36 of 112
46. As agreed to in the Product Development and Collaboration Agreement, VSL’s bylaws include a clause stating that:
As long as Professor Claudio De Simone owns, directly or indirectly, 4.99% or more of the total voting stock of the Corporation, he shall transfer or offer to transfer, without the payment of further consideration by the Corporation, all rights owned by him, directly or through another person, whether patent, trademark, copyright or otherwise, relating to any inventions made by him in the field of pharmaceutical nutritionals compositions and active principles, whether for animal or human use, since the incorporation of the Corporation, to the Corporation.
(Bylaws, Art. 7 § 7, attached as Exhibit 2).
47. At the time of its incorporation and continuing for years, Professor De Simone owned, either directly or indirectly, well in excess of 4.99% of the total voting stock of VSL through his direct ownership interest in VSL, as well as through his interest in CD Investments.
DE SIMONE ASSIGNS TO VSL ALL INTELLECTUAL PROPERTY RELATED TO VSL#3.
48. On September 18, 2000, VSL, Mendes Italy, and De Simone executed the following agreements in accordance with the Product Development and Collaboration Agreement:
a. An Assignment Agreement pursuant to which De Simone transferred intellectual property rights to VSL (the “De Simone Assignment Agreement,” attached as Exhibit 3);
b. An Assignment Agreement pursuant to which Mendes Srl transferred intellectual property rights to VSL (the “Mendes Assignment Agreement,” attached as Exhibit 4); and
c. An Option Agreement pursuant to which De Simone provided VSL with the right to obtain additional intellectual property rights from him once he acquired full title to such intellectual property (the “De Simone Option Agreement,” attached as Exhibit 5) (collectively, the De Simone Assignment Agreement, the Mendes Assignment Agreement and the De Simone Option Agreement are referred to as the “VSL Assignment Agreements.”)
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49. VSL exercised the De Simone Option Agreement on or about July 2, 2004, and paid De
Simone $100,000.00 as required by the agreement. The documents effecting VSL’s exercise of the De
Simone Option Agreement are attached as Exhibit 6.
50. Pursuant to the Mendes Assignment Agreement between Mendes Italy (as assignor) and
VSL (as assignee), De Simone transferred to VSL all of his intellectual property rights and confidential
information relating to the VSL#3 product (including trade secret, know-how, trademark, and other
proprietary rights). (Mendes Assignment Agreement § 1.01).
51. At the time these transfers of intellectual property were made, De Simone was engaged in
a dispute, and eventual lawsuit, regarding the proper inventorship of the ‘615 Patent, among other
patents (the “Inventorship Dispute”). See Simone v. Estate of Renata Maria Anna Cavaliere Vesely, et
al., Case No. 1:02-cv-1650 (D.D.C.). In the lawsuit that resulted from the Inventorship Dispute, De
Simone sought to remove an allegedly mis-named inventor so that De Simone was the only named
inventor on the ‘615 Patent. Thus, at the time of VSL’s formation, De Simone alone could not convey
all right, title, and interest in the ‘615 Patent to VSL#3.
52. While Mendes and De Simone had transferred all of their rights to VSL#3 via the
Assignment Agreement, to the extent that such transfer did not include their VSL#3 Patent Rights, De
Simone entered into a “Patent Licence [sic] Agreement” on January 30, 2001 (the “Patent License
Agreement, attached as Exhibit 7), pursuant to which De Simone granted to VSL “the exclusive right to
his co-ownership under the Patent and all registrations and applications and all good will associated
therewith, with the right to grant sublicenses, to manufacture, promote, market and sell the Product in the Territory,” which remained valid until the ‘615 Patent’s expiration. (Patent License Agreement §
2.1).
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53. Additionally, in the Patent License Agreement De Simone agreed to the following:
Being that the Patent is co-owned by CDS and a third party, CDS hereby covenants and agrees to make his best efforts in order to allow VSL to enjoy an exclusive license to the Product in the Territory. If CDS shall acquire the entire ownership rights or the exclusive exploitation rights of the Patent from the other co-owner or its assignee/s[sic], CDS agrees to grant the option to VSL to acquire such rights at a price and conditions equal to the price and conditions CDS has agreed with the co-owner or its assignee/s[sic]. VSL will be entitled to exercise such option within 3 months from CDS notification of the acquisition of the rights from the other co-owner or its assignee/s[sic], as above described.
(Id. § 3.1 (emphasis added)).
54. VSL compensated De Simone handsomely for the rights that he transferred to VSL under
the Mendes Assignment Agreement and the Patent License Agreement. De Simone received
$1,500,000.00 pursuant to the De Simone Assignment Agreement, as well as $400,000.00 pursuant to
the Mendes Assignment Agreement. Additionally, De Simone indirectly owned approximately one-
third of VSL through his ownership stake in CD Investments. Moreover, pursuant to the Patent License
Agreement’s terms, De Simone received a royalty of 3% on net sales of the first $50,000,000.00 of
VSL#3 sold, and a royalty of 5% on net sales of VSL#3 in excess of $50,000,000.00.
55. Through these various agreements, De Simone assigned all of his intellectual property
and associated rights regarding VSL#3 to VSL including the know-how related to the manufacture of
VSL#3.
VSL GIVES DE SIMONE CONTROL OVER ITS DAY-TO-DAY OPERATIONS.
56. The same date that the parties executed the Product Development and Collaboration
Agreement and adopted VSL’s bylaws, VSL’s board of directors elected De Simone as CEO.
57. De Simone continued in his role as VSL’s CEO until submitting his resignation on
November 14, 2014.
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58. De Simone and VSL never agreed to allow De Simone to exclude or expressly reserve for himself any trade secret, know-how, trademark or other intellectual property rights related to the VSL#3 product. The company therefore had all of the intellectual property rights needed to manufacture, market, and sell VSL#3 no later than the date of the Patent License Agreement.
59. Recognizing this fact, De Simone and VSL executed numerous agreements which
represented, explicitly and/or implicitly, that VSL owned all of the intellectual property and proprietary information for VSL#3.
60. For example, on or about February 7, 2001, VSL executed a Confidentiality and
Restricted Use Agreement with Rhodia, Inc., a predecessor to Danisco, the sole manufacturer of VSL#3
(the “Rhodia Agreement”).
61. Through the Rhodia Agreement, VSL and Rhodia agreed to share their respective proprietary and confidential information to explore a possible collaboration between the parties regarding certain VSL probiotic cultures, which ultimately became the strains of bacteria used in
VSL#3.
62. Although the Rhodia Agreement had a one-year term, it was amended multiple times (the
“Rhodia Amendments”) (the Rhodia Agreement and Rhodia Amendments are attached collectively as
Exhibit 8).
63. The Rhodia Agreement and Rhodia Amendments, some of which De Simone executed as
President and CEO of VSL, were based upon, and explicitly referenced, VSL’s ownership of the intellectual property and scientific know-how for VSL#3.
39 Case 8:15-cv-01356-PWG Document 9 Filed 06/03/15 Page 40 of 112
64. De Simone also signed agreements on behalf of VSL that either assigned or licensed all
intellectual property related to VSL#3 in various geographic territories, thereby representing to third parties that VSL—and not De Simone—owned the intellectual property rights for VSL#3.
65. For example, in his role as president and CEO of VSL, De Simone executed an
agreement on VSL’s behalf in favor of Actial Farmaceutica LdA (“Actial”)—another subsidiary of CD
Investments—which assigned all intellectual property rights related to VSL#3 for all geographic
territories except for North America, South America, and Latin America (the “Actial Sales Agreement”).
The Actial Sales Agreement included all know-how, trade secrets, and other intellectual property rights
related to VSL#3.
66. VSL was using its VSL#3 intellectual property rights, including the trade secrets and
know-how needed to manufacture and sell VSL#3 by December 1, 2003 at the latest, when VSL
executed a License Agreement with Sigma Tau Pharmaceuticals Inc. (“STPI”) in which STPI became
VSL’s exclusive licensee to market and sell VSL#3 within the United States (the “2003 STPI License
Agreement,” attached as Exhibit 9”).
67. Pursuant to the 2003 STPI License Agreement, which De Simone executed on behalf of
VSL, VSL granted to STPI an exclusive license to the VSL#3 trademark rights within the U.S., the ‘615
Patent, and the know-how related VSL#3.
68. Therefore, as contemplated by the Product Development and Collaboration Agreement—
and as evidenced by De Simone’s own conduct as CEO—VSL had rightful ownership of the trade
secrets, know-how, and other intellectual property needed to manufacture and sell VSL#3.
DE SIMONE ENGAGES IN SELF-DEALING IN AN EFFORT TO RECLAIM OWNERSHIP OVER VSL#3
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69. When VSL#3 began to demonstrate commercial success, De Simone became greedy.
Not content to share the profits of VSL#3 with the Cavazza Brothers, De Simone set in motion a scheme of self-dealing and deception designed to seize the massive commercial potential of VSL#3 for himself.
70. First, De Simone retained attorney Victor Balancia (“Balancia”), then with the law firm of Pennie & Edmonds LLP, to represent him in the Inventorship Dispute. Although De Simone was listed as the sole party plaintiff in the lawsuit, he used his role as CEO of VSL to retain attorney
Balancia and Pennie & Edmonds LLP on behalf of VSL. Thus, VSL was the client and paid all the attorneys’ fees and costs related to De Simone’s lawsuit to obtain sole ownership of the ‘615 Patent.
71. In 2005 De Simone settled his lawsuit related to the ‘615 Patent and obtained the entire right, title and interest to the ‘615 Patent. Consequently, in accordance with the Patent License
Agreement, De Simone was then obligated to offer to assign to VSL all of his remaining rights to the
‘615 Patent.
72. Notwithstanding the fact that De Simone was VSL’s CEO and that VSL funded the
litigation for De Simone to acquire exclusive ownership of the ‘615 Patent, a review of VSL’s corporate
minutes do not evidence De Simone ever making the required offer.
73. Through the course of the Inventorship Dispute and subsequent patent work and
litigation, attorney Balancia and his various law firms became VSL’s counsel regarding ‘615 Patent
issues. As such, De Simone provided Balancia with substantial knowledge of VSL’s business, and
Balancia became well-versed in the properties of VSL#3.
74. In his ongoing attempts to hamstring VSL in favor of his personal interests, De Simone
retained Balancia to represent him in personal matters adverse to VSL. While De Simone was breaching
his fiduciary duties to VSL, VSL’s counsel was protecting De Simone’s interest instead of VSL’s,
41 Case 8:15-cv-01356-PWG Document 9 Filed 06/03/15 Page 42 of 112
ultimately leading Balancia and his then-law firm McKenna Long & Aldridge to withdraw as counsel for VSL in September 2014.
75. The nefarious nature of De Simone’s scheming increased over time. Beginning at least as early as 2007, De Simone attempted to unlawfully take back for himself VSL’s know-how and trade secrets related to the manufacture, marketing, and sales of VSL#3, and began a multi-year campaign entering into numerous “know-how agreements” between him, personally, and various third parties.
76. For example, De Simone and VSL entered into a Know-How License Agreement for the
Canadian territory on or about August 10, 2007 (the “Canadian Know-How Agreement,” attached as
Exhibit 10).
77. De Simone entered into this agreement despite the fact that he had already transferred the know-how to VSL pursuant to the Production Development and Collaboration Agreement and the VSL
Assignment Agreements in 2000. In other words, through the Canadian Know-How Agreement, De
Simone purported to transfer to VSL intellectual property that he had already fully divested to VSL. Not surprisingly, the Canadian Know-how Agreement was executed by De Simone, personally, and Park on behalf of VSL.
78. Additionally, a Confidential Disclosure Agreement was executed by Danisco (as successor in interest to Rhodia), CD International, CD Investments, CD Pharma India PVT, Ltd. (“CD
Pharma India”), Actial, VSL, and De Simone (the “Confidential Disclosure Agreement,” attached as
Exhibit 11).
79. The Confidential Disclosure Agreement was intended to be a continuation of the Rhodia
Agreement, and allowed the entities to “have ongoing discussion relating to the use of Danisco’s culture products and/or the manufacture of certain toll manufactured products,” namely, VSL#3.
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80. Importantly, the Confidential Disclosure Agreement was executed by De Simone, as the
CEO, on behalf of VSL.
81. The Confidential Disclosure Agreement states that De Simone “is the owner of the product formulation referred to as VSL#3 described in U.S. Patent n. 5,716,615 and that De Simone has licensed such product to C.D. International.”
82. This is not true, as De Simone had assigned or otherwise conveyed all of his VSL#3
intellectual property rights to VSL previously.
83. Subsequently, on or about June 1, 2008, the parties executed a “First Amendment to
Confidential Disclosure Agreement (the “First Amendment to Confidential Disclosure Agreement,”
attached as Exhibit 12.
84. Importantly, De Simone executed the First Amendment to Confidential Disclosure
Agreement on behalf of all five entities other than Danisco.
85. In addition to extending the term of the Confidential Disclosure Agreement, the First
Amendment to Confidential Disclosure Agreement included for the first time the addition of an entirely self-serving statement that certain information, “including but not limited to previously disclosed trade secrets and/or know-how disclosed by De Simone to Rhodia Inc. and/or Danisco shall be protected indefinitely.” (First Amendment to Confidential Disclosure Agreement ¶ 3).
86. Not only was this statement self-serving, but it was factually untrue. As evidenced by the agreement between VSL and Danisco’s predecessor-in-interest, Rhodia, it was VSL—not De Simone— who owned the trade secrets and know-how that were disclosed by VSL to enable Rhodia and Danisco to manufacture VSL#3.
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87. At the time De Simone included this false statement in the First Amendment to
Confidential Disclosure Agreement with Danisco, he knew it to be completely untrue.
DE SIMONE BRINGS IN A CO-CONSPIRATOR TO HELP HIM RECLAIM VSL#3 FROM THE JOINT VENTURE.
88. As De Simone was beginning to put into motion his scheme to reclaim VSL#3 for himself, he hired Park, an orthodontist by training, as VSL’s Chief Operating Officer. Park was appointed to VSL’s board on December 1, 2006, and she remained on its board until her resignation from VSL on October 20, 2014 (effective November 19, 2014).
89. At the time of Park’s appointment to VSL’s Board, upon information and belief, VSL had three employees: (1) De Simone, its CEO; (2) Park, its COO; and, (3) Maurizio Terenzi, its CFO.
90. However, on October 9, 2007, not long after Park was hired, Maurizio Terenzi tendered his resignation as a board member and as CFO, which VSL accepted as of that date.
91. Thus, for approximately 8 months in 2007 and 2008, VSL had only two employees and two board members, De Simone and Park.
92. With no one else protecting VSL’s interests, De Simone prepared an employment agreement for his co-conspirator, Park, in 2008 (the “Park Employment Agreement,” attached as
Exhibit 13).
