Stemage Skin Care, LLC v. NuGene International, Inc. et al

Filing 1

COMPLAINT Receipt No: 0973-16047671 - Fee: $400, filed by Plaintiff Stemage Skin Care. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Exhibit D, # 5 Exhibit E, # 6 Exhibit F, # 7 Exhibit G, # 8 Exhibit H) (Attorney Robert J Parks added to party Stemage Skin Care(pty:pla))(Parks, Robert)

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ROBERT J. PARKS, ESQ. (SBN 103014)
[e-mail]
ROBERT K. EDMUNDS, ESQ. (SBN 89477)
[e-mail]
BUCHANAN INGERSOLL & ROONEY LLP
600 West Broadway, Suite 1100
San Diego, CA 92101
Telephone: [phone]
Fax:
619 702 3898

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Attorneys for Plaintiff Stemage Skin Care, LLC

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UNITED STATES DISTRICT COURT

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FOR THE CENTRAL DISTRICT OF CALIFORNIA, SOUTHERN DIVISION

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STEMAGE SKIN CARE, LLC, a North
Carolina limited liability company,
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Plaintiff,
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vs.
NUGENE INTERNATIONAL, INC., a
Nevada corporation; NUGENE, INC., a
California corporation; MOHAMMAD
ALI KHARAZMI, an individual;
MOHAMMED SAEED KHARAZMI,
an individual; KATHY IRELAND
WORLDWIDE, a California
corporation; STEPHEN ROSEBERRY,
an individual; STEVE ROSENBLUM,
an individual; ERIK STERLING, an
individual; and DOES 1 through 50,
inclusive,

Case No.
COMPLAINT FOR:
(1) COPYRIGHT INFRINGEMENT;
(2) INTERFERENCE WITH
CONTRACT;
(3) INTENTIONAL INTERFERENCE
WITH PROSPECTIVE ECONOMIC
ADVANTAGE;
(4) NEGLIGENT INTERFERENCE
WITH PROSPECTIVE ENCONOMIC
ADVANTAGE; AND
(5) CONSPIRACY
DEMAND FOR A JURY TRIAL

Defendants.

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COMPLAINT

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COMPLAINT

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This is an action by Stemage Skin Care, LLC (“Plaintiff”) for damages and

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injunctive relief arising from infringement of Plaintiff’s copyright in an audio-visual

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work of authorship. Plaintiff also seeks damages for interference with contract,

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intentional interference with prospective economic advantage; negligent interference

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with prospective economic advantage; and conspiracy. In support of this Complaint,

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Plaintiff alleges as follows.
THE PARTIES

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1.

Plaintiff is a North Carolina limited liability company and maintains a

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place for the transaction of business at 520 Elliot Street, Charlotte, North Carolina

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28202-1366.

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2.

Plaintiff is informed and believes and thereon alleges that Defendant

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NuGene International, Inc. (“NuGene International”) is a publicly traded Nevada

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corporation, with addresses at 1645 Village Center Circle, Suite 170, Las Vegas,

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Nevada 89134, and 1184 Virginia St., Far Rockaway, New York 11619. On

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information and belief, Defendant NuGene International, during periods of time

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relevant to this Complaint, has authorized, directed, and participated substantially in

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the unlawful conduct alleged hereunder, and has acted as the alter ego of Defendant

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NuGene for all material purposes.

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3.

Plaintiff is informed and believes and thereon alleges that Defendant

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NuGene, Inc. (“NuGene”) is a California corporation, with an address at 17912

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Cowan, Irvine, California 92614, and that NuGene is a wholly owned subsidiary of

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NuGene International.

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4.

Plaintiff is informed and believes and thereon alleges that Defendant

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Mohammad Ali Kharazmi (“MA Kharazmi”) is a California resident located and

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doing business at 17912 Cowan, Irvine, California 92614. On information and belief,

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Defendant MA Kharazmi is a principal officer, director and/or shareholder of

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Defendants NuGene International and/or NuGene and, during periods of time
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relevant to this Complaint, has authorized, directed, participated substantially in the

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unlawful acts alleged hereunder.

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5.

Plaintiff is informed and believes and thereon alleges that Defendant

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Mohammad Saeed Kharazmi (“MS Kharazmi”) is a California resident located and

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doing business at 17912 Cowan, Irvine, California 92614. On information and belief,

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Defendant MS Kharazmi is a principal officer, director and/or shareholder of

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Defendants NuGene International and/or NuGene and, during periods of time

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relevant to this Complaint, has authorized, directed, participated substantially in the

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unlawful acts alleged hereunder.

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6.

Plaintiff is informed and believes and thereon alleges that Defendant

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Kathy Ireland Worldwide (“Kathy Ireland Worldwide”) is a California corporation,

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with an address at P.O. Box 1410, Rancho Mirage, California 92270.

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Plaintiff is informed and believes and thereon alleges that Defendant

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Stephen Roseberry (“Roseberry”) is a California resident located and doing business

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at 2029 Century Park East, 14th Floor, Los Angeles, California 90067. On

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information and belief, Defendant Roseberry is a principal officer, director and/or

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shareholder of Defendant Kathy Ireland Worldwide and, during periods of time

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relevant to this Complaint, has authorized, directed, participated substantially in the

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unlawful acts alleged hereunder.

