Trademark Trial and Appeal Board Electronic Filing System. http://estta.uspto.gov ESTTA Tracking number: ESTTA964842 Filing date: 04/04/2019
IN THE UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD Proceeding 92070684 Party Defendant Millennium Dental Technologies, Inc. Correspondence MILLENNIUM DENTAL TECHNOLOGIES INC Address 10945 SOUTH STREET SUITE 306 CERRITOS, CA 90703 UNITED STATES [email protected] 949-752-8585
Submission Motion to Suspend for Civil Action Filer's Name Patrick J. Jennings Filer's email [email protected] Signature /Pat Jennings/ Date 04/04/2019 Attachments Lanap Motion to Suspend Cancellation Based on Civil Matter.pdf(145391 bytes ) Lanap Exhibits.pdf(1219411 bytes )
IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE TRADEMARK TRIAL & APPEAL BOARD
FOTONA LLC, Petitioner, v. Reg. No. 3898378 Cancellation No. 92070684
MILLENNIUM DENTAL TECHNOLOGIES, INC. Registrant.
MOTION TO SUSPEND FOR CIVIL ACTION
In accordance with 37 C.F.R. § 2.117 and T.B.M.P. §510.02(a), and by and through its
undersigned counsel, Registrant Millennium Dental Technologies, Inc. (“Millennium”)
respectfully requests that the Trademark Trial and Appeal Board (“TTAB”) suspend this
cancellation because Millennium and Petitioner Fotona, LLC (“Fotona”) are currently involved
in a federal district court case, Millennium Dental Technologies, Inc. v. Fotona, LLC., Case No.
8:18-cv-00348, that is currently pending in the United States District Court for the Central
District of California and would have a bearing on this cancellation.
In the federal district court case, Millennium has alleged, inter alia, the misappropriation of its registered trademark, LANAP, and Fotona has answered the allegations averring that the registration of the LANAP trademark was improperly allowed. A copy of Millennium’s Third
Amended Complaint is attached as Exhibit 1. A copy of Fotona’s Answer to the Third Amended
Complaint is attached as Exhibit 2. In the cancellation, Fotona has alleged the Millennium’s
LANAP mark is generic.
Millennium requests the suspension of the cancellation because the outcome of the civil
action between the parties will have a bearing on this cancellation and because of the TTAB’s
policy to suspend cases in favor of civil actions. See, T.B.M.P. §510.02(a) and B&B Hardware,
Inc. v. Hargis Industries, Inc., 135 U.S. 1293, 135 (2015). The civil action will necessarily address the genericness claim Fotona has raised in the cancellation because that issue is intertwined with Fotona’s claim that the LANAP trademark was improperly issued. The civil action is scheduled for trial to begin on May 8, 2019. Thus, the outcome of the civil action would resolve the genericness issue raised in the cancellation before the TTAB would decide that issue.
WHEREFORE, Millennium requests that this cancellation be suspended pending the final determination of the above referenced civil action.
Dated: April 4, 2019 Respectfully submitted,
/Pat Jennings/ Patrick Jennings Kecia J. Reynolds Pillsbury Winthrop Shaw Pittman LLP 1200 Seventeenth Street, NW Washington, DC 20036 (202) 663-8000
Counsel for Millennium Dental Technologies, Inc.
CERTIFICATE OF SERVICE
I hereby certify that a true and complete copy of the foregoing Motion to Suspend for Civil Action has been served on Steven P. Hollman of Sheppard Mullin Richter & Hampton LLP by forwarding said copy on April 4, 2019, via email, to [email protected].
Exhibit 1 Case 8:18-cv-00348-DOC-KES Document 23 Filed 04/13/18 Page 1 of 35 Page ID #:379
1 WAYNE R. GROSS, State Bar No. 138828 [email protected] 2 EVAN C. BORGES, State Bar No. 128706 [email protected] 3 JOSHUA M. ROBBINS, State Bar No. 270553 [email protected] 4 GREENBERG GROSS LLP 650 Town Center Drive, Suite 1700 5 Costa Mesa, California 92626 Telephone: (949) 383-2800 6 Facsimile: (949) 383-2801
7 Attorneys for Plaintiff Millennium Dental Technologies, Inc. 8 9 UNITED STATES DISTRICT COURT 10 CENTRAL DISTRICT OF CALIFORNIA, SOUTHERN DIVISION 11 12 MILLENNIUM DENTAL Case No. 8:18-cv-00348-DOC-KES TECHNOLOGIES, INC., a California 13 Corporation, THIRD AMENDED COMPLAINT FOR: 14 Plaintiff, (1) VIOLATION OF THE 15 v. LANHAM ACT (15 U.S.C. § 1125(a)); 16 DR. ALLEN SCOTT TERRY, D.D.S., (2) UNFAIR COMPETITION an individual; FOTONA, LLC, a (California Business and 17 Wyoming Limited Liability Company; Professions Code § 17500); and DOES 1 through 10, inclusive, (3) UNFAIR COMPETITION 18 (California Business and Defendants. Professions Code § 17200); 19 (4) BREACH OF CONTRACT (License Agreement); and 20 (5)TORTIOUS INTERFERENCE WITH 21 CONTRACTUAL RELATIONS 22 Assigned for All Purposes to Hon. 23 David O. Carter
24
25
26
27 28
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1 Plaintiff Millennium Dental Technologies, Inc., a California corporation 2 (hereinafter “Millennium” or “MDT”) brings its complaint and alleges as follows: 3 NATURE OF ACTION 4 1. This is a civil action for violation of the Lanham Act, 15 U.S.C. § 1125 5 (a) and (c), violations of California Unfair Competition Law (Cal. Bus. & Prof. 6 Code §§ 17200 and 17500), breach of contract, and tortious interference with 7 contractual relations. 8 2. In 1991, Dr. Robert H. Gregg II, D.D.S. (“Dr. Gregg”) pioneered a new 9 periodontal treatment procedure that would prove to revolutionize the treatment of 10 moderate to severe periodontal (gum) disease. Advanced cases of periodontal 11 disease are extremely challenging, and often are treated with multiple tooth 12 extractions. Prior to Dr. Gregg’s invention, severe gum disease could only be 13 treated by periodontists who utilized complicated and painful periodontal surgery. 14 His first-of-its-kind procedure entailed the development of a dental laser—the 15 PerioLase® MVP-7™ (“PerioLase®”)—optimally designed to specifically support 16 his novel treatment protocol, which saves teeth from unnecessary extraction 17 surgeries. With this new proprietary procedure, properly trained dentists as well as 18 periodontists could utilize the PerioLase® to treat the most severe cases of gum 19 disease—giving hope to despairing periodontal patients. Dr. Gregg’s procedure 20 enabled properly trained dentists as well as periodontists to reverse and regenerate 21 inflamed, infected, and contagious diseased tissue in a much less painful, and more 22 successful, manner through a laser procedure referred to as the LANAP® Protocol, 23 a registered trademark of MDT. 24 3. Dr. Gregg, through MDT, the company he founded, spent decades and 25 several million dollars to invent and refine the LANAP® Protocol. 26 4. MDT has funded research, which has produced scientific evidence 27 showing that the LANAP® Protocol is the “Holy Grail” of periodontal wound 28
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1 healing—true periodontal regeneration.1 By definition, successful periodontal 2 regeneration implies the simultaneous regeneration of the alveolar bone, periodontal 3 ligament, and new cementum, because the periodontium functions as a unit. 4 5. Since its invention, the proprietary LANAP® Protocol and the 5 PerioLase® laser have been adopted by two branches of the U.S. military (Army 6 and Navy), eleven Veterans Administration (“VA”) hospitals, and numerous 7 prestigious educational institutions, including the University of California, San 8 Francisco, Rutgers School of Dental Medicine, University of Kentucky College of 9 Dentistry, University of Minnesota, and Columbia. 10 6. To ensure patient safety, MDT mandates that all customers that 11 purchase its PerioLase® Periodontal Package (“PPP”)—which includes a license for 12 the LANAP® Protocol, the PerioLase®, and a LANAP® Piezo periodontal scaler— 13 undergo its intensive proprietary training, which is unlike anything else offered in 14 the industry. MDT also has invested heavily in advanced clinical and histological2 15 research and is committed to improving treatment for periodontal disease, always 16 abiding by its company mission statement of “The Patient Comes First.” 17 7. Because of its research, intensive training, and patient-centered 18 philosophy, MDT and its LANAP® trademark are known and respected worldwide 19 in the field of laser periodontal treatment. Indeed, as the pioneer and steward of the 20 21
22 1 This evidence has been published in prestigious, peer-reviewed periodontal journals. See, e.g., Marc L. Nevins, et al., Human Clinical and Histological 23 Evaluation of Laser-Assisted New Attachment Procedure, 32 INT’L J. OF PERIODONTICS & RESTORATIVE DENTISTRY 497 (2012) (LANAP treatment produced 24 evidence of “periodontal regeneration with new cementum, periodontal ligament, and alveolar bone.”); Gerald M. Kramer, Surgical Alternatives in Regenerative 25 Therapy of the Periodontium, 12 INT’L J. OF PERIODONTICS & RESTORATIVE DENTISTRY 10, 11 (1992) (professing that the “Holy Grail of periodontics” is “the 26 restoration of the destroyed periodontium by new cementum, periodontal ligament, and bone, as well as their recreation in normal anatomic relationships and 27 function.”). 2 28 Histology is the study of the microscopic structures of tissues.
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1 revolutionary technology it developed, MDT and LANAP® are regarded as the 2 world leader in the field of laser periodontal therapy. 3 8. LANAP® is a registered trademark of MDT, and is backed by a 4 proprietary training program and process that Fotona cannot legally replicate. Nor 5 can the LANAP® Protocol be performed properly on a Fotona laser, due to, among 6 other things, differences in the lasers’ optical fiber diameters, specific operating 7 parameters, and energy settings, which are verified and standardized by an external 8 power meter. To practitioners in the field, LANAP® also stands for MDT’s unique 9 commitment to patient safety, intensive live-patient training program, guaranteed 10 clinical outcomes, and the high quality of services MDT provides after a dentist 11 purchases a PerioLase® Periodontal Package. 12 9. Defendant Fotona, LLC (“Fotona”) is a Wyoming-based LLC that 13 imports lasers manufactured in Slovenia by Fotona d.d.o., a former state-owned 14 defense industry company in the former Yugoslavia that is a subsidiary of a billion 15 dollar, China-based private equity fund. Unlike MDT, which is a specialist in the 16 periodontal field, Fotona makes everything from lasers for tattoo removal to a laser 17 system used in the modernization of Soviet-era tanks. 18 10. Despite the advantage of being a subsidiary of a multinational 19 conglomerate, rather than compete fairly with MDT, Fotona has engaged in a series 20 of false and misleading statements to the marketplace which, by falsely comparing 21 Fotona’s product to LANAP®, are wholly inaccurate, constitute unfair competition, 22 and seek to unfairly and unlawfully pass off Fotona’s inferior products and services 23 as equivalent to those of MDT. 24 11. Among other false and misleading statements, many of which are 25 detailed below, Fotona has represented to potential customers that it can perform the 26 same treatment and attain the same clinical outcomes as LANAP®, which is false. 27 12. In addition, Fotona conspired with a South Dakota-based dentist named 28 Dr. A. Scott Terry (“Terry”), who is also a defendant in this case, to make false and
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1 misleading statements to the marketplace and compete unfairly against MDT. In 2 April 2014, September 2014, and March 2015, Terry completed the intensive 3 LANAP® training with MDT. At the time he began his LANAP® training, Terry 4 admitted he had no experience whatsoever with laser dentistry, stating in writing 5 that “I have never used laser before.” 6 13. Before Terry was permitted to attend the LANAP® training or access 7 the LANAP® training materials, MDT required that Terry sign agreements 8 prohibiting him from, among other things, using any MDT advertising materials or 9 trademarks, conducting research involving the LANAP® Protocol except with the 10 prior written consent of MDT, or teaching the LANAP® Protocol. In signing these 11 agreements, Terry specifically acknowledged and agreed that “the LANAP® 12 Training . . . is confidential and proprietary in nature.” 13 14. Unbeknownst to MDT, Terry was later discovered to be affiliated with 14 Fotona. Among other things, in June 2015 (shortly after completing his MDT 15 training), Terry applied to give a thinly-veiled marketing presentation for Fotona at 16 the Academy of Laser Dentistry (“ALD”). Terry coordinated with Fotona regarding 17 the content of his presentation. Unfortunately for Terry and Fotona, his presentation 18 was tape recorded by ALD and subsequently discovered by MDT. 19 15. Analysis of Terry’s presentation revealed that Terry falsely claimed to 20 have developed a “new” surgical procedure that could achieve the same or better 21 results as LANAP®. Terry’s “new” surgical protocol was adopted by Fotona as an 22 official protocol to be used with Fotona’s laser, which is known as the LightWalker. 23 16. In fact, Terry’s procedure was far from new. Terry’s presentation 24 described in detail a number of the steps in the LANAP® procedure. Despite 25 superficial alterations, Terry’s “new” presentation was nothing more than the 26 passing off of the LANAP® process that had been created years earlier by Dr. 27 Gregg. To make matters worse, Terry’s presentation unlawfully disclosed at least 28 one aspect of the LANAP® training program that is a proprietary trade secret.