93. Notwithstanding Park’s and De Simone’s duty to act in VSL’s best interests, the Park
Employment Agreement was incredibly one-sided in Park’s favor, and did nothing to protect the company.
94. For example, the Park Employment Agreement provided that, even if Park were terminated for cause or resigned without good reason, she would receive all unpaid salary and unpaid incentive bonuses.
44 Case 8:15-cv-01356-PWG Document 9 Filed 06/03/15 Page 45 of 112
95. The Park Employment Agreement also contained a change-in-control provision that
provided Park a payment of $1,000,000 if there was a change in control at VSL. Because Park’s
voluntary resignation from the 2-person board under any circumstances would arguably constitute a
“change in the majority of members of the board,” the agreement purportedly allowed Park to voluntarily resign and collect the $1,000,000 fee, in addition to all unpaid salary and bonus amounts.
96. The Park Employment Agreement also contained a provision entitling Park to a salary increase up to $260,000 per year based on the company entering into an agreement with STPI worth at least $3,000,000 per year by July 31, 2010. In reality, this agreement with STPI already existed prior to
drafting the Park Employment Agreement. The condition precedent for the salary increase was
therefore illusory.
97. The Park Employment Agreement also contained a provision stating that Park’s salary
may be “increased, but not decreased” at the sole discretion of the board (of which Park and De Simone
were the sole members), and a provision providing that Park should receive all unpaid salary and bonus
amounts even in the event of her death or disability.
98. Presumably, De Simone executed the Park Employment Agreement with its highly
unfavorable terms as a means of influencing Park to conspire with him and act at his behest,
notwithstanding that De Simone’s course of action was not in VSL’s best interests.
99. In return for the extremely favorable employment terms she received from De Simone, and as evidence of the agreement and conspiracy between them, Park signed on behalf of VSL various agreements which favored De Simone’s personal interest over the corporate interest of VSL and which gave De Simone the purported “right” to interfere with VSL’s supply and distribution channels for
VSL#3.
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DE SIMONE ENGAGES IN SELF-DEALING AND MALFEASANCE IN 2008 WHEN HE PERSONALLY ENTERS INTO A CONTRACT WITH DANISCO FOR THE MANUFACTURE OF VSL#3
100. Up until 2008, Danisco continued to manufacture VSL#3 directly for VSL, which owned or controlled all intellectual property and rights associated with the product.
101. Nevertheless, in June of 2008, De Simone clandestinely executed an agreement with
Danisco (the “2008 Danisco Agreement”) in which he purported to grant to Danisco:
[A] non-exclusive, royalty-free, fully paid up, worldwide license to make, have made, use, offer to sell, sell, export and import VSL#3 Product.
(2008 Danisco Agreement § 2, attached as Exhibit 14)
102. A review of VSL’s corporate minutes fails to reflect any reference to the 2008 Danisco
Agreement.
103. In fact, VSL did not learn of the 2008 Danisco Agreement until the summer of 2014, and
VSL still does not have an unredacted copy of the 2008 Danisco Agreement.
104. A review of the 2008 Danisco Agreement demonstrates that it was clearly meant to benefit De Simone personally, and was not in VSL’s best interests despite De Simone’s role as CEO of
VSL at the time of its execution. Among other things, the Danisco Agreement:
a. Purported to grant to Danisco rights from De Simone that were actually owned by VSL;
b. Was entered into by De Simone in his personal capacity notwithstanding the fact that the agreement should have been executed on behalf of VSL; and
c. Gave De Simone, individually, the power to decide the entities for which Danisco could manufacture and supply VSL#3.
105. Moreover, the 2008 Danisco Agreement failed for lack of consideration, as Danisco did not receive anything of value from De Simone that had not already been provided by VSL.
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106. As has become clear in the past few months, De Simone’s decision to enter into the 2008
Danisco Agreement in his personal capacity represented a significant step in his long-term plan to compete with VSL. It purportedly vested in De Simone the unilateral ability to decide whether Danisco could continue to supply VSL#3 to VSL and its affiliates.
DE SIMONE CONTINUES HIS COURSE OF SELF-DEALING
107. On or about January 28, 2010, in furtherance of his scheme to usurp for himself the ability to continue selling VSL#3, De Simone, in his personal capacity, executed a “Know-How License
Agreement” between VSL and De Simone (the “January 2010 Know-How Agreement,” attached as
Exhibit 15).
108. The January 2010 Know-How Agreement purported to license to VSL “all goodwill and
Know-How owned or controlled by CDS associated therewith for the production and commercialization
of [VSL#3]…” at the expiration of the Patent License Agreement, and continuing until January 31,
2016, unless otherwise terminated.
109. As noted above, VSL already possessed the know-how for VSL#3. Consequently, this
agreement is a nullity.
110. A review of the January 2010 Know-How Agreement demonstrates that it was clearly
meant to benefit De Simone personally, and was not in VSL’s best interests despite De Simone’s role as
CEO of VSL at the time of its execution.
111. For example, the January 2010 Know-How Agreement contains a highly unusual change-
in-control provision that purportedly allowed Park and De Simone, as the majority of VSL’s board of
directors, to terminate the January 2010 Know-How Agreement by simply resigning as board members.
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112. On or about March 21, 2010, in furtherance of his scheme to usurp for himself the ability to continue selling VSL#3, De Simone, in his personal capacity, also executed a “Know-How License
Agreement” between VSL and De Simone for the China territory (including its subsequent amendment,
the “March 2010 Know-How Agreement,” attached as Exhibit 16). The March 2010 Know-How
Agreement was subsequently amended on or about March 14, 2014.
113. The March 2010 Know-How Agreement purported to license to VSL “the right to use the
[] CDS Know-How to have manufactured, to register, to market and to sell and/or to grant rights for
manufacturing, registration, marketing and selling of [VSL#3] either directly or indirectly in [China].”
114. As noted above, VSL already possessed the know-how for VSL#3. Consequently, the
March 2010 Know-How Agreement is entirely superfluous and is a nullity.
115. The March 2010 Know-How Agreement contained the same, self-serving change-in-
control provision as the January 2010 Know-How Agreement.
116. Moreover, the March 2010 Know-How Agreement provided to De Simone royalties that
were entirely out of proportion with the royalties VSL had agreed to pay De Simone in past agreements.
117. At the time De Simone executed the January 2010 Know-How Agreement and March
2010 Know-How Agreement, he no longer owned the know-how that he purported to license, as he had
previously transferred such know-how to VSL pursuant to the Production Development and
Collaboration Agreement and the VSL Assignment Agreements.
DE SIMONE’S AND PARK’S SELF-DEALING ACCELERATES IN 2014
De Simone Engages in Self-Dealing by Entering into the 2014 Danisco Supply Agreement.
118. As the ‘615 Patent’s February 2015 expiration date covering VSL#3 drew closer, De
Simone became more brazen in his self-dealing. In June of 2014, VSL and Danisco entered into a
48 Case 8:15-cv-01356-PWG Document 9 Filed 06/03/15 Page 49 of 112
supply agreement pursuant to which Danisco agreed to continue manufacturing VSL#3 on VSL’s behalf
(the “2014 Danisco Supply Agreement,” attached as Exhibit 17).
119. The true purpose behind entering into the 2014 Danisco Supply Agreement was not to
benefit VSL, however. Rather, the 2014 Danisco Supply Agreement constituted a vehicle that would
allow De Simone to immediately compete with VSL if he chose to leave VSL.
120. Specifically, De Simone and Park structured the 2014 Danisco Supply Agreement so that
De Simone, in his personal capacity, would become the “buyer” of VSL#3 if there was a “change in
control” of VSL under the terms of the January 2010 Know-How Agreement.
121. As set forth above, under the January 2010 Know-How Agreement’s highly unusual
change-in-control provision, De Simone and Park allegedly possessed the ability to trigger a change in
control by simply resigning from the board. Accordingly, at such a time as Park and De Simone
determined, they could effect a change in control, terminate the January 2010 Know-How Agreement, and cut off VSL’s supply of VSL#3; at which time De Simone—in his personal capacity—would step
into VSL’s shoes and become the buyer of VSL#3 under the 2014 Danisco Supply Agreement.
122. In short, Park and De Simone orchestrated the January 2010 Know-How Agreement and
2014 Danisco Supply Agreement so that they could unilaterally trigger a change in control and usurp
from VSL its most valuable product.
123. After filing the Complaint in the present action, De Simone pulled this trigger by sending
a letter dated May 18, 2015 to Scott Bush, a Danisco employee, purportedly removing VSL and STPI as
authorized purchasers of VSL#3 and replacing De Simone as the “buyer” under the 2014 Danisco
Supply Agreement in VSL’s place. (Letter from De Simone to Scott Bush, dated May 18, 2015, is
attached as Exhibit 18).
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124. Thus, the combination of the January 2010 Know-How Agreement and the 2014 Danisco
Supply Agreement was intended to benefit De Simone, personally, and not VSL.
125. Further evidence of the self-serving nature of the 2014 Danisco Supply Agreement includes, but is not limited to:
a. De Simone’s inclusion of himself, personally, as a party to the Supply Agreement, where no reason for his inclusion existed other than to benefit De Simone personally;
b. The timing of the Supply Agreement. Although it was effective as of January 1, 2014, the Supply Agreement was finalized and executed in June of 2014, six months after its effective date. This agreement represents just another instance of De Simone planting land mines for VSL on his way out the door; and,
c. De Simone’s inclusion of a clause allowing De Simone to define which entities were allowed to purchase product under the Agreement, and cut off existing customers for no reason.
126. For the same reasons that the 2008 Danisco Agreement is invalid, the 2014 Danisco
Supply Agreement is also invalid.
The Johnson & Johnson Agreements.
127. On or about April 26, 2011, VSL, through De Simone, and Johnson & Johnson Pte. Ltd.
(“J&J”) entered into a Development & Distribution Agreement (the “DDA”) for the commercialization and distribution of VSL#3 in China.
128. In early 2014, J&J and VSL subsequently entered into an amendment to the Development
& Distribution Agreement (the “DDA Amendment”), and a Manufacturing and Supply Agreement (the
“MSA”) (collectively the DDA, the DDA Amendment, and the MSA are referred to as the “J&J
Agreements”).
129. The J&J Agreements were intended to allow VSL and J&J to sell and commercially
exploit VSL#3 in China.
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130. A review of the J&J Agreements demonstrates that De Simone did not execute them with
VSL’s best interests in mind. In fact, it appears that De Simone executed these agreements on behalf of
VSL, despite knowing that the agreements would cause VSL to lose massive amounts of money under
the contract terms.
131. Specifically, the March 2010 Know-How Agreement provides that De Simone personally
receive a royalty of up to 45% of VSL’s net sales in China. Putting aside that VSL already owned the
know-how, and that De Simone and Park were breaching multiple duties entering into such a
transaction, these royalty payments were up to nine times higher than De Simone’s royalty payments for
Canada and the U.S.
132. Additionally, through the J&J Agreements, De Simone obligated VSL to pay its sole
supplier a price that was almost double the price J&J would pay under a 15-year contract. As such,
VSL would lose money on each transaction with J&J, while De Simone would profit personally.
133. Compounding De Simone’s and Park’s obvious breach of fiduciary duty in executing
these agreements, and in furtherance of their scheme to compete with VSL, De Simone and Park
deliberately chose not to fill purchase orders that J&J submitted to VSL in the fall of 2014. On
September 8, 2014, November 5, 2014 and November 7, 2014, just prior to De Simone’s and/or Park’s
resignation from VSL, J&J submitted purchase orders totaling approximately 2700 kilograms of VSL#3
(the “J&J Purchase Orders”).
134. Neither De Simone nor Park, however, ever forwarded these orders on to Danisco.
Danisco was not even aware of these orders until after De Simone had resigned and had purportedly cut
off VSL’s right to supply J&J with product for sale in China and to purchase VSL#3 from Danisco.
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135. Moreover, the J&J Agreements allow J&J to obtain VSL#3 from alternative sources
should VSL be unable to fulfill its supply obligations. Without question, De Simone and Park failed to
submit the J&J Purchase Orders on purpose—just prior to purportedly cutting off VSL’s ability to obtain
VSL#3—in order to force VSL into a breach of the J&J Agreements, and to allow J&J to seek an
alternative source of supply.
136. Not surprisingly, after De Simone left VSL he approached J&J and offered to be that
alternative source of supply through companies that he owns.
137. In short, De Simone entered into a contract with J&J on VSL’s behalf that he fully
expected VSL to breach. Once VSL breached, De Simone planned to step in to supply J&J with VSL#3.
De Simone Thwarts VSL’s Stockholders’ Request For Information.
138. On May 13, 2014, Maurizio Martinetti (“Martinetti”), one of three members of CD
Investments’ board of directors, sent a letter to Dr. Luigi Carmelo Mento (“Mento”), President and CEO
of CD Investments, as well as Chairman of CD Investments’ board. In the letter, Mr. Martinetti
requested access to various types of information and corporate records related to CD Investments and its
subsidiary, VSL (the “Martinetti Requests”).
139. The Martinetti Requests were made in advance of CD Investments’ board meeting in
Rome on May 21, 2014. At the time of the Martinetti Requests, CD Investments’ board was composed of Martinetti, De Simone, and Mento.
140. On May 19, 2014, De Simone, the other CD Investments’ board member, sent a letter to
Mento in which he objected to VSL providing any of the information requested by Martinetti, and VSL refused to provide to CD Investments or Martinetti the information that he requested.
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141. On May 21, 2014, CD Investments held its board meeting. De Simone refused to attend the meeting. At the meeting, Martinetti again requested that CD Investments either provide to him or acquire the information called for by the Martinetti Requests. Ultimately, CD Investments failed to provide Martinetti with any of the information that he requested.
142. Upon CD Investments’ failure to provide the requested information, Mento decided not to remain in his position on CD Investments’ board of directors.
143. Subsequently, on June 12, 2014, Martinetti and Mento, as well as a number of other individuals, visited CD Investments’ offices for the purpose, in part, of retrieving information regarding
VSL on CD Investments’ computers. Mento provided Gabriele Ferrari, a computer specialist, with the password to CD Investments’ computers. As detailed in the document attached as Exhibit 19 (including a certified translation thereof), all of CD Investments’ computers had effectively been wiped clean; however, Ferrari was able to conclude that several of the computers were connected to a cloud-based file hosting service called a “dropbox,” including at least one computer which was connected to a dropbox owned by De Simone. Otherwise, the computers contained next to nothing regarding either CD
Investments or its subsidiaries.