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8.

Plaintiff is informed and believes and thereon alleges that Defendant

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Steve Rosenblum (“Rosenblum”) is a California resident located and doing business

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at 2029 Century Park East, 14th Floor, Los Angeles, California 90067. On

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information and belief, Defendant Rosenblum is a principal officer, director and/or

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shareholder of Defendant Kathy Ireland Worldwide and, during periods of time

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relevant to this Complaint, has authorized, directed, participated substantially in the

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unlawful acts alleged hereunder.

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9.

Plaintiff is informed and believes and thereon alleges that Defendant Erik

Sterling (“Sterling”) is a California resident located and doing business at 2029
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Century Park East, 14th Floor, Los Angeles, California 90067. On information and

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belief, Defendant Sterling is a principal officer, director and/or shareholder of

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Defendant Kathy Ireland Worldwide and, during periods of time relevant to this

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Complaint, has authorized, directed, participated substantially in the unlawful acts

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alleged hereunder.

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10. Plaintiff lacks knowledge or information as to the true names and

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capacities of defendants sued herein as Does 1 through 50, inclusive, and therefore

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sues these defendants by such fictitious names. Plaintiff is informed and believes and

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thereon alleges that each of Does 1 through 50, inclusive, is liable for the obligations

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and claims alleged herein. Plaintiff will amend this Complaint to allege their true

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names and capacities when ascertained.

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JURISDICTION AND VENUE

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11. This Court has subject matter jurisdiction over Plaintiff’s copyright

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infringement claim pursuant to 17 U.S.C. § 501 and 28 U.S.C. §§ 1331 and 1338(a).
12. This Court has supplemental jurisdiction over Plaintiff’s claims arising

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under the laws of the State of California pursuant to 28 U.S.C. § 1367(a) because

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these claims are so related to Plaintiff’s claims under federal law that they form part

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of the same case or controversy and derive from a common nucleus of operative fact.

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13. Venue is proper in this Court pursuant to 28 U.S.C. § 1391(b) and §

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1400(a) because (a) the facts of infringement and other wrongful conduct alleged in

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this Complaint occurred in the Central District of California: (b) the Defendants are

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doing business and may be found in the Central District of California; and (c)

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Defendants have a sufficient connection with the Central District of California to

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make venue proper in this District, all as alleged in this Complaint.

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GENERAL ALLEGATIONS

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Ireland’s Ambassador Agreement with Plaintiff

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14. At all relevant times, Plaintiff is, and has been, in the business of

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developing and commercializing certain skin care products, based on supplements
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derived from human adult stem cells called Human Mesenchymal Stem Cells (the

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“Products”).
15. In or about August, 2012, Plaintiff retained the services of Kathy Ireland

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(“Ireland”), to provide certain so-called “Ambassador Services” promoting the

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Products. At the time, Forbes Magazine had recognized Ireland, a super model

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swimsuit icon, as having built a licensing empire by making herself, her name, and

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her likeness available to others for the promotion of their products. A true and

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correct copy of the article in the February 27, 2012 edition of Forbes is attached

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hereto as Exhibit A and incorporated herein by this reference.
16. On or about August 20, 2012, Ireland’s company, kathy ireland, inc.

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(“KII”), and Plaintiff entered into that certain Commercial Ambassador Agreement

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(the “Ambassador Agreement”) dated August 20, 2012, pursuant to which KII made

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Ireland available to perform the Ambassador Services. Ireland signed the

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Ambassador Agreement on KII’s behalf, and she signed a personal guaranty of KII’s

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obligations under the Ambassador Agreement. For the purposes of this complaint,

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Ireland and KII are referred to collectively and/or interchangeably as “Ireland.” A

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true and correct copy of the Ambassador Agreement with Ireland’s guaranty is

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attached hereto as Exhibit B and is incorporated herein by this reference.
17. The Ambassador Agreement contained, among others, the following

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material provisions:
(a)

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Pursuant to Section 1(d), the initial term was to end on December 31,

(b)

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Pursuant to Section 5(a), Plaintiff agreed to pay (and paid) Ireland an

2017.

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“Ambassador Fee” of $100,000.00. The fee was for appearing on the “Show,”

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defined as “a one half-hour television direct response program, which demonstrates,

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promotes and sells a line of skin care products presently known as Stemage.”

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(c)

Pursuant to Section 2(f), Plaintiff agreed to pay all of the production

costs for the Show.
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(d)

Pursuant to Section 2(j), Ireland agreed that Plaintiff would own all of

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the rights related to the Show and that Plaintiff agreed to give Ireland a royalty-free

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license in perpetuity to use any excerpts from the Show solely for Ireland’s own

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promotional and marketing purposes.