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1 17. Terry’s presentation and the “research” he supposedly conducted 2 regarding the LANAP® Protocol violated his agreements with MDT. 3 18. As a result of the misconduct, misrepresentations, and unfair business 4 practices of Fotona and Terry, MDT has suffered damages in the form of lost sales, 5 the devaluation of its confidential and proprietary materials and training course 6 based on their unauthorized disclosure, loss of market share, loss of goodwill and 7 trademark dilution. 8 JURISDICTION AND VENUE 9 19. This action was filed in Orange County Superior Court on October 11, 10 2016. Defendants Fotona and Terry filed a demurrer to the First Amended 11 Complaint on or about February 3, 2017. On March 16, 2017, the demurrer was 12 overruled in its entirety. 13 20. On February 9, 2018, MDT amended its First Amended Complaint, and 14 added a cause of action under the Lanham Act. Defendants then removed this 15 action to this Court on March 1, 2018. 16 21. This Court has federal question jurisdiction over the subject matter of 17 this action pursuant to 15 U.S.C. § 1331, because this action arises, in part, under 18 the Lanham Act, 15 U.S.C. § 1125. The Court has supplemental jurisdiction over 19 the state court claims pursuant to 28 U.S.C. § 1367, given that all the claims form 20 part of the same case or controversy under Article III of the United States 21 Constitution. 22 22. Venue is proper in this judicial district under 28 U.S.C. § 1391(b) and 23 (d), as a substantial part of the events giving rise to the claims occurred in this 24 district. 25 23. Defendant Terry consented to jurisdiction and venue in Orange County, 26 California in the License Agreements attached hereto and discussed below. 27 28
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1 PARTIES 2 24. Plaintiff MDT is a California corporation with its principal place of 3 business located in the City of Cerritos, County of Los Angeles, California. 4 25. Defendant Terry is an individual, who, on information and belief, 5 resides in the City of Sioux Falls, County of Minnehaha, South Dakota. 6 26. Defendant Fotona is a Wyoming Limited Liability Company with 7 offices in Texas and San Clemente, California. 8 27. Plaintiff is informed and believes, and based thereon alleges, that each 9 of the Defendants designated herein is, and at all material times has been, the agent, 10 employee, co-owner, servant, partner, fiduciary and representative of the remaining 11 Defendants and in that capacity is liable to Plaintiff as set forth herein. 12 28. Plaintiff is informed and believes, and based thereon alleges, that each 13 of the Defendants conspired with each other to commit the acts herein alleged for 14 their individual and collective benefit. 15 FACTUAL ALLEGATIONS 16 I. Dr. Robert Gregg Invents Revolutionary Technology that Vastly 17 Improves the Patient Experience and Clinical Outcomes for the 18 Treatment of Periodontal Disease. 19 29. Almost fifty percent of Americans have “have mild, moderate or severe 20 periodontitis, the more advanced form of periodontal disease.”3 For adults age 65 21 and older, rates increase to 70.1 percent.4 Periodontitis is not just a disease of the 22 23 24 25 3 American Academy of Periodontology, CDC: Half of American Adults Have 26 Periodontal Disease, https://www.perio.org/consumer/cdc-study.htm (last visited 27 April 9, 2018). 4 28 Ibid.
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1 mouth. It may also “be linked with respiratory disease, rheumatoid arthritis, 2 coronary artery disease or stroke.”5 3 30. Traditional treatment for periodontitis involves painful surgery that 4 patients dread and often avoid altogether. The President and co-founder of MDT, 5 Dr. Gregg, embarked on over two decades of research and work—including use of 6 clinical case studies, other scientific evidence, and university-based National 7 Institutes of Health research—designed to demonstrate to the dental profession a 8 less painful and superior treatment for periodontitis employing a specific and 9 optimized laser technology and proprietary surgical process and treatment protocol. 10 31. Dr. Gregg is a former faculty member at the UCLA School of 11 Dentistry, a current Adjunct Associate Professor in the Department of Periodontics 12 at the Rutgers School of Dental Medicine, and a practicing dentist. In the 1980s, Dr. 13 Gregg began research into the application of laser technologies to the field of 14 dentistry. In 1991, Dr. Gregg invented Laser Excision New Attachment Procedure 15 (“LENAP”), a process for surgically treating periodontal disease via regeneration. 16 32. Dr. Gregg founded MDT in 1996 to advance the research and 17 acceptance of the protocol using an optimized laser device and the training program 18 he had developed. Throughout the years, MDT has continued to support an 19 ambitious research agenda for laser treatment of periodontal disease. 20 II. MDT and Its LANAP® Brand Are the World Leader in the Field of 21 Laser Periodontal Treatment. 22 33. MDT has spent millions of dollars developing and refining its unique 23 and innovative clinical process and protocol for treating periodontal disease. 24 25 5 26 Mayo Clinic, Periodontitis, https://www.mayoclinic.org/diseases- conditions/periodontitis/symptoms-causes/syc-20354473 (last visited April 9, 2018). 27 In addition, the literature supports the existence of a direct causal link between 28 periodontitis and preterm and low birthweight babies.
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1 34. Although MDT has been and remains the world leader in the field of 2 laser periodontics, it is a small, family run company. MDT continues to operate out 3 of the same medical-dental office complex in Cerritos, California, where Dr. Gregg 4 maintains his private dental practice and sees patients on a regular basis. 5 35. In 1996, MDT applied for, and in 1997, the U.S. Patent Office, 6 recognizing MDT’s pioneering efforts, issued a patent to MDT for LENAP.6 The 7 patent partially disclosed MDT’s proprietary LANAP® Protocol. However, other 8 portions of MDT’s LANAP® Protocol and training program have continued to be 9 developed, refined, and protected as trade secrets. Still other aspects of the 10 LANAP® Protocol will be granted protection under U.S. Patent No. 9,943,379, 11 which is expected to issue on April 17, 2018. 12 36. Continuing through the present day, MDT is the leader in supporting 13 research and development in the field of laser periodontal therapy. For example, in 14 2001, MDT received its first clearance from the FDA to market its PerioLase® for 15 laser curettage (removal of diseased or inflamed soft tissue in the periodontal 16 pocket) and the removal of dental caries, which are commonly known as “cavities.” 17 37. From 1998 through 2017, MDT funded a series of significant studies, 18 including but not limited to two human histology studies and a prospective 19 randomized, blinded, multicenter, university-based clinical study, laying the 20 groundwork for the wide-scale adoption of laser periodontal therapy.7 In 2004, Dr. 21 Raymond Yukna published a histological study supporting the efficacy of 22 Millennium’s periodontal protocol, which study laid the groundwork for the FDA’s 23
24 6 MDT’s patent (No. 5,642,997) was issued on July 1, 1997, and expired on 25 February 1, 2016. 7 26 See, e.g., Institute for Advanced Laser Dentistry, Study to Compare Laser Assisted New Attachment Procedure (LANAP) to Traditional Treatments of Chronic 27 Periodontitis (LANAP) (2015), available at https://clinicaltrials.gov/ct2/show/ 28 NCT01282229?term=LANAP&rank=2) (last visited April 13, 2018).
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1 clearance of Millennium’s “laser-assisted new attachment procedure,” also in 2004. 2 In 2016, MDT received the first-ever FDA clearance for laser tissue regeneration 3 (“True Regeneration™”) by demonstrating that tissues8 lost to periodontal disease 4 can be fully and truly regenerated using MDT’s revolutionary technology and 5 clinical methods.9 6 38. MDT’s core philosophy centers around patient welfare. MDT requires 7 licensed purchasers of its PerioLase® Periodontal Package to undergo and complete 8 a proprietary, confidential training course, involving five stages (termed 9 “Evolutions”) over five days, which instruct dentists in detail regarding how to 10 effectively and safely perform the LANAP® Protocol in a variety of different 11 contexts and tissue conditions, to optimize the healing response based on the 12 particular demands that individual patient tissues present.10 MDT will not deliver its 13 laser until the purchaser has completed an intensive three-day Laser BootCamp™, 14 which consists of Evolutions One, Two, and Three, and which includes extensive 15 didactic, and live-patient, hands-on clinical training by the attendees. MDT will 16 only sell its training program separately from the purchase of an MDT laser if the 17 training is for an associate in a dental office that already uses an MDT laser. This is 18 because the LANAP® Protocol cannot be properly performed using any other laser 19 currently on the market. 20 39. A purchase of a laser from MDT also provides access to nearly 1,000 21 pages of instructional materials, which have been carefully compiled, annotated, and 22 8 By definition, successful periodontal regeneration implies the simultaneous 23 regeneration of the alveolar bone, periodontal ligament, and new cementum, 24 because the periodontium functions as a unit. 9 25 This clearance came as a result of a second human histology study conducted by Dr. Mark Nevins. Supra note 1. 26 10 Further, MDT’s training program offers five clinical mentors to each 27 attendee by the end of their training program, consisting of three certified 28 instructors, Dr. Dawn Gregg (Training Director), and Dr. Gregg (Program Director).
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1 curated to ensure that MDT’s customers know how to perform its clinical program 2 to achieve successful treatment outcomes for patients. MDT’s training program is 3 confidential and cannot be accessed unless the purchaser (licensed dentists and 4 periodontists) agrees to sign a non-disclosure agreement. MDT’s confidential and 5 proprietary training program is an important source of its competitive advantage, 6 differentiating MDT from its competitors, including Fotona. 7 40. MDT estimates that over 2,200 dentists and approximately one-third of 8 active members of the American Academy of Periodontology (“AAP”) have been 9 trained in LANAP® by MDT, including half of the AAP Trustees and 75 percent of 10 the AAP Executive Board. 11 41. MDT and its LANAP® brand have developed a well-deserved 12 reputation for being by far the superior choice for laser periodontal treatment 13 because of MDT’s (1) unique business model emphasizing patient safety and 14 wellbeing; (2) guaranteed clinical outcomes documented by scientific research; (3) 15 extensive research and development; (4) an accredited,11 robust and proprietary live- 16 patient training program unlike anything offered in the field; (5) high-quality 17 service, support, and customer satisfaction; and (6) its unique, optimized, and 18 specialized PerioLase® laser, which MDT developed exclusively for LANAP® 19 periodontal treatment. 20 III. Fotona Engages in False and Misleading Advertising, Harming MDT’s 21 Revenues and Reputation. 22 42. Knowing that it cannot fairly compete with MDT’s vastly superior 23 package of products and services, Fotona has sought to unfairly compete with MDT 24 by unlawfully piggybacking on MDT’s extensive innovations, intellectual property, 25 research and development, and the goodwill MDT has acquired at great expense.
26 11 MDT’s patient training program is accredited by both the American Dental 27 Association and the Academy of General Dentistry for their continuing education 28 programs.