144. Thus, at some point prior to June 12, 2014, and presumably at De Simone’s direction, someone had either deleted or destroyed CD Investments’ records contained on its computers, which included records of its subsidiary VSL. Moreover, upon information and belief, at some point someone had transferred CD Investments’ information and documents, which included VSL records, to De
Simone via his dropbox. Additionally, the contents of the office had been entirely removed. At this juncture, however, while an IT specialist has been able to restore some of the records that De Simone
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attempted to destroy, which include VSL’s records, CD Investments has reported to VSL that it cannot be certain what VSL records were transferred to De Simone via his dropbox.
145. On September 4, 2014, CD Investments, pursuant to an action by written consent of the stockholders under Section 228 of the General Corporation Law of the State of Delaware, elected Jim
Brady (“Brady”) as a third director of VSL (in addition to Park and De Simone).
146. On September 29, 2014, Brady demanded an inspection of certain books and records of
VSL pursuant to Delaware law, 8 Del. C. § 220.
147. Because De Simone and Park failed and refused to provide access to the requested books and records, on October 10, 2014, Brady was forced to file a complaint with the Delaware Court of
Chancery requesting the court to compel the company to allow inspection and copying of its books and records. See Brady v. VSL Pharmaceuticals, Inc., Case No. 10126.
De Simone Attempts to Register the Confusingly Similar Trademarks “VSL3 by De Simone” and “VSL3TOTAL” in the United States as He Works Toward His Exit.
148. While all of the above was taking place, De Simone also attempted to register trademarks that are likely to cause confusion with VSL’s federally registered trademarks.
149. VSL owns a federal registration for the word mark “VSL#3” for use in connection with
International Class 5 for “pharmaceutical preparations for the treatment of diseases of the digestive system,” U.S. Reg. No. 2,653,253, which issued on November 26, 2002 (the “VSL#3 Registration,” attached as Exhibit 20). The VSL#3 Registration is registered on the Principal Register and is incontestable under 15 U.S.C. § 1065.
150. VSL also owns a federal registration for the word mark “VSL#3-DS” for use in connection with International Class 5 “pharmaceutical preparations for the treatment of diseases of the digestive system, and food supplements,” U.S. Reg. No. 3,275,673, which issued on August 7, 2007 (the
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“VSL#3-DS Registration,” attached as Exhibit 21). The VSL#3-DS Registration is registered on the
Principal Register and is incontestable under 15 U.S.C. § 1065.
151. VSL also owns a federal registration for the word mark “VSL” for use in connection with
International Class 5 “pharmaceutical preparations and nutraceuticals for the treatment of diseases of the digestive systems,” U.S. Reg. No. 3,093,502, which issued on May 16, 2006 (the “VSL Registration,” attached as Exhibit 22). The VSL Registration is registered on the Principal Register and is incontestable under 15 U.S.C. § 1065 (collectively the VSL#3 Registration, VSL#3-DS Registration, and VSL Registration are referred to herein as the “VSL#3 Trademarks”).
152. Through its licensee, VSL uses its VSL#3 Trademarks to advertise, market, and sell
VSL#3 throughout the United States. Because of VSL’s extensive use of the VSL#3 Trademarks through its licensee to identify and distinguish its products from those of its competitors, and because of the significant expenditure of time, effort, and money marketing, advertising, and promoting the VSL#3
Trademarks, these marks have developed and now represent and possess significant goodwill and secondary meaning to consumers of the VSL#3 product.
153. Notwithstanding the fact that VSL owns all right, title, and interest in and to the VSL#3
Trademarks, on June 6, 2014—during his tenure as the CEO of VSL—De Simone filed a U.S. federal trademark application for the word mark “VSL3 BY DE SIMONE” for use in connection with
International Class 5 “lactic acid bacteria compositions for use as a drug or dietary/food supplement,”
U.S. Serial No. 79/150,539 (the “VSL BY DE SIMONE Application,” attached as Exhibit 23), through
Mendes SA, a Swiss company controlled by De Simone.
154. Further, on September 16, 2013—during his tenure as the CEO of VSL—De Simone filed a U.S. federal trademark application for the word mark “VSL3TOTAL” for use in connection with
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International Class 5 “pharmaceuticals, namely, lactic acid bacteria for medical purposes;
pharmaceutical preparations containing lactic acid bacteria; food and dietary supplements containing
lactic acid bacteria; lactic acid bacteria for use as a drug or dietary/food supplement; nutritional
supplements containing lactic acid bacteria,” U.S. Serial No. 86/065,600 (the “VSL3TOTAL
Application,” attached as Exhibit 24), through Mendes SA. The VSL BY DE SIMONE Application and VSL3TOTAL Application are referred to herein as the “De Simone Trademark Applications.”
155. The De Simone Trademark Applications, and use of those trademarks, are likely to create
consumer confusion, mistake, or deception with VSL’s use of its VSL#3 Trademarks.
156. Attempting to register such confusingly similar trademarks is further evidence of De
Simone’s attempt to infringe numerous intellectual property rights of VSL and to directly compete with
VSL. These acts are further evidence of De Simone’s self-dealing during his tenure as CEO for VSL.
157. Likewise, while he was the CEO and Chairman of VSL, De Simone was actively engaged
establishing his competing business through Mendes SA. Upon information and belief, he worked with
Park, Florence Pryen, and others to establish a brand known as “Vivomixx,” which is promoted as being
identical in composition to VSL#3. In fact, De Simone set about evaluating Vivomixx advertising and
how he could characterize it as identical to VSL#3, all while still serving as an officer and director of
VSL.
158. On information and belief, De Simone has used and is using the trademark VSL#3, and
similar variations thereof, in connection with advertising, promoting, and offering to sell a product with
an identical composition to the VSL#3 product.
159. For example, a “vsl3.no” website references “VSL#3®” in large font at the top of the
page with a notice that reads in part “Due [to] rebranding [] VSL # 3 is [being] marketed under the name
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VIVOMIXX. It is only [the] pack that [is] chang[ing], the content is the same.” A true and accurate
copy of the screenshots of the vsl3.no webpage as of January 21, 2015 is attached as Exhibit 25.
160. On information and belief, De Simone’s use of the term “VSL - 3” to advertise
competing products is further evidenced at Vivomixx’s Facebook social media pages, www.facebook.com/vivomixx and https://www.facebook.com/vsl3.probiotyk, which states
“VivomixxTM is a food supplement containing a combination of 8 different strains of live lactic acid bacteria and bifidobacteria. It is gluten-free and it does not contain preservatives, colouring agents nor syntetic [sic] sweeteners. Active ingredient VSL – 3 mix.” A true and accurate copy of the screenshots of the Vivomixx Facebook social media pages as of December 21, 2014 and January 22, 2015, respectively, are attached as Exhibits 26 and 27.
161. As part of De Simone’s plan to eliminate VSL from the marketplace, Mendes SA has also filed a Cancellation Proceeding with the Trademark Trial and Appeal Board on January 19, 2015, seeking cancellation of the VSL#3 Registrations. See Mendes SA v. VSL Pharmaceuticals, Inc.,
Cancellation No. 92060709 (T.T.A.B. 2015).
De Simone and Park Resign, Interfere with VSL’s Supply Chain and Scheme to Compete with VSL.
162. On October 20, 2014, Park tendered her resignation to VSL, asserting that she was resigning “for cause.”
163. Just a few days earlier, Park had resigned from her position as a director of VSL, leaving
De Simone and Brady as its only two directors.
164. In tendering her resignation, Park failed to specify the basis for her “for cause” resignation.
165. Upon learning of her resignation, Brady called Park and asked to meet with her.
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166. In a conversation with Park, Brady made clear to Park that he wanted to meet with her to better understand VSL’s information and documents that she possessed in order to ensure that a smooth transition occurred following her departure. Brady also wanted to understand whether there were any terms pursuant to which Park would remain with VSL.
167. After initially agreeing to meet with Brady, and despite the fact that she remained employed by VSL, Park backed out of the meeting and refused to return Brady’s calls.
168. Instead, Brady received a letter from Park’s attorney. In the letter, Park’s counsel copied
De Simone’s counsel and asked for appropriate instructions on her transition out of VSL.
169. At the time of Park’s counsel’s letter, De Simone remained both VSL’s CEO and the
Chairman of its board of directors, and its only other employee. Consequently, De Simone was the one person who was unquestionably capable of gathering Park’s information and documents on behalf of
VSL.
170. Brady immediately forwarded Park’s counsel’s letter on to De Simone and asked that De
Simone provide him with Park’s employment agreement, the basis for her resignation, what steps VSL was taking to deal with her resignation, as well as what steps VSL was taking to retain Park as an employee. (October 24, 2014 Letter from Brady to De Simone, attached as Exhibit 28).
171. At that time, De Simone refused to provide Brady with any of the requested information.
172. Upon information and belief, Park had no intention of affecting any sort of transition, and
De Simone took no steps to gather her information and documents on VSL’s behalf.
173. Presumably, De Simone and Park refused to do so because they knew that De Simone would also soon resign and that he would soon be competing with VSL.
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174. Consequently, De Simone and Park continued to stonewall Brady and VSL regarding its
information and documents, which has continued to this day.
175. Subsequently, on November 14, 2014, De Simone resigned as CEO and member of the
Board of Directors of VSL.
176. Following De Simone’s and Park’s resignations from the Board, Brady was VSL’s sole
remaining director.
177. Consequently, on November 17, 2014, Brady sent correspondence to Park in which he
once again requested that Park provide him information and documents that are critical to VSL
continuing as a going concern. (November 17, 2014 Letter from Brady to Park, attached as Exhibit 29).
178. To date, Park has failed to provide a single VSL document or piece of information that
she has in her possession.
179. On November 14, 2014, by letter, De Simone purported to terminate the January 2010
Know How Agreement (the “Know-How Termination,” attached as Exhibit 30).
180. By terminating the January 2010 Know-How Agreement, De Simone—in his personal
capacity—allegedly became the sole “buyer” of VSL#3 under the 2014 Danisco Supply Agreement.
Accordingly, De Simone is now asserting that VSL can no longer buy VSL#3 pursuant to that
agreement. De Simone informed Danisco of the same in his letter to Scott Bush dated May 18, 2015.
(See Exhibit 18).
181. On November 16, 2014, by letter, De Simone purported to terminate the March 2010
Know-How Agreement and amendment thereto (the “China Know-How Termination,” attached as
Exhibit 31), precluding VSL from supplying VSL#3 to J&J in China after December 31, 2014.
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182. Additionally, De Simone has reached out to J&J to inform it that VSL is allegedly not
lawfully permitted to supply J&J with VSL#3. Consequently, De Simone has suggested that J&J should obtain VSL#3 from him, rather than VSL.
183. De Simone also purported to remove Actial, VSL’s European counterpart, from the list of authorized buyers under the 2008 Danisco Agreement, and as such, Danisco is now refusing to allow
VSL or Actial to purchase additional VSL#3.
184. With the expiration of the ‘615 Patent in February of 2015, De Simone is now attempting
to compete with the VSL#3 product in the marketplace. Because De Simone cannot directly compete
with VSL#3 without VSL’s know-how and other trade secrets, De Simone has offered to provide a
newly formed company, ExeGi, with access to this information to develop a competing product under
the brand name “Visbiome.”
185. It is apparent based on the actions described herein, that De Simone has embarked upon a
premeditated scheme to convert VSL’s intellectual property and confidential and proprietary business
information related to VSL#3, interfere with VSL’s supply chain for VSL#3, and cripple VSL’s ability
to manufacture and sell the product. By doing so, De Simone hopes that he will be able to seize VSL’s
market share for himself via his own company, Mendes SA, and new licensees such as ExeGi.
EXEGI INFORMS VSL THAT IT INTENDS TO USE VSL’S MISAPPRIORIATED KNOW-HOW TO SELL AN IDENTICAL PRODUCT
186. Upon information and belief, ExeGi was formed in Albany, New York in or around
October 2014, roughly the same time that De Simone resigned his position as CEO of VSL and refused to return to VSL its confidential and proprietary business information.
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187. Upon information and belief, soon after ExeGi was formed, ExeGi began working with
De Simone on plans to produce and market a probiotic product to directly compete with VSL#3 using intellectual property that De Simone misappropriated from VSL.
188. On February 27, 2015, ExeGi’s CEO Marc Tewey sent a letter to VSL’s counsel
(February 27, 2015 Letter from Marc Tewey to Williams Mullen attached as Exhibit 32). The letter referenced the expiration of the ‘615 Patent and stated that ExeGi intended to “launch a generic formulation of the original probiotic combination of product, previously sold under the VSL#3 brand.”
In the letter Mr. Tewey also stated that De Simone would be “supporting this effort by granting ExeGi access to his know-how and supply for the U.S. and Canada.”
189. The same day, VSL’s counsel responded in writing to Mr. Tewey’s letter. (February 27,
2015 Letter from Douglas M. Nabhan, Esq. to Mr. Tewey attached as Exhibit 33). This response provided ExeGi with written notice that De Simone had breached his fiduciary duties to VSL and misappropriated VSL’s trade secrets related to VSL#3, and that if ExeGi used the VSL#3 know-how wrongfully possessed by De Simone, ExeGi would be liable for trade secret misappropriation.
190. VSL received no response until May 15, 2015, when it received another letter, this time from ExeGi’s litigation counsel who claimed to be representing both ExeGi and De Simone (May 15,
2015 Letter from Jeremy W. Schulman to Douglas M. Nabhan, Esq. attached as Exhibit 34). In this letter, ExeGi purportedly “reject[ed]” VSL’s assertion that De Simone had misappropriated VSL’s trade secrets. ExeGi’s counsel further referenced the numerous self-dealing contracts executed by De Simone to support an argument that De Simone owned the intellectual property, notwithstanding the fact that
VSL already owned or possessed all intellectual property for VSL#3 at the time De Simone executed them.
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EXEGI CONTINUES TO USE VSL’S KNOW-HOW AND REGISTERED TRADEMARK DESPITE WRITTEN NOTICE OF DE SIMONE’S SELF-DEALING AND MISAPPROPRIATION
191. On May 15, 2015, ExeGi published a press release on its website,
EXEGIPHARMA.COM, announcing that it had signed an agreement with De Simone to produce a
product named “Visbiome,” which the press release describes as “a generic formulation of the probiotic
marketed under the name ‘VSL#3.’” (“Visbiome Press Release,” attached as Exhibit 35).
192. The Visbiome Press Release states that Visbiome “will contain the same strains, in the same concentrations and proportions tested and marketed under the brand name ‘VSL#3,’ and is produced using the same manufacturing facility, methods and quality standards as the original product.”
193. The Visbiome Press Release also states that ExeGi’s collaboration with De Simone “will ensure patients have continued access to the product they need,” and that “[r]esearchers, physicians, and
patients can count on Visbiome…to contain the formulation they have trusted for almost 15 years.”