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(e)

In addition to the Show, Ireland agreed, pursuant to Section 2(b)(i), to

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make herself “available, subject to her personal schedule, to support ongoing

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promotional activities including but not limited to: speaking engagements, TV and

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media appearances, and online social media venues such as web blogs, Twitter,

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Facebook and related vehicles.” Plaintiff agreed to pay the expenses for travel and

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hotels that Ireland incurred in connection with these additional services.
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Plaintiff agreed that “[p]rior to use, all marketing materials,

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advertisements, packaging, on-line content, images, and the like to be used [by

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Plaintiff] with the Products shall be submitted to [Ireland] for review and approval. If

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[Ireland] has not approved or rejected such materials with five (5) business days of

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[Plaintiff’s] submission, then any such material shall be deemed approved by

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[Ireland].”

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(g)

Plaintiff agreed that Ireland could represent “other cosmetic products so

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long as those products are not Competing Products.” The Ambassador Agreement

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defined “Competing Products as “any stem cell based skin care products.”

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(h)

Ireland agreed that without Plaintiff’s prior written consent, she “will not

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engage in or be involved with endorsing, sponsoring, promoting, manufacturing,

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advertising, marketing or distributing any Competing Products for a period

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commencing on the date of this Agreement and ending at the time that this

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Agreement expires or is otherwise terminated as set forth herein except for

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termination pursuant to Section 7(c) hereof in which event this Section 3 shall survive

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until the natural expiration of this Agreement.”

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(i)

Ireland agreed that her services under the Ambassador Agreement were

“of special and extraordinary character, which gives them unique value,” and the loss
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of those services “could not be adequately compensated for by damages; a breach of

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any provision hereof would cause [Plaintiff] irreparable harm” where Plaintiff would

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be “entitled to injunctive or other equitable relief.” Further, if Ireland “indicates she

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does not intend to perform, it shall be deemed a breach of this Agreement and

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[Plaintiff’s] remedies hereunder shall be cumulative.”
18. From 2012 to approximately October 2014, Plaintiff and Ireland worked

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together to produce the Show and other direct response infomercial, and to present

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the Products to the market in other venues, such as news programs, television shows,

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public appearances, and the like.
19. The Show first aired and was published publicly on or about April 29,

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2013.
20. In or about May 2013, Ireland’s role on behalf of Plaintiff’s Products was
announced publicly in press releases. One press release read, in part, as follows:
LOS ANGELES, May 22, 2013/PRNewswire/ -- Kathy Ireland,
CEO and Chief Designer of kathy ireland Worldwide (kiWW) and
leading women’s health advocate, and world-renowned board
certified surgeon Dr. David Scharp today announced their
collaboration in bringing to the beauty market a stem cell-derived
product brand named Stemage. They note that the unique aspect of
the natural skin rejuvenation system is that it targets visible signs of
aging through the unique and proprietary use of human Mesenchymal
stem cell derivatives, not stem cells but rather active ingredients or
derivatives of which stem cells are comprised.

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It is a first venture into the science of stem cells for Kathy, whose
kiWW is the 25th most powerful brand name worldwide on Licensing
Global Magazine’s top 125 brands list. Ireland’s firm designs and
markets more than 15,000 individual products throughout the world.
“Skin care is one of my passions. My work and my life were
impacted by troubled skin. Stemage is new, powerful and
extraordinary. Expect to feel and see something different. Our
relationship with the researchers and executive team at Stemage is
responsible for a strategic alliance, between our two companies.
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Stem cells are the next phase of health and personal care. My skin
feels healthier, trouble free and finally, I’m able to wear less makeup.
I love Stemage. I believe you will too,” says Kathy Ireland, CEO and
Chief Designer of kathy ireland Worldwide.
The contents of this press release were published, and may still be found, on
several beauty-related and cosmetics-related websites. A true and correct of the press
release is attached hereto as Exhibit C and is incorporated herein by this reference.
21. On or about May 31, 2013, Ireland’s launch with Plaintiff was published
in an article in License! Global Magazine. A true and correct copy of the article is
attached hereto as Exhibit D and is incorporated herein by this reference.
22. Ireland also participated in several programs, such as infomercials and
one appearance on Marie (i.e., Marie Osmond’s television show), in which Ireland
appeared and promoted Plaintiff’s Products. The most recent of the programs located
appears to have aired in March, 2014.
23. In early 2014, Plaintiff and Ireland mutually decided to consider different
ways of bringing the Products to the market, including, without limitation, a
rebranding of the Products.
24. By March 2014, Plaintiff had developed a new marketing strategy for the
Products. As required under Section 3(d) of the Ambassador Agreement, Plaintiff
submitted the new strategy to Ireland for her review and approval. Section 3(d) of the
Ambassador Agreement provided that Ireland had five (5) business days following
Plaintiff’s submittal of its new marketing strategy to reject or otherwise disapprove it,
and that if Ireland did not approve or reject Plaintiff’s submittal within those five (5)
business days, Ireland would be deemed to have approved Plaintiff’s submittal.
Ireland did not approve or reject Plaintiff’s submittal of its new marketing strategy
within the five (5) business day period, and was therefore deemed to have approved
Plaintiff’s new marketing strategy.
25. On or about May 8, 2014, Ireland participated with Plaintiff in the
development of a new direct response video to be played on television for
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promotional purposes. On or about May 20, 2014, Ireland approved the video.
26. On or about June 9, 2014, Ireland emailed Plaintiff to ask Plaintiff to

