Opposition Brief — Jarrow Formulas, Inc. v. Nutrition Now, Inc.

‘ourt, US,

<a OCT 28 !

No.02-489 we

CLERK

IN THE = eine

Supreme Court of the United States

JARROW FORMULAS, INC.,

Petitioner,

v.

NUTRITION NOW, INC.,

Respondent.

ON PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

nnemeemne

BRIEF IN OPPOSITION

JOHN A. LAWRENCE

RADCLIFF DONGELL LAWRENCE LLP

Attorneys for Respondent

707 Wilshire Boulevard

4Sth Floor

Los Angeles, CA 90017

(213) 614-1990

177012 fc

COUNSEL PRESS ‘

(800) 274-3321 + (800) 359-6859

i

STATEMENT PURSUANT TO RULE 29.6

Respondent, Nutrition Now, Inc., has no parent corporation,

and no publicly-held company owns 10% or more of its stock.

il

TABLE OF CONTENTS

Statement Pursuant to Rule 29.6 ...............

Table of Cams ov ka xe kk kc ose

Summary of Reasons for Denying the Petition ....

A. This Court Has Long Held That A Party’s

B.

Laches May Bar Prospective Relief .......

There Is No “Split” Among The Circuit

Courts On The Availability Of Laches As

A Bar To Prospective Relief .............

Counter-Statement of the Case .................

Prejudice to Nutrition Now..............

Petitioner’s Erroneous “Unclean Hands” And

Public Interest Arguments ...............

Page

il

Contents

Reasons for Denying the Petition ............... 12

I. This Court Has Held Explicitly That Laches

May Bar Prospective Injunctive Relief Under

cp ee US. eer errr er Serer ee 12

Il. The Circuits Are Not Split — Laches Is

Available As A Defense To Claims For

Prospective Relief Under The Lanham Act

{6 UES ES eee eres ae ee ree 14

A. Laches Is Universally Recognized As An

Appropriate Consideration Upon An

Application For Prospective Relief ... 14

B. Permutations In Terminology Between

The Circuits Do Not Undermine

The Consensus That Laches May,

In Appropriate Circumstances, Bar

Prospective Injunctive Relief ........ 21

Ill. The Public Interest Is Adequately Protected

i ti eGR OWNENS eee een ee 24

EET Sr ne oe ee retell ay 29

iv

TABLE OF CITED AUTHORITIES

Page

Federal Cases

Advanced Hydraulics, Inc. v. Otis Elevator Company,

525 F.2d 477 (7th Cir. 1975), cert. denied, 423

U.S. 869, 96 S. Ct. 132, 46 L. Ed. 2d99(1975) .. 16

Alfred Dunhill of London, Inc. v. Kasser Distillers

Products Corp., 350 F. Supp. 1341 (E.D. Pa.

1972), aff’d mem., 480 F.2d 917 (3d Cir. 1973)... = 23

Anheuser-Busch, Inc. v. Du Bois Brewing Co., 175

F.2d 370 (3d Cir. 1949), cert. denied, 339 U.S.

934, 70S. Ct. 664, 94 L. Ed. 1353 (1950) ..... 16, 24

Ansin v. River Oaks Furniture, Inc., 105 F.3d 745

(1st Cir. 1997), cert. denied, 522 U.S. 818, 118

>. Ct. 70, 139 L. BG. 24 51 CESGE) . cess 22

Chapin-Sacks MFG. Co. v. Hendler Creamery Co.,

Bae F, Fae CR BPO bn See i hoes 16

Chattanoga Manufacturing, Inc. v. Nike, Inc., 301

ee fe, Lee, re 4, 12, 16, 18

City of Wyandotte v. Consolidated Rail Corp.,

2k F.9e SO) COGS BOGE) occ cc ccesivencnes 22

Conopco, Inc. v. Campbell Soup Co., 95 F.3d 187

eo re er ees 3, 15-16, 24

Vv

Cited Authorities

Page

Continental Coatings Corporation v. Metco, Inc.,

464 F.2d 1375 (7th Cir. 1972) ...........505- 18

Cuban Cigar Brands N.V. v. Upmann International,

Inc., 457 F. Supp 1090 (S.D.N.Y. 1978), aff'd, 607

F.2d 995 (2d Cig. 1979) 0... cccsevscvencsss 12

Danjagq v. Sony Corp., 263 F.3d 942 (9th Cir. 2001)

5 aU Salk Mente RRS ee eee eek oeuE es 2, 18, 19, 20, 23

Dial A Car, Inc. v. Transportation, Inc., 82 F.3d 484

(D.C. Cie. 106) once cue nececcncveveseces 27

Eli Lilly & Co. v. Roussel-Uclaf Holdings Corp., 23

F. Supp. 2d 460 (D.N.J. 1998) ...........-45. 27

Eppendorf Netheler Hinz GMBH v. National

Scientific Supply Co., 14 Fed. Appx. 102 (2d Cir.

| ererTs eee rr rer ee re eet 22

E-Systems, Inc. v. Monitek, Inc., 720 F.2d 604 (9th

Cie: TOD 0 ics beeweneneeeheeeneereaveates 18

Foy v. Klapmeier, 992 F.2d 774 (8th Cir. 1993) ... 23

Fruit Industries v. Bisceglia Bros. Corporation, 101

F.2d 752 (3d Cir. 1939), cert. denied, 307 U.S.

646, 59 S. Ct. 1043, 83 L. Ed. 1526 (1939) .... 15-16

Godfrey v. BellSouth Telecommunications, Inc.,

89 F.3d 755 (11th Cir. 1996) ............-4-. 23

vi

Cited Authorities |

Page

Hanover Star Milling Company v. D.D. Metcalf, 240

U.S. 403, 36 S. Ct. 357, 60 L. Ed. 713 (1916) .. 3, 13

Holmes v. Pension Plan of Bethlehem Steel Corp.,

213 F.96 126 COG CR, BOWE) svescvescccececes 22

Hot Wax, Inc. v. Turtle Wax, Inc., 191 F.3d 813 (7th

Cae, SReee cnwsisciusveevi 4, 6-7, 16, 18, 22, 24, 25

James Burrough Ltd. v. Sign of Beefeater, Inc., 572

Fee Se Cre Gat RPT V62 00 i Setsaceesdees 18

Kellog Company v. Exxon Corporation, 209 F.3d 562

(6th Cir. 2000), cert. denied, 531 U.S. 944, 121

S. Ct. 340, 148 L. Ed. 2d 273 (2000) ..... 4, 17, 20, 21

Kennedy v. Electricians Pension Plan, IBEW No.

995, 954 F.2d 1116 (Sth Cir. 1992) ........... 22

La Republique Francaise v. Saratoga Vichy Spring

Company, 191 U.S. 427, 24S. Ct. 145, 48 L. Ed.

kt | eee re rere rrr rr Pe 14

Lyons Partnership, L.P. v. Morris Costumes, Inc., 243

FOG FOr COREE OOUEE 500s eebivterbeceanh 19, 20

Mylan Laboratories, Inc. v. Matkari, 7 F.3d 1130

C60 GAS, FEF OP oa 000t0c8essccoesbeveweewens 27

vil

Cited Authorities

Page

N.A.A.C.P. v. N.A.A.C.P. Legal Defense & Educational

Fund, Inc., 753 F.2d 131 (D.C. Cir. 1985), cert.

denied, 472 U.S. 1021, 105 S. Ct. 3489, 87 L. Ed.

fg. eres reese 16

Nartron Corporation v. Stmicroelectronics, Inc., 305

Pu Se CE Gee SEE cc acccesesseacess 12, 16, 17

Newman vy. Checkrite California, Inc., 912 F. Supp.

Rae Cd Salis SUED chee ees cae vocrseeweees 17

Polaroid Corporation v. Polarad Electronics

Corporation, 287 F.2d 492 (2d Cir. 1961), cert.

denied, 368 U.S. 820, 82 S. Ct. 36,7 L. Ed. 2d 25

SE oo 6 bb 60 nat en sated se beeceeeaeetes 7, &3

Prudential Insurance Company of America v.