194. Finally, the Visbiome Press Release provides a biography of De Simone, including a statement that De Simone invented the formulation of the probiotic VSL#3.
195. Nowhere in the Visbiome Press Release does ExeGi state that “VSL#3” is a registered trademark of VSL, nor does it state that VSL#3 is sold by VSL or its licensees.
196. In addition to the Visbiome Press Release, ExeGi advertises the Visbiome product on its
website (See “Visbiome Website Advertisement,” a true and accurate copy as of May 31, 2015 is
attached as Exhibit 36). The Visbiome Website displays the Visbiome logo, product packaging (both
shown below), and a summary of the Visbiome product, all of which prominently include VSL’s registered trademark, VSL#3.
Visbiome Logo
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Visbiome Product Packaging
197. In several places on the Visbiome Website, ExeGi advertises the product as: “Original
Formula VSL#3 Probiotic Blend” (emphasis in original) in large, bold lettering, set off from other text.
198. The Visbiome product packaging also states “Compare to active ingredients in VSL#3”
(emphasis in original).
199. The Visbiome Websites further states that “Visbiome contains the same strains, in the same concentrations and proportions, as the original VSL#3®.”
200. At the Visbiome Website alone, VSL’s registered trademark appears six times on a single page.
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201. Nowhere on the Visbiome Website does ExeGi state that “VSL#3” is a registered
trademark of VSL, nor does it state that VSL#3 is sold by VSL or its licensees.
202. ExeGi further misused VSL’s registered trademark at Digestive Disease Week 2015
(“DDW 2015”), a gastroenterology, hepatology, endoscopy and gastrointestinal surgery exhibit, which
ran May 16-19, 2015 in Washington, DC. Even in ExeGi’s two-sentence description in the directory of
exhibitors, ExeGi describes Visbiome as “a generic formulation of the VSL#3 brand probiotic blend”
(DDW 2015 Exhibit materials, attached as Exhibit 37).
203. Thus, it is now clear that De Simone and his affiliates and licensees are attempting to
usurp all of VSL’s intellectual property rights, including infringing its VSL#3 trademark in an effort to
completely eliminate VSL from the marketplace.
VSL’S EUROPEAN COUNTERPART, ACTIAL, OBTAINED A PRELIMINARY INJUNCTION FROM A LONDON COURTAS A RESULT OF DE SIMONE’S SELF-DEALING. ALTHOUGH THE COURT HAS DISCHARGED THE INJUNCTION ON JURISDICTIONAL GROUNDS, THE COURT NEVERTHELESS FOUND THAT ACTIAL HAD SET FORTH A “GOOD ARGUABLE CASE” THAT DE SIMONE AND MENDES COMMITTED MALFEASANCE.
204. As set forth above, De Simone structured his relationship with Danisco such that he controlled the companies for which it could manufacture VSL#3.
205. Actial controls the marketing and sale of VSL#3 in Europe.
206. Until September 9, 2014, De Simone served as both the CEO and Chairman of the Board of Actial.
207. While still a director of Actial, De Simone removed Actial from the entities to which
Danisco could supply VSL#3.
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208. Instead, De Simone has been shipping VSL#3 made by Danisco to Mendes Italy, a company that De Simone controls. In effect, he is trying to squeeze Actial out of the market, while supplying the market through one of his own companies.
209. As a result of De Simone’s self-dealing, Actial sought a preliminary injunction from the
High Court of London in the United Kingdom (the “High Court”).
210. The High Court issued a mandatory injunction requiring that De Simone authorize
Danisco to supply Actial with VSL#3 for sale in the United Kingdom while the litigation between the parties is ongoing. A copy of the orders issued by the High Court are attached as Exhibits 38 and 39.
211. By Order dated March 31, 2015, the High Court discharged the injunction based on its conclusion that it lacked jurisdiction over Actial’s operative claims (attached as Exhibit 40). In doing so, the High Court handed down a detailed judgment regarding its findings as to each of Actial’s claims.
Ultimately, and based on many of the same facts and virtually all of the same documents, the High Court concluded that it would have left the injunction in place if it had jurisdiction, finding the following:
i. “there is a good arguable case made out in relation to Actial’s claims against the Professor
and Mendes Italy for an unlawful means conspiracy.”
ii. “there is a good arguable case made out for [a wrongful interference with contractual
relations] claim in tort against the Professor and Mendes Italy.”
iii. “there is a good arguable case that there has been such infringement and passing off in
England [of Actial’s trademark in the UK] by the Professor and Mendes Italy.”
212. Despite its March 31, 2015 judgment discharging the injunction, on May 7, 2015, the
High Court of Justice, Chancery Division in London ruled in favor of interim relief for Actial, ordering as follows:
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“[De Simone] shall, within 48 hours of [Actial] satisfying the undertaking in (a) above, instruct Danisco USA Inc to supply to one of [Actial’s] two packing agents…sufficient bulk VSL#3 to enable [Actial] to fulfill the order placed by Ferring UK on the 13 April 2015 for supplies of Product totalling €1,634,857.70.
Any further application to require [De Simone] to authorise the release of further bulk VSL#3 from Danisco to [Actial’s] packing agents to enable it to fulfil any additional orders placed by Ferring UK in advance of the appeal shall be made to the Court of Appeal.”
213. On May 13, 2015, De Simone filed an Application for Permission to Appeal and a Stay, seeking permission to appeal the High Court’s May 7, 2015 ruling and to stay the interim relief granted to Actial pending a renewed application for permission to appeal.
214. On May 14, 2015, Deputy Judge Andrew Hochhauser QC entered a written ruling on De
Simone’s Application for Permission to Appeal and a Stay, denying both applications. The Deputy
Judge subsequently denied De Simone’s request for permission to appeal the ruling, requiring De
Simone to instruct Danisco to provide VSL#3 to either of Actial’s packing agents. A copy of the Ruling and associated documents issued by the High Court are attached as Exhibit 41.
215. In denying De Simone’s application for permission to appeal, the Judge reiterated that he had “formed the view that greater hardship would be caused by refusing to limit the interim relief…than granting it.” In denying the application for a stay, the Judge reasoned that “[t]he delay, which would be caused by such a stay, would defeat the object of the interim relief granted. Such a stay would be inappropriate in relation to an application for permission to appeal which, in my view, stands no real prospect of success.”
216. As of the date of this filing, and despite Deputy Judge Hochhauser’s ruling, De Simone has failed to comply with the order of the High Court and has not instructed Danisco to provide VSL#3 to either of Actial’s packing agents.
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217. Actial has filed an Application for Contempt against De Simone in the High Court. A
hearing on this application is scheduled for June 8, 2015.
ACTIAL HAS ALSO OBTAINED AN INJUNCTION FROM A SWISS COURT TO HALT DE SIMONE’S MALFEASANCE.
218. As noted above, the Mendes entities are the vehicles through which De Simone is selling
VSL#3 (or its equivalent) to compete with VSL and Actial.
219. Mendes SA is headquartered in Lugano, Switzerland.
220. Subsequent to resigning from VSL, De Simone—through Mendes SA —registered
“VSL3 BY DE SIMONE” and “VSL3TOTAL” for use in the European Union and/or Switzerland.
221. Moreover, De Simone began advertising, preparing to sell, and/or selling the equivalent
probiotic product under the marks “VSL3 BY DE SIMONE” and/or “VSL3TOTAL,” to compete
directly with Actial in those territories.
222. Consequently, Actial sought an injunction from a Swiss court to halt Mendes SA’s
activities related to such unauthorized use of marks that are confusingly similar to Actial’s Swiss and
European Union “VSL#3” trademark rights.
223. On December 3, 2014, a Swiss court issued the equivalent of a temporary restraining
order against Mendes SA. In its order, which is attached as Exhibit 42, the Swiss court prohibited
Mendes SA from selling any products containing the marks VSL#3, VSL3, VSL3 BY DE SIMONE or
VSL3TOTAL, as stand alone or together with other words or marks.
224. The Swiss court also ordered the seizure of Mendes SA’s documents.
225. As had already occurred in London, the Swiss courts have acted to protect Actial from
Mendes SA’s and De Simone’s malfeasance.
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226. Similar to that relief awarded by Courts in the United Kingdom and Switzerland
previously, VSL is now seeking relief and protection within the United States from this Court for
Mendes SA’s and De Simone’s actions that infringe VSL’s United States trademark rights.
COUNT I DECLARATORY RELIEF REGARDING OWNERSHIP OF VSL#3 INTELLECTUAL PROPERTY (De Simone)
227. VSL restates and incorporates by reference its allegations in Paragraphs 1 through 225, as
if fully set forth herein.
228. Under the Declaratory Judgment Act, the Court “may declare the rights and other legal
relations of an interested party seeking such a declaration, whether further relief is or could be sought.”
28 U.S.C. § 2201(a).
229. By purportedly removing VSL from, and adding Mendes SA and ExeGi to, the list of entities to whom Danisco can supply VSL#3, as well as effecting a change in control of VSL; entering into and subsequently terminating the January 2010 Know-How Agreement, March 2010 Know-How
Agreement, and Canadian Know-How Agreement; becoming the buyer of VSL#3 under the 2014
Danisco Supply Agreement; and executing numerous agreements that represent that De Simone is the
owner of the intellectual property related to VSL#3, De Simone created an actual, justiciable
controversy between VSL and De Simone, as to whether the intellectual property and proprietary and
confidential information related to VSL#3 belongs to VSL, which may be heard and determined by this
Court pursuant to 28 U.S.C. § 2201.
230. Accordingly, VSL requests a declaration from this Court that all of the intellectual
property and proprietary and confidential information related to VSL#3 belongs to VSL and not De
Simone.
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COUNT II DECLARATORY RELIEF REGARDING OWNERSHIP OF OTHER INTELLECTUAL PROPERTY (De Simone)
231. VSL restates and incorporates by reference its allegations in Paragraphs 1 through 229 as if fully set forth herein.
232. Under the Declaratory Judgment Act, the Court “may declare the rights and other legal relations of an interested party seeking such a declaration, whether further relief is or could be sought.”
28 U.S.C. § 2201(a).
233. Pursuant to the Product Development and Collaboration Agreement, De Simone promised to “transfer free of charge to VSL Pharmaceuticals, Inc. all the rights relating to the inventions made by him in the field of pharmaceutical nutritional compositions and active principles for human and animal use since the incorporation of VSL Pharmaceuticals Inc. and as long as he owns, directly or indirectly, 4.99% or more of the voting stock of VSL Pharmaceuticals, Inc.”
234. Furthermore, pursuant to Art. 7 § 7 of the Bylaws, De Simone is required to “transfer or offer to transfer, without the payment of further consideration by the Corporation, all rights owned by him, directly or through another person, whether patent, trademark, copyright or otherwise, relating to any inventions made by him in the field of pharmaceutical nutritionals compositions and active principles, whether for animal or human use, since the incorporation of the Corporation, to the
Corporation.”
235. Upon information and belief, De Simone has failed to transfer to VSL all the rights relating to the inventions made by him in the field of pharmaceutical nutritional compositions and active principles for human and animal use since the incorporation of VSL.
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236. Accordingly, VSL requests a declaration from this Court that any and all rights owned by
De Simone, directly or through another person, whether patent, trademark, copyright or otherwise, relating to any inventions made by De Simone in the field of pharmaceutical nutritionals compositions and active principles, whether for animal or human use, since VSL’s incorporation, belong to VSL; and requiring De Simone to provide a list of all such inventions.
COUNT III DECLARATORY RELIEF THAT CERTAIN AGREEMENTS ARE VOID (De Simone and Danisco)
237. VSL restates and incorporates by reference its allegations in Paragraphs 1 through 235, as if fully set forth herein.
238. Under the Declaratory Judgment Act, the Court “may declare the rights and other legal relations of an interested party seeking such a declaration, whether further relief is or could be sought.”
28 U.S.C. § 2201(a).
239. By asserting ownership rights that he did not own; by co-opting VSL’s opportunities and intellectual property in breach of his fiduciary duties; by purportedly removing VSL from, and adding
Mendes SA and ExeGi to, the list of entities to whom Danisco can supply VSL#3; as well as effecting a change in control of VSL, entering into and subsequently terminating the January 2010 Know-How
Agreement, March 2010 Know-How Agreement, and Canadian Know-How Agreement, and becoming the buyer of VSL#3 under the 2014 Danisco Supply Agreement, De Simone created an actual, justiciable controversy as to whether the 2008 Danisco Agreement, the 2014 Danisco Supply
Agreement, the Canadian Know-How Agreement, the January 2010 Know-How Agreement, and the
March 2010 Know-How Agreement are valid, which may be heard and determined by this Court pursuant to 28 U.S.C. § 2201.
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240. Accordingly, VSL requests a declaration from this Court that the 2008 Danisco
Agreement, the 2014 Danisco Supply Agreement, the Canadian Know-How Agreement, the January
2010 Know-How Agreement, and the March 2010 Know-How Agreement are all invalid and unenforceable.
COUNT IV BREACH OF FIDUCIARY DUTY (De Simone)
241. VSL restates and incorporates by reference its allegations in Paragraphs 1 through 239, as if fully set forth herein.
242. As a corporate officer and director of VSL, De Simone owed VSL, inter alia, the duty of loyalty and the duty to act in good faith.
243. By the actions described herein, De Simone placed his personal interests above VSL’s.
244. Such self-interested actions include, but are not limited to:
a. Failing to grant VSL the option to acquire the entire ownership rights or the exclusive exploitation rights of the ‘615 Patent at a price and conditions equal to the price and conditions De Simone paid for such rights;
b. Entering into agreements with VSL that purported to divest VSL of intellectual property rights that had already been fully assigned to VSL, such as the January 2010 Know-How Agreement, March 2010 Know-How Agreement, and Canadian Know-How Agreement;
c. Inserting De Simone personally as a party to agreements, such as the 2008 and 2014 Danisco Supply Agreements, for which there was no valid basis for his being a party;
d. Including terms in agreements that benefitted De Simone personally, to the detriment of VSL—such as the January 2010 Know-How Agreement change-in-control provision—and allowed De Simone to compete with VSL upon the expiration of the ‘615 Patent;
e. Conspiring to cut off VSL’s supply of VSL#3, misappropriate VSL’s trade secrets and compete with VSL;
f. Entering into the J&J contract on terms that were designed to ultimately favor De Simone, rather than VSL; and
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g. Filing confusingly similar trademark applications noted in Counterclaim XV, infra, through De Simone’s company and co-Defendant, Mendes SA, before De Simone tendered his resignation to VSL.
245. By performing these acts, De Simone intentionally acted with a purpose other than to advance the best interest of VSL.