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participate in a “multi-partner Design and Retail Synergies” conference telephone

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call. Plaintiff participated in the conference call.
27. On or about July 19, 2014, Ireland sent Plaintiff an email, requesting

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Plaintiff’s new marketing plans. On or about July 21, 2014, Plaintiff replied to

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Ireland’s email by submitting the details of its marketing plan including a rebranding

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plan. Plaintiff indicated in its reply that it hoped to launch the new marketing

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strategy by August 1, 2014. Ireland did not approve or reject the new marketing

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materials, including, without limitation, the rebranding plan, within the five (5)

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business days following Plaintiff’s submission to Ireland. Under Section 3(d) of the

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Ambassador Agreement, Ireland was deemed to have approved Plaintiff’s marketing

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plan.

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28. On or about August 14, 2014, Ireland sent Plaintiff an email, requesting

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samples of the marketing materials to be mailed to Ireland at an address in Rancho

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Mirage, California. Plaintiff sent the samples as requested. Ireland did not approve

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or reject the samples within the five (5) business days following Plaintiff’s

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submission to Ireland. Under Section 3(d) of the Ambassador Agreement, Ireland

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was deemed to have approved Plaintiff’s samples.

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29. On or about August 15, 2014, Ireland invited Plaintiff to participate in

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another "Retail Task Force" conference call. On or about August 20, 2014, Ireland

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sent an email to Plaintiff, thanking it for its participation in the Retail Task Force

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conference call.

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30. As of October 1, 2014, Plaintiff had performed all of its obligations under
the Ambassador Agreement, except those that Ireland had excused or waived.
31. On or about October 1, 2014, Ireland informed Plaintiff that she had

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decided to cease performing services for Plaintiff under the Ambassador Agreement.

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Ireland attempted to justify her decision by, among other things, knowingly,
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intentionally, falsely, and fraudulently claiming that she had good cause to terminate

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the Ambassador Agreement because Plaintiff had breached the Ambassador

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Agreement by, among other things, changing its marketing strategy for its Products

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without first obtaining Ireland’s approval and over her objections. Under Section

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2(k) of the Ambassador Agreement, Ireland’s announced intention to no longer

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perform under the Ambassador Agreement constituted a deemed breach of the

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Agreement.
32. Plaintiff is informed and believes, and thereon alleges, that Ireland’s

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purported termination of the Ambassador Agreement was pretextual and was

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intended to conceal, and did conceal, her material breach of Section 3(a) the

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Ambassador Agreement, pursuant to which Ireland had agreed that, without

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Plaintiff’s written consent, she would not “engage in or be involved with endorsing,

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sponsoring, promoting, manufacturing, advertising, marketing or distributing any

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Competing Products.”
33. Plaintiff is informed and believes, and thereon alleges, that before

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October 1, 2014, Ireland had been engaged and involved in negotiations with

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Defendants NuGene, MA Kharazmi, and MS Kharazmi for the purpose of endorsing,

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sponsoring, promoting, advertising, marketing, and distributing NuGene’s stem-cell

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based skin care products that were competitive with Plaintiff’s Products.
34. On or about November 4, 2014, Defendants Kathy Ireland Worldwide

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and NuGene entered into that certain License Agreement (the “NuGene License

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Agreement”) dated November 4, 2014, pursuant to which Kathy Ireland Worldwide

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agreed to make Ireland available to NuGene for the purpose of providing to NuGene

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and its competing products the same types of ambassador services that Ireland had

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agreed to render to Plaintiff and its Products under the Ambassador Agreement. A

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true and correct copy of the NuGene License Agreement is attached hereto as Exhibit

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E and is incorporated herein by this reference.

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////
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35. Plaintiff is informed and believes, and thereon alleges, that Ireland

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breached the Ambassador Agreement in order to enter to the NuGene License

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Agreement because the NuGene License Agreement was more lucrative for her. For

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example, Plaintiff paid Ireland an up-front of $100,000, whereas NuGene agreed to

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pay, and paid, Ireland an up-front fee of $350,000. NuGene also agreed to pay

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Ireland a royalty equal to five percent (5%) of the net sales of NuGene products, with

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guaranteed minimum royalty payments of $100,000 in Year 1, $150,000 in Year 2,

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$200,000 in Year 3, and $250,000 in Year 4.

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36. Plaintiff did not learn that Ireland had entered into the NuGene License
Agreement until on or about February 3, 2015.
37. On or about March 5, 2015, Plaintiff learned that NuGene had posted a

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number of audiovisual presentations on its website at www.nugene.com/media

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(“NuGene Videos”).