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1 Specifically, Fotona has sought to pass itself off as “equivalent” or “superior” to 2 MDT, and has made numerous claims about MDT and MDT’s products and services 3 which are false and/or misleading. 4 43. Fotona also has targeted existing MDT customers and disseminated 5 false and misleading advertising and marketing statements in an effort to encourage 6 MDT customers to switch from using MDT’s lasers, protocols, and services to 7 Fotona’s. Defendants also have directed false and misleading advertising and 8 marketing to customers and potential customers of MDT at trade shows, on Fotona’s 9 websites, through mass emails, and through other media. Many of these statements 10 are in the form of false and/or misleading comparative advertising, as discussed 11 below. 12 A. Fotona Sends a Mass Email to Current and Potential MDT 13 Customers, Which Contains Numerous False and Misleading 14 Statements. 15 44. On or about September 3, 2015, Scott Kennedy (“Kennedy”), a 16 salesperson for Fotona, submitted a draft email conveying various false and 17 misleading side-by-side comparisons between MDT’s and Fotona’s respective 18 products and processes. (Exhibit A.) This email, which contained false and 19 misleading information, was sent to Keith Bateman, Executive Vice President at 20 Fotona, for his review and comment. The email was subsequently edited, approved, 21 given the caption “Lightwalker ATS Dual Perio Laser vs. Periolase.” 22 45. On September 23, 2015, Fotona caused the revised email (the 23 “Kennedy Email”) to be circulated to approximately 900 dentists and 24 periodontists—including Dr. Travis Mize and Dr. Mark Khaimov, both MDT 25 customers. The email, as approved by Fotona and disseminated to the marketplace, 26 contained multiple false and/or misleading representations. For example, the email 27 included the following table, which purported to compare MDT, LANAP®, and the 28 PerioLase® laser to Fotona and its inferior LightWalker laser:
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 46. The above table contains at least the following false and misleading 17 information: 18 Fotona’s Representation False and/or Misleading Because 19 MDT’s then-current price for its In fact, at the time Fotona distributed 20 PerioLase® laser was “~$125,000.” the above-referenced email, the 21 standard retail price for MDT’s 22 PerioLase® laser was $109,995. 23 Moreover, this continued to be the 24 standard retail price of the 25 PerioLase® until approximately 26 March 2016. 27 The Lightwalker employs “3 Pulse In fact, LANAP® practitioners are 28
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1 Durations for WPT”12 and the taught to use 7 pulse durations. 2 PerioLase® also employs “3 pulse Moreover, the statement is false and 3 durations for LANAP.” misleading because the MDT and 4 Fotona lasers use different optical 5 fiber diameters for their therapeutic 6 light-energy emissions. Thus, the 7 MDT laser differs significantly from 8 the Fotona laser, even when the 9 same power, Hertz (pulses per 10 second), and pulse characteristics are 11 used.13 12 Fotona admits that it does not In fact, after the first day of 13 provide a guarantee for clinical LANAP® treatment, results are 14 results, but attempts to undermine observable, including the presence 15 MDT’s six-month guarantee by of a stable fibrin clot, which 16 falsely claiming that it “takes 9 indicates that healing has begun. 17 month[s] to see results and must MDT has an extensive library of 18 prove it did not work.” patients at the six-month post- 19 20 12 “WPT” is one of several periodontal “protocols” that Fotona advertises for 21 use with its LightWalker laser. 22 13 The Fotona and MDT lasers disperse laser energy via a substantially 23 different optical fiber. The diameter of the optical fiber is important because a smaller diameter fiber produces a more concentrated, energy-dense beam, resulting 24 in different (and potentially more dangerous) effects on teeth and soft tissues. By 25 way of analogy, poking a patient with a needle, as opposed to a rod, with the same amount of force will produce different effects. MDT calculates that its 360 µm fiber 26 spreads energy over an area which is 27% larger than the area affected by a 320 µm 27 Fotona fiber. 28
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1 treatment stage, which document 2 highly significant clinical results. 3 These sixth-month results can be 4 compared to the results the customer 5 obtains at the six-month mark. 6 MDT customers need only show that 7 their sixth-month results do not meet 8 those that can be expected at the six- 9 month mark in order to begin 10 MDT’s guarantee process. 11 The LightWalker includes “7 Days Upon information and belief, 12 of Training,” whereas the Fotona’s LightWalker only included 13 PerioLase® includes “6 Days of a single day of training on 14 Training.” periodontal procedures. 15 16 47. The Kennedy Email contained additional false and misleading 17 statements. For instance, the Kennedy Email represented that Fotona’s LightWalker 18 is capable of “separating connective tissue through photobiomodulation.” No 19 evidence exists, however, that “photobiomodulation” plays any role in separating 20 periodontal tissue. 21 48. A purported testimonial in the Kennedy Email also represented that 22 Fotona’s “ER:YAG [laser] is used at least 5-to-1 more often [than MDT’s Nd:YAG 23 laser], if not more” by practicing periodontists. This statement is false and 24 misleading. The ER:YAG laser is a generalist tool that is, in most cases, 25 functionally equivalent to traditional, non-laser dental tools. In contrast, the 26 Nd:YAG laser is a specialized laser with specific application to the periodontal 27 field. 28
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1 49. The widely-circulated Kennedy Email contains additional false and 2 misleading comparison charts, which broadly misstate the processes and steps 3 involved with MDT’s LANAP® and a related procedure called LAPIP™ that is 4 used for treatment of peri-implantitis, a destructive inflammatory process that can 5 occur around dental implants. 6 50. The Kennedy Email also includes the following additional table: 7 8 9 10 11 12 13 14 15 16 (Highlights added.) 17 51. Under Step 2, the Kennedy Email falsely stated that the Piezo scaler 18 was “sold [s]eparately.” In fact, at the time the Kennedy Email was distributed, and 19 as a matter of practice, the Piezo scaler was and is included with the initial purchase 20 of the PerioLase® Periodontal Package. 21 52. Under Step 3 in the above table, the Kennedy Email falsely and 22 misleadingly includes the abbreviation “N/A” under the column for the PerioLase® 23 with respect to “[r]emoval [of] [s]mear [l]ayer.” In fact, the PerioLase® is entirely 24 capable of removing smear layer, supported by decades of clinical use and 25 numerous research studies. 26 53. Under Step 4 in the above table, the Kennedy Email falsely and 27 misleadingly includes the abbreviation “N/A” under the column for the PerioLase® 28 with respect to “[p]ocket [d]isinfection.” In fact, the PerioLase® and the LANAP®
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1 Protocol is particularly well-suited to the performance of pocket disinfection, which 2 is documented with multiple studies published in the literature. 3 54. Under Step 5 in the above table, the Kennedy Email also falsely states 4 “N/A” under the column for the PerioLase® with respect to “Bone Recontouring.” 5 In fact, MDT’s LANAP® Protocol prescribes bone recontouring by using the 6 PerioLase® Periodontal Package accessory known as the LANAP® Piezo scaler. 7 55. Under Step 6 in the above table, the Kennedy Email falsely and/or 8 misleadingly refers to the PerioLase® as achieving only the result allegedly 9 obtainable with the Lightwalker called “Coagulation.” In fact, the PerioLase® and 10 LANAP® Protocol go far beyond coagulation, which is the mere accumulation of 11 dead or necrotic tissue. Specifically, with the PerioLase® and LANAP® Protocol, a 12 dentist can achieve hemostasis or a stable fibrin clot of vital living tissue, which is 13 essential to healing as well as tissue regeneration, results for which only MDT has 14 histological studies to support its clinical outcome claims. 15 56. The Kennedy Email also includes the following table: 16 17 18 19 20 21 22 23 24 25 (Highlights added.) 26 57. At Step 1 in the above table, Fotona falsely and/or misleadingly claims 27 that, when using the PerioLase®, the dentist “[m]ust keep [the] laser pointed away 28 from [the] implant to avoid arching.” In fact, under MDT’s LAPIP™ Protocol, the
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1 laser energy is directed parallel to the implant surface but still affects the implant for 2 sterilization due to the angulation of energy exiting the fiber and the scattering and 3 ricocheting effect of the photons. Moreover, Step 1 misleadingly implies that the 4 removal of granulation tissue is desirable. 5 58. At Step 2 in the above table, the Kennedy Email falsely includes the 6 abbreviation “N/A” under the column for the PerioLase®. In truth, the PerioLase® 7 can perform the “[r]emoval of [b]acterial [b]iofilm” on an implant.14 8 59. Finally, the Kennedy Email contains the following false and misleading 9 comparison chart: 10 11 12 13 14 15 16 17 18 19 20 21 (Highlights added.) 22 60. Again, the widely-disseminated Kennedy Email contains false and 23 misleading information. The PerioLase® is entirely capable of “[f]lapless [c]rown 24 25 14 26 See Marco Giannelli, et al., In Vitro Evaluation of the Effects of Low- Intensity Nd:YAG Laser Irradiation on the Inflammatory Reaction Elicited by 27 Bacterial Lipopolysaccharide Adherent to Titanium Dental Implants, 80 J. 28 PERIODONTOL 977 (2009).
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1 [l]engthening,” “[b]one [d]econtamination,” “[e]xtraction [of] socket debridement,” 2 and “[r]emoval of epithelium from recipient gingival graft sites.” 3 61. Importantly, the Kennedy Email was part of a larger pattern of Fotona 4 competing unfairly in the marketplace. On the same date as the Kennedy Email, 5 September 23, 2015, Fotona also entered into a sales commission and compensation 6 agreement with Dr. Terry, who, as elaborated in section III.B below, had been in 7 active communication with Fotona earlier that year about promoting Fotona lasers 8 while in the midst of his confidential training with MDT. 9 B. Fotona Widely Disseminates False and Misleading Information at 10 Critically Important Trade Shows. 11 62. Not content to smear MDT in targeted mass email solicitations, Fotona 12 also has widely disseminated false and misleading information about MDT, 13 LANAP®, and the PerioLase® at critically important trade shows. Trade shows are 14 widely attended by dentists and periodontists who are considering the purchase of a 15 laser for periodontal treatment. Trade shows also make up a very significant portion 16 of MDT’s total sales. 17 63. The Northeastern Society of Periodontists (“NESP”) is a society 18 dedicated to promoting the field of periodontics in the states of Maine, 19 Massachusetts, Vermont, Rhode Island, New Hampshire, Connecticut, New York, 20 New Jersey, Pennsylvania, Maryland and Delaware. At the October 2015 and 2016 21 NESP trade shows, Fotona sales representatives informed dentists stopping by their 22 booth that their laser could perform LANAP®, which was and is false. Fotona 23 warned potential customers that, although its laser could perform LANAP®, the 24 dentists using their laser could not say they were “doing LANAP®.” Fotona 25 repeated these false and misleading statements at other trade shows, including the 26 November 2016 Greater New York Dental Meeting at which MDT’s customer Dr. 27 Shalom Mintz, among other doctors, was targeted by Fotona’s misrepresentations. 28
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1 64. Fotona representatives also falsely told customers, including Dr. Mintz, 2 that the Fotona LightWalker’s 320µm laser fiber was the same diameter as the fiber 3 used during the LANAP® Protocol. In reality, LANAP® is typically performed 4 using a specially-calibrated optical fiber with a therapeutic emission diameter of 5 360µm. 6 65. On information and belief, in or about February 2016, Fotona 7 representatives at a trade show told a Canadian dentist named Dr. Grant, who had 8 already signed a purchase order for a PerioLase®, that Fotona can “do LANAP®.” 9 This representation prompted Dr. Grant to abandon his agreement with MDT and 10 purchase a LightWalker instead. In abandoning his contract, Dr. Grant thanked 11 MDT sales agent Anthony Cannon for introducing him to LANAP® and “True 12 Regeneration™,” but stated that he was not willing to pay MDT’s price point when 13 he “can do the same thing with the LightWalker.” Dr. Grant himself subsequently 14 passed along this misinformation to other potential MDT customers, including a Dr. 15 Dan Boyko, causing MDT even greater harm. 16 66. In addition, on or about August 10, 2016, Fotona sales representative 17 Scott Kennedy informed a sales prospect, Dr. Schuster, that Fotona’s Nd:YAG laser 18 “is the same 1064 wavelength and same pulse durations as the LANAP by Periolase 19 which costs $100,000.” In truth, Fotona’s LightWalker does not have all the same 20 pulse durations as LANAP® and the PerioLase®. 21 67. In or about September 2016, Fotona created and circulated at trade 22 shows a corporate brochure containing a testimonial stating, “with the WPT protocol 23 we [Fotona] now have the techniques in which to achieve tissue regeneration.” In 24 this way, Fotona falsely and/or misleadingly held itself out as equivalent to MDT, 25 which, through the investment of significant funds and histological evidence, had 26 obtained the first-ever FDA clearance for true periodontal regeneration (new 27 cementum, new periodontal ligament, and new alveolar bone) in March of 2016. 28 Fotona distributed this brochure at dental conventions including the AAP’s laser
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1 periodontal conference and the California Dental Association’s (“CDA”) Anaheim 2 convention, which is one of the nation’s premier dental conventions. 3 68. On or about May 4, 2017, Fotona repeated the above-quoted 4 testimonial in a LightWalker brochure circulated at the CDA Foundation’s “CDA 5 Presents” convention in Anaheim. The brochure claimed that “[a]n exceptionally 6 high regenerative rate of alveolar bone is achieved after TwinLight treatment of the 7 implant surface and the bony implant site.” On information and belief, Fotona has 8 no evidence or data to support this claim. This brochure further falsely claimed that, 9 “[b]ecause the Er:YAG wavelength in the LightWalker is used in optimal mode, 10 there is no danger of thermal damage to the surrounding bones” and further, 11 “[t]here is no mechanical, chemical, or any other means of trauma during the entire 12 treatment.” (Emphasis added.) Obviously, Fotona’s Er:YAG laser, which it 13 advertises for use in bone-cutting procedures, is entirely capable of causing trauma 14 and danger to patients.15 15 69. In addition, at the 2017 CDA convention, Fotona distributed another 16 piece of advertising, a brochure entitled “Twinlight™ Periodontal Treatment.” The 17 brochure, again by false comparison to MDT’s true regeneration claim backed by 18 histological evidence, repeated that Fotona’s product and process are “extremely 19 effective” in achieving “gum-tooth reattachment” and “growth of new dental 20 tissue.” These allusions to MDT’s product and advertisements are by no means 21 coincidental: Fotona revealingly replicates MDT’s trademarked phrase “No Cut – 22 No Sew – No Fear®”, writing “No blade, no stitches, little to no post-operative 23 pain!” in a large box at the center of its brochure. The brochure further falsely 24
25 15 Charles M. Cobb, Lasers and the Treatment of Periodontitis: the Essence 26 and the Noise, 75 PERIODONTOLOGY 2000 205, 206 (2017) (“A clinician lacking [detailed knowledge of laser safety and laser-tissue interactions] . . . is at great risk 27 of producing undesired tissue damage (65, 66) (Figs 1 and 2) [referencing gruesome 28 photographs of tissue damage caused by dental lasers].”).