Gibraltar Financial Corporation of California,

694 F.2d 1150 (9th Cir. 1982), cert. denied, 463

U.S. 1208, 103 S. Ct. 3538, 77 L. Ed. 2d 1389

CRE 66 ck kdentshacevenssades sews iesecens y

Roberts v. Colorado State Board of Agriculture, 998

F.2d 824 (10th Cir. 1993), cert. denied, 510 U.S.

1004, 114. S. Ct. 580, 126 L. Ed. 2d 478 (1993)... 23

Safeway Stores, Incorporated v. Safeway Quality

Foods, Inc., 433 F.2d 99 (7th Cir. 1970) ....... 16

San Francisco Arts & Athletics, Inc. v. United States

Olympic Committee, 483 U.S. 522, 107 S. Ct.

ras OF is es EE CRT be cab ccd viccues 14

vill

Cited Authorities

Page

Sara Lee Corporation v. Kayser-Roth Corporation,

81 F.3d 455 (4th Cir. 1996), cert. denied, 519 U.S.

976, 117 S. Ct. 412, 136 L. Ed. 2d 325 (1996) ..

Ee Eee pT regs” 3-4, 12, 16, 19

Saratoga Vichy Spring Co., Inc. v. Lehman, 625 F.2d

ge > 2 || Perri TT rrr Tee ee 15

Seven-Up Company v. O-So-Grape Co., 283 F.2d 103

(7th Cir. 1960), cert. denied, 365 U.S. 869, 81

Bh. CK, Bae So he Se Be Se CEES ov ccccewcecss 18

Skippy, Inc. v. CPC International, Inc., 674 F.2d 209

(4th Cir. 1982), cert. denied, 459 U.S. 969, 103

S. Ct. 298, 74 L. Ed. 2d 280 (1982) ......... 4, 16,17

Sobosle v. United States Steel Corp., 359 F.2d 7 (3d

oR Pr er re rer Pee 15

Tandy Corp. v. Malone & Hyde, Inc., 769 F.2d 362

(6th Cir. 1985) cert. denied, 476 U.S. 1158, 106

S. Ct. 2277, 90 L. Ed. 2d 719 (1986) .......... 4,17

Times Mirror Magazines, Inc. v. Field & Stream

Licenses Company, 294 F.3d 383 (2d Cir. 2002) .. 12

TWM Manufacturing Co., Inc. v. Dura Corp., 592

F.2d 346 (6th Cir. 1979), cert. denied, 479 U.S.

852, 39 S. Ct. 183, 93 L. Ed. 2d 117 (1986) .... =—:17

ix

Cited Authorities

Page

United Drug Co. v. Theodore Rectanus Co., 248 U.S.

90, 39 S. Ct. 48, 63 L. Ed. 141 (1918) ........ 12, 13

University of Pittsburgh v. Champion Products Inc.,

686 F.2d 1040 (3d Cir. 1982), cert. denied, 459

U.S. 1087, 103 S. Ct. 571, 74 L. Ed. 2d 933 (1982)

coed e ohare estes cece ed eee sand we buen 18-19, 24

Wanlass v. Fedders Corp., 145 F.3d 1461 (Fed. Cir.

Tee rT TTT Tre rr eee ree ee 23

White v. Daniel, 909 F.2d 99 (4th Cir. 1990), cert.

denied, 501 U.S. 1260, 111 S. Ct. 2916, 115

S Ff 8 oi. ere ee ree 22

Whitman v. Walt Disney Prod’s Inc., 263 F.2d 229

ts FS ae ere ere ree eee 18

Whittaker Corp. v. Execuair Corp., 736 F.2d 1341

ee BPO TTITeCTTET TTT LTT Tee 16

State Cases

Finnie v. Town of Tiburon, 199 Cal. App. 3d 1, 244

CUE, WUT SE CASED: dnc ccistcccecceseecees 17

x

Cited Authorities

Statutes

California Business & Professions Code

Se eR en Cire bade hee Shs ew Oe we

California Business and Professions Code

ge XS ey rere oe ee eee

Lanham Act

bogie ia Bh” ee rrr

Rules

of eR ek ee rer ee ree

Se es Oe EE bs bes Saw keewy eee be

oe 8S en rn ree

Federal Regulations

(ie) eg Ss Se ee ee eer TT oe

Se OU dks ches sheen es cae ewes

OPO OES iio

Page

es ey eS ee ee a ee ee oe eee >

Ten Ne ee ee OT, a eee

xi

Cited Authorities

Treatises

5 J. Thomas McCarthy, McCarthy on Trademarks

and Unfair Competition (4th ed. 2002)

ee oe ee a a ie

5 J. Thomas McCarthy, McCarthy on Trademarks

and Unfair Competition (4th ed. 2002)

“S - Aeapaer Dehse ie ae iatcens VAGHEU Nin eeienriad

5 J. Thomas McCarthy, McCarthy on Trademarks

and Unfair Competition (4th ed. 2002)

Pe os po ee a a

5 J. Thomas McCarthy, McCarthy on Trademarks

and Unfair Competition (4th ed. 2002)

TS ee Are een one

5 J. Thomas McCarthy, McCarthy on Trademarks

and Unfair Competition (4th ed. 2002)

Dee pe aes ae

Page

24

21

16

1

The Petition for a Writ of Certiorari should be denied

because there is no compelling reason for this Court to

exercise its discretion to review the judgment of the United

States Court of Appeals for the Ninth Circuit (the “Ninth

Circuit”), issued on June 4, 2002, affirming the Judgment of

the United States District Court, Central District of California

(the “District Court”), entered on November 14, 2000.

There is no conflict between the Ninth Circuit’s ruling

and the decisions of other United States Court of Appeals,

nor does the Petition raise any important issue of law. Indeed,

on the record below, neither of the questions posed by

Petitioner, Jarrow Formulas, Inc. (“Jarrow”), presents any

genuine issue. Rather, what Jarrow advances is solely a matter

of private commercial interest. This is admitted not only by

Jarrow’s protracted delay in filing suit, but by its failure to

even attempt to involve any of the Federal regulatory agencies

charged with protecting the public interest. Both the District

Court and the Ninth Circuit considered Jarrow’s public

interest argument and correctly rejected it because no real

issue of public interest is implicated.

Regarding the applicability of laches, the case below

involved one basic question: Whether (i) Jarrow’s unreasonable

delay and (ii) resulting prejudice to Respondent Nutrition Now,

Inc. (“Nutrition Now”) bars prospective injunctive relief to

Jarrow in a false advertising action. The District Court,

citing extensive and controlling authority, so found; the Ninth

Circuit agreed. Both Courts’ rulings were consistent with

applicable authority in the other Circuits.

Jarrow has conjured a phantom split of authority between

the Third, Fourth, and Sixth Circuits, on the one hand, and

the Seventh and Ninth Circuits, on the other hand, regarding

whether a laches defense may bar injunctive relief. In fact,

2

there is no split of authority. All of the Circuits that have

considered the issue have acknowledged that a party’s laches

may bar injunctive relief in appropriate circumstances.

The most that can be said is that some Circuits allow the

laches defense sparingly and apply it more narrowly under

certain circumstances, while others recognize the defense

more widely, and apply it with less scrutiny.

SUMMARY OF REASONS FOR

DENYING THE PETITION

A. This Court Has Long Held That A Party’s Laches May

Bar Prospective Relief

Contrary to Jarrow’s assertion, in Danjaq v. Sony Corp.,

263 F.3d 942 (9th Cir. 2001), the Ninth Circuit did not depart

radically from prior precedent when it concluded that laches

could bar injunctive relief (Petition at p. 12). Decades before

its decision in Danjaq, citing controlling precedent from this

Court, in Prudential Insurance Company of America v. Gibraltar

Financial Corporation of California, 694 F.2d 1150, 1152

and n.1 (9th Cir. 1982), cert. denied, 463 U.S. 1208, 103 S. Ct.

3538, 77 L. Ed. 2d 1389 (1983), the Ninth Circuit expressly

endorsed an application of laches as a bar to injunctive relief.