246. As such, De Simone breached his duty of loyalty and duty to act in good faith.
247. As a direct and proximate cause of De Simone’s breach, VSL has been, and will continue to be, damaged in an amount to be proved at trial.
COUNT V CONSPIRACY (De Simone)
248. VSL restates and incorporates by reference its allegations in Paragraphs 1 through 246, as if fully set forth herein.
249. De Simone and Park conspired to cut off VSL’s supply of VSL#3, misappropriate VSL’s trade secrets, and compete directly with VSL.
250. Through the wrongful and unlawful acts described herein, Park and De Simone carried out their conspiracy.
251. Such wrongful and unlawful acts include but are not limited to:
a. Failing to grant VSL the option to acquire the entire ownership rights or the exclusive exploitation rights of the ‘615 Patent at a price and conditions equal to the price and conditions De Simone paid for such rights;
b. Entering into agreements with VSL that purported to divest VSL of intellectual property rights that had already been fully assigned to VSL, such as the January 2010 Know-How Agreement, March 2010 Know-How Agreement, and Canadian Know-How Agreement;
c. Inserting De Simone personally as a party to agreements, such as the 2008 and 2014 Danisco Supply Agreements, for which there was no valid basis for his being a party;
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d. Including terms in agreements that benefitted De Simone personally, to the detriment of VSL—such as the January 2010 Know-How Agreement change-in-control provision—and allowed De Simone to compete with VSL upon the expiration of the ‘615 Patent;
e. Entering into the Park Employment Agreement, which was entirely one sided, not in VSL’s best interest;
f. Conspiring to cut off VSL’s supply of VSL#3, misappropriate VSL’s trade secrets, and compete with VSL; and
g. Entering into the J&J contract on terms that were designed to ultimately favor De Simone, rather than VSL.
252. De Simone’s and Park’s actions were malicious and willful, with the purpose of injuring
VSL. As such, VSL is entitled to punitive damages in an amount to be determined at trial.
253. As a direct and proximate result of De Simone’s and Parks conspiracy, VSL has been, and will continue to be, damaged in an amount to be proved at trial.
COUNT VI FRAUD (De Simone)
254. VSL restates and incorporates by reference its allegations in Paragraphs 1 through 252, as if fully set forth herein.
255. As described above, De Simone deliberately concealed from VSL his intent to compete with VSL in the sale and commercial exploitation of VSL#3, or a generic version of the same product.
256. Moreover, De Simone deliberately concealed from VSL the self-interested dealings described herein, including but not limited to executing the First Amendment to Confidential Disclosure
Agreement, the 2008 Danisco Agreement, the 2014 Danisco Supply Agreement, the January 2010
Know-How Agreement and the March 2010 Know-How Agreement.
257. Such omissions were material to VSL.
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258. Moreover, based on De Simone’s fiduciary duty to VSL, De Simone had a duty to advise
VSL of his intentions and actions taken to compete with VSL, but failed to do so.
259. De Simone knew that this information was material to VSL, and withheld this
information with an intent to induce VSL to enter into certain agreements that were beneficial to De
Simone and harmful to VSL, including but not limited to, the 2014 Danisco Supply Agreement and the
January 2010 Know-How Agreement.
260. De Simone also withheld this information with an intent to induce VSL not to take actions that would have better prepared or allowed VSL to compete with De Simone, or would have precluded De Simone from competing with VSL.
261. Based on De Simone’s material omissions, and as a direct result of De Simone’s wrongful and unlawful acts described herein, VSL, through De Simone, entered into these agreements and failed to take certain actions to compete with De Simone or preclude De Simone from competing with VSL.
262. VSL’s actions were justifiable and reasonable based on De Simone’s material omissions.
263. Based on De Simone’s fraud, bad faith, and intentional wrongdoing, VSL is entitled to its attorneys’ fees.
264. De Simone’s actions were malicious and willful, with the purpose of injuring VSL. As such, VSL is entitled to punitive damages in an amount to be determined at trial.
265. As a direct and proximate result of VSL’s justifiable reliance upon De Simone’s material omissions, VSL has been, and will continue to be, damaged in an amount to be proved at trial.
COUNT VII TORTIOUS INTERFERENCE WITH A BUSINESS OPPORTUNITY/RELATIONSHIP (De Simone)
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266. VSL restates and incorporates by reference its allegations in Paragraphs 1 through 264, as if fully set forth herein.
267. Based on the parties’ past dealings, VSL had a valid business relationship and reasonable
probability of a business opportunity to purchase VSL#3 from Danisco, the world’s only manufacturer
of VSL#3.
268. Because of his position with VSL, De Simone was aware of this opportunity.
269. De Simone intentionally and wrongfully interfered with that opportunity and relationship
through the acts described herein, including but not limited to structuring the 2008 Danisco Agreement,
2014 Danisco Supply Agreement, January 2010 Know-How Agreement and March 2010 Know-How
Agreement, in such a manner as would allow De Simone to terminate the agreements, become the buyer under the 2014 Danisco Supply Agreement, cripple VSL’s supply chain, force VSL to breach the J&J
Agreements and allow De Simone to compete directly with VSL.
270. De Simone’s actions were both intentional and wrongful, especially in light of De
Simone’s fiduciary obligations to VSL.
271. As a direct and proximate result of De Simone’s actions, and after receipt of De Simone’s
May 18th letter, Danisco has stated that it will not sell VSL#3 to VSL.
272. As a direct and proximate cause of De Simone’s actions, VSL has been, and will continue
to be, damaged in an amount to be proved at trial.
COUNT VIII USURPATION OF A CORPORATE OPPORTUNITY (De Simone)
273. VSL restates and incorporates by reference its allegations in Paragraphs 1 through 271, as
if fully set forth herein.
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274. By resigning—thereby effecting a change in control of VSL—and subsequently terminating the January 2010 Know-How Agreement, De Simone—in his personal capacity—would become the buyer of VSL#3 under the 2014 Danisco Supply Agreement.
275. On November 14, 2014, De Simone, in fact, resigned from VSL and purportedly terminated the January 2010 Know-How Agreement.
276. Accordingly, De Simone, in his personal capacity, became the “buyer” under the 2014
Danisco Supply Agreement.
277. There was no valid business reason for De Simone to insert himself personally in the
2014 Danisco Supply Agreement.
278. The right to purchase VSL#3 from Danisco was a corporate opportunity belonging to
VSL.
279. VSL was financially able to exploit the opportunity.
280. The opportunity is within the VSL’s line of business.
281. VSL had an interest or expectancy in the opportunity.
282. By taking the opportunity for his own, De Simone was placed in a position inimical to his duties to VSL.
283. The opportunity was not presented to De Simone in his individual capacity.
284. The opportunity was, and is, essential to VSL.
285. By the actions set forth above, De Simone wrongfully employed the resources of the corporation in pursuing or exploiting the opportunity.
286. As a direct and proximate cause of De Simone’s usurpation of VSL’s corporate opportunity, VSL has been, and will continue to be, damaged in an amount to be proved at trial.
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COUNT IX ACTUAL AND THREATENED MISAPPROPRIATION OF TRADE SECRETS (De Simone)
287. VSL restates and incorporates by reference its allegations in Paragraphs 1 through 285, as
if fully set forth herein.
288. VSL’s know-how and information related to the manufacture and sale of VSL#3 constitute trade secrets under Md. Code Ann., Com. Law § 11–1201 et seq., the Maryland Uniform
Trade Secrets Act.
289. Specifically, VSL’s know-how and information related to the manufacture and sale of
VSL#3 includes technical and non-technical information, discoveries, improvements, processes, formulae, data, inventions, biological materials, and other information which is useful or necessary to have made, develop, use or sell VSL#3 (the “VSL#3 Know-How”).
290. The VSL#3 Know-How is not commonly known or available to the public, is not readily ascertainable by proper means, and VSL derives great economic value and benefit from the VSL#3
Know-How. The VSL#3 Know-How is the subject of extensive efforts by VSL to keep secret.
291. De Simone assigned all right, title, and interest in and to the VSL#3 Know-How through
his execution of the 2000 Mendes Assignment Agreement.
292. The VSL#3 Know-How was communicated to, inter alia, De Simone via his access to the
VSL#3 Know-How during his employment as CEO of VSL.
293. De Simone had a fiduciary obligation to secure and respect the secrecy of the VSL#3
Know-How for VSL during his employment as CEO of VSL.
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294. During De Simone’s employment as CEO of VSL, De Simone improperly engaged in numerous acts of self-dealing through his personal licensing of the VSL#3 Know-How to VSL and third parties.
295. De Simone further improperly engaged in a campaign to enter into contracts both personally and on behalf of VSL that would allow for De Simone to immediately compete with VSL and cut off VSL’s supply of VSL#3 if De Simone chose to leave VSL.
296. Upon the De Simone’s resignation in November 2014, De Simone has improperly attempted to compete with VSL and to cut off VSL’s supply of VSL#3 from Danisco.
297. De Simone’s acquisition of the VSL#3 Know-How for his personal exploitation was by improper means, including fraud, deceit, misrepresentations, conversion, breach of his duties to VSL as an officer of VSL, self-dealing, and usurpation of a corporate opportunity, and constitutes misappropriation of VSL’s trade secrets under the Maryland Uniform Trade Secrets Act.
298. De Simone knew VSL considered the VSL#3 Know-How to be trade secrets, knew VSL took extensive efforts to maintain its secrecy, and nonetheless intentionally and deliberately used improper means to personally acquire these trade secrets and then to personally exploit them without
VSL’s permission and further to directly compete with VSL for his own economic benefit.
299. De Simone has further disclosed, and granted access to, the VSL#3 Know-How to ExeGi without authorization from VSL.
300. As a result of De Simone’s misappropriation of VSL’s trade secrets, VSL has suffered, and will suffer, significant damages.
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301. De Simone’s willful and intentional misappropriation of VSL’s trade secrets was
specifically done to injure VSL and for De Simone’s commercial benefit, and entitles VSL to exemplary damages, as well as an award of VSL’s attorneys’ fees.
COUNT X CONVERSION, IN THE ALTERNATIVE TO COUNT IX (De Simone)
302. VSL restates and incorporates by reference its allegations in Paragraphs 1 through 285, as
if fully set forth herein.
303. If VSL’s confidential and/or proprietary information are not established as trade secrets,
De Simone has wrongfully exercised dominion over and taken possession of this confidential and
proprietary information upon leaving VSL.
304. VSL had an interest in, and right to possession of, its confidential and proprietary
information.
305. De Simone’s misappropriation of VSL’s confidential and proprietary information is
inconsistent with VSL’s exclusive rights to that information.
306. De Simone is using and intends to use VSL’s confidential and proprietary information to
the detriment and injury of VSL, and in order to compete unfairly with VSL.
307. VSL was injured and damaged as the direct and proximate result of De Simone’s conversion of its confidential and proprietary information.
COUNT XI UNJUST ENRICHMENT, IN THE ALTERNATIVE TO COUNT IX (De Simone)
308. VSL restates and incorporates by reference its allegations in Paragraphs 1 through 285, as
if fully set forth herein.
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309. If VSL’s confidential and/or proprietary information are not established as trade secrets,
De Simone has been unjustly enriched by wrongfully exercising dominion over and taking possession of
VSL’s confidential and proprietary information upon leaving VSL.
310. As part of his employment with VSL, VSL provided De Simone VSL’s trade secrets and
confidential and proprietary information, and De Simone accepted the same.
311. De Simone was aware that the trade secrets and confidential and proprietary information
of VSL were proprietary, confidential, and unavailable to the public.
312. De Simone has used VSL’s trade secrets and confidential and proprietary information,
has benefited from this use, and has not paid VSL for this use.
313. Moreover, as direct result of De Simone’s use of VSL’s trade secrets and confidential and
proprietary information, and accepting the benefit thereof, VSL has been impoverished as—but for De
Simone’s actions—VSL would have benefitted from the use thereof.
314. De Simone would be unjustly enriched if not required to make payment to VSL for the
use of its trade secrets and confidential and proprietary information.
315. As a direct and proximate result of De Simone’s conduct, VSL is entitled to have and
recover compensatory damages from De Simone in an amount to be proved at trial.
COUNT XII TRADEMARK INFRINGEMENT UNDER 15 U.S.C. § 1114 (De Simone and Mendes SA)
316. VSL restates and incorporates by reference its allegations in Paragraphs 1 through 314, as
if fully set forth herein.
317. This claim arises under 15 U.S.C. § 1114 for willful and deliberate infringement and
contributory infringement of the VSL#3 Trademarks.
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318. The VSL#3 word mark set forth in the VSL#3 Registration is a valid, protectable, and enforceable mark.
319. The VSL#3 Registration is incontestable under 15 U.S.C. § 1065.
320. The VSL#3-DS word mark set forth in the VSL#3-DS Registration is a valid, protectable and enforceable mark.
321. The VSL#3-DS Registration is incontestable under 15 U.S.C. § 1065.
322. The VSL word mark set forth in the VSL Registration is a valid, protectable, and enforceable mark.
323. The VSL Registration is incontestable under 15 U.S.C. § 1065.
324. VSL has rights in its VSL#3 Trademarks that are superior to any rights De Simone may have in his use of “VSL,” “VSL#3,” “VSL – 3” or similar terms, which De Simone uses in connection with identical, similar, and/or related products.
325. Consumers associate the marks set forth in the VSL#3 Trademarks with VSL as the single source of the goods and services provided under the marks.
326. VSL has not given De Simone or Mendes SA authorization, consent, permission, or license to use the VSL#3 Trademarks.
327. Upon information and belief, De Simone and Mendes SA have used, are using, and/or are inducing third parties to use the terms “VSL – 3” and “VSL#3” to advertise, market, promote, and offer to sell competing food supplement products.
328. De Simone’s and Mendes SA’s use of the terms “VSL – 3” and “VSL#3” have created and does create a likelihood of confusion, mistake, or deception among consumers with or regarding the
VSL#3 Trademarks.
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329. At the time De Simone and Mendes SA began using the “VSL – 3” and “VSL#3” terms,
De Simone and Mendes SA had actual knowledge of VSL’s federally registered VSL#3 Trademarks.
330. At the time De Simone and Mendes SA began using the “VSL – 3” and “VSL#3” terms,
De Simone and Mendes SA had constructive notice of VSL’s federally registered VSL#3 Trademarks under 15 U.S.C. § 1072.
331. De Simone and Mendes SA knew, or should have known by the exercise of reasonable care, that their use of “VSL – 3” and “VSL#3” in connection with competing food supplement products would cause confusion, mistake, or deception among consumers with VSL’s marks set forth in the
VSL#3 Trademarks.
332. De Simone and Mendes SA knew of VSL’s federally registered VSL#3 Trademarks, and intended to trade off, did trade off, intends to trade off, and will trade off, the extensive goodwill built up by VSL in its VSL#3 Trademarks.