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38. Plaintiff’s claims against Ireland for her breach of the Ambassador

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Agreement are the subject matter of that certain arbitration pending before the

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American Arbitration Association entitled kathy ireland, Inc. v. Stemage Skin Care,

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LLC, AAA Case No. 01-15-0002-7331, including certain related counterclaims.
Ireland’s License Agreement with NuGene

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39. Plaintiff is informed and believes, and thereon alleges, that Defendant
NuGene is a California corporation formed on or about December 5, 2006.
40. Plaintiff is informed and believes, and thereon alleges, that on or about

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March 29, 2011, NuGene obtained registration with the United States Patent and

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Trademark Office of the trademark “NuGene” in International Class 003 consisting

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of, among other things, anti-aging moisturizer, eye contour cream, non-medicated

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anti-aging serum, skin lotion, and hydrating sunscreen cream.” A true and correct

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copy of the trademark registration obtained online from the United States Patent and

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Trademark Office’s website is attached hereto as Exhibit F and is incorporated herein

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by this reference.
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41. On or about November 4, 2014, NuGene entered into the NuGene

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License Agreement with Kathy Ireland Worldwide and Ireland.
42. Plaintiff is informed and believes, and thereon alleges, that on or about

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December 29, 2014, NuGene merged with an entity known as NG Acquisition Inc., a

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wholly owned subsidiary of Bling Marketing, Inc., a publicly traded Nevada

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corporation, and that as a result of the merger, Defendant NuGene, Inc. became a

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wholly owned subsidiary of Bling Marketing, Inc.
43. Plaintiff is informed and believes, and thereon alleges, that on or about

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January 15, 2015, Bling Marketing, Inc. changed its name to NuGene International,
Inc.

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44. Plaintiff is informed and believes, and thereon alleges, that in an article in

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License! Global Magazine dated on or about March 25, 2015, NuGene, Kathy Ireland

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Worldwide, and Ireland announced a campaign to “re-launch” skin care products,

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stating that “[t]he campaign will include a re-branded Internet presence and new

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videos featuring Ireland.” A true and correct copy of the article is attached hereto as

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Exhibit G and is incorporated herein by this reference.

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FIRST CAUSE OF ACTION

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(Copyright Infringement Against NuGene International,

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NuGene, MA Kharazmi, and MS Kharazmi)

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45. Plaintiff repeats and realleges each of the allegations contained in all of

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the preceding paragraphs 1 through 44, inclusive, as if fully set forth at length herein.

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46. The principal obligation undertaken by Ireland in the Ambassador

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Agreement was to provide the services of hosting one or more half-hour television

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direct response programs demonstrating, promoting and selling Plaintiff’s Products.

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Section 2(a) of the Ambassador Agreement provides in relevant part:

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As part of the “Ambassador Services," [Ireland] shall make the

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Ambassador available as an on-camera and voice-over performer,

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sufficient to provide material for the Show as Company shall
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reasonably require and as the Ambassador's personal schedule

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permits, provided that the Ambassador uses reasonable efforts to

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make herself available.

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47. In Section 2(j) of the Ambassador Agreement, Ireland assigned all right,

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title and interest in the “result and proceeds” of the agreement, including copyright

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ownership. Section 2(j) provides:

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Ownership of Results and Proceeds. Except as otherwise set out in

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this Agreement, the Company shall be entitled to, and shall own,

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solely and exclusively, all of the result and proceeds thereof as a

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work-for-hire, and all rights of every kind therein in perpetuity

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throughout the universe, including the copyright in the Show.

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However, Company hereby grants Lender a non-royalty license in

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perpetuity to use any excerpts from the Show solely for Lender's own

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promotional and marketing purposes. Except as set out in this

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Agreement, Lender and the Ambassador hereby assign and transfer to

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the Company all right, title and interest in such results and proceeds

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without reservation, condition, or limitation, and shall execute

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separate assignments upon requests. This Section 2(j) shall survive

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expiration or termination of this Agreement.

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48. Pursuant to Section 2 of Ambassador Agreement, the parties produced a

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number of audio-visual presentations (the “Stemage Videos”) consisting entirely of

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original authorship.

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49. On June 29, 2015, Plaintiff obtained from the U.S. Copyright Office

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registration of copyright in the audio-visual presentation illustrated at

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https://vimeo.com/131539020 (hereinafter “Plaintiff’s copyrighted work”). A copy

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of the registration as it appears on U.S. Copyright Office’s website, U.S. Copyright

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Registration # PA0001947991, is attached hereto as Exhibit H and incorporated

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herein by this reference. Pursuant to Section 2(f) of the Ambassador Agreement,
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Plaintiff owns all right, title and interest to this copyright.
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On or about March 5, 2015, Plaintiff learned that Defendant NuGene had

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posted an audiovisual presentation on its website at www.nugene.com/media bearing

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substantial similarity to Plaintiff’s copyrighted work. That presentation, entitled

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“Kathy Ireland – Talks with Tommy Mehare & Selina Lopez about the NuGene

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Difference,” is available for inspection at

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www.youtube.com/watch?v=V2qaJi30Vew, A side-by-side comparison between

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Plaintiff’s copyrighted work and Defendant NuGene’s audiovisual presentation is

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illustrated at https://vimeo.com/121710827.