In Prudential, citing numerous supporting cases from

the Second, Third, Fourth, Seventh and Tenth Circuits,

the Ninth Circuit noted that

[t]he Supreme Court explicitly made laches available

as an equitable defense barring injunctive relief

in United Drug Co. v. Rectanus Co., 248 U.S. 90,

102-103, 39 S. Ct. 48, 52-53, 63 L. Ed. 141 (1918);

and La Republique Francaise v. Saratoga Vichy

Spring Company, 191 U.S. 427, 436-437, 24 S. Ct.

145, 146-147, 48 L. Ed. 247 (1903).

Bot se ee ee

3

Id. at 1152. This Court also ruled to like effect in Hanover

Star Milling Company v. D.D. Metcalf, 240 U.S. 403, 36

S. Ct. 357, 60 L. Ed. 713 (1916) (preliminary injunction

denied and plaintiff estopped from asserting trademark

infringement because defendant had, in good faith; expended

money and efforts to build its trade).

Accordingly, the Ninth Circuit’s application of laches to

bar Jarrow’s claim for injunctive relief was supported by

Supreme Court precedent. As is discussed below, it was also

consistent with Circuit Court precedent.

B. There Is No “Split” Among The Circuit Courts On The

Availability Of Laches As A Bar To Prospective Relief

The availability of laches as a bar to prospective relief

is well accepted. See generally, 5 J. Thomas McCarthy,

McCarthy on Trademarks and Unfair Competition, § 31.30

(4th ed. 2002) (hereinafter, “McCarthy Trademarks”).

The list of Circuit Court decisions approving the application

of a laches defense to bar prospective injunctive relief has

only grown in the twenty years since the Ninth Circuit

compiled its catalogue of such decisions in Prudential,

supra at n.1. Since that time', numerous Circuits, including

the Fourth and Sixth Circuits, have discussed or applied

laches in the context of an application for prospective relief.

See, e.g., Conopco, Inc. v. Campbell Soup Co., 95 F.3d 187,

192 (2d Cir. 1996) (dismissing on laches grounds claim

for permanent injunctive relief against alleged false

advertisement); Sara Lee Corporation v. Kayser-Roth

1. This discussion focuses only on cases decided after the Ninth

Circuit’s 1982 decision in Prudential, supra, because the Court in

that case created a virtual digest of the rulings among the Circuits at

the time. As is discussed more fully, infra, subsequent rulings among

the Circuits have remained consistent with Prudential.

4

Corporation, 81 F.3d 455, 461 (4th Cir. 1996), cert. denied,

519 US. 976, 117 S. Ct. 412, 136 L. Ed. 2d 325 (1996) (Courts

may sparingly apply estoppel by laches in trademark

infringement case to deny injunction to plaintiff who unreason-

ably delayed seeking redress to defendant’s detriment); Skippy,

Inc. v. CPC International, Inc., 674 F.2d 209, 212 (4th Cir. 1982),

cert. denied, 459 U.S. 969, 103 S. Ct. 298, 74 L. Ed. 2d 280

(1982) (availability of laches as a defense to claims for injunctive

relief for trademark infringement and unfair competition may

be limited when defendant is guilty of bad faith infringement);

Tandy Corp. v. Malone & Hyde, Inc., 769 F.2d 362, 366 n.2

(6th Cir. 1985), cert. denied, 476 U.S. 1158, 106 S. Ct. 2277,

90 L. Ed. 2d 719 (1986) (some affirmative conduct in the nature

of an estoppel, prejudice, or conduct amounting to “virtual

abandonment” is necessary to deny injunctive relief in trademark

infringement action); Kellog Company v. Exxon Corporation,

209 F.2d 562, 568 (6th Cir. 2000), cert. denied, 531 U.S. 944,

1218S. Ct. 340, 148 L. Ed. 2d 273 (2000) (defendant must prove

elements of estoppel to defeat injunctive relief in trademark

infringement action); Chattanooga Manufacturing, Inc. v. Nike,

Inc., 301 F.3d 789 (7th Cir. 2002) (injunctive relief denied where

trademark holder’s 14 year delay was unreasonable and

prejudicial); Hot Wax, Inc. v. Turtle Wax, Inc., 191 F.3d 813

(7th Cir. 1999) (claim dismissed on laches because of plaintiff’s

delay of over 20 years in asserting false advertising claim).

Jarrow’s selective treatment of the case law (Petition

at pp. 10-21) ignores the wealth of authority which shows that,

rather than a “split” among the Circuits, there is virtual unanimity

on the availability of laches as a bar to prospective relief.

See also 5 McCarthy Trademarks, § 31.22 (4th ed. 2002).

Finally, Jarrow’s argument also hinges on a fabricated

public interest argument. On one level, Jarrow’s claim is an

attempt to enforce regulations that it has no standing to assert.

tL i OU atte 2 ta

5

On a more important level, Jarrow’s claim is premised on

assumptions that are either outside the record, or are contradicted

by the facts in it. Both the District Court and the Ninth Circuit

considered and appropriately rejected Jarrow’s public interest

argument.

COUNTER-STATEMENT OF THE CASE

Jarrow filed its Complaint on August 18, 2000, and its

First Amended Complaint on August 23, 2000. The First

Amended Complaint asserted claims of Unfair Competition,

Violation of the Lanham Act (15 U.S.C. § 1125(a)), Unfair

Trade Practices under California Law (California Business

& Professions Code §§ 17200, et seq.), and False Advertising

under California law (California Business and Professions

Code §§ 17500, et seq.) against Nutrition Now, all of which

were based upon Jarrow’s allegations that the label on

Nutrition Now’s probiotic product, “PB8,” contained false

and misleading statements. Jarrow sought damages and

injunctive relief.

Pursuant to Supreme Court Rules 15.3, 24.2 and 24.1(g),

Nutrition Now recites briefly the facts that are material to

the two issues presented to this Court.”

2. Jarrow’s Petition cites with alarming frequency to matters

outside the record in this action. The examples are too numerous to

list or to correct. However, some of the more egregious examples

include the following: (1) Jarrow fails to note that PB8 is a proprietary

blend and, therefore, not subject to the sections of the DSHEA that

Jarrow cites [Petition, p. 3, n.2]; (2) Jarrow ignores the fact that

Nutrition Now’s claims are made as of the date of manufacture and

erroneously compares this claim with the results of Jarrow’s purported

tests, the invalidity of which was demonstrated in the District Court

[Petition, pp. 3-6]; and (3) Jarrow claims an inability to test PB8,

which, in addition to being irrelevant, is belied by Rogovin’s claim

that he had tested PB8 in 1993 [Petition, pp. 4-5].

6

A. Nutrition Now’s Probiotic Supplement, PB8

Nutrition Now has made the same three basic claims for

its PB8 product since its introduction in 1985: (1) 14 billion

good bacteria at the time of manufacture; (2) 8 types of

beneficial bacteria; and (3) No refrigeration needed.

The cultures from which PB8 is manufactured are tested

by an independent laboratory, and the bacteria count for each

lot is verified, as of the time of manufacturing. Eight different

types of bacteria are used in the manufacture of the product

and the product may be stored at room temperature.

B. Consumer Satisfaction With PB8

Nutrition Now and Jarrow are direct competitors in the

natural probiotic market. Despite the highly competitive

nature of the probiotic business, the market for PB8 has

increased steadily due to customer satisfaction and increased

distribution. Nutrition Now is one of the industry’s leaders.

Its growth is due to both marketing support and customer

satisfaction, which was shown to the satisfaction of both the

District Court and the Ninth Circuit. (Pet. Appendix A,

pp. 16a-18a; Appendix C, pp. 57a-60a.) Nutrition Now is a

member of the National Nutritional Foods Association

(“NNFA”) and the American Herbal Products Association.

PB8 was named the nation’s number one probiotic product

by Vitamin Retailer Magazine, winning the Gold Medal

“Vity” Award for Nutrition Now the last three years prior to

the commencement of the action below.’ Nutrition Now has

3. Revealing its true motivation, Jarrow simply waited until

Nutrition Now was sufficiently successful so as to warrant filing an

action. As the Seventh Circuit observed in Hot Wax, Inc. v. Turtle

(Cont’d)

7

at all times complied with all applicable regulations

promulgated by the Federal Food and Drug Administration

concerning Probiotic products, and has never been cited for

any regulatory violation concerning probiotic products.