333. De Simone’s and Mendes SA’s wrongful acts alleged herein violated VSL’s rights under
15 U.S.C. § 1114(a), and have been deliberate, willful, and in disregard of VSL’s rights.
334. De Simone’s and Mendes SA’s wrongful acts alleged herein have permitted and/or will permit De Simone and Mendes SA to earn substantial revenues and profits on the strength of VSL’s marks set forth in the VSL#3 Trademarks.
335. By reason of De Simone’s and Mendes SA’s wrongful acts alleged herein, VSL has suffered and is continuing to suffer damage to its business, trade, reputation, and goodwill as a result of the erroneous perception that the goods of De Simone, Mendes SA, and/or their third-party distributors and resellers are affiliated with, sponsored by, approved by, or originate from VSL.
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336. As a result of De Simone’s and Mendes SA’s wrongful acts alleged herein, VSL has suffered and is continuing to suffer irreparable injury. VSL cannot be adequately compensated for these inquiries by damages alone, and VSL has no adequate remedy at law for De Simone’s and Mendes SA’s infringement and/or induced infringement of VSL’s rights. VSL is entitled to preliminary and permanent injunctive relief, as well as attorneys’ fees.
COUNT XIII UNFAIR COMPETITION UNDER 15 U.S.C. § 1125(a) (De Simone and Mendes)
337. VSL restates and incorporates by reference its allegations in Paragraphs 1 through 335, as
if fully set forth herein.
338. This claim arises under 15 U.S.C. § 1125(a) for willful and deliberate infringement and
unfair competition, and contributory infringement with regard to the VSL#3 Trademarks.
339. The VSL#3 Trademarks are valid, protectable, and enforceable marks.
340. Since its initial sales of the VSL#3 product within the United States several years ago,
VSL, through its licensees, has continuously and exclusively used the VSL#3 Trademarks within the
United States in connection with the offering for sale, advertising and sale of food supplement products
and related goods and services, prior to De Simone’s and Mendes SA’s use of the “VSL – 3” and
“VSL#3” terms in connection with food supplement products.
341. By reason of VSL’s continuous and exclusive use and promotion of the VSL#3
Trademarks, as well as the distinctiveness of its VSL#3 Trademarks, consumers associate the VSL#3
Trademarks with a single source of the goods and services provided under the VSL#3 Trademarks.
342. Upon information and belief, De Simone and Mendes SA have used, are using, and/or are
inducing third parties to use the term “VSL – 3” and “VSL#3” to advertise, market, promote, and offer
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to sell food supplement products that will directly compete with VSL’s VSL#3 product within the
United States.
343. VSL has not given De Simone or Mendes SA authorization, consent, permission, or
license to use the VSL#3 Trademarks.
344. De Simone’s and Mendes SA’s use of the terms “VSL – 3,” “VSL#3” and similar terms
has created and does create a likelihood of confusion, mistake, or deception among consumers with
between De Simone’s and Mendes SA’s goods and services and those offered by VSL in connection
with its VSL#3 Trademarks.
345. At the time De Simone and Mendes SA began using the “VSL – 3” and “VSL#3” terms,
De Simone and Mendes SA had actual knowledge of VSL’s federally registered VSL#3 Trademarks.
346. At the time De Simone and Mendes SA began using the “VSL – 3” and “VSL#3” terms,
De Simone and Mendes SA had constructive notice of VSL’s federally registered VSL#3 Trademarks
under 15 U.S.C. § 1072.
347. De Simone and Mendes SA knew, or should have known by the exercise of reasonable
care, that their use of “VSL – 3” and “VSL#3” in connection with food supplement products would
cause confusion, mistake, or deception among consumers with VSL’s marks set forth in the VSL#3
Trademarks.
348. De Simone’s and Mendes SA’s wrongful acts alleged herein violated VSL’s rights under
15 U.S.C. § 1125(a), and have been deliberate, willful, and in disregard of VSL’s rights.
349. De Simone’s and Mendes SA’s wrongful acts alleged herein have permitted and/or will permit De Simone and Mendes SA to earn substantial revenues and profits on the strength of VSL’s marks set forth in the VSL#3 Trademarks.
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350. De Simone’s and Mendes SA’s wrongful acts alleged herein violate VSL’s rights protected by Maryland common law.
351. By reason of De Simone’s and Mendes SA’s wrongful acts alleged herein, VSL has suffered and is continuing to suffer damage to its business, trade, reputation, and goodwill as a result of
the erroneous perception that the goods of De Simone, Mendes SA, and/or their third-party distributors and resellers are affiliated with, sponsored by, approved by, or originate from VSL.
352. As a result of De Simone’s and Mendes SA’s wrongful acts alleged herein, VSL has suffered and is continuing to suffer irreparable injury. VSL cannot be adequately compensated for these inquiries by damages alone, and VSL has no adequate remedy at law for De Simone’s and Mendes SA’s infringement and/or induced infringement of VSL’s rights. VSL is entitled to preliminary and permanent injunctive relief, as well as attorneys’ fees.
COUNT XIV VIOLATION OF MD CODE ANN., BUS. REG., § 1-414 (De Simone and Mendes SA)
353. VSL restates and incorporates by reference its allegations in Paragraphs 1 through 351, as if fully set forth herein.
354. This claim arises under Md. Code Ann., Business Regulation, §1-401 et seq. for willful and deliberate unlawful use of the VSL#3 Trademarks.
355. VSL’s VSL#3 Trademarks are trademarks that VSL places on its goods to identify those
goods and to distinguish them from other goods made and sold by individuals and entities other than
VSL.
356. De Simone’s and Mendes SA’s wrongful acts alleged herein have created and do create a
likelihood of confusion, mistake, or deception among consumers with De Simone’s, Mendes SA’s
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and/or their third-party distributors and resellers’ goods and services and those offered by VSL in connection with its VSL#3 Trademarks.
357. At the time De Simone and Mendes SA began using the “VSL – 3” and “VSL#3” terms,
De Simone and Mendes SA had actual knowledge of VSL’s federally registered VSL#3 Trademarks.
358. At the time De Simone and Mendes SA began using the “VSL – 3” and “VSL#3” terms,
De Simone and Mendes SA had constructive notice of VSL’s federally registered VSL#3 Trademarks under 15 U.S.C. § 1072.
359. De Simone and Mendes SA knew, or should have known by the exercise of reasonable care, that their use of “VSL – 3” and “VSL#3” in connection with food supplement products would cause confusion, mistake or deception among consumers with VSL’s marks set forth in the VSL#3
Trademarks.
360. De Simone’s and Mendes SA’s wrongful acts alleged herein have permitted and/or will permit De Simone and Mendes SA to earn substantial revenues and profits on the strength of VSL’s marks set forth in the VSL#3 Trademarks.
361. By reason of De Simone’s Mendes SA’s wrongful acts alleged herein, VSL has suffered and is continuing to suffer damage to its business, trade, reputation, and goodwill as a result of the erroneous perception that the goods of De Simone, Mendes SA, and/or their third-party distributors and
resellers are affiliated with, sponsored by, approved by or originate from VSL.
362. As a result of De Simone’s and Mendes SA’s wrongful acts alleged herein, VSL has
suffered and is continuing to suffer irreparable injury. VSL cannot be adequately compensated for these
inquiries by damages alone, and VSL has no adequate remedy at law for De Simone’s and Mendes SA’s
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infringement and/or induced infringement of VSL’s rights. VSL is entitled to preliminary and
permanent injunctive relief.
COUNT XV DECLARATORY JUDGMENT THAT REGISTRATION OF FEDERAL TRADEMARK APPLICATIONS U.S. SERIAL NOS. 79/150,539 AND 86/065,600 WOULD HARM VSL AND SHOULD BE CANCELLED (De Simone and Mendes SA)
363. VSL restates and incorporates by reference its allegations in Paragraphs 1 through 361, as if fully set forth herein.
364. Notwithstanding the fact that VSL owns all right, title, and interest in and to the VSL#3
Trademarks, De Simone, through his Swiss company Mendes SA, filed the VSL3TOTAL Application and the VSL3 BY DE SIMONE Application for use in connection with products that are identical to the products sold by VSL under its federally registered and incontestable VSL#3 Trademarks before De
Simone tendered his resignation to VSL.
365. The claimed marks set forth in the VSL3TOTAL Application and the VSL3 BY DE
SIMONE Application are likely to cause confusion with VSL’s federally registered and incontestable
VSL#3 Trademarks.
366. VSL would be harmed by the registration of the claimed marks set forth in the
VSL3TOTAL Application and the VSL3 BY DE SIMONE Application because the applications contain
terms that are nearly identical to the VSL#3 Trademarks for use in connection with products that are
identical to the products sold by VSL under its VSL#3 Trademarks. Mendes SA’s claim to exclusive rights in the marks set forth in the VSL3TOTAL Application and the VSL3 BY DE SIMONE
Application would cause a likelihood of consumer confusion with VSL’s use of its VSL#3 Trademarks
and thereby harm both VSL and the public.
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367. This Court should therefore declare that VSL3TOTAL Application and the VSL3 BY DE
SIMONE Application are invalid and that Mendes SA does not have the right to register the marks set forth in either application.
COUNT XVI BREACH OF CONTRACT PATENT LICENSE AGREEMENT (De Simone)
368. VSL restates and incorporates by reference its allegations in Paragraphs 1 through 366, as if fully set forth herein.
369. To the extent that it constitutes a valid and enforceable agreement, VSL performed all of its obligations under the Patent License Agreement.
370. In or about 2005, De Simone acquired the entire ownership rights of the ‘615 Patent from the Co-Owners.
371. To the extent that it constitutes a valid and enforceable agreement, De Simone breached the Patent License Agreement by failing to offer and grant VSL the option to acquire the entire ownership rights or the exclusive exploitation rights of the ‘615 Patent at a price and conditions equal to the price and conditions De Simone paid for such rights.
372. As a direct and proximate result of De Simone’s breach, VSL paid De Simone royalties related to the Patent License Agreement, to which he was not entitled.
373. Accordingly, as a direct and proximate cause of De Simone’s breach, VSL has been damaged in an amount to be proved at trial.
COUNT XVII UNJUST ENRICHMENT, IN THE ALTERNATIVE TO COUNT XVI (De Simone)
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374. VSL restates and incorporates by reference its allegations in Paragraphs 1 through 366, as
if fully set forth herein.
375. Through the Patent License Agreement, De Simone has been receiving regular royalties
from VSL, which VSL would not be required to pay De Simone had he granted VSL the option to acquire the entire ownership rights or the exclusive exploitation rights of the ‘615 Patent at a price and conditions equal to the price and conditions De Simone paid for such rights.
376. As a direct result, VSL has been impoverished because, but for De Simone’s actions,
VSL would own the ‘615 Patent entirely, and would not be required to continue to pay De Simone
royalties.
377. De Simone lacks any justification for his actions, especially in light of the fiduciary
obligations owed to VSL.
378. VSL lacks a remedy provided by law for De Simone’s actions.
379. As a direct and proximate cause of De Simone’s actions, De Simone has been enriched
and VSL has been impoverished in an amount to be proved at trial.
380. To allow De Simone to accept and retain the benefits conferred on him goes against the
fundamental principles of justice or equity and good conscience.
COUNT XVIII BREACH OF CONTRACT AS A THIRD-PARTY BENEFICIARY TO THE PRODUCT DEVELOPMENT AND COLLABORATION AGREEMENT (De Simone)
381. VSL restates and incorporates by reference its allegations in Paragraphs 1 through 379, as
if fully set forth herein.
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382. The Product Development and Collaboration Agreement is a valid and enforceable agreement between De Simone, Mendes Luxembourg, Mendes Italy, Sinaf and Taufin.
383. The parties to the Product Development and Collaboration Agreement intended, under the agreement, to give VSL all of the intellectual property for VSL#3 in order to effectuate their plan to
develop and distribute what would be called “VSL#3” and other probiotic medical-food products across
the world.
384. This intention to benefit VSL was a material part of the parties’ purpose in entering into
the Product Development and Collaboration Agreement.
385. VSL is a third party beneficiary of the Product Development and Collaboration
Agreement as it was the entity that was supposed to receive all of De Simone’s and the Mendes entities’
intellectual property for VSL#3.
386. As De Simone claims that he owns the intellectual property for VSL#3, De Simone is in
breach of the Product Development and Collaboration Agreement.
387. As a direct and proximate result of De Simone’s breach, VSL has suffered damages in an
amount to be proved at trial.
COUNT XIX CONVERSION OF VSL INFORMATION (De Simone)
388. VSL restates and incorporates by reference its allegations in Paragraphs 1 through 386, as
if fully set forth herein.
389. Because of his position as corporate officer and VSL board member, De Simone had in
his possession certain of VSL’s confidential and proprietary information, including but not limited to,
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VSL’s documents, data, drawings, manuals, letters, notes, reports, electronic mail, and recordings (the
“VSL Information”).
390. For example, De Simone sent and received email using a “@vslpharma.com” email
address. Any communications to/from the “@vslpharma.com” domain, as well as the identity of the
Internet Service Provider (e.g., Gmail) that supports that email domain and/or any third-party vendor
who manages or maintains the domain, as well as all information necessary to transition control of the
@vslpharma.com addresses to VSL’s current management, constitute VSL Information.
391. Despite VSL’s repeated requests for the VSL Information, De Simone has failed and
refused to provide the VSL Information.
392. VSL has a property interest in the VSL Information, and a right to possession of same.
393. As a direct and proximate result of De Simone’s conversion of the VSL Information,
VSL has suffered damages in an amount to be proved at trial.
COUNT XX ACTUAL AND THREATENED MISAPPROPRIATION OF TRADE SECRETS (ExeGi)
394. VSL restates and incorporates by reference its allegations in Paragraphs 1 through 392, as
if fully set forth herein.
395. VSL’s know-how and information related to the manufacture and sale of VSL#3
constitute trade secrets under Md. Code Ann., Com. Law § 11–1201 et seq., the Maryland Uniform
Trade Secrets Act.
396. Specifically, VSL’s VSL#3 Know-How includes technical and non-technical
information, discoveries, improvements, processes, formulae, data, inventions, biological materials, and
other information which is useful or necessary to have made, develop, use, or sell VSL#3.
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397. The VSL#3 Know-How is not commonly known or available to the public, is not readily
ascertainable by proper means, and VSL derives great economic value and benefit from the VSL#3
Know-How. The VSL#3 Know-How is the subject of extensive efforts by VSL to keep secret.
398. De Simone assigned all right, title, and interest in and to the VSL#3 Know-How through
his execution of the 2000 Mendes Assignment Agreement.
399. The VSL#3 Know-How was communicated to, inter alia, De Simone via his access to the
VSL#3 Know-How during his employment as CEO of VSL.