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51. Plaintiff is informed and believes, and alleges thereon, that NuGene

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International, NuGene, MA Kharazmi, and MS Kharazmi (collectively, “NuGene

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Copyright Infringers”), and each of them, copied Plaintiff’s copyrighted work in

13

violation of Plaintiff’s exclusive rights under Section 106 of the United States

14

Copyright Law, 17 U.S.C. § 106. After contracting with Plaintiff and accepting

15

payment from Plaintiff to produce a creative work of authorship, and after assigning

16

all right, title and interest in that work of authorship, for which she was paid in full,

17

Defendant Ireland accepted payment by Defendant NuGene, a direct competitor of

18

Plaintiff, for a substantially similar work of authorship within the meaning of the U.S.

19

Copyright Law, thereby infringing Plaintiff’s exclusive rights in a combination of

20

creative elements, including similarities to Plaintiff’s script, similarities in the

21

number, identity and appearance of the actors, similarities in the format and length of

22

Plaintiff’s copyrighted work, and the total “look and feel” of Plaintiff’s copyrighted

23

authorship. By its acts alleged above, the NuGene Copyright Infringers have

24

willfully, intentionally, with willful blindness to and in reckless disregard of

25

Plaintiff’s rights, infringed Plaintiff’s exclusive rights in its copyrighted work.

26

52. As a result of their wrongful conduct, the NuGene Copyright Infringers,

27

jointly and severally, are liable to Plaintiff for copyright infringement pursuant to

28

Section 501 of the United States Copyright Law, 17 U.S.C. § 501.
- 13 COMPLAINT

Case 8:15-cv-01078-AG-JCG Document 1 Filed 07/08/15 Page 15 of 24 Page ID #:15

1

53. Plaintiff has suffered damages as a proximate result of the copyright

2

infringement by the NuGene Copyright Infringers, and, pursuant to Section 504 of the

3

United States Copyright Law, is entitled to recover such damages, including any and

4

all profits that each of the NuGene Copyright Infringers has earned as a result of its

5

wrongful conduct.

6

54. Plaintiff is also entitled to injunctive relief against the NuGene Copyright

7

Infringers pursuant to Section 502 of the United States Copyright Law, 17 U.S.C. §

8

502, and to an order impounding any and all infringing materials pursuant to 17

9

U.S.C. § 503.

10

55. Plaintiff has no adequate remedy at law for the NuGene Copyright

11

Infringers’ wrongful conduct because (i) Plaintiff’s copyrights are unique and

12

valuable property which has no readily determinable market value; (ii) the NuGene

13

Copyright Infringers’ infringement harms Plaintiff such that Plaintiff could not be

14

made whole by any monetary award; and (iii) the NuGene Copyright Infringers’

15

wrongful conduct, and the resulting damage to Plaintiff, is continuing.

16

SECOND CAUSE OF ACTION

17

(Intentional Interference with Contract Against NuGene, MA Kharazmi, and

18

MS Kharazmi)

19

56. Plaintiff repeats and realleges each of the allegations contained in all of

20

the preceding paragraphs 1 through 55, inclusive, as if fully set forth at length herein.

21

57. At all times relevant hereto, the Ambassador Agreement between Ireland

22
23

and Plaintiff was valid and in full force and effect.
58. Plaintiff is informed and believes, and thereon alleges, that at all times

24

relevant hereto, NuGene, MA Kharazmi, and MS Kharazmi (collectively, the

25

“NuGene Defendants”) knew of the Ambassador Agreement and knew that the

26

Ambassador Agreement was valid and in full force and effect.

27
28

59. Plaintiff is informed and believes, and thereon alleges, that at all times
relevant hereto and before entering into the NuGene License Agreement, the NuGene
- 14 COMPLAINT

Case 8:15-cv-01078-AG-JCG Document 1 Filed 07/08/15 Page 16 of 24 Page ID #:16

1

Defendants knew that commencing in 2013 through and including 2014, Ireland had

2

endorsed, and was rendered ambassador services to, Plaintiff and its Products.
60. Plaintiff is informed and believes, and thereon alleges, that at all times

3
4

relevant hereto, the NuGene Defendants knew that the skin care products for which

5

they wanted to retain Ireland’s services as an ambassador were directly competitive

6

with Plaintiff’s Products.
61. Plaintiff is informed and believes, and thereon alleges, that at all times

7
8

relevant hereto, the NuGene Defendants intended to induce, and did induce, Ireland

9

to breach her Ambassador Agreement with Plaintiff and to enter into the NuGene

10

License Agreement.

11

62. Ireland did, in fact, breach the Ambassador Agreement by, among other

12

things, knowingly, intentionally, falsely, and fraudulently claiming that Plaintiff had

13

breached the Ambassador Agreement when, in fact, Ireland knew that Plaintiff had

14

performed all of its obligations under the Ambassador Agreement.
63. Plaintiff is informed and believes, and thereon alleges, that the NuGene

15
16

Defendants’ unjustified conduct was a moving and procuring cause for Ireland’s

17

breach of the Ambassador Agreement.
64. As a direct and proximate cause of the NuGene Defendants’ intentional

18
19

inference with Plaintiff’s Ambassador Agreement with Ireland, Plaintiff has been

20

damaged in an amount according to proof.
65. In doing the acts herein alleged, the NuGene Defendants acted willfully

21
22

and with the intent to cause injury to Plaintiff. Each of the NuGene Defendants is

23

therefore guilty of malice and/or oppression and/or fraud in conscious disregard of

24

Plaintiff's rights, thereby warranting an assessment of punitive damages in an amount

25

appropriate to punish each of the NuGene Defendants and to deter others from

26

engaging in similar misconduct.