C. All Of Jarrow’s Claims Date Back To 1993

Nutrition Now’s president, Martin Rifkin (“Rifkin”),

was first confronted by Jarrow Rogovin (“Rogovin”),

Jarrow’s President, at a trade show in Seattle, Washington,

in mid-1993. At that time, Rogovin disparaged Nutrition

Now’s product and business practices, and accused it of false

labeling, false advertising, and fraudulent business practices

— the very same claims that Jarrow asserted seven years

later when it belatedly filed the underlying action.

The trade show encounter was but a precursor of Jarrow’s

1993 attack on Nutrition Now’s business. On September 22,

1993, Jarrow filed a letter of complaint with the NNFA,

again making the same claims asserted in this case. Jarrow

asserted that PB8’s labeling made the following “false,

unfair, misleading and illegal claims”: “1) That the product

contains ‘14 Billion Good Bacteria Per Capsule’; 2) That

each capsule contains ‘8 Strains of Viable Bacteria’; 3) That

‘No Refrigeration Needed.’ ” Jarrow also stated that Institut

(Cont'd)

Wax, Inc., 191 F.3d 813, 823 (7th Cir. 1999), not only should this

kind of conduct not be allowed, it underlies the purpose of the laches

defense: “[I]t cannot be equitable for a well-informed merchant with

knowledge of a claimed invasion of right to wait to see how successful

his competitor will be and then destroy with the aid of court decree

much that the competitor has striven for and accomplished.” (quoting

Polariod Corp. v. Polarad Elecs. Corp., 287 F.2d 492, 498 (2d Cir.

1961)).

8

Rosell, its manufacturer, had tested PB8 and that, “Institut Rosell

has found virtually no live bacteria in this product.” In this letter

of complaint, Jarrow also complained of Nutrition Now’s

“protein matrix” coating*, which it rejected as being a “fraud,”

“illegal,” and “unfair,” and the order of the organisms listed on

bottles of PB8, which Jarrow attacked as “doubtful.”

In a separate letter to its customers, dated September 23,

1993, Jarrow assailed PB8 as being “worthless” and “sold under

false circumstances.” Nutrition Now responded that Jarrow’s

allegations were merit less and demanded that Jarrow cease and

desist its disparagement. Jarrow refused and responded on

September 24 with a lengthy and vitriolic personal attack on

Rifkin’s character and competence, and further accused Nutrition

Now of making false and unsubstantiated statements.

Rogovin continued his attack with yet another letter to

Rifkin, dated September 25, 1993. In that letter, Rogovin

asserted that he was pursuing a “counterassault” against PB8,

and acknowledged that the time for Jarrow to file an action

against Nutrition Now was running:

I want you to be aware of the fact that my

counterassault against your fraudulent marketing

of PB8 is relatively kind. I could be suing you for

unfair competition already. I could also have just

turned Nutrition Now in to the Federal Trade

Commission (FTC) for consumer fraud.

4. Conveniently, but not coincidentally, the “protein matrix,”

which Jarrow had dismissed as meaningless in 1993 was not an

impediment to testing PB8 until Jarrow had to try to fabricate

arguments against entry of summary judgment against it in the

underlying action. As noted by the District Court, the fallacy of this

argument was betrayed by Rogovin himself in 1993 when he asserted

that he had already had Institut Rosell test PB8 in 1993.

9

Acknowledging that the time-clock was ticking on his

claims, Rogovin stated:

If you knew what I knew about your product, what

would you do after all this time?

and attached a further “personal note” to his letter:

I have given you, sir, a lot of time to clean up

your act. Time’s up.

Although the Petition attempts to portray Rogovin as a

simple businessman who lacked legal acumen, he was no

stranger to litigation. On the contrary, in his 1993 letters Rogovin

bragged about having sued a mutual competitor, Nature’s Way,

for alleged Lanham Act violations, and claimed that he protected

“the entire legitimate probiotic industry.” He concluded:

Sir, you’re a morsel by comparison. Don’t try to bite

off something you can’t chew with me. There are

two con jobs doing the rounds in the west coast,

particularly the northwest: PB8 and Staff of Life.

I intend to deliver the coup de grace to both.*

5. Indeed, in an unsolicited letter to Nutrition Now’s counsel,

dated September 8, 2000, Rogovin detailed a history of strategic

litigation against Jarrow’s competitors commencing as early as 1989.

In that letter, Rogovin went on to State, “The current suit, you’re

quite correct, may have been a situation known to us ...” and

“I would have been justified in not only suing your client for unfair

competition but for libel based upon that horribly dishonest letter

your client sent to its customer base dated September 30, 1993.”

Thus Jarrow’s familiarity with the legal system and the extent of

Jarrow’s unreasonable delay in pursuing its claims are acknowledged

expressly by its principal officer.

10

Despite such sabre-rattling®, Jarrow waited seven years

before he sued Nutrition Now. Similarly, Jarrow never filed

any claim with the Federal Trade Commission, and, once

the true facts were disclosed, Jarrow’s complaint to the NNFA

resulted in no action. Rather than act then on whatever legal

rights it believed it had, Jarrow sat on them and attacked

Nutrition Now in the court of public opinion. Pressed on

this issue by both the District Court and the Ninth Circuit,

Jarrow was unable to articulate any coherent or reasonable

excuse for not having proceeded at that time, as he had so

loudly threatened to do.

D. Prejudice to Nutrition Now

Over the 15 years since PB8 was introduced in 1985,

Nutrition Now expended “significant” and “enormous”

resources in researching, developing, manufacturing, packaging,

labeling, distributing, mass-marketing, promoting and

advertising its product, while building a solid and satisfied

customer base. (Pet., Appendix A, pp. 16a-17a; Appendix C,

pp. 57a-58a). Nutrition Now has made heavy capital investments

and invested substantial labor, which built PB8’s good-will

and led to national customer satisfaction. In reliance on Jarrow’s

acquiescence by its virtual silence between the 1993 threats and

the 2000 lawsuit, in good faith Nutrition Now continued to invest

in its product and developed substantial business in the probiotic

field. Now, Jarrow attempts to gain through litigation the

competitive advantage it failed to secure on the merits in the

marketplace, which is the true proving ground for customer

satisfaction and the public interest.

6. Jarrow’s “public interest” argument is also suspect because

of the delay. Were the public interest truly at the bottom of this

litigation, why did Jarrow not act sooner? Instead, and again putting

the lie to Jarrow’s opportunistic accusations, the only competent

evidence in the record demonstrates consumer satisfaction with PB8.

11

E. Petitioner’s Erroneous “Unclean Hands” And Public

Interest Arguments

Both the District Court and the Ninth Circuit rejected

Jarrow’s contention that Nutrition Now had “unclean hands” in

developing the market for PB8. Each court rightly found that

the mere allegation that a party knew that its marketing

representations were false, which is simple and easy to claim,

could not defeat a valid laches defense. Otherwise, the

application of laches would be effectively precluded “whenever

a dispute of fact regarding the merits of a Lanham Act claim

existed.” (Pet., Appendix A, pp. 1 8a-19a; Appendix C, pp. 60a-6 1a).

Likewise, Jarrow’s irrelevant but oft-repeated and hotly disputed

allegation of Nutrition Now’s test result manipulation in 1993

(Pet., p. 7, n.5)’, even assuming its truth, was rejected by the

Ninth Circuit as insufficient. (Pet., Appendix C, pp. 61a-62a).

Jarrow also advanced the question of the public interest

as yet another reason for the courts below to ignore its

extensive delay. Both the District Court and the Ninth Circuit

noted that the record established little, if any, public interest

beyond Jarrow’s disputed false labeling allegations. In fact,

the record reflected potentially beneficial effects of and

consumer satisfaction with PB8. (Pet., Appendix A, pp. 19a-

20a; Appendix C., pp. 59a-60a). By contrast, there was “no

evidence that N/Now’s PB8 has had or is having a negative

impact on the public interest[.]” (Pet., Appendix A, p. 20a).

In sum, Jarrow did not present any cogent argument invoking

the public interest, only its own disputed labeling allegations.

7. Jarrow’s representation of the facts concerning Alpha

Omega’s testing was based on Rogovin’s hearsay statement, which

was wholly contradicted by Rifkin before the District Court. Nutrition

Now timely and properly objected, however, the claim had little

impression on that Court, which found no reason to discuss it in its

written opinion.