400. De Simone had a fiduciary obligation to secure and respect the secrecy of the VSL#3
Know-How for VSL during his employment as CEO of VSL.
401. During De Simone’s employment as CEO of VSL, De Simone improperly engaged in numerous acts of self-dealing through his personal licensing of the VSL#3 Know-How to VSL and third
parties.
402. De Simone further improperly engaged in a campaign to enter into contracts both
personally and on behalf of VSL that would allow for De Simone to immediately compete with VSL and
cut off VSL’s supply of VSL#3 if De Simone chose to leave VSL. De Simone’s acquisition of the
VSL#3 Know-How for his personal exploitation was by improper means, including fraud, deceit,
misrepresentations, theft, conversion, breach of his duties to VSL as an officer of VSL, self-dealing,
and usurpation of a corporate opportunity, and constitutes misappropriation of VSL’s trade secrets under
the Maryland Uniform Trade Secrets Act.
403. De Simone knew VSL considered the VSL#3 Know-How to be trade secrets, knew VSL
took extensive efforts to maintain its secrecy, and nonetheless intentionally and deliberately used
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improper means to personally acquire these trade secrets and then to personally exploit them without
VSL’s permission and further to directly compete with VSL for his own economic benefit.
404. ExeGi has worked directly with De Simone to use the VSL#3 Know-How to launch a directly competitive product to be marketed in the U.S. and Canada as “Visbiome.” ExeGi informed
VSL on February 27, 2015 of its intention to access “De Simone’s know-how and supply” to launch its
Visbiome product.
405. VSL provided written notice to ExeGi on the same day, February 27, 2015, that De
Simone had “taken the intellectual property of VSL Pharmaceuticals, Inc. in breach of his fiduciary duties to his Company” and that he had “already misappropriated the trade secrets of VSL.”
406. Therefore, prior to developing its directly competitive Visbiome product, ExeGi knew or should have known that the VSL#3 Know-How constituted trade secrets of VSL and that De Simone had utilized improper means to acquire the VSL#3 Know-How.
407. ExeGi is currently promoting its Visbiome product as, among other things, the “Original
Formula VSL#3 Probiotic Blend,” as “a generic formulation of the VSL#3 brand probiotic blend,” and as containing “the same strains, in the same concentrations and proportions, as the original VSL#3
Brand probiotic blend.” See Exhibits 35 - 36.
408. In the Visbiome Press Release, ExeGi further states that “it has signed an agreement with
Professor Claudio De Simone, MD, PhD, to produce a generic formulation of the probiotic marketed under the name ‘VSL#3.’” See Exhibit 35.
409. These statements by ExeGi evidence its intent to continue knowingly and improperly using the VSL#3 Know-How in connection with its Visbiome product.
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410. As a result of ExeGi’s misappropriation of VSL’s trade secrets, VSL has suffered, and
will suffer, significant damages and irreparable harm.
411. ExeGi’s willful and intentional misappropriation of VSL’s trade secrets, specifically done
to injure VSL and for ExeGi’s commercial benefit, entitles VSL to exemplary damages, as well as an
award of VSL’s attorneys’ fees.
412. Unless ExeGi is enjoined from using the VSL#3 Know-How to launch a product that is directly competitive to VSL’s VSL#3 product, VSL will further suffer immediate, substantial, and
irreparable harm.
COUNT XXI UNJUST ENRICHMENT (IN THE ALTERNATIVE TO COUNT XX) (ExeGi)
413. VSL restates and incorporates by reference its allegations in Paragraphs 1 through 392, as
if fully set forth herein.
414. If VSL’s confidential and/or proprietary information are not established as trade secrets,
ExeGi has been and will be unjustly enriched by using VSL’s confidential and proprietary information
which was wrongfully converted by De Simone.
415. As part of his employment with VSL, VSL provided De Simone VSL’s trade secrets and
confidential and proprietary information, and De Simone accepted the same.
416. ExeGi knew or should have known that the trade secrets and confidential and proprietary
information of VSL were proprietary, confidential, and unavailable to the public; and that they were
wrongfully converted by De Simone.
417. ExeGi has used VSL’s trade secrets and confidential and proprietary information, has
benefited from this use, and has not paid VSL for this use.
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418. Moreover, as direct result of De Simone’s theft and ExeGi’s use of VSL’s trade secrets
and confidential and proprietary information, and ExeGi’s accepting the benefit thereof, VSL has been impoverished as—but for De Simone and ExeGi’s actions—VSL would have benefitted from the use thereof.
419. ExeGi would be unjustly enriched if not required to make payment to VSL for the use of
its trade secrets and confidential and proprietary information.
420. As a direct and proximate result of ExeGi’s conduct, VSL is entitled to have and recover
compensatory damages from ExeGi in an amount to be proved at trial.
COUNT XXII TRADEMARK INFRINGEMENT UNDER 15 U.S.C. § 1114 (ExeGi)
421. VSL restates and incorporates by reference its allegations in Paragraphs 1 through 419, as
if fully set forth herein.
422. This claim arises under 15 U.S.C. § 1114 for willful and deliberate infringement and contributory infringement of the VSL#3 Trademarks.
423. The VSL#3 word mark set forth in the VSL#3 Registration is a valid, protectable, and
enforceable mark.
424. The VSL#3 Registration is incontestable under 15 U.S.C. § 1065.
425. The VSL#3-DS word mark set forth in the VSL#3-DS Registration is a valid, protectable,
and enforceable mark.
426. The VSL#3-DS Registration is incontestable under 15 U.S.C. § 1065.
427. The VSL word mark set forth in the VSL Registration is a valid, protectable, and
enforceable mark.
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428. The VSL Registration is incontestable under 15 U.S.C. § 1065.
429. VSL has rights in its VSL#3 Trademarks that are superior to any rights ExeGi may have in its use of “VSL#3” or similar terms, which ExeGi uses in connection with an identical, similar, and/or related product.
430. Consumers associate the marks set forth in the VSL#3 Trademarks with VSL as the single source of the goods and services provided under the marks.
431. VSL has not given ExeGi authorization, consent, permission, or license to use the VSL#3
Trademarks.
432. ExeGi has used and is using the term “VSL#3” to advertise, market, promote, and offer to sell a competing food supplement product, Visbiome.
433. ExeGi’s use of the term “VSL#3” will create a likelihood of confusion, mistake, or deception among consumers with or regarding the VSL#3 Trademarks. ExeGi advertises its product in such a way as to misrepresent its association with VSL, including advertising Visbiome as “VSL#3
PROBIOTIC BLEND,” and making representations that Visbiome “will contain the same strains, in the same concentrations and proportions tested and marketed under the brand name ‘VSL#3,’ and is produced using the same manufacturing facility, methods and quality standards as the original product,” that Visbiome “will ensure patients have continued access to the product they need,” and that
“[r]esearchers, physicians, and patients can count on Visbiome…to contain the formulation they have trusted for almost 15 years.” See Exhibit 35.
434. At the time ExeGi began using the “VSL#3” term, ExeGi had actual knowledge of VSL’s federally registered VSL#3 Trademarks.
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435. At the time ExeGi began using the “VSL#3” term, ExeGi had constructive notice of
VSL’s federally registered VSL#3 Trademarks under 15 U.S.C. § 1072.
436. ExeGi knew, or should have known by the exercise of reasonable care, that its use of
“VSL#3” in connection with a competing food supplement product would cause confusion, mistake or
deception among consumers with VSL’s marks set forth in the VSL#3 Trademarks.
437. ExeGi knew of VSL’s federally registered VSL#3 Trademarks, and intended to trade off,
did trade off, intends to trade off, and will trade off, the extensive goodwill built up by VSL in its
VSL#3 Trademarks.
438. ExeGi’s wrongful acts alleged herein violated VSL’s rights under 15 U.S.C. § 1114(a),
and have been deliberate, willful, and in disregard of VSL’s rights.
439. ExeGi’s wrongful acts alleged herein have permitted and/or will permit ExeGi to earn
substantial revenues and profits on the strength of VSL’s marks set forth in the VSL#3 Trademarks.
440. By reason of ExeGi’s wrongful acts alleged herein, VSL has suffered and is continuing to suffer damage to its business, trade, reputation, and goodwill as a result of the erroneous perception that
ExeGi’s Visbiome product is affiliated with, sponsored by, approved by or originate from VSL.
441. As a result of ExeGi’s wrongful acts alleged herein, VSL has suffered and is continuing
to suffer irreparable injury. VSL cannot be adequately compensated for these inquiries by damages alone, and VSL has no adequate remedy at law for ExeGi’s infringement and/or induced infringement of
VSL’s rights. VSL is entitled to preliminary and permanent injunctive relief, as well as attorneys’ fees.
COUNT XXIII UNFAIR COMPETITION UNDER 15 U.S.C. § 1125(a) (ExeGi)
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442. VSL restates and incorporates by reference its allegations in Paragraphs 1 through 440, as if fully set forth herein.
443. This claim arises under 15 U.S.C. § 1125(a) for willful and deliberate infringement and unfair competition, and contributory infringement with regard to the VSL#3 Trademarks.
444. The VSL#3 Trademarks are valid, protectable, and enforceable marks.
445. Since its initial sales of the VSL#3 product within the United States several years ago,
VSL, through its licensees, has continuously and exclusively used the VSL#3 Trademarks within the
United States in connection with the offering for sale, advertising, and sale of food supplement products and related goods and services, prior to ExeGi’s use of the “VSL#3” term in connection with its
Visbiome product.
446. By reason of VSL’s continuous and exclusive use and promotion of the VSL#3
Trademarks, as well as the distinctiveness of its VSL#3 Trademarks, consumers associate the VSL#3
Trademarks with a single source of the goods and services provided under the VSL#3 Trademarks.
447. ExeGi has used and is using the term “VSL#3” to advertise, market, promote, and offer to sell its Visbiome product.
448. VSL has not given ExeGi authorization, consent, permission, or license to use the VSL#3
Trademarks.
449. ExeGi’s use of the term “VSL#3” and similar terms has created and does create a likelihood of confusion, mistake, or deception among consumers with between the Visbiome product and those products offered by VSL in connection with its VSL#3 Trademarks. ExeGi advertises its product in such a way as to misrepresent its association with VSL, including advertising Visbiome as
“VSL#3 PROBIOTIC BLEND,” and making representations that Visbiome “will contain the same
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strains, in the same concentrations and proportions tested and marketed under the brand name ‘VSL#3,’ and is produced using the same manufacturing facility, methods and quality standards as the original product,” that Visbiome “will ensure patients have continued access to the product they need,” and that
“[r]esearchers, physicians, and patients can count on Visbiome…to contain the formulation they have
trusted for almost 15 years.” See Exhibit 35.
450. At the time ExeGi began using the “VSL#3” term, ExeGi had actual knowledge of VSL’s federally registered VSL#3 Trademarks.
451. At the time ExeGi began using the “VSL#3” term, ExeGi had constructive notice of
VSL’s federally registered VSL#3 Trademarks under 15 U.S.C. § 1072.
452. ExeGi knew, or should have known by the exercise of reasonable care, that its use of
“VSL#3” in connection with its Visbiome product would cause confusion, mistake, or deception among
consumers with VSL’s marks set forth in the VSL#3 Trademarks.
453. ExeGi’s wrongful acts alleged herein violated VSL’s rights under 15 U.S.C. § 1125(a),
and have been deliberate, willful, and in disregard of VSL’s rights.
454. ExeGi’s wrongful acts alleged herein have permitted and/or will permit ExeGi to earn
substantial revenues and profits on the strength of VSL’s marks set forth in the VSL#3 Trademarks.
455. ExeGi’s wrongful acts alleged herein violate VSL’s rights protected by Maryland
common law.
456. By reason of ExeGi’s wrongful acts alleged herein, VSL has suffered and is continuing to
suffer damage to its business, trade, reputation, and goodwill as a result of the erroneous perception that
ExeGi’s Visbiome product is affiliated with, sponsored by, approved by, or originates from VSL.
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457. As a result of ExeGi’s wrongful acts alleged herein, VSL has suffered and is continuing to suffer irreparable injury. VSL cannot be adequately compensated for these inquiries by damages alone, and VSL has no adequate remedy at law for ExeGi’s infringement and/or induced infringement of
VSL’s rights. VSL is entitled to preliminary and permanent injunctive relief, as well as attorneys’ fees.
COUNT XXIV VIOLATION OF MD. CODE ANN., BUS. REG. § 1-414 (ExeGi)
458. VSL restates and incorporates by reference its allegations in Paragraphs 1 through 456, as if fully set forth herein.
459. This claim arises under Md.Code Ann., Bus. Reg. § 1-414 for ExeGi’s unlawful use of
VSL’s VSL#3 Trademarks.
460. VSL’s VSL#3 Trademarks, including “VSL#3,” are names that VSL places on its goods to identify those goods and distinguish them from other goods made and sold by individuals and entities other than VSL, and thus are “Marks” under Md. Code Ann., Bus. Reg. § 1-401(c).
461. ExeGi’s wrongful acts alleged herein have created and do create a likelihood of confusion, mistake, or deception among consumers with between ExeGi’s product and those offered by
VSL in connection with its VSL#3 Trademarks.
462. At the time ExeGi began using the “VSL#3” term, ExeGi had actual knowledge of VSL’s federally registered VSL#3 Trademarks.
463. At the time ExeGi began using the “VSL#3” term, ExeGi had constructive notice of
VSL’s federally registered VSL#3 Trademarks under 15 U.S.C. § 1072.
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464. ExeGi knew, or should have known by the exercise of reasonable care, that its use of
“VSL#3” in connection with its Visbiome product would cause confusion, mistake, or deception among consumers with VSL’s marks set forth in the VSL#3 Trademarks.
465. ExeGi’s wrongful acts alleged herein have permitted and/or will permit ExeGi to earn substantial revenues and profits on the strength of VSL’s marks set forth in the VSL#3 Trademarks.
466. By reason of ExeGi’s wrongful acts alleged herein, VSL has suffered and is continuing to suffer damage to its business, trade, reputation, and goodwill as a result of the erroneous perception that
ExeGi’s Visbiome product is affiliated with, sponsored by, approved by, or originates from VSL.
467. As a result of ExeGi’s wrongful acts alleged herein, VSL has suffered and is continuing to suffer irreparable injury. VSL cannot be adequately compensated for these inquiries by damages alone, and VSL has no adequate remedy at law for ExeGi’s infringement. VSL is entitled to preliminary and permanent injunctive relief.
COUNT XV PRELIMINARY AND PERMANENT INJUNCTION FOR RETURN OF CORPORATE RECORDS (De Simone)
468. VSL restates and incorporates by reference its allegations in Paragraphs 1 through 466, as if fully set forth herein.