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1 described Fotona’s treatment as “revolutionary” and “the most up to date solution 2 available.” Finally, as a means of gaining credibility for Fotona, the brochure cited 3 two separate scientific studies in support of its claims. In fact, both of the studies in 4 question were not performed using a Fotona laser, but rather, by researchers 5 utilizing the LANAP® Protocol and an MDT PerioLase. In short, Fotona falsely 6 attributed to its product and process credit and scientific support given solely and 7 exclusively to MDT’s LANAP® Protocol and Periolase. As with Fotona’s entire 8 false advertising campaign, Fotona was falsely passing itself off as MDT and 9 misleadingly suggesting that it was and is the same as MDT, when that is simply not 10 the truth. 11 70. Indeed, as a further tactic of obfuscation, Fotona in its brochure, when 12 citing the author of one of the studies that allegedly provide support for the Fotona 13 product and process, reversed and misstated the name of the author of the key study, 14 whose name is Professor Raymond A. Yukna and who is a world-renowned 15 periodontist and scientific researcher well known for his work with LANAP®, as 16 “Raymond, A.Y.” 17 71. Consistent with Fotona’s overall false and misleading statements to the 18 marketplace about its alleged equivalence to MDT’s LANAP® Protocol and 19 Periolase, on or about September 20, 2016, Fotona sales representative Tom 20 Newman falsely informed a sales prospect, Dr. William Cho, that the Fotona’s 21 LightWalker has the settings to perform LAPIP™ “like no tomorrow.” Also, on or 22 about August 25, 2017, Fotona sales representative Scott McCracken instructed a 23 Fotona-affiliated dentist, Dr. Bill Greider, to help him try to persuade a sales 24 prospect, Dr. Jon Ormson, to buy a Fotona laser. Dr. Greider reached out to Dr. 25 Ormson, cc’ing McCracken, and stated that “The Lightwalker will allow you to 26 perform . . . LANAP and PIPS. Just to name a few.” 27 72. In fact, LANAP® and LAPIP™ are trademarks of MDT and cannot be 28 performed on any device other than the PerioLase®. Moreover, neither LANAP®
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1 nor LAPIP™ can be performed without access to MDT’s extensive and proprietary 2 training program. 3 73. As shown by the above examples, Fotona’s primary sales strategy in 4 the periodontal space revolves around conflating MDT and LANAP®—the true 5 leaders in the field—with Fotona’s inferior products and services. Fotona 6 representatives have repeatedly made false and/or misleading statements to the 7 market in an attempt to unfairly advantage itself of the goodwill earned by MDT 8 through decades of research, innovation, and its unparalleled dedication to patient 9 safety and clinical outcomes. Unfortunately, these unfair and unlawful tactics have 10 been effective, resulting in a precipitous decline in MDT’s sales following the false 11 and/or misleading statements by Fotona. 12 IV. Fotona Conspires with Terry to Breach Terry’s Agreements with MDT 13 and Disseminate False and Misleading Information About MDT, 14 LANAP®, and the PerioLase®. 15 A. Terry Signs License Agreements, Purchases a PerioLase®, and 16 Receives Extensive Training in LANAP®. 17 74. On or about April 8, 2014, Terry, as buyer, and MDT, as seller, entered 18 into a contract entitled “Periolase MVP-7 Periodontal Package Order” (the “Order”). 19 The Order provided for Terry to purchase and MDT to sell a “Periolase MVP-7 20 Periodontal Package” for the purchase price of $110,545.00. That periodontal 21 package included the price for a dental laser, a specialized hand piece, laser fibers, a 22 Piezo scaler, and five days of specialized training on how to safely and effectively 23 use the laser to perform MDT’s LANAP® Protocol, including live supervised 24 clinical training on actual dental patients. 25 75. As part of his contract with MDT, Terry agreed to several conditions, 26 including the following: 27 THIS AGREEMENT GIVES YOU NO OTHER RIGHTS 28 IN OR TO THE MILLENNIUM MATERIALS OR
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1 OTHER PROPERTY OF MILLENNIUM, INCLUDING 2 WITHOUT LIMITATION, NO RIGHTS TO (1) teach or 3 permit any other person to use the Millennium Materials 4 or perform the Patented Procedure unless that other person 5 is separately authorized under a current license agreement 6 with Millennium, (2) use the Millennium Materials for any 7 other purpose other than the treatment of Your patients, or 8 (3) use any Millennium advertising materials or 9 trademarks (e.g., "Laser Periodontal Therapy", "Laser 10 Periodontitis Therapy", "Laser ENAP", "LANAP®", "No 11 Cut-No Sew", and the Millennium logo) other than in 12 connection with Your authorized practice of the LANAP® 13 protocols. 14 A true and correct copy of the Order and First License Agreement is attached hereto 15 as Exhibit B and is incorporated herein by this reference, as if set forth in full 16 herein. 17 76. Terry expressly agreed to abide by all terms of the Order. 18 77. On April 17, 2014, Terry attended his first Laser Boot Camp class. 19 Prior to being given any of the confidential and proprietary training material, hand- 20 outs and notebooks, Terry was required to sign a second “License Agreement” 21 (“Second License Agreement,” referred to collectively with First License 22 Agreement as the “License Agreements”). 23 [T]his License does NOT grant Licensee the right: (i) to 24 teach the LANAP® Protocol or permit or authorize any 25 person other than Licensee to practice the LANAP® 26 Protocol; (ii) to conduct any research involving the 27 LANAP® Protocol except with the prior written consent 28 of Millennium; (iii) to demonstrate the LANAP®
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1 Protocol or disclose the Millennium Materials or the 2 Proprietary Techniques to any other person or for any 3 purpose other than Licensee's individual use on a patient 4 in Licensee's own dental practice; (iv) to permit any 5 other party to use, view or have access to the 6 Millennium Materials, (unless such person is separately 7 authorized under a current license agreement with 8 Millennium) or for Licensee or any other person to copy, 9 sell, distribute or translate Millennium Materials; . . . or 10 (vi) to use the Millennium Marks except as 11 authorized by this Agreement 12 (Emphasis added). A true and correct copy of the Second License Agreement is 13 attached hereto as Exhibit C and is incorporated herein by this reference, as if 14 set forth in full herein. 15 78. In addition to the above restrictions, Terry also agreed that MDT’s 16 materials included information that is “confidential and proprietary in nature . . . , 17 and developed or acquired by [MDT] at great expense.” Terry acknowledged that 18 he had no right “to use or disclose to any third party any” of MDT’s confidential and 19 proprietary information without MDT’s consent. 20 79. Terry completed his initial 3-day boot camp on April 19, 2014. He 21 completed the fourth Evolution on September 12, 2014, and his final fifth Evolution 22 on March 21, 2015. 23 80. In each of the five Evolutions or training classes, Terry was trained not 24 only in the basic steps of the LANAP® Protocol, but also the confidential and 25 proprietary clinical techniques that needed to be utilized to obtain the best clinical 26 results for individual patients. These steps, procedures and techniques are not 27 described or defined in the Laser Excisional New Attachment Procedure patent, but 28
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1 can only be learned from taking MDT’s training course and experiencing the hands- 2 on training provided by MDT’s exceptionally qualified instructors. 3 81. Before the LANAP® intensive training, Terry had no knowledge 4 whatsoever of laser dentistry. Before beginning his training, Terry stated in writing 5 that, “I have never used laser before.” 6 82. Since completing LANAP® training, Terry has not contacted MDT and 7 requested MDT’s consent to teach, advertise, research, or sell any of the confidential 8 information or techniques that he learned in the MDT training. MDT has not 9 authorized either Terry or Fotona to advertise, sell, or teach the proprietary 10 techniques and procedures taught during MDT’s five-day training courses. 11 B. Terry and Fotona Collude to Breach Terry’s Agreements with 12 MDT and to Disseminate False and Misleading Information. 13 83. In the first week of March 2015, less than a year since Terry’s purchase 14 of a PerioLase® and prior to Terry’s completion of his LANAP® training, Terry 15 and agents of Fotona—including Keith Bateman, Executive Vice President at 16 Fotona—began colluding to adapt MDT’s proprietary protocol to Fotona’s 17 LightWalker product, thereby undercutting one of MDT’s most important market 18 advantages. 19 84. For example, on or about May 13, 2015, Terry wrote Dimas Garcia, 20 Fotona’s then-VP of Sales and Clinical Education, requesting assistance in 21 preparing materials related to his “advanced course.” Terry requested a budget and 22 authorization to create a video of the different steps of the periodontal protocol he 23 would be presenting. Terry stated that he believed a video would be necessary 24 because “the J stroke . . . would be easy to show on video, but impossible to 25 demonstrate with pictures.” 26 85. Throughout May and early June 2015, Terry’s protocol was reviewed, 27 analyzed, and expanded upon by a panel of at least seven Fotona-affiliated 28 employees and practitioners.