12

REASONS FOR DENYING THE PETITION

I. THIS COURT HAS HELD EXPLICITLY THAT

LACHES MAY BAR PROSPECTIVE INJUNCTIVE

RELIEF UNDER THE LANHAM ACT

This Court has repeatedly affirmed the rule that laches®,

equitable estoppel, acquiescence’, and estoppel may bar

injunctive relief where a defending party has, in good-faith,

marketed and expended money and effort to build up its trade

and reputation.

In United Drug Co. v. Theodore Rectanus Co., 248 U.S.

90, 39 S. Ct. 48, 63, L. Ed. 141 (1918), this Court held explicitly

that the laches defense is available against injunctive relief.

In Rectanus, a senior user traded medicines under the “Rex”

label, initially throughout Massachusetts; approximately six

years later, the junior user began marketing similar medicines

under the same label in Louisville, Kentucky. The dispute arose

when the senior user expanded into the junior user’s market.

8. Three elements are needed to prove a laches defense:

(1) plaintiff’s knowledge of defendant’s use of its mark; (2) plaintiff

inexcusably delayed in taking action; and (3) defendant will be

prejudiced if plaintiff were to be permitted to assert its right at this

time. Cuban Cigar Brands N.V. v. Upmann International, Inc.,

457 F. Supp. 1090, 1096 (S.D.N.Y. 1978), aff'd, 607 F.2d 995 (2d Cir.

1979); Sara Lee Corporation v. Kayser-Roth Corporation, 81 F.3d

455, 461 (4th Cir. 1996), cert. denied, 519 U.S. 976, 117 S. Ct. 412,

136 L. Ed. 2d 325 (1996); Nartron Corp. v. Stmicroelectronics, Inc.,

305 F.3d 397 (6th Cir. 2002); Chattanoga Manufacturing, Inc. v.

Nike, Inc., 301 F.3d 789, 792-793 (7th Cir. 2002).

9. “Acquiescence” has been held to encompass similar factors.

Times Mirror Magazines, Inc. v. Field & Stream Licenses Company,

294 F.3d 383, 395 (2d Cir. 2002).

13

Regarding the application of laches to a request for

injunctive relief, this Court in Rectanus held that equity will

bar prospective relief in cases of good-faith use of a trademark

and name. /d. at 103. The Court reasoned that a senior user

who has confined the use of the “Rex” mark to a limited

territory over a long period of time risks having an innocent

party apply the same mark to goods of similar character, and

expend money and effort in building up a trade under it. Since

Rectanus, in good faith and without prior notice, had selected

the “Rex” mark and succeeded in building up a local but

valuable trade under it by expending money and effort, the

petitioner was estopped from setting up the mark’s continued

use in that territory as an infringement of the trade-mark.

Previously, in Hanover Star Milling Company v. D. D.

Metcalf, 240 U.S. 403, 36 S. Ct. 357, 60 L. Ed. 713 (1916),

this Court also concluded that plaintiffs laches and acquiescence

barred injunctive relief for trademark infringement where the

defendant’s actions were not fraudulent, but made in good faith.

Id. at 419. In Hanover Star Milling, Allen & Wheeler Company

had first adopted and used the trade-mark “Tea Rose” on a type

of flour that it made and sold only in that part of the United

States that was North of the Ohio River. Hanover had also

adopted “Tea Rose” as its mark, but in the Southeast. Due to

Hanover’s efforts over many years, the mark had come to mean

Hanover’s flour in that territory.

On the issues of laches and acquiescence in trademark

infringement cases, this Court in Hanover Star Milling

concluded that, while injunctive relief would be proper if the

defendant had acted fraudulently or with knowledge of the

plaintiff’s rights, such relief was properly denied since Hanover

had not acted fraudulently, but in good-faith. Jd. at 419.

14

Even earlier, in La Republique Francaise v. Saratoga

Vichy Spring Company, 191 U.S. 427, 437, 24S. Ct. 145,

48 L. Ed. 247 (1903), this Court refused to enjoin the alleged

infringer from using the word “Vichy” because the original

user had delayed taking action for thirty years and because

the labels were dissimilar. The Court reasoned that “with the

yearly increasing sales and competition of the defendant

company, no move was made against them for twenty-five

years, and until 1898, when this bill was filed. A clearer case

of laches could hardly exist.” Jd.'°

II. THE CIRCUITS ARE NOT SPLIT — LACHES IS

AVAILABLE AS A DEFENSE TO CLAIMS FOR

PROSPECTIVE RELIEF UNDER THE LANHAM

ACT

A. Laches Is Universally Recognized As An Appropriate

Consideration Upon An Application For Prospective

Relief

As discussed below, the Second, Third, Fourth, Sixth,

Seventh, Ninth and the District of Columbia Circuits all

recognize a party’s laches as a defense against prospective

injunctive relief under the Lanham Act.

10. The availability of an equitable defense, including laches,

to bar an injunction was also recognized in San Francisco Arts &

Athletics, Inc. v. United States Olympic Committee, 483 U.S. 522,

531, 107 S. Ct. 2971, 97 L. Ed. 2d 427 (1987), although laches was

not applied on the facts of the case. In that case, the Unites States

Olympic Committee (“USOC”) had sued a California corporation

and various individuals under the Amateur Sports Acts to restrain

their use of the term “Olympics” to describe an athletic competition

they sponsored. This Court held that an unauthorized user of

“Olympic” words and symbols, although lacking normal statutory

defenses to trademark infringement, may raise traditional equitable

defense, such as laches. Jd.

- a

The Second Circuit has held that a defendant’s good

faith is a gateway key to claim the defense of laches as a bar

to an injunction. In those instances, the laches defense is not

only available to defeat equitable claims for an injunction in a

trademark suit, but also to defeat equitable claims for an

accounting. Saratoga Vichy Spring Co., Inc. v. Lehman, 625

F.2d 1037, 1041 (2d Cir. 1980) (federal trademark, unfair

competition, false designation of origin); Polaroid Corporation

v. Polarad Electronics Corporation, 287 F.2d 492 (2nd Cir.

1961), cert. denied, 368 U.S. 820, 82 S. Ct. 36,7 L. Ed. 2d 25

(1961) (plaintiffs 11-year delay, with knowledge of allegedly

infringing use barred injunctive relief); Conopco, Inc. vy.

Campbell Soup Co., 95 F.3d 187 (2d Cir. 1996) (claim for

permanent injunctive relief against alleged false advertisement

was dismissed on the grounds of laches.)

The Third and Fourth Circuits also apply laches to bar

injunctive relief, but with a sense of caution. Sobosle vy.

United States Steel Corp., 359 F.2d 7, 12 (3d Cir. 1966) (delay

or laches may operate as a defense to an injunction when,

in light of all the circumstances, a plaintiff has unreasonably

delayed seeking relief and the opposing party has been

prejudiced''); Fruit Industries v. Bisceglia Bros. Corporation,

11. While Jarrow notes that in its view there is a split in the

Circuits regarding whether economic injury to a defendant caused

by delay may properly constitute “prejudice” (Petition at p. 13 n.7),

in fact, virtually every Circuit court has recognized economic invest-

ment/economic injury to a defendant as a proper factor to be considered

in the assessment of whether laches may be asserted as a defense.

The Circuits unanimously recognize that economic investment and

“substantial activities” constitute prejudice in satisfaction of

the third element of laches, equitable laches, or estoppel as defenses

barring prospective injunctive relief. Polaroid Corporation v. Polarad

Electronics Corporation, 287 F.2d 492, 498 (2d Cir. 1961), cert. denied,

368 U.S. 820, 82 S. Ct. 36,7 L. Ed. 2d 25 (1961); Conopco, Inc. v.

(Cont’d)

16

101 F.2d 752 (3d Cir. 1939), cert. denied, 307 U.S. 646, 59

S. Ct. 1043, 83 L. Ed. 1526 (1939) (senior user’s three year

delays and acquiescence precluded from preventing junior

user from using trademark where junior user expended money

and effort in building up substantial business); See Sara Lee,

81 F.3d at 461 (1996) (estoppel by laches is sparingly applied

in trademark infringement actions where plaintiff seeks only

equitable relief). See also 5 McCarthy Trademarks, § 31.7.