27

////

28

////
- 15 COMPLAINT

Case 8:15-cv-01078-AG-JCG Document 1 Filed 07/08/15 Page 17 of 24 Page ID #:17

1

THIRD CAUSE OF ACTION

2

(Intentional Interference with Prospective Economic Advantage Against

3

NuGene, MA Kharazmi, and MS Kharazmi)
66. Plaintiff repeats and realleges each of the allegations contained in all of

4
5

the preceding paragraphs 1 through 65, inclusive, as if fully set forth at length herein.
67. At all relevant times, the NuGene Defendants knew of, among other

6
7

things, Plaintiff's Ambassador Agreement with Ireland, Plaintiff’s use of and reliance

8

on Ireland in the promotion, marketing, and sales of Plaintiff’s Products to its

9

customers, and Plaintiff’s use of and reliance on Ireland in connection with Plaintiff’s

10

relationships with its suppliers and vendors.
68.

11

Despite knowing of the Ambassador Agreement and Plaintiff’s existing

12

marketing, promotional, and sales activities involving, and business relationships

13

with, its customers, suppliers, and vendors, the NuGene Defendants intentionally

14

interfered with those activities and business relationships by inducing Ireland to

15

breach the Ambassador Agreement.
69.

16

As a direct result of the NuGene Defendants’ actions and omissions,

17

Plaintiff was damaged in an amount according to proof due to sudden loss of Ireland

18

as an ambassador, spokesperson, and promoter of Plaintiff’s Products after Plaintiff

19

had invested in substantial amounts of time and resources in developing marketing,

20

promotional, and sales campaigns featuring Ireland and in building a distribution

21

network for its Products.
70. In doing the acts herein alleged, the NuGene Defendants acted willfully

22
23

and with the intent to cause injury to Plaintiff. Each of the NuGene Defendants is

24

therefore guilty of malice and/or oppression and/or fraud in conscious disregard of

25

Plaintiff's rights, thereby warranting an assessment of punitive damages in an amount

26

appropriate to punish each of the NuGene Defendants and to deter others from

27

engaging in similar misconduct.

28

////
- 16 COMPLAINT

Case 8:15-cv-01078-AG-JCG Document 1 Filed 07/08/15 Page 18 of 24 Page ID #:18

1

FOURTH CAUSE OF ACTION

2

(Negligent Interference with Prospective Economic Advantage Against NuGene,

3

MA Kharazmi, and MS Kharazmi)

4

71. Plaintiff repeats and realleges each of the allegations contained in all of

5

the preceding paragraphs 1 through 70, inclusive, as if fully set forth at length herein.

6

72. At all relevant times, the NuGene Defendants knew or should have

7

known of, among other things, Plaintiff's Ambassador Agreement with Ireland,

8

Plaintiff’s use of and reliance on Ireland in the promotion, marketing, and sales of

9

Plaintiff’s Products to its customers, and Plaintiff’s use of and reliance on Ireland in

10
11

connection with Plaintiff’s relationships with its suppliers and vendors.
73. The NuGene Defendants knew, or should have known, that in inducing

12

Ireland to breach her Ambassador Agreement with Plaintiff, the NuGene Defendants

13

was negligently interfering with Plaintiff’s existing marketing, promotional, and sales

14

activities involving, and business relationships with, its customers, suppliers, and

15

vendors.

16

74.

As a direct result of the NuGene Defendants’ actions and omissions,

17

Plaintiff was damaged in an amount according to proof due to sudden loss of Ireland

18

as an ambassador, spokesperson, and promoter of Plaintiff’s Products after Plaintiff

19

had invested in substantial amounts of time and resources in developing marketing,

20

promotional, and sales campaigns featuring Ireland and in building a distribution

21

network for its Products.

22

FIFTH CAUSE OF ACTION

23

(Intentional Interference with Contract Against Kathy Ireland Worldwide,

24

Roseberry, Rosenblum, and Sterling)

25

75. Plaintiff repeats and realleges each of the allegations contained in all of

26

the preceding paragraphs 1 through 74, inclusive, as if fully set forth at length herein.

27

76. At all times relevant hereto, the Ambassador Agreement between Ireland

28

and Plaintiff was valid and in full force and effect.
- 17 COMPLAINT

Case 8:15-cv-01078-AG-JCG Document 1 Filed 07/08/15 Page 19 of 24 Page ID #:19

1
2
3

77. Defendant Kathy Ireland Worldwide was not a party to the Ambassador
Agreement.
78. At all times relevant hereto, Defendants Kathy Ireland Worldwide,

4

Roseberry, Rosenblum, and Sterling (collectively, the “Worldwide Defendants”)

5

knew of the Ambassador Agreement and knew that the Ambassador Agreement was

6

valid and in full force and effect.