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1 86. Terry’s and Fotona’s collusion culminated in Terry’s submittal of 2 application materials for a presentation to be given at the Academy of Laser 3 Dentistry (“ALD”) on or about June 2015. The abstract for Terry’s presentation was 4 entitled “Comparison of a new minimally invasive laser-assisted periodontal 5 surgical protocol to the LANAP protocol.” Some of the slides submitted with 6 Terry’s application falsely stated that “Terry has no financial interests in Fotona 7 Corp and received no financial assistance for study.” 8 87. On or about April 15, 2016, after consulting with Fotona, Terry gave 9 his presentation at the ALD. Unfortunately for Terry, and the presentation was 10 videotaped and MDT later purchased a copy of the videotape from the ALD. 11 88. In the course of his presentation, Terry revealed to the ALD that he is a 12 “paid instructor for Fotona for training their users in the advanced periodontal 13 technique.” Further, it was represented that Terry’s technique had been adopted by 14 Fotona as their advanced surgical protocol for moderate-to-severe periodontal 15 disease. 16 89. Terry named his and Fotona’s protocol “Dual Wavelength Laser 17 Assisted Osseous Surgery” or “DWLAOS.” In reality, DWLAOS is little more than 18 the LANAP protocol by a different name, but which gratuitously coaches that 19 certain steps be performed with the erbium component of Fotona’s dual wavelength 20 LightWalker (the Er:YAG) and adds a commonly known “technique” for cutting the 21 flap to allow visual access. Revealingly, after describing the Er:YAG’s capability in 22 the root surface debridement step of his procedure, Terry immediately reverts to his 23 MDT training and states that, because the Er:YAG works slowly, “for me I find that 24 the ultrasonics and hand instruments are probably the best way to go here.” 25 90. Even though MDT’s patent for Laser Excisional New Attachment 26 Procedure expired February 1, 2016, the specialized training, clinical techniques, 27 procedures, laser power settings, the number of laser passes, the detailed 28 confidential steps, and other practical information essential to proper performance of
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1 LANAP® and necessary to achieve the best clinical results for each patient are not 2 part of the patent, but can only be obtained through MDT’s proprietary training. 3 91. In his opening remarks, Terry, as a paid instructor for Fotona, falsely 4 represented to the audience that he developed DWLAOS for the purpose of 5 “enhancing the predictability of treatment and that he has a desire to incorporate all 6 the best of our laser treatments into one procedure.” Notwithstanding contractual 7 prohibitions against conducting research involving the LANAP® Protocol, Terry 8 then explained that one of the main purposes of his lecture was to reveal his research 9 in comparing his “new” DWLAOS procedure to LANAP® in a split-mouth 10 treatment study that he had purportedly performed. 11 92. The real purpose behind Terry’s presentation was to attempt to 12 convince the members of the ALD that they should purchase the Fotona laser rather 13 than MDT’s PerioLase®. Terry’s presentation was a thinly-veiled marketing 14 presentation in which Terry falsely claimed to have invented a new protocol. In 15 reality, Terry’s presentation relied on steps lifted from the protocol MDT had 16 developed at great expense and trained Terry to perform. 17 93. Terry then proceeded to provide to the ALD a detailed explanation of 18 the techniques MDT taught Terry in the MDT’s training courses. Terry even goes 19 so far as to actually quote multiple statements made by MDT instructors during the 20 courses he attended. 21 94. Terry also instructs the audience to use a “J” stroke—a term coined by 22 MDT to describe one of the confidential and proprietary techniques that MDT 23 developed and teaches in its classes. The term “J” stroke does not have a medical 24 definition and is not a recognized surgical term or technique generally recognized in 25 the dental industry. MDT regards the “J” stroke technique as a trade secret. MDT 26 protects its confidentiality and derives independent economic value from the secrecy 27 of the technique. 28
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1 95. Terry next presents his purported research on the LANAP® Protocol. 2 Terry claims that he performed experiments on 22 patients in his office, in which he 3 conducted LANAP® on one side of the patient’s mouth and DWLAOS on the other. 4 96. In sum, at his April 15, 2016 presentation at the ALD, Terry breached 5 his contracts with MDT and disclosed at least one of MDT’s trade secrets. Terry 6 also falsely claimed to have developed a “new” periodontal laser protocol, which, in 7 fact, Terry had merely learned through his extensive training with MDT. 8 97. On information and belief, Terry gave similar presentations at various 9 different locations throughout the latter-half of 2015 and continuing through 2017, 10 including in Seattle, Dallas, Boston, and Marshall, Minnesota. In at least one such 11 presentation, Terry’s slides falsely and/or misleadingly stated that “Dr. Terry has no 12 financial interests in the Fotona Corp and received no financial assistance for 13 study.” In fact, Terry received a presentation fee and had his expenses paid by 14 Fotona for each of these events, and was even compensated on a commission basis 15 for Fotona lasers sold by another Fotona salesman for a period in late 2015. 16 98. On or about April 21, 2016, Terry made further false statements during 17 a sales pitch to Dr. Farhad Boltchi on a public internet forum available to dentists 18 and periodontists (i.e., potential customers). Terry began by trying to gain 19 credibility by stating that he was LANAP-certified. Next, Terry falsely stated that 20 he was “not a salesman” for Fotona, when in fact, Terry already had entered into at 21 least one commission agreement with Fotona based on the sale of lasers, and Terry 22 was a paid presenter for Fotona. Terry also falsely claimed that “[t]he only 23 difference with the Nd:YAG is the diameter of the fiber,” when in fact many 24 material differences exist. Finally, Terry falsely claimed that his protocol—which 25 he said had been adopted by Fotona—was superior to LANAP® and that, in any 26 event, “you can definitely perform the LANAP protocol with the ND:YAG 27 Lightwalker laser,” but “the doctor cannot say he is doing the LANAP, but instead is 28 doing ‘laser-Assisted’ surgery.” Terry’s false and misleading statements, once
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1 again, echoed the false and misleading statements alleged above, which Fotona had 2 been willfully and deliberately making to the marketplace as part of a concerted 3 campaign over a period of years. 4 FIRST CAUSE OF ACTION 5 (Violation of the Lanham Act, as to All Defendants) 6 99. Plaintiffs incorporate herein by this reference paragraphs 1 through 98, 7 inclusive. 8 100. Defendants have used, made, approved, and sponsored false and 9 misleading representations of fact, orally and in written commercial advertisements 10 and other promotional materials, including but not limited to Defendants’ claims 11 discussed above, which misrepresent the nature, characteristics, and qualities of the 12 technology, products, pricing and training of Fotona, the clinical outcomes of 13 Fotona’s products and procedures, and the technology, products, pricing and 14 training of MDT. These false and misleading statements violate section 43(a) of the 15 Lanham Act, 15 U.S.C. § 1125(a). 16 101. Defendants’ false and misleading statements have harmed MDT and 17 caused potential and existing MDT customers to switch from using MDT’s dental 18 lasers and training to those of Defendants, as MDT and Fotona are in direct 19 competition. Because of Defendants’ publication of deliberately false comparative 20 claims regarding the quality and characteristics of the respective products of MDT 21 and Fotona, MDT is entitled to a presumption of actual deception, reliance, and 22 materiality. 23 102. As detailed above, Defendants’ false and misleading statements are 24 material. Defendants’ false and misleading statements are likely to influence—and 25 have in fact influenced—purchasing decisions by potential consumers, and have 26 deceived or have the capacity to deceive potential consumers and consumers. 27 103. Defendants’ false and misleading statements, its products, and MDT’s 28 products have been placed in interstate commerce.
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1 104. Defendants’ misappropriation of MDT’s trademarked term 2 “LANAP®” to assist in their sales of Fotona’s products and procedures causes a 3 likelihood of consumer confusion, and deprives MDT of the fair earnings of its skill, 4 labor and enterprise invested in developing the LANAP® mark. 5 105. MDT has been injured as a result of Defendants’ false and misleading 6 statements, in the form of lost sales, lost profits, lost market share, and harm to the 7 goodwill associated with MDT and its products. MDT therefore seeks recovery 8 from Defendants of all amounts available under 15 U.S.C. § 1117, including without 9 limitation, Defendants’ profits, MDT’s damages, the costs of the action, enhanced 10 damages, reasonable attorneys’ fees, and any additional amount that the Court 11 considers just. 12 106. MDT’s name, reputation, and goodwill will be irreparably injured by 13 Defendants’ acts unless Defendants are permanently enjoined from continuing such 14 acts by this Court. This harm constitutes an injury for which MDT has no adequate 15 remedy at law. Additionally, Defendants’ false and misleading advertising is 16 injuring the dental laser industry and the consuming public. Defendants should 17 therefore be permanently enjoined from engaging in the conduct described above. 18 SECOND CAUSE OF ACTION 19 (Unfair Competition, False and Misleading Statements in Violation of 20 California Business and Professions Code § 17500, as to All Defendants) 21 107. Plaintiffs incorporate herein by this reference paragraphs 1 through 22 106, inclusive. 23 108. Fotona, its sales representatives, and its agent Terry have targeted 24 existing MDT customers and used false and misleading advertising and marketing 25 statements and proclamations in an effort to get said customers to switch from using 26 MDT’s lasers and protocols to Fotona’s laser and “new” protocol. Defendants also 27 have directed false and misleading advertising and marketing to customers and 28 potential customers of MDT at trade shows, on their websites, via direct messages to
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1 prospective customers, in mass emails, and through other media. Many of these 2 statements are in the form of false and misleading comparative advertising. 3 109. Defendants’ false and misleading advertising and marketing statements 4 are given high creditability and relied upon by dental practitioners due to Terry’s 5 representation that he was trained by MDT, and therefore, possesses “insider 6 knowledge” that Fotona’s laser and protocol are superior and will achieve better 7 clinical results. 8 110. The misstatements are such that Defendants either knew or should have 9 reasonably known them to be untrue or misleading. 10 111. MDT has suffered economic injury in fact as a result of Defendants’ 11 unfair competition in the form of lost sales, lost profits, lost market share, and harm 12 to the goodwill associated with MDT, its products, and its trademarks. MDT 13 therefore seeks recovery from Defendants of all amounts available under California 14 Unfair Competition law, including restitution and an injunction prohibiting 15 Defendants from engaging in the conduct described above. 16 THIRD CAUSE OF ACTION 17 (Unfair Competition, Unlawful, Unfair or Fraudulent Business Practices in 18 Violation of California Business and Professions Code § 17200, as to All 19 Defendants) 20 112. Plaintiffs incorporate herein by this reference paragraphs 1 through 21 111, inclusive. 22 113. Business and Professions Code § 17200 defines unfair competition as 23 “any unlawful, unfair or fraudulent business act or practice and unfair, untrue or 24 misleading advertising.” 25 114. Defendants falsely advertise and misrepresent to MDT customers and 26 potential customers that the proprietary protocols owned by MDT were 27 independently created by the Defendants and that the Defendants’ “new” and 28
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1 “revolutionary” techniques and protocols are more effective in treating periodontal 2 disease—all of which is false, misleading, unlawful, and unfair. 3 115. MDT has suffered economic injury in fact as a result of Defendants’ 4 unfair competition in the form of lost sales, lost profits, lost market share, and harm 5 to the goodwill associated with MDT, its products, and its trademarks. MDT 6 therefore seeks recovery from Defendants of all amounts available under California 7 Unfair Competition law, including restitution and an injunction prohibiting 8 Defendants from engaging in the conduct described above. 9 FOURTH CAUSE OF ACTION 10 (Breach of Contract as against Defendant Terry) 11 116. Plaintiff incorporates herein by reference paragraphs 1 through 115, 12 inclusive. 13 117. Terry entered into two separate License Agreements wherein he agreed 14 that in exchange for MDT teaching him LANAP®, including all of the confidential, 15 proprietary clinical steps necessary to obtain the best clinical results, he would not 16 teach the LANAP® Protocol or permit or authorize any other person to practice the 17 LANAP® Protocol, to conduct any research involving the LANAP® Protocol 18 except with the prior written consent of MDT, to demonstrate the LANAP® 19 Protocol or disclose the MDT’s proprietary techniques and trade secrets to any other 20 person, or to otherwise employ LANAP® for any purpose other than his personal 21 use on patients in his dental practice. 22 118. Terry’s April 15, 2016 presentation to the ALD, wherein he disclosed 23 confidential and proprietary material and clinical techniques taught to him by MDT, 24 is a material breach of both License Agreements. 25 119. Terry’s admission that he is a paid instructor for Fotona and teaches the 26 confidential proprietary material and clinical techniques to Fotona customers is also 27 a material breach of both License Agreements. 28