Likewise, in Skippy, supra, the Fourth Circuit clarified

the limitations of applying the laches defense and held that

(Cont'd)

Campbell Soup Co., 95 F.3d 187, 192 (2d Cir. 1996); Anheuser-Busch,

Inc. v. Du Bois Brewing Co., 175 F.2d 370 (3d Cir. 1949), cert. denied,

339 U.S. 934, 70 S. Ct. 664, 94 L. Ed. 1353 (1950) (prejudice by

defendant’s advertising expenses and local good will); Chapin-Sacks

MFG. Co. v. Hendler Creamery Co., 254 F. 553, 557 (4th Cir. 1918)

(expenditure with knowledge of plaintiff of large sum by deliberate

infringer to develop good will in market outside plaintiffs’ territory;

injunction denied as to this outside territory); Nartron Corporation,

supra (any prejudice is sufficient); Chattanoga Manufacturing, Inc.

v. Nike, Inc., 301 F.3d 789, 795 (7th Cir. 2002) (if the delay is lengthy,

prejudice is more likely to have occurred, and less proof of prejudice

is required); Advanced Hydraulics, Inc. v. Otis Elevator Company,

525 F.2d 477, 481 (7th Cir. 1975), cert. denied, 423 U.S. 869, 96 S.

Ct. 132, 46 L. Ed. 2d 99 (1975); Safeway Stores, Incorporated v.

Safeway Quality Foods, Inc., 433 F.2d 99, 103 (7th Cir. 1970); Hot

Wax, Inc. v. Turtle Wax, Inc., 191 F.3d 813, 824 (7th Cir. 1999);

Whittaker Corp. v. Execuair Corp., 736 F.2d 1341, 1347 (9th Cir. 1984)

(detrimental reliance found in merely continuing a business,

“incurring additional potential liability” by reason of Plaintiff’s

delay); N.A.A.C.P. v. N.A.A.C.P. Legal Defense & Educational Fund,

Inc., 753 F.2d 131, 138 (D.C. Cir. 1985), cert. denied, 472 U.S. 1021,

105 S. Ct. 3489, 87 L. Ed. 2d 623 (1985) (injunctive relief may be

appropriately barred under doctrine of laches in a trademark

infringement suit when defendant invested substantial labor and

capital building trademark’s goodwill).

17

the availability of laches as a defense to claims for injunctive

relief for trademark infringement and unfair competition may

be limited when the defendant is guilty of bad faith infringe-

ment. Skippy, 674 F.2d at 212.

The Sixth Circuit’s application of laches in trade-

mark infringement cases is well recognized and in some cases

depends upon the facts and circumstances of each case. Estoppel

(delay, coupled with prejudice) forecloses a plaintiff from

obtaining injunctive relief in a trademark infringement action.

TWM Manufacturing Co., Inc. v. Dura Corp., 592 F.2d 346,

349-50 (6th Cir. 1979), cert. denied, 479 U.S. 852, 107 S. Ct.

183, 93 L. Ed. 2d 117 (1986) (delay of six years and two months);

Tandy Corp., 769 F.2d at 366 n.2 (to deny injunctive relief in a

trademark infringement action, some affirmative conduct in the

nature of an estoppel or conduct amounting to “virtual abandon-

ment” is necessary); Kellog Company v. Exxon Corporation,

209 F.3d 562, 568 (6th Cir. 2000), cert. denied, 531 U.S. 944,

121 S. Ct. 340, 148 L. Ed. 2d 273 (2000) (defendant must prove

elements of estoppel to defeat a suit for injunctive relief). Indeed,

in the recent case of Nartron Corporation, supra, the court held

that a trademark holder was not entitled to prospective relief

11 years after it had knowledge of the alleged infringing activity.

(305 F.3d 397, October 1, 2002).

There is no dispute as to the consensus within the Second,

Seventh and Ninth Circuits'?. Jarrow itself submits that the latter

12. Likewise, as noted by the Court below, under California

law, laches may properly be applied to defeat an application for

prospective relief. See Pet., Appendix C, pp. 62a-63a; Finnie v. Town

of Tiburon, 199 Cal. App. 3d 1, 244 Cal. Rptr. 581, 588 (1988), and

cases therein cited. See also Newman v. Checkrite California, Inc.,

912 F. Supp. 1354, 1376 (E.D. CA. 1995) (equitable defenses are

ordinarily appropriately raised against claims under California

Business and Professions Code).

18

Circuits permit a laches defense to claims for prospective relief

in trademark cases. See Chattanoga Manufacturing, Inc. v. Nike,

Inc., 301 F.3d 789 (7th Cir. 2002) (judgment for defendant in

trademark infringement action for damages and injunctive relief

where plaintiff’s laches was unreasonable and prejudicial since

competitor spent millions of dollars annually promoting its

products); Seven-Up Company v. O-So-Grape Co., 283 F.2d

103 (7th Cir. 1960), cert. denied, 365 U.S. 869, 81 S. Ct. 903,

5 L. Ed. 2d 859 (1961) (plaintiff's laches barred injunctive relief

to restrain Defendant from using trademark); Hot Wax, Inc. v.

Turtle Wax, Inc., 191 F.3d 813 (7th Cir. 1999) (twenty-year delay

constitutes laches which barred plaintiff’s false advertising

claim); James Burrough Ltd. v. Sign of Beefeater, Inc., 572 F.2d

574, 578-79 (7th Cir. 1978) (affirmative conduct in the nature

of estoppel is rieeded to deny injunctive relief in trademark

litigation); Continental Coatings Corporation v. Metco, Inc.,

464 F.2d 1375, 1378 (7th Cir. 1972) (plaintiff not entitled to

equitable relief for damages for future infringement where delay

was unreasonable and unexcused); Danjag v. Sony Corp., 263

F.3d 942 (9th Cir. 2001) (laches barred prospective injunctive

relief as well as retrospective relief in a counterclaim for

copyright infringement); Whitman v. Walt Disney Prod’ Inc.,

263 F.2d 229 (9th Cir. 1958) (laches barred action where passage

of time lulled defendant into a false sense of security, and

defendant acted in reliance); E-Systems, Inc. v. Monitek, Inc.,

720 F.2d 604, 607 (9th Cir. 1983) (for laches to constitute a

defense where injunctive relief is sought, passage of time must

be accompanied by circumstances which estop plaintiff from

obtaining injunctive relief; laches barred injunctive relief).

The cases cited by Jarrow do not support its argument

that a “split” exists in the Circuits. Jarrow cites to one case

from the Third Circuit in support of its position: University

of Pittsburgh v. Champion Products Inc., 686 F.2d 1040

(3d Cir. 1982), cert. denied, 459 U.S. 1087, 103 S. Ct. 571,

19

74 L. Ed. 2d 933 (1982)'3 However, this case is consistent

with and reinforces Nutrition Now’s arguments: actual laches

works as an equitable estoppel barring all relief and requires

a showing of both delay and prejudice. Jd. at 1044.

Accordingly, the reason why the Pittsburgh Court concluded

that the university’s delay did not bar its right to injunctive

relief was that the manufacturer had not been prejudiced by

it. The Court required a showing of delay, coupled with

prejudice, and rejected only Champion’s contention that delay

alone bars prospective relief. Jd. at 1946. The Court did not

reject the concept of economic prejudice as an element of a

laches defense. Rather, the Court found that Champion had

not demonstrated any such prejudice. In sum, Champion had

not satisfied the third element of laches: prejudice.

Jarrow relies upon Lyons Partnership, L.P. v. Morris

Costumes, Incorporated, 243 F.3d 789 (4th Cir. 2001) for the

proposition that, in the Fourth Circuit, “laches does not bar

claims for prospective relief under the Lanham Act at all.”

(Pet. p. 18). Jarrow overstates the holding in Lyons and other

Fourth Circuit authority is in accord with the general rule.