7

79. At all times relevant hereto and before entering into the NuGene License

8

Agreement, the Worldwide Defendants knew that commencing in 2013 through and

9

including 2014, Ireland had endorsed, and was rendered ambassador services to,

10
11

Plaintiff and its Products.
80. At all times relevant hereto, the Worldwide Defendants knew that the

12

skin care products for which NuGene wanted to retain Ireland’s services as an

13

ambassador were directly competitive with Plaintiff’s Products.

14

81. At all times relevant hereto, the Worldwide Defendants intended to

15

induce, and did induce, Ireland to breach her Ambassador Agreement with Plaintiff

16

and to enter into the NuGene License Agreement.

17

82. Ireland did, in fact, breach the Ambassador Agreement by, among other

18

things, knowingly, intentionally, falsely, and fraudulently claiming that Plaintiff had

19

breached the Ambassador Agreement when, in fact, Ireland knew that Plaintiff had

20

performed all of its obligations under the Ambassador Agreement.

21

83. Plaintiff is informed and believes, and thereon alleges, that the

22

Worldwide Defendants’ unjustified and unjustifiable conduct was a moving and

23

procuring cause for Ireland’s breach of the Ambassador Agreement.

24

84. As a direct and proximate cause of the Worldwide Defendants’

25

intentional inference with Plaintiff’s Ambassador Agreement with Ireland, Plaintiff

26

has been damaged in an amount according to proof.

27
28

85. In doing the acts herein alleged, the Worldwide Defendants acted
willfully and with the intent to cause injury to Plaintiff. Each of the Worldwide
- 18 COMPLAINT

Case 8:15-cv-01078-AG-JCG Document 1 Filed 07/08/15 Page 20 of 24 Page ID #:20

1

Defendants is therefore guilty of malice and/or oppression and/or fraud in conscious

2

disregard of Plaintiff's rights, thereby warranting an assessment of punitive damages

3

in an amount appropriate to punish the Worldwide Defendants, and each of them, and

4

to deter others from engaging in similar misconduct.

5

SIXTH CAUSE OF ACTION

6

(Intentional Interference with Prospective Economic Advantage Against Kathy

7

Ireland Worldwide, Roseberry, Rosenblum, and Sterling)

8
9
10

86. Plaintiff repeats and realleges each of the allegations contained in all of
the preceding paragraphs 1 through 85, inclusive, as if fully set forth at length herein.
87. At all relevant times, Kathy Ireland Worldwide knew of, among other

11

things, Plaintiff's Ambassador Agreement with Ireland, Plaintiff’s use of and reliance

12

on Ireland in the promotion, marketing, and sales of Plaintiff’s Products to its

13

customers, and Plaintiff’s use of and reliance on Ireland in connection with Plaintiff’s

14

relationships with its suppliers and vendors.

15

88.

Despite knowing of the Ambassador Agreement and Plaintiff’s existing

16

marketing, promotional, and sales activities involving, and business relationships

17

with, its customers, suppliers, and vendors, the Worldwide Defendants intentionally

18

interfered with those activities and business relationships by inducing Ireland to

19

breach the Ambassador Agreement.

20

89.

As a direct result of the Worldwide Defendants’ actions and omissions,

21

Plaintiff was damaged in an amount according to proof due to sudden loss of Ireland

22

as an ambassador, spokesperson, and promoter of Plaintiff’s Products after Plaintiff

23

had invested in substantial amounts of time and resources in developing marketing,

24

promotional, and sales campaigns featuring Ireland and in building a distribution

25

network for its Products.

26

90. In doing the acts herein alleged, the Worldwide Defendants acted

27

willfully and with the intent to cause injury to Plaintiff. The Worldwide Defendants

28

is therefore guilty of malice and/or oppression and/or fraud in conscious disregard of
- 19 COMPLAINT

Case 8:15-cv-01078-AG-JCG Document 1 Filed 07/08/15 Page 21 of 24 Page ID #:21

1

Plaintiff's rights, thereby warranting an assessment of punitive damages in an amount

2

appropriate to punish the Worldwide Defendants, and each of them, and to deter

3

others from engaging in similar misconduct.

4

SEVENTH CAUSE OF ACTION

5

(Negligent Interference with Prospective Economic Advantage Against Kathy

6

Ireland Worldwide)

7
8
9

91. Plaintiff repeats and realleges each of the allegations contained in all of
the preceding paragraphs 1 through 90, inclusive, as if fully set forth at length herein.
92. At all relevant times, the Worldwide Defendants knew or should have

10

known of, among other things, Plaintiff's Ambassador Agreement with Ireland,

11

Plaintiff’s use of and reliance on Ireland in the promotion, marketing, and sales of

12

Plaintiff’s Products to its customers, and Plaintiff’s use of and reliance on Ireland in

13

connection with Plaintiff’s relationships with its suppliers and vendors.

14

93. The Worldwide Defendants knew, or should have known, that in

15

inducing Ireland to breach her Ambassador