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1 120. Terry’s admission that he has conducted research regarding the 2 LANAP® Protocol and the confidential clinical techniques taught to him by MDT is 3 a further material breach of the License Agreements. 4 121. Plaintiff has performed all of the conditions, covenants, and promises 5 required to be performed in accordance with the terms of the PerioLase® MVP-7™ 6 Periodontal Package Order Form and both License Agreements. 7 122. At the time both License Agreements were entered into, their terms 8 were clearly defined with specificity, were fair, just and reasonable as to the 9 Defendant, and the consideration to be received by Defendant was adequate. 10 123. As a result of Defendant Terry’s intentional breach of both License 11 Agreements, MDT has been damaged by the loss of sales of its PerioLase® MVP- 12 7™ Periodontal Package in an amount to be proven at trial. 13 124. Plaintiff also seeks an injunction which would compel Terry to 14 immediately cease and desist from any further unauthorized disclosures of MDT’s 15 confidential proprietary information and techniques. 16 FIFTH CAUSE OF ACTION 17 (California Common Law Tortious Interference with Contractual Relations, as 18 to Defendant Fotona) 19 125. Plaintiffs incorporate herein by this reference paragraphs 1 through 20 124, inclusive. 21 126. Defendant Fotona and its agents knew of the contractual relationship 22 between Plaintiff and Terry, as well as the contractual relationship between Plaintiff 23 and Dr. Grant recounted above. 24 127. Despite that knowledge—or more accurately, due to that knowledge— 25 Fotona sought out and induced these individuals to breach and disregard their 26 agreements with MDT and instead engage in a course of action to benefit Fotona. 27 28
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Exhibit 2 Case 8:18-cv-00348-DOC-KES Document 29 Filed 05/14/18 Page 1 of 22 Page ID #:578
1 MICHAEL D. STEWART, Cal. Bar No. 161909 [email protected] 2 JACQUELINE G. LUTHER, Cal. Bar No. 271844 [email protected] 3 SHEPPARD, MULLIN, RICHTER & HAMPTON LLP 650 Town Center Drive, 4th Floor 4 Costa Mesa, California 92626-1993 Telephone: (714) 513-5100 5 Facsimile: (714) 513-5130
6 Attorneys for Defendants DR. ALLEN SCOTT TERRY, D.D.S. and FOTONA, 7 LLC
8 MARK A. FINKELSTEIN, Cal. Bar No. 173851 [email protected] 9 JONES DAY 3161 Michelson Drive, Suite 800 10 Irvine, California 92612-4408 Telephone: (949) 851-3939 11 Facsimile: (949) 553-7539
12 Attorneys for Defendant FOTONA, LLC 13 UNITED STATES DISTRICT COURT 14 CENTRAL DISTRICT OF CALIFORNIA – SOUTHERN DIVISION 15 MILLENNIUM DENTAL Case No. 8:18-cv-00348 DOC(KESx) TECHNOLOGIES, INC., a California 16 Corporation, Assigned to the Hon. David O. Carter 17 Plaintiff, Courtroom 9D
18 v. FOTONA, LLC’s ANSWER TO 19 DR. ALLEN SCOTT TERRY, D.D.S., MILLENNIUM DENTAL an individual; FOTONA, LLC, a TECHNOLOGIES, INC.’S THIRD 20 Wyoming limited liability company; AMENDED COMPLAINT and DOES 1 through 10, inclusive, 21 Defendants. 22
23 24 25 26 27 28
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1 Defendant Fotona, LLC (“Fotona”) hereby answers the Third Amended 2 Complaint in this action as follows: 3 1. In answering paragraph 1, Fotona admits that Plaintiff purports to bring 4 a civil action for violation of the Lanham Act, violations of California Unfair 5 Competition Law, breach of contract, and tortious interference with contractual 6 relations, but denies that any such claims have been appropriately alleged or are 7 meritorious. 8 2. In answering paragraph 2, Fotona admits that advanced cases of 9 periodontal disease can be extremely challenging, and are sometimes treated by 10 extracting teeth. Fotona further admits that the PerioLase is used to treat gum 11 disease. Fotona denies the remaining allegations of paragraph 2. 12 3. Fotona is without information sufficient to admit or deny the 13 allegations of paragraph 3 and, on that basis, denies such allegations. 14 4. In answering paragraph 4, Fotona admits that the periodontium 15 functions as a unit. Fotona is without information sufficient to admit or deny the 16 allegations of paragraph 4 pertaining to MDT’s research and, on that basis, denies 17 such allegations. Fotona denies the remaining allegations of paragraph 4. 18 5. Fotona is without information sufficient to admit or deny the 19 allegations of paragraph 5 and, on that basis, denies such allegations. 20 6. Fotona is without information sufficient to admit or deny the 21 allegations of paragraph 6 and, on that basis, denies such allegations. 22 7. Fotona denies the allegations of paragraph 7. 23 8. In answering paragraph 8, Fotona admits that LANAP is a registered 24 trademark of MDT, but avers that the registration was improperly allowed. Fotona 25 denies the remaining allegations of paragraph 8. 26 9. Fotona admits that it is a Wyoming LLC, headquartered in Dallas, 27 Texas, and that Fotona, d.o.o. is a Slovenian affiliate. Fotona admits that it designs 28
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1 and manufactures laser systems across a wide variety of industries and disciplines. 2 Fotona denies the remaining allegations of paragraph 9. 3 10. Fotona denies the allegations of paragraph 10. 4 11. Fotona denies the allegations of paragraph 11. 5 12. In answering paragraph 12, Fotona is without information sufficient to 6 admit or deny the allegations regarding Dr. Terry’s training and what he stated 7 regarding his experience and, on that basis, denies such allegations. Fotona denies 8 the remaining allegations of paragraph 12. 9 13. Fotona is without information sufficient to admit or deny the 10 allegations of paragraph 13 and, on that basis, denies such allegations. 11 14. In answering paragraph 14, Fotona admits that Dr. Terry’s presentation 12 at ALD was videotaped, but avers that Dr. Terry was aware that it was being 13 videotaped. Fotona further admits that Dr. Terry has had certain communications 14 with Fotona, including prior to the ALD presentation, and that Dr. Terry is an 15 independent dentist whom Fotona occasionally uses as an instructor in perio courses 16 for dentists who have already purchased Fotona’s LightWalker dental laser. Fotona 17 denies the remaining allegations of paragraph 14. 18 15. Fotona denies the allegations of paragraph 15. 19 16. Fotona denies the allegations of paragraph 16. 20 17. Fotona denies the allegations of paragraph 17. 21 18. Fotona denies the allegations of paragraph 18. 22 19. Fotona admits the allegations of paragraph 19. 23 20. Fotona admits the allegations of paragraph 20. 24 21. Paragraph 21 contains a legal conclusion to which no response is 25 required, but Fotona agrees that jurisdiction is proper in this Court. 26 22. Paragraph 22 contains a legal conclusion to which no response is 27 required, but Fotona agrees that venue is proper in this Court. Fotona denies the 28 remaining allegations of paragraph 22.
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1 23. Fotona is without information sufficient to admit or deny the 2 allegations of paragraph 23 and, on that basis, denies such allegations. 3 24. Fotona admits the allegations of paragraph 24. 4 25. Fotona admits the allegations of paragraph 25. 5 26. Fotona admits the allegations of paragraph 26. 6 27. Fotona denies the allegations of paragraph 27. 7 28. Fotona denies the allegations of paragraph 28. 8 29. In answering paragraph 29, Fotona admits that according to the website 9 accessible at http://www.perio.org/consumer/cdc-study.htm (visited on May 7, 10 2018), it states that in 2009 and 2010, an estimated 47.2% of American adults “have 11 mild, moderate or severe periodontitis” and that it states for “adults 65 and older, 12 prevalence rates increase to 70.1percent.” Fotona is without sufficient information 13 to admit or deny the accuracy of those statistics. Fotona also admits that, according 14 to the website https://www.mayoclinic.org/diseases- 15 conditions/periodontitis/symptoms-causes/syc-20354473 (visited on May 7, 2018), 16 it states that “periodontitis may be linked with respiratory disease, rheumatoid 17 arthritis, coronary artery disease or stroke.” Fotona is without sufficient information 18 to admit or deny the accuracy of that statement and, on that basis, denies them and 19 further notes that the website then goes to state that “more studies are needed to 20 confirm a link.” Fotona denies the remaining allegations of paragraph 29. 21 30. In answering paragraph 30, Fotona admits that one traditional treatment 22 for periodontitis is surgery that can be painful, which some patients may dread. 23 Fotona is without information sufficient to admit or deny the allegations of 24 paragraph 30 related to Dr. Gregg’s research and, on that basis, denies such 25 allegations. Fotona denies the remaining allegations of paragraph 30. 26 31. Fotona is without information sufficient to admit or deny the 27 allegations of paragraph 31 and, on that basis, denies such allegations. 28
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1 32. Fotona is without information sufficient to admit or deny the 2 allegations of paragraph 32 and, on that basis, denies such allegations. 3 33. Fotona is without information sufficient to admit or deny the 4 allegations of paragraph 33 and, on that basis, denies such allegations. 5 34. In answering paragraph 34, Fotona denies that MDT has been and 6 remains the world leader in the field of laser periodontics. Fotona is without 7 information sufficient to admit or deny the remaining allegations of paragraph 34 8 and, on that basis, denies such allegations. 9 35. In answering paragraph 35, Fotona admits that MDT applied for a 10 patent in 1996, which was issued in 1997, pertaining to LENAP. Fotona futher 11 admits that, on April 17, 2018, U.S. Patent No. 9,943,379 B2 issued for “Laser- 12 Assisted Periodontics.” Fotona denies the remaining allegations of paragraph 35. 13 36. Fotona is without information sufficient to admit or deny the 14 allegations of paragraph 36 and, on that basis, denies such allegations. 15 37. Fotona is without information sufficient to admit or deny the 16 allegations of paragraph 37 and, on that basis, denies such allegations. 17 38. In answering paragraph 38, Fotona denies that Laser Assisted New 18 Attachment Procedure cannot be properly performed with lasers other than MDT’s 19 lasser. Fotona is without information sufficient to admit or deny the remaining 20 allegations of paragraph 38 and, on that basis, denies such allegations. 21 39. In answer to paragraph 39, Fotona denies that MDT’s training materials 22 are confidential, and avers that at least the vast majority of them are public 23 documents, many of which MDT does not have the rights to reprint. Fotona is 24 without information sufficient to admit or deny the allegations of paragraph 39 and, 25 on that basis, denies such allegations. 26 40. Fotona is without information sufficient to admit or deny the 27 allegations of paragraph 40 and, on that basis, denies such allegations. 28 41. Fotona denies the allegations of paragraph 41.
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1 42. Fotona denies the allegations of paragraph 42. 2 43. Fotona denies the allegations of paragraph 43. 3 44. Fotona denies the allegations of paragraph 44. 4 45. In answering paragraph 45, Fotona admits that an email from Scott 5 Kennedy, dated September 23, 2015, contains the table quoted therein. Fotona 6 further admits that the email was circulated to approximately 900 dentists and 7 periodontists, including Dr. Mize and Dr. Khaimov, but avers that the majority of 8 the dentists and periodontists did not open the email. Fotona is without information 9 sufficient to admit or deny the allegations of paragraph 45 regarding MDT’s 10 customers and, on that basis, denies such allegations. Fotona denies the remaining 11 allegations of paragraph 45. 12 46. Fotona denies the allegations of paragraph 46. 13 47. Fotona denies the allegations of paragraph 47. 14 48. Fotona denies the allegations of paragraph 48. 15 49. Fotona denies the allegations of paragraph 49. 16 50. Fotona admits the allegations of paragraph 50. 17 51. Fotona is without information sufficient to admit or deny the 18 allegations of paragraph 51 and, on that basis, denies such allegations, but denies the 19 email contains any actionable false statements. 20 52. Fotona is without information sufficient to admit or deny the 21 allegations of paragraph 52 and, on that basis, denies such allegations, but denies the 22 email contains any actionable false statements. 23 53. Fotona is without information sufficient to admit or deny the 24 allegations of paragraph 53 and, on that basis, denies such allegations, but denies the 25 email contains any actionable false statements. 26 54. Fotona is without information sufficient to admit or deny the 27 allegations of paragraph 54 and, on that basis, denies such allegations, but denies the 28 email contains any actionable false statements.