As the Fourth Circuit noted in Sara Lee Corp., supra, estoppel

by laches may bar relief where the plaintiff has unreasonably

delayed seeking redress, despite its knowledge of the defendant’s

infringing conduct, and the defendant has been prejudiced as a

result. The laches defense is limited, however, in situations,

unlike the one at bar, where there is no prejudice to the defendant,

or demonstrable confusion or other public interest evidenced.

Danjaq, 263 F.3d at 960. (See Pet., Appendix C, p. 58a.) Lyons

involved a dispute between the creator’s of Barney, a purple

dinosaur character, and costumers who were creating and renting

confusingly similar costumes. There was no evidence of any

13. Jarrow erroneously cites to this case as 686 F.3d 1040

(3d Cir. 1982).

20

prejudice to defendants as a result of plaintiff’s delay in asserting

its rights. On the contrary, the costumers had merely added the

infringing costumes as one more of the many that they offered

to the public. Both Danjag and the Ninth Circuit in the case

below noted this distinction. By contrast, the uncontradicted

evidence in the case below was that Nutrition Now had invested

heavily in developing PB8, to its prejudice, in reliance on

Jarrow’s acquiescence. Further, the Court in Lyons was

protecting both the owner’s property rights and the public’s

demonstrated interest in not being confused. Jarrow, by contrast,

has no property interest to protect, and, as held by each Court

having reviewed the facts of this case, there is no public interest

involved. As noted above, the only evidence in the record is of

consumer satisfaction with PB8.

Jarrow’s reliance on Kellogg Company v. Exxon

Corporation, 209 F.3d 562 (6th Cir. 2000), cert. denied, 531

U.S. 944, 121 S. Ct. 340, 148 L. Ed. 2d 273 (2000) is also

misplaced. In that case, the Court did not reject laches as a

defense to injunctive relief. Rather, it held that mere delay was

insufficient. The court ruled that to “defeat a suit for injunctive

relief, a defendant must also prove elements of estoppel which

requires more than a showing of mere silence on the part of the

plaintiff.” Jd. at 574. Defendant is also required to show that

it was misled by plaintiff through actual misrepresentations,

affirmative acts of misconduct, intentional misleading silence

or conduct amounting to virtual abandonment of the trademark.

Id. The Court did not find an estoppel since the record reflected

a genuine factual issue of whether plaintiff was put on notice

regarding defendant’s use of the trademark at issue. In fact,

when Plaintiff requested examples of defendant’s then-current

use of the trademark, defendant failed to include examples of

the trademark’s use in connection with the sale of food items,

which led plaintiff to believe that defendant’s use was limited

21

to the promotion of petroleum products. Jd. Thus, defendant

failed to establish the first element of laches: plaintiff’s

knowledge of defendants’ infringement.

B. Permutations In Terminology Between The

Circuits Do Not Undermine The Consensus That

Laches May, In Appropriate Circumstances,

Bar Prospective Injunctive Relief

What Petitioner calls a “split” of authority is nothing more

than the use of variant terminology by the Courts to describe

the same principles that they apply universally: the lapse of time,

coupled with prejudice to defendant or other affirmative

conduct on plaintiff’s part such as estoppel or acquiescence,

bars prospective injunctive relief in a trademark infringement

action. As J. Thomas McCarthy eloquently stated:

[a] good deal of confusion in the case opinions is

created by differing meanings attached to the word

“laches.” Some courts use the word to refer only

to plaintiff’s unreasonable delay in filing suit.

Other courts use the word to refer to the

conclusion that plaintiff is estopped by its delay

coupled with resulting prejudice to defendant . . .

most patent infringement cases appear to define

“laches” as that delay with resulting prejudice

which bars remedies for past infringement, while

“estoppel” is that degree of delay and prejudicial

reliance on the patgntee’s inaction which will bar

prospective relief as well. The semantic picture

is further clouded by confusing use in the

trademark cases of the term ‘acquiescence.’

5 McCarthy Trademarks, § 31.2 (4th ed. 2002).

22

Professor McCarthy went on to state:

The inter-relationship between delay, prejudice and

estoppel was explained by one court in these terms:

In order to find that a claimant’s ... interminable

inactivity or negligence has swollen to the level of

disabling laches or estoppel, his delay must be an

inexcusable one that has consequently prejudiced

an innocent user. . . By the mechanics of this precept,

equity comes to the aid of an innocent user and grants

him refuge from a claimant who has calmly folded

his hands and remained silent while the innocent

user has exploited and strengthened his mark. . . One

who is estopped may be merely the hapless victim

of his own lethargy. Estoppel, then is synonymous

with apparent or implied acquiescence. Jd.

Of course there will be variations in the application of

the laches doctrine based on factual permutations. This is

logical since all Circuits agree that the application of laches

is left to the sound discretion of the district court—to be

reviewed only for clear error of law or abuse of discretion’.

14. First Circuit: Ansin v. River Oaks Furniture, Inc., 105 F.3d

745 (1st Cir. 1997), cert. denied, 522 U.S. 818, 118 S. Ct. 70, 139

L. Ed. 2d 31 (1969) (laches ruling reviewed under abuse of discretion

standard). Second Circuit: Eppendorf Netheler Hinz GMBH vy.

National Scientific Supply Co., 14 Fed. Appx. 102 (2d Cir. 2001)

(same). Third Circuit: Holmes v. Pension Plan of Bethlehem Steel

Corp., 213 F.3d 124 (3d Cir. 2000) (same). Fourth Circuit: White v.

Daniel, 909 F.2d 99 (4th Cir. 1990), cert. denied 501 U.S. 1260, 111

S. Ct. 2916, 115 L. Ed. 2d 1079 (1991) (same). Fifth Circuit:

Kennedy v. Electricians Pension Plan, IBEW No. 995, 954 F.2d 1116

(Sth Cir. 1992) (same). Sixth Circuit: City of Wyandotte v.

Consolidated Rail Corp., 262 F.3d 581 (6th Cir. 2001) (same).

Seventh Circuit: Hot Wax v. Turtle Wax, 191 F.3d 813 (7th Cir. 1999)

(Cont'd)

23

These linguistic variations were discussed by the District

Court in Alfred Dunhill of London, Inc. v. Kasser Distillers

Products Corp. 350 F. Supp. 1341 (E.D. Pa. 1972), aff’d

mem., 480 F.2d 917 (3d Cir. 1973), where the Court stated:

The varying visage of the term “laches,” i.e., “laches

in the sense of mere delay,” “laches without more,”

“laches by estoppel,” has only muddled the concept

as it is used in trademark law, for restricting the

definition of laches only in terms of delay does not

comport with the classic definition. Jd. at 1364-1365.

The Dunhill Court concluded that while mere delay may

not bar relief, laches does. Jd. at 1365. Further, the Court

determined that laches and equitable estoppel are similar, so

it discussed them together, recognizing that “the defendant’s

intent is an equitable consideration under either.” Jd.

The Court also noted that principles of laches by estoppel or

equitable estoppel will bar all relief. To invoke equitable

estoppel, plaintiff must be charged with inexcusable delay

which prejudiced the innocent defendant. Jd. at 1364.

(Cont’d)

(same). Eighth Circuit: Foy v. Klapmeier, 992 F.2d 774 (8th Cir.

1993) (court’s ruling on equitable matters reviewed under abvse of

discretion standard). Ninth Circuit: Danjag v. Sony Corp., 203 F.3d

942 (9th Cir. 2001) (laches ruling reviewed under abuse of discretion

or clearly erroneous standard). Tenth Circuit: Roberts v. Colorado

State Board of Agriculture, 998 F.2d 824 (10th Cir. 1993), cert.

denied, 510 U.S. 1004, 114 S. Ct. 580, 126 L. Ed. 2d 478 (1993)

(court’s ruling on equitable matters reviewed under abuse of

discretion standard). Eleventh Circuit: Godfrey v. BellSouth

Telecommunications, Inc., 89 F.3d 755 (11th Cir. 1996). Federal

Circuit: Wanlass v. Fedders Corp., 145 F.3d 1461 (Fed. Cir. 1998)

(laches ruling reviewed under abuse of discretion standard).