469. After De Simone resigned from VSL, and as a result of the resolution of a separate lawsuit seeking VSL’s books and records, VSL began to receive certain corporate documents and records, the existence of which VSL’s current management had been previously unaware.
470. Among these corporate documents and records were certain contracts between VSL and third-parties, pursuant to which VSL is required to deliver certain products (the “Production Contracts”).
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471. Through VSL’s review of the Production Contracts and its discussions with the
Production Contracts’ counterparties, VSL has learned that the VSL Information in De Simone’s possession includes certain additional contracts necessary to VSL’s business relationships with those counterparties (the “Additional Contracts”).
472. Upon information and belief, De Simone has in his possession or control certain of the
Additional Contracts.
473. VSL currently is in negotiations with the Production Contracts’ counterparties to maintain the business relationships put into jeopardy due to the effects of Park’s and De Simone’s resignations.
474. The Additional Contracts in their possession are necessary to the ongoing negotiations with the Production Contracts’ counterparties.
475. Moreover, the VSL Information in De Simone’s possession, including, upon information and belief, VSL’s confidential, proprietary or trade secret information, is necessary to the ongoing negotiations with the Production Contracts’ counterparties.
476. As a result of De Simone’s resignation, and the fact that De Simone was the sole employee of VSL at the time of his resignation, VSL has no other means by which to obtain the VSL
Information in De Simone’s possession.
477. Unless De Simone is ordered by this Court to promptly deliver the VSL Information to
VSL, VSL will suffer immediate, substantial, and irreparable harm, including the loss of current and future VSL customers.
478. For the reasons set forth herein, VSL requests that that the Court issue an injunction, on a preliminary and permanent basis, directing De Simone to:
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a. promptly deliver the VSL Information to VSL;
b. provide all information in their possession regarding VSL’s internet service provider, and to provide all information necessary to transition control of VSL’s internet account; and
c. ensure that no VSL Information is destroyed, by directing De Simone to provide to VSL an inventory of all computers, mobile devices, tablets, databases, CDs, DVDs, thumb drives and/or other external hard drives that may contain VSL Information and allowing VSL to coordinate the return of the VSL Information on such devices with all metadata intact.
479. Any remedies available at law, such as monetary damages, are inadequate to compensate
VSL for the loss of the VSL Information.
480. The equities support the relief requested, as the harm to VSL by not entering the injunction outweighs the harm to De Simone by entering the injunction.
481. Considering the balance of hardships between De Simone and VSL, a remedy in equity is warranted.
482. Granting the injunction is in the public interest as it in the public’s interest to preserve the status quo.
COUNT XXVI PRELIMINARY INJUNCTION FOR MANUFACTURE OF PRODUCT (De Simone and Danisco)
483. VSL restates and incorporates by reference its allegations in Paragraphs 1 through 481, as if fully set forth herein.
484. For the reasons set forth herein, VSL seeks immediate injunctive relief mandating that
Danisco be permitted to manufacture VSL#3 for the United States, China, and Canada, pending the outcome of this matter.
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485. As evidenced by the plain language of the contracts, De Simone’s actions, as well as a grant of similar relief by two European courts, a reasonable likelihood exists that VSL will be successful on the merits of this action.
486. Absent this injunction, VSL will suffer irreparable harm, as Danisco is currently the only manufacturer of VSL#3 in the world.
487. By permitting Danisco to manufacture VSL#3 for VSL for the United States, China, and
Canada, the Court will merely maintain the status quo.
488. Moreover, Danisco will not suffer any harm as Danisco will be entitled to again supply
VSL with VSL#3, through which it will profit.
489. Granting a preliminary injunction is in the public interest as it in the public’s interest to preserve the status quo and protect the sanctity of contracts.
COUNT XXVII PERMANENT INJUNCTION PRECLUDING DE SIMONE’S USE OF VSL#3 KNOW-HOW (De Simone)
490. VSL restates and incorporates by reference its allegations in Paragraphs 1 through 488, as if fully set forth herein.
491. For the reasons set forth herein, VSL seeks entry of a permanent injunction prohibiting from disclosing, licensing, providing access to or otherwise using the VSL#3 Know-How, including but not limited to use for the development, manufacture or sale of any probiotic products.
492. Absent this injunction, VSL will suffer irreparable harm.
493. Any remedies available at law, such as monetary damages, are inadequate to compensate
VSL for its injury.
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494. The equities support the relief requested, as the harm to VSL by not entering the
injunction outweighs the harm to De Simone by entering the injunction.
495. Considering the balance of hardships between De Simone and VSL, a remedy in equity is warranted.
COUNT XXVIII PRELIMINARY AND PERMANENT INJUNCTION FOR EXEGI’S TRADEMARK INFRINGEMENT (ExeGi)
496. VSL restates and incorporates by reference its allegations in Paragraphs 1 through 494, as if fully set forth herein.
497. For the reasons set forth herein, VSL seeks entry of a preliminary and permanent injunction preventing ExeGi from using the VSL#3 Trademarks or any other marks that are likely to cause confusion as to the source, sponsorship or affiliation of its products and services.
498. Absent this injunction, VSL will suffer irreparable harm to its business, trade, reputation, and goodwill as a result of the erroneous perception that ExeGi’s Visbiome product is affiliated with, sponsored by, approved by, or originates from VSL.
499. Any remedies available at law, such as monetary damages, are inadequate to compensate
VSL for its injury.
500. The equities support the relief requested, as the harm to VSL by not entering the injunction outweighs the harm to ExeGi by entering the injunction.
501. Considering the balance of hardships between ExeGi and VSL, a remedy in equity is warranted.
COUNT XIX PRELIMINARY AND PERMANENT INJUNCTION FOR EXEGI’S MISAPPROPRIATION OF VSL’S TRADE SECRETS
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(ExeGi)
502. VSL restates and incorporates by reference its allegations in Paragraphs 1 through 500, as
if fully set forth herein.
503. Unless ExeGi is enjoined from using the VSL#3 Know-How to launch a product that is directly competitive to VSL’s VSL#3 product, VSL will suffer immediate, substantial, and irreparable harm.
504. For the reasons set forth herein, VSL requests that that the Court issue an injunction, on a preliminary and permanent basis, directing ExeGi to:
a. cease marketing, selling or purchasing from Danisco, products that are manufactured
using or otherwise derived from the VSL#3 Know-How; and
b. cease use of and preserve and/or return VSL’s trade secrets, including the VSL#3
Know-How.
505. The equities support the relief requested, as the harm to VSL by not entering the injunction outweighs the harm to ExeGi by entering the injunction.
506. Considering the balance of hardships between ExeGi and VSL, a remedy in equity is warranted.
507. Granting the injunction is in the public interest as it in the public’s interest to preserve the status quo.
DEMAND FOR JURY TRIAL
VSL requests a trial by jury of all of the issues in this action.
REQUEST FOR RELIEF
WHEREFORE, VSL prays for the following relief:
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a. A declaration that:
i. all of the intellectual property and proprietary and confidential information related
to VSL#3 belongs to VSL and not De Simone;
ii. that any and all rights owned by De Simone, directly or through another person,
whether patent, trademark, copyright or otherwise, relating to any inventions
made by De Simone in the field of pharmaceutical nutritionals compositions and
active principles, whether for animal or human use, since VSL’s incorporation,
belong to VSL; and requiring De Simone to provide a list of all such inventions;
and
iii. that the 2008 Danisco Agreement, the 2014 Danisco Supply Agreement, the
Canadian Know-How Agreement, the January 2010 Know-How Agreement, and
the March 2010 Know-How Agreement are all invalid and unenforceable;
b. Judgment for VSL against De Simone for breach of fiduciary duty, conspiracy, fraud, tortious interference, usurpation of a business opportunity, breach of contract, unjust enrichment, and/or conversion, in an amount to be proved at trial, plus attorneys’ fees, interest, and/or punitive damages;
c. Judgment for VSL on its causes of action against De Simone, Mendes SA, ExeGi, and any agents thereof, for trademark infringement and unfair competition under 15 USC § 1114, 15 USC §
1125(a), Md. Code Ann., Bus. Reg. § 1-414, and Maryland common law;
d. Preliminary and permanent injunctive relief against De Simone, Mendes SA, ExeGi, and their officers, directors, agents and employees and all those in active concert or participation with De
Simone, Mendes SA, and/or ExeGi, including their manufacturers and distributors who receive actual notice of the judgment by personal service or otherwise, as follows:
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i. from further commercial use of the VSL#3 Trademarks or any marks confusingly
similar thereto, either alone or in combination with other words, names, or symbols,
on or in connection with the sale, offer for sale, or advertising of drug or
dietary/food supplement products and related goods and services;
ii. from performing or committing any other acts falsely representing De Simone’s,
Mendes SA’s, and/or ExeGi’s goods or services, or which are likely to cause
confusion or mistake in the mind of the purchasing public, or to lead purchasers or
the trade to believe that De Simone’s, Mendes SA’s, and/or ExeGi’s services or
products come from or are the services or products of VSL, or are somehow
sponsored by, associated with, affiliated with, or connected with VSL, or that there
is some relation, association, affiliation, or connection between VSL and De
Simone, Mendes SA or ExeGi;
iii. from passing off, or inducing or enabling others to sell or pass off, De Simone’s,
Mendes SA’s, ExeGi’s, and their third-party distributors’ and resellers’ products or
services as those of VSL; and
iv. from otherwise unfairly competing with VSL, and from any other acts which
discourage, dilute, or destroy the public’s recognition of the VSL#3 Trademarks.
e. That upon final judgment, if in favor of VSL, this Court issue a Writ to the United States
Marshall that directs the Marshall to seize and impound all of De Simone’s, Mendes SA’s, and ExeGi’s advertising materials used to infringe the VSL#3 Trademarks, and that all of these items be destroyed;
f. An award of actual, statutory, multiple, treble, exemplary, enhanced, and/or punitive damages, plus interest, and an accounting of and disgorgement of De Simone’s, Mendes SA’s, and
108 Case 8:15-cv-01356-PWG Document 9 Filed 06/03/15 Page 109 of 112
ExeGi’s profits, for their violations of 15 U.S.C. §§ 1114, 1125(a), Md. Code Ann., Bus. Reg. § 1-414
and the common law of unfair competition;
g. A declaration that the VSL3TOTAL Application and VSL3 BY DE SIMONE
Application are invalid and cancelled, and that neither De Simone nor Mendes SA have the right to
register the marks set forth therein;
h. An award of interest, including pre- and post-judgment interest, and costs of this action, together with VSL’s attorney’s fees;
i. An injunction, on a preliminary and permanent basis, directing De Simone to:
i. promptly deliver the VSL Information to VSL;
ii. promptly instruct that any of his agents, including his attorney Victor Balancia,
deliver any VSL Information and documents to VSL;
iii. provide all information in their possession regarding VSL’s internet service
provider, and to provide all information necessary to transition control of VSL’s
internet account; and
iv. ensure that no VSL Information is destroyed, by directing De Simone to provide
to VSL an inventory of all computers, mobile devices, tablets, databases, CDs,
DVDs, thumb drives and/or other external hard drives that may contain VSL
Information and allowing VSL to coordinate the return of the VSL Information on
such devices with all metadata intact;
j. Judgment for VSL against De Simone and ExeGi for misappropriation of trade secrets
under Md. Code Ann., Com. Law § 11–1201, and an award of damages, in an amount to be proved at
trial, plus exemplary damages and attorneys’ fees.
109 Case 8:15-cv-01356-PWG Document 9 Filed 06/03/15 Page 110 of 112
k. A preliminary injunction mandating that VSL be added to the list of companies for which
Danisco may manufacture VSL#3 for the United States, China, and Canada, pending the outcome of this
matter;
l. A preliminary and permanent injunction prohibiting ExeGi from disclosing, licensing,
providing access to or otherwise using the VSL#3 Know-How, including but not limited to use for the development, manufacture or sale of any probiotic products;
m. A permanent injunction prohibiting De Simone from disclosing, licensing, providing
access to or otherwise using the VSL#3 Know-How, including but not limited to use for the
development, manufacture or sale of any probiotic products; and
n. Such other and further relief as this Court deems just and proper.
VSL PHARMACEUTICALS, INC.,
By: ______/s/______Brian Cashmere, Esq. (USDC MD Bar No. 14170) ([email protected]) Williams Mullen, P.C. 8300 Greensboro Drive, Suite 1100 McLean, Virginia 22102 (703) 760-5200 (telephone) (703) 748-0244 (facsimile)
To be admitted pro hac vice: Douglas M. Nabhan, Esq. (VSB #24078) Turner A. Broughton, Esq. (VSB #42627) Harold E. Johnson, Esq. (VSB # 65591) Richard T. Matthews, Esq. (VSB # 71241) Andrew O. Mathews, Esq. (VSB #77068) Williams Mullen PO Box 1320 Richmond, VA 23218-1320 Telephone: (804) 420-6000
110 Case 8:15-cv-01356-PWG Document 9 Filed 06/03/15 Page 111 of 112
Facsimile: (804) 420-6507 [email protected] [email protected] [email protected] [email protected] [email protected] Counsel for VSL Pharmaceuticals, Inc.
111 Case 8:15-cv-01356-PWG Document 9 Filed 06/03/15 Page 112 of 112
CERTIFICATE
I hereby acknowledge that on this 3rd day of June, 2015, I caused a copy of the foregoing
Answer to be filed with the Electronic Case Filing system of the District of Maryland, which will provide electronic notice to the following parties:
Jeremy W. Schulman Alexander C. Vincent 12505 Park Potomac Ave., 6th Floor Potomac, Maryland 20854 Telephone: 301-230-5200 Facsimile: 301-230-2891 [email protected] [email protected] Counsel for Plaintiff
By: /s/ Brian Cashmere, Esq. (USDC MD Bar No. 14170) ([email protected]) Williams Mullen, P.C. 8300 Greensboro Drive, Suite 1100 McLean, Virginia 22102 (703) 760-5200 (telephone) (703) 748-0244 (facsimile)
28234975_7.doc
112 IN THE UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
Mendes SA ) Cancellation No. 92060709 ) ) Reg. No. 2653253 Petitioner ) Mark: VSL#3 ) Reg. No. 3093502 v. ) Mark: VSL ) Reg. No. 3275673 VSL Pharmaceuticals, Inc. ) Mark: VSL#-DS ) Respondent )
PETITIONER’S MOTION TO SUSPEND PROCEEDING IN VIEW OF PENDING CIVIL ACTION
Exhibit B Case 8:15-cv-01356-TDC Document 13 Filed 06/03/15 Page 1 of 2 Case 8:15-cv-01356-TDC Document 13 Filed 06/03/15 Page 2 of 2