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1 55. Fotona is without information sufficient to admit or deny the 2 allegations of paragraph 55 and, on that basis, denies such allegations, but denies the 3 email contains any actionable false statements. 4 56. Fotona admits the allegations of paragraph 56. 5 57. Fotona is without information sufficient to admit or deny the 6 allegations of paragraph 57 regarding MDT’s procedure and, on that basis, denies 7 such allegations. Fotona denies the remaining allegations of paragraph 57. 8 58. Fotona is without information sufficient to admit or deny the 9 allegations of paragraph 58 and, on that basis, denies such allegations, but denies the 10 email contains any actionable false statements. 11 59. In answering paragraph 59, Fotona admits that the Kennedy email 12 contains the cited chart. Fotona denies the remaining allegations of paragraph 59. 13 60. Fotona is without information sufficient to admit or deny the 14 allegations of paragraph 60 and, on that basis, denies such allegations, but denies the 15 email contains any actionable false statements. 16 61. Fotona denies the allegations of paragraph 61. 17 62. In answering paragraph 62, Fotona admits that dentists and 18 periodontists attend trade shows, sometimes to consider making a laser purchase. 19 Fotona is without information sufficient to admit or deny the allegations of 20 paragraph 62 regarding the source of MDT’s sales and, on that basis, denies such 21 allegations. Fotona denies the remaining allegations of paragraph 62. 22 63. In answering paragraph 63, Fotona is without information sufficient to 23 admit or deny the allegations of paragraph 63 regarding the Northeastern Society of 24 Periodontists and, on that basis, denies such allegations. Fotona denies the 25 remaining allegations of paragraph 63. 26 64. In answering paragraph 64, Fotona is without information sufficient to 27 admit or deny the allegations of paragraph 64 regarding how LANAP is typically 28
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1 performed and, on that basis, denies such allegations. Fotona denies the remaining 2 allegations of paragraph 64. 3 65. In answering paragraph 65, Fotona is without information sufficient to 4 admit or deny the allegations of paragraph 65 regarding what Dr. Grant said to 5 Anthony Cannot or “other potential MDT customers” and, on that basis, denies such 6 allegations. Fotona denies the remaining allegations of paragraph 65. 7 66. In answering paragraph 66, Fotona admits that Scott Kennedy sent an 8 August 10, 2016 email to the email address “[email protected]” 9 wherein he stated that “The only difference between our Erbium only and our dual 10 laser, is the NDYag. The NYag is mainly a perio and biostim laser. It is the same 11 1064 wavelength and same pulse durations as the LANAP by Periolase which costs 12 $100,000.” Fotona denies the remaining allegations of paragraph 66. 13 67. In answering paragraph 67, Fotona admits that in March 2016, Plaintiff 14 obtained FDA clearance for “Promotion of true regeneration of the attachment 15 apparatus (new cementum, new periodontal ligament, and new alveolar bone) on a 16 previously diseased root surface.” Fotona admits that it attended and circulated 17 promotional materials at the CDA Anaheim convention, but denies that its materials 18 contained any actionable false statements. Fotona denies the remaining allegations 19 of paragraph 67. 20 68. In answering paragraph 68, Fotona admits that it attended and 21 circulated promotional materials at the CDA Presents convention in Anaheim in 22 May 2017, but denies that its materials contained any actionable false statements. 23 Fotona denies the remaining allegations of paragraph 68. 24 69. In answering paragraph 69, Fotona admits that it attended and 25 distributed certain promotional materials at the 2017 CDA convention, but denies 26 that its promotional materials contained any actionable false statements. Fotona 27 denies the remaining allegations of paragraph 69. 28
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1 70. Fotona is without sufficient information to admit or deny the 2 allegations of paragraph 70 and, on that basis, denies such allegations. 3 71. Fotona is without sufficient information to admit or deny the 4 allegations of paragraph 71 and, on that basis, denies such allegations. 5 72. In answering paragraph 72, Fotona admits that LANAP is a registered 6 trademark of MDT, but avers the registration was improperly allowed. Fotona 7 denies the remaining allegations of paragraph 72. 8 73. Fotona denies the allegations of paragraph 73. 9 74. Fotona is without information sufficient to admit or deny the 10 allegations of paragraph 74 and, on that basis, denies such allegations. 11 75. Fotona is without information sufficient to admit or deny the 12 allegations of paragraph 75 and, on that basis, denies such allegations. 13 76. Fotona is without information sufficient to admit or deny the 14 allegations of paragraph 76 and, on that basis, denies such allegations. 15 77. Fotona is without information sufficient to admit or deny the 16 allegations of paragraph 77 and, on that basis, denies such allegations. 17 78. Fotona is without information sufficient to admit or deny the 18 allegations of paragraph 78 and, on that basis, denies such allegations. 19 79. Fotona is without information sufficient to admit or deny the 20 allegations of paragraph 79 and, on that basis, denies such allegations. 21 80. Fotona is without information sufficient to admit or deny the 22 allegations of paragraph 80 and, on that basis, denies such allegations. 23 81. Fotona is without information sufficient to admit or deny the 24 allegations of paragraph 81 and, on that basis, denies such allegations. 25 82. Fotona is without information sufficient to admit or deny the 26 allegations of paragraph 82 and, on that basis, denies such allegations. 27 83. Fotona denies the allegations of paragraph 83. 28
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1 84. In answering the allegations of paragraph 84, Fotona admits that on or 2 about May 13, 2015, Dr. Terry sent an email correspondence to Dimas Garcia 3 asking, “Is there a budget that we are working with?” and stating that “The J stroke 4 for the ablation step would be easy to demonstrate on video, but impossible to show 5 with pictures.” Fotona denies that Dr. Terry’s statements are an example of any 6 actionable wrongdoing and denies the remaining allegations of paragraph 84. 7 85. In answering paragraph 85, Fotona admits that it had correspondence 8 with Dr. Terry’s regarding his proposed presentation to the Academy of Laser 9 Dentistry. Fotona denies the remaining allegations of paragraph 85. 10 86. In answering paragraph 86, Fotona admits that Dr. Terry’s presentation 11 to the Academy of Laser Dentistry was entitled “Comparison of a new minimally 12 invasive laser-assisted periodontal surgical protocol to the LANAP protocol.” 13 Fotona denies the remaining allegations of paragraph 86. 14 87. In answering paragraph 87, Fotona admits that Dr. Terry gave a 15 presentation to the Academy of Laser Dentistry that was videotaped. Fotona is 16 without information sufficient to admit or deny the allegations of paragraph 87 17 regarding whether MDT purchased a copy of that video and, on that basis, denies 18 such allegations. Fotona denies the remaining allegations of paragraph 87. 19 88. In answering the allegations of paragraph 88, Fotona admits that during 20 Dr. Terry’s April 15, 2016 presentation to the ALD, he stated that he is “an 21 instructor for the Fotona for training their users in the advanced periodontal 22 technique.” Fotona denies the remaining allegations of paragraph 88. 23 89. In answering paragraph 89, Fotona admist that Dr. Terry named his 24 protocol “DWLAOS,” or “Dual Wavelength Laser Assisted Osseous Surgery.” 25 Fotona further admits that, in his presentation, Dr. Terry stated “for me I find that 26 the ultrasonics and hand instruments are probably the best way to go.” Fotona 27 denies the remaining allegations of paragraph 89. 28
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1 90. In answering paragraph 90, Fotona admits that MDT’s patent for Laser 2 Excisional New Attachment Procedure expired on February 1, 2016. Fotona denies 3 the remaining allegations of paragraph 90. 4 91. Fotona denies the allegations of paragraph 91. 5 92. Fotona denies the allegations of paragraph 92. 6 93. Fotona is without information sufficient to admit or deny the 7 allegations of paragraph 93 and, on that basis, denies such allegations. 8 94. In answering paragraph 94, Fotona admits that “J” stroke does not have 9 a medical definition. Fotona denies the remaining allegations of paragraph 94. 10 95. In answering paragraph 95, Fotona admits that, in Dr. Terry’s 11 presentation to the Academy of Laser Dentistry, he explained that, for 22 patients, 12 he performed LANAP on one side of the patient’s mouth and DWLAOS on the 13 other side. Fotona denies the remaining allegations of paragraph 95. 14 96. Fotona denies the allegations of paragraph 96. 15 97. Fotona is without sufficient information to admit or deny the 16 allegations of paragraph 97 regarding statements allegedly made by Dr. Terry during 17 various presentations and, on that basis, denies such allegations. Fotona denies the 18 remaining allegations of paragraph 97. 19 98. In answering paragraph 98, Fotona is without information sufficient to 20 admit or deny the allegations of paragraph 98 regarding statements allegedly made 21 by Dr. Terry and, on that basis, denies such allegations. Fotona denies the 22 remaining allegations of paragraph 98. 23 ANSWER TO FIRST CAUSE OF ACTION 24 99. Fotona incorporates its responses to paragraphs 1 through 98, inclusive. 25 100. Fotona denies the allegations of paragraph 100. 26 101. Fotona denies the allegations of paragraph 101. 27 102. Fotona denies the allegations of paragraph 102. 28
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1 103. In answer to paragraph 103, Fotona admits that it, and MDT have 2 placed certain products into interstate commerce. Fotona denies the remaining 3 allegations of paragraph 103. 4 104. Fotona denies the allegations of paragraph 104. 5 105. Fotona denies the allegations of paragraph 105. 6 106. Fotona denies the allegations of paragraph 106. 7 ANSWER TO SECOND CAUSE OF ACTION 8 107. Fotona incorporates its responses to paragraphs 1 through 106, 9 inclusive. 10 108. Fotona denies the allegations of paragraph 108. 11 109. Fotona denies the allegations of paragraph 109. 12 110. Fotona denies the allegations of paragraph 110. 13 111. Fotona denies the allegations of paragrapn 111. 14 ANSWER TO THIRD CAUSE OF ACTION 15 112. Fotona incorporates its responses to paragraph 1 through 111, inclusive. 16 113. Paragraph 113 contains a legal conclusion to which no response is 17 necessary. 18 114. Fotona denies the allegations of paragraph 114. 19 115. Fotona denies the allegations of paragraph 115. 20 ANSWER TO FOURTH CAUSE OF ACTION 21 116. Fotona incorporates its responses to paragraphs 1 through 115, 22 inclusive. 23 117. Fotona is without information sufficient to admit or deny the 24 allegations of paragraph 117 and, on that basis, denies such allegations. 25 118. Fotona denies the allegations of paragraph 118. 26 119. Fotona denies the allegations of paragraph 119. 27 120. Fotona denies the allegations of paragraph 120. 28
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1 121. Fotona is without information sufficient to admit or deny the 2 allegations of paragraph 121 and, on that basis, denies such allegations. 3 122. Fotona denies the allegations of paragraph 122. 4 123. Fotona denies the allegations of paragraph 123. 5 124. Fotona is without information sufficient to admit or deny the 6 allegations of paragraph 124 regarding what relief MDT intends to seek and, on that 7 basis, denies such allegations. Fotona denies the remaining allegations of paragraph 8 124. 9 ANSWER TO FIFTH CAUSE OF ACTION 10 125. Fotona incorporates its responses to paragraph 1 through 124, inclusive. 11 126. Fotona denies the allegations of paragraph 126. [check] 12 127. Fotona denies the allegations of paragraph 127. 13 128. Fotona denies the allegations of paragraph 128. 14 129. Fotona denies the allegations of paragraph 129. 15 ANSWER TO PRAYER FOR RELIEF 16 MDT’s prayer for relief does not require a response. To the extent a response 17 is required, Fotona denies that MDT is entitled to an relief whatsoever. 18 AFFIRMATIVE DEFENSES 19 FIRST AFFIRMATIVE DEFENSE 20 (Failure to State a Cause of Action) 21 1. Neither the Complaint, nor any cause of action asserted therein, 22 asserts facts sufficient to constitute a cause of action against Defendants. 23 SECOND AFFIRMATIVE DEFENSE 24 (Estoppel) 25 2. Any of the conduct of Defendants which is alleged in the 26 Complaint to be unlawful was taken as a result of conduct or omissions by Plaintiff 27 and Plaintiff is thus estopped from asserting any cause of action against Defendants. 28
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1 THIRD AFFIRMATIVE DEFENSE 2 (Statute of Limitations) 3 3. The Complaint, and the causes of action contained therein, are 4 barred by one or more of the statute of limitations provisions, including those 5 contained at California Code of Civil Procedure sections 337, 338, 339, 340(3), 6 and/or 343 and/or California Civil Code section 3426.6. 7 FOURTH AFFIRMATIVE DEFENSE 8 (Reasonableness and Good Faith) 9 4. Defendants acted diligently, reasonably, and in good faith at all 10 times material herein, based on all relevant facts and circumstances known by 11 Defendants. Accordingly, Plaintiff is barred from any recovery in this action. 12 FIFTH AFFIRMATIVE DEFENSE 13 (Unenforceable Provisions) 14 5. The contract provisions which Plaintiff attempts to enforce 15 against Defendants are void to the extent they purport to restrain Defendants from 16 working in any profession or occupation, as such provisions violate California 17 Business and Professions Code section 16600 and the Cartwright Act. 18 SIXTH AFFIRMATIVE DEFENSE 19 (Justification - Consent) 20 6. Any acts alleged to have been committed by Defendants were 21 committed in the exercise of good faith and with probable cause, and were 22 reasonable and justified under the circumstances. Plaintiff consented to the acts 23 alleged in its Complaint. 24 SEVENTH AFFIRMATIVE DEFENSE 25 (Confidential Mediation and Settlement Communications) 26 7. Certain of Plaintiff’s advertising claims are barred by virtue of 27 the fact that Plaintiff cannot rely upon Defendants’ privileged and confidential 28 mediation and settlement communications to substantiate its claims. They are also