24

The concept of evaluating the essence of the defense,

regardless of the variant nomenclature involved, was endorsed

by the Third Circuit in Anheuser-Busch, Inc. v. Du Bois Brewing

Co., 175 F.2d 370 (3d Cir. 1949), cert. denied, 339 U.S. 934, 70

S. Ct. 664, 94 L. Ed. 1353 (1950), a case relied on by the Third

Circuit in University of Pittsburgh v. Champion Products, Inc.,

supra. In that case, the Court held that after 31 years of delay,

the plaintiff was guilty of “inexcusable laches” and was “grossly

remiss.” Jd. at 374. The Court found that the long delay prior to

the filing of the complaint for injunctive relief amounted to at

least an acquiescence, if not an abandonment of the exclusive

right in use of the trademark. Accordingly, the Court ruled

that plaintiff was estopped from asserting its claim.

Ill. THE PUBLIC INTEREST IS ADEQUATELY

PROTECTED

In the absence of a threat to the public health, as here’®,

the public interest in false advertising cases is the same as it is

in trademark infringement cases. Accordingly, there is “no

distinction between trademark cases and misleading advertisement

cases for the purpose of laches. In both contexts, laches may

properly be applied so long as its application is equitable in

light of the public’s interest in being free from confusior. and

deception.” 5 McCarthy Trademarks, § 31.1 (4th ed. 2002)

citing Conopco, Inc. v. Campbell Soup Company, 95 F.3d 187,

193 (2d Cir. 1996) (estoppel by laches found and § 43(a) false

advertising charge dismissed), and Hot Wax, Inc. v. Turtle Wax,

Inc., 191 F.3d 813 (7th Cir. 1999) (twenty-year delay constituted

laches which barred plaintiff’s false advertising claim).

15. As noted by both the District Court and the Ninth Circuit,

the record is devoid of any evidence of a threat to the public health.

On the contrary, the only evidence presented establishes both a benefit

to the public health and consumer satisfaction with the PB8 product.

(Pet., Appendix A, pp. 19a-19b; Appendix C, p. 60a).

25

Case law developed in the context of trademark

infringement is applicable to the analysis required in this

case. Indeed, contrary to Jarrow’s assertion (Pet. at p. 22),

trademark infringement cases arguably present a more

compelling case for prospective relief than do false advertis-

ing cases. Typically, in trademark infringement cases,

the plaintiff is seeking prospective protection for its valuable

property interests. By contrast, false advertising claims

involve, at best, economic claims by a party whose interests

are market competitive. Such interests present a less forceful

case for equitable intervention by way of injunctive relief,

particularly preliminary injunctive relief, where the facts are

disputed, there is no bad faith, and where the only evidence

presented shows public satisfaction with the product that is

being attacked by the competitor.

Although the public’s interest in being free from

confusion with respect to products in the marketplace is

important, that interest alone cannot stand as a bar to the

application of laches in cases involving Lanham Act claims.

Hot Wax, Inc. v. Turtle Wax, Inc., 191 F.3d 813, 826 (7th Cir.

1999). Jarrow’s argument disregards completely the fact that,

as in Hot Wax, supra, Nutrition Now has offered ample

evidence of consumer satisfaction with PB8 both by

testimonials and market approval. Moreover, Nutrition Now

has never been cited for any regulatory violation concerning

PB8. This evidence trumps Jarrow’s speculative argument

regarding harm to the public interest, which is founded solely

upon Jarrow’s extrapolation of its labeling dispute. Both the

District Court and the Ninth Circuit considered and properly

rejected Jarrow’s claim on this point.

26

The District Court and the Ninth Circuit expressly

weighed the public interests involved and found that, on the

facts presented, the only evidence in the record showed a

benefit to the public interest, rather than a detriment.

(Pet., Appendix A, pp. 19a-20a; Appendix C, p.60a). This,

coupled with the prejudice to Nutrition Now caused by

Jarrow’s extraordinary and unjustified delay, not only in

filing suit but also in failing to involve the regulatory agencies

actually given the charge of protecting the public interest,

renders the decisions of the Courts below correct on

these facts.

Jarrow has no evidence in support of its public interest

argument. In fact, Jarrow’s position “compares apples with

oranges.” As is noted clearly on Nutrition Now’s label,

all bacterial counts are made as of the time of manufacturing;

however, all of Jarrow’s “tests” occurred later and under

dubious conditions. Ironically, Jarrow itself markets a

competitive product for which it makes similar claims.

At best, there are disputed claims regarding the status of

certain ingredients. Considering there has been no showing

that PB8’s labeling is having a negative impact on the public

interest, and in the face of satisfaction with the product,

Jarrow’s self-serving consumer public interest argument

should not stand in the way of the application of the doctrine

of laches. In short, Jarrow’s public interest argument is

competitive warfare in disguise.

Importantly, the Food and Drug Administration (“FDA”)

and the Federal Trade Commission (“FTC”) have the

authority to and do supervise and regulate the field, using,

among other tools, the Dietary Supplement Health and

Education Act of 1994 (“DSHEA”’) together with federal and

state unfair business practice and false advertising laws.

27

21 C.F.R. §§ 101.13, 101.14 and 101.36 (2001). Those

agencies have “jurisdiction” to take action against nutritional

supplement companies. If Jarrow truly believed that PB8

presented a threat to the public interest, it would have sought

to involve those agencies. Inexplicably, however, in the face

of such an allegedly dire threat to the public, Jarrow never

tried to involve either agency. The reason for Jarrow’s

reticence is that Jarrow was likely more interested in the

potential for obtaining monetary relief, so it proceeded only

by the instant lawsuit.

Regardless of Jarrow’s motivation, it lacks standing to

pursue claims under DSHEA and cannot bootstrap Lanham

Act claims into an enforcement action. Individuals cannot

use the Lanham Act’s provisions against false, deceptive and

misleading advertising to enforce FDA regulations. Mylan

Laboratories, Inc. v. Matkari, 7 F.3d 1130, 1139 (4th Cir.

1993). Ingenious pleading to escape the principle that FDCA

does not create a private right of action by making it appear

that another law “not truly appropriate is applicable” is

contrary to the established case law. See Eli Lilly & Co. v.

Roussel-Uclaf Holdings Corp., 23 F. Supp. 2d 460 (D.N.J.

1998) (“every federal court that has addressed the issue has

held that the FDCA does not create a private right of

action to enforce or restrain violations of its provisions and

accompanying regulations”); and Dial A Car, Inc. v.

Transportation, Inc., 82 F.3d 484, 490 (D.C. Cir. 1996)

(rejecting the “back door method” of enforcing administrative

agency rules through the use of the Lanham Act).

The economic nature of Jarrow’s claims render its plea

for prospective injunctive relief suspect on at least two

fundamental grounds. First, Jarrow’s argument that it is truly

seeking to protect the public interest, as its claims are presented

28

before this Court, is belied by its extensive delay in asserting

those claims, despite particularized threats of action to be

taken both via litigation and by complaint before regulatory

agencies (i.e., the Federal Trade Commission and/or The Food

and Drug Administration). In short, Jarrow’s actions speak

louder than its words. Second, if Jarrow’s delay in asserting

its claims was prompted by the fact that only by the year

2000, after Nutrition Now had, via its marketing expenditures,

established a strong position in the market, did Jarrow believe

it worthwhile to pursue its alleged claims, it has thus shown

its true colors. Jarrow either lay in wait until the prospect of

economic damages was sufficiently lucrative to justify the

litigation effort, or until the market impact upon its business

was noticeable. Either way, Jarrow’s equitable position must

be balanced against the prejudice to Nutrition Now, both in

the form of evidentiary prejudice and in the form of economic

prejudice incurred by Nutrition Now in reliance on the hollow-

ness of Jarrow’s threat of suit.’®

On balance, as found by both the District Court and the

Ninth Circuit, Nutrition Now’s prejudice was substantial and

far outweighed any equitable claim presented by Jarrow.

On the facts presented, that determination should not be

disturbed by this Court.

16. See n.10, supra.

29 Je

CONCLUSION

For the foregoing reasons, Nutrition Now respectfully

requests that the Petition for Writ of Certiorari be denied.

Respectfully submitted,

JoHN A. LAWRENCE

RADCLIFF DONGELL LAWRENCE LLP

Attorneys for Respondent

707 Wilshire Boulevard

45th Floor

Los Angeles, CA 90017

(213) 614-1990