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1 barred by the parol evidence rule and the terms of an integrated settlement 2 agreement. 3 EIGHTH AFFIRMATIVE DEFENSE 4 (Special Damages) 5 8. Plaintiff has failed to specifically allege special damages. 6 Accordingly, Plaintiff is not entitled to recover such damages. 7 NINTH AFFIRMATIVE DEFENSE 8 (Unclean Hands) 9 9. The Complaint and each of the causes of action asserted therein 10 are barred by Plaintiff’s own unclean hands. Among other things, Plaintiff has 11 made false and misleading claims against Fotona by falsely telling dentists that 12 Fotona is risking patient safety, falsely advertises that it is the only laser company 13 that has obtained FDA clearance for True Periodontal Regeneration, and has 14 engaged in misconduct by issuing defamatory press releases, statements, and posting 15 comments online maligning Fotona, including the following false statements made 16 to Fotona’s customers and prospective customers: 17 October 13, 2017 post on dentaltown message board “To All” 18 stating, “So give that [sic] Walker laser a go. Fire it up. Just make 19 sure your malpractice insurance is current.” 20 October 13, 2017 post on dentaltown message board stating that 21 “we have a doctor from Delaware who bought a Fotona Lightwalker 22 and told us he wasn’t trained well, the laser was underpowered, 23 didn’t get the promised results, he had no company support, etc. 24 We unfortunately have a number of the Fotona customers who first 25 bought on price, now buying MDT’s PPP. Now that seems 26 expensive to me. But what about the patients who were treated by a 27 laser without an FDA cleared protocol. Lightwalker has no such 28 protocol cleared by the FDA for treating periodontal disease, except
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1 for sulcular debridement and calculus removal. Training on the 2 Lightwalker is not typically included. It is al la carte, unlike the 3 PPP. As I have said for as long as I have been posting in this forum- 4 -the most expensive "laser" one buys is the one without 5 comprehensive and dedicated training, and a clinical guarantee. 6 Advertisement published by Plaintiff featuring a “testimonial” from 7 William Schneweiss, DDS (the “Schneweiss Advertisement”) 8 wherein he states that he switched from Fotona’s dental laser to 9 Plaintiff’s dental laser because “LightWalker did not have published 10 articles specific to their laser”, “they do not have a tested protocol”, 11 “there isn’t a power meter”, “the LightWalker erbium laser had no 12 clinical value, nor did it add any new treatment to my practice”, and 13 “I would warn any clinician who cares about their patients, before 14 all else, don’t buy just any laser based on price, buy based on 15 clinical outcome and only the LANAP protocol proved that to me.” 16 January 2, 2017 email correspondence between Plaintiff’s sales 17 representative, Debra Chadderon and Cameron Hamidi, DDS, MPH 18 with the subject line “Must read… Dr. Schneweiss testimonial on 19 the Fotona vs Periolase” attaching the Schneweiss Advertisement. 20 Plaintiff’s signage at its trade show booth during the 2017 American 21 Dental Association Annual Meeting improperly advising others not 22 to be “Fooled” by Defendant because “Fotona does not have FDA 23 clearance for LANAP” and to “Stop Learn the Facts” in order to 24 discourage customers from purchasing Defendant’s dental laser. 25 Dr. Robert Gregg’s twitter page wherein he posts statements and 26 links to articles defaming Fotona including the following: 27 (1) September 20, 2017 post stating that “US International Trade 28 Commission Opens Investigation into Fotona Dental Laser” and
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1 linking to the article published on crossradtoday.com entitled “US 2 International Trade Commission Opens Investigation into Fotona 3 Dental Laser, Reports Millennium Dental Technologies”; 4 (2) September 12, 2017 post linking to the article entitled “Make 5 America Great – Buy American! US Dental Manufacturer Seeks to 6 Protect Patients from Foreign Counterfeit Products”; and (3) August 7 31, 2017 post stating “US International Trade Assoc. Complaint 8 filed by Millennium Dental Technologies, Inc. against Fotona, LLC, 9 d.o.o.” and linking to the August 31, 2017 article published on 10 markets.businessinsider.com entitled “US International Trade 11 Association Complaint filed by Millennium Dental Technologies, 12 Inc. agaisnt Fotona, LLC and Fotona, d.o.o.” 13 September 20, 2017 article published on crossroadtoday.com 14 entitled “US International Trade Commission Opens Investigation 15 into Fotona Dental Laser, Reports Millennium Dental 16 Technologies” wherein the “source” is identified as “Millennium 17 Dental Technologies.” 18 September 5, 2017 press release entitled “Make America Great – 19 Buy American! US Dental Manufacturer Seeks to Protect Patients 20 from Foreign Counterfeit Products” published on Plaintiff’s website 21 (www.lanap.com) under the “News & Media” tab stating that 22 “Fotona LightWalker family of products imported in to the USA 23 from Slovenia … hurt American jobs, hurt the American economy, 24 and funnel money to off-shore banks” and “it places patients in 25 harm’s way from inferior and misbranded dental devices and 26 procedures.” 27 November 30, 2016 article entitled “Lawsuit Filed by Millennium 28 Dental Technologies, Inc against Fotona, LLC for Violations of
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1 California’s Uniform Trade Secrets Act” identifying the “News 2 Provided By Millennium Dental Technologies, Inc.” 3 August 31, 2017 article entitled “US International Trade 4 Association Complaint filed by Millennium Dental Technologies, 5 Inc. agaisnt Fotona, LLC and Fotona, d.o.o.” published on 6 markets.businessinsider.com. 7 September 5, 2017 article entitled “Make America Great – Buy 8 American! US Dental Manufacturer Seeks to Protect Patients from 9 Foreign Counterfeit Products” published on www.prnewswire.com 10 and identifying the “News Provided By Millennium Dental 11 Technologies, Inc.” 12 Plaintiff’s advertisement for the Seattle Study Club Speed Sale from 13 May 2-4, 2018 wherein Plaintiff falsely claims that it is the “only” 14 laser company that has obtained “FDA Clearance for True 15 Periodontal Regeneration.” 16 Plaintiff’s advertisement for the Seattle Study Club Speed Sale from 17 February 19-21, 2018 wherein Plaintiff falsely claims that it is the 18 “only” laser company that has obtained “FDA Clearance for True 19 Periodontal Regeneration.” 20 April 2, 2018 email from Plaintiff’s sales representative to 21 Dr. Joshua Tomasik falsely claiming, among other things, that 22 “From training, to setting’s, to the delivery system, Lightwalker for 23 periodontal regeneration, just doesn’t offer any clinical value that 24 has been proven or safe to the patient or the industry.” 25 Plaintiff engaged in litigation misconduct by asserting a claim for 26 trade secret violation, which the Orange County Superior Court 27 ruled was made in “bad faith,” and solely to “stifle competition with 28 Fotona.”
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1 Plaintiff engaged in litigation misconduct by filing a separate claim 2 in the ITC in bad faith. As found by the Orange County Superior 3 Court, this claim was brought “to wear down Defendants with 4 duplicative and costly satellite litigation in two separate forums in 5 an apparent effort to pummel them into submission by needlessly 6 driving up their litigation costs.” 7 Plaintiff engaged in litigation misconduct through its discovery 8 gamesmanship. 9 This is not an exhaustive list of examples of Plaintiff’s own unclean hands. 10 TENTH AFFIRMATIVE DEFENSE 11 (Failure To Mitigate) 12 10. Plaintiff has failed to mitigate its damages, if any, and to the 13 extent of such failure to mitigate, any damages awarded to Plaintiff should be 14 reduced accordingly. 15 ELEVENTH AFFIRMATIVE DEFENSE 16 (Laches) 17 11. Plaintiff’s claims are barred by the doctrine of laches. 18 TWELFTH AFFIRMATIVE DEFENSE 19 (Offset) 20 12. Assuming arguendo that Plaintiff is awarded any money in this 21 action, Defendants are entitled to an offset against any such award in the amount of 22 any damages Defendants have suffered by virtue of Plaintiff’s conduct or in the 23 amount of any money otherwise owed by Plaintiff to Defendants. 24 THIRTEENTH AFFIRMATIVE DEFENSE 25 (Comparative Fault of Plaintiff) 26 13. Any loss or damage allegedly sustained by Plaintiff, if any, was 27 proximately caused or contributed to, in whole or in part, by the negligent, 28 intentional or other wrongful acts and/or omissions of Plaintiff for which
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1 Defendants are not responsible. Accordingly, Plaintiff is entitled to no recovery 2 from Defendants, or the amount for which Defendants could be found liable must be 3 reduced or barred in whole by the extent to which Plaintiff caused or contributed to 4 such loss or damage, if any. 5 FOURTEENTH AFFIRMATIVE DEFENSE 6 (Comparative Fault of Third Parties) 7 14. Any loss or damage allegedly sustained by Plaintiff, if any, was 8 proximately caused or contributed to, in whole or in part, by the negligent, 9 intentional or other wrongful acts and/or omissions of persons and/or entities other 10 than Defendants, for which Defendants are not responsible. Accordingly, Plaintiff is 11 entitled to no recovery from Defendants, or the amount for which Defendants could 12 be found liable must be reduced or barred in whole by the extent to which persons or 13 entities other than Defendants caused or contributed to such loss or damage, if any. 14 FIFTEENTH AFFIRMATIVE DEFENSE 15 (Non-Commercial Use) 16 15. Plaintiff’s claims are barred, in whole or in part, because the 17 activity complained about constitutes non-commercial use and, thus, is not 18 actionable. 19 SIXTEENTH AFFIRMATIVE DEFENSE 20 (Lack of Deliberate or Willful Conduct) 21 16. Defendants have not engaged in any deliberate or willful conduct 22 which bars plaintiff’s claims, in whole or in part. 23 SEVENTEENTH AFFIRMATIVE DEFENSE 24 (Additional Affirmative Defenses) 25 17. Defendants presently have insufficient knowledge or information 26 on which to form a belief as to whether they may have additional affirmative 27 defenses. Defendants reserve their right to file an amended answer asserting 28
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1 additional affirmative defenses in the event that discovery indicates that they are 2 appropriate. 3 WHEREFORE, Fotona prays for judgment as follows: 4 1. That Plaintiff take nothing by reason of its Complaint on file herein; 5 2. For costs of suit incurred herein, including attorneys’ fees; and 6 3. For such other and further relief as this Court deems just and proper. 7 8 Dated: May 14, 2018
9 SHEPPARD, MULLIN, RICHTER & HAMPTON LLP 10
11 By /s/ Michael D. Stewart 12 MICHAEL D. STEWART 13 JACQUELINE G. LUTHER
14 Attorneys for Defendants 15 DR. ALAN SCOTT TERRY, D.D.S. (incorrectly identified as “DR. ALLEN 16 SCOTT TERRY, D.D.S,”) and 17 FOTONA, LLC 18 19 20 21 22 23 24 25 26 27 28
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Case 8:18-cv-00348-DOC-KES Document 29 Filed 05/14/18 Page 22 of 22 Page ID #:599
1 PROOF OF SERVICE 2 STATE OF CALIFORNIA, COUNTY OF ORANGE 3 At the time of service, I was over 18 years of age and not a party to this action. I am employed in the County of Orange, State of California. My business 4 address is 650 Town Center Drive, 4th Floor, Costa Mesa, CA 92626-1993. 5 On May 14, 2018, I served true copies of the following document(s) described as 6 FOTONA, LLC’s ANSWER TO MILLENNIUM DENTAL 7 TECHNOLOGIES, INC.’S THIRD AMENDED COMPLAINT 8 on the interested parties in this action as follows: 9 Attorney for Plaintiff Millennium Attorneys for Defendant Fotona, LLC Dental Technologies, Inc. 10 Mark A. Finkelstein, Esq. Wayne R. Gross, Esq. JONES DAY 11 Evan C. Borges, Esq. 3161 Michelson Drive, Suite 800 Joshua M. Robbins, Esq. Irvine, California 92612-4408 12 Greenberg Gross LLP Telephone: (949) 851-3939 650 Town Center Drive, Suite 1700 Facsimile: (949) 553-7539 13 Costa Mesa, California 92626 E-mail: [email protected] Telephone: (949) 383-2860 | 14 Facsimile: (949) 383-2801 E-mail: [email protected] 15 [email protected] [email protected] 16 17 BY CM/ECF NOTICE OF ELECTRONIC FILING: I electronically filed the document(s) with the Clerk of the Court by using the CM/ECF system. 18 Participants in the case who are registered CM/ECF users will be served by the CM/ECF system. Participants in the case who are not registered CM/ECF 19 users will be served by mail or by other means permitted by the court rules. 20 I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct and that I am employed in the office 21 of a member of the bar of this Court at whose direction the service was made. 22 Executed on May 14, 2018, at Costa Mesa, California. 23 24 /s/ James E. Summers
25 James E. Summers
26 27 28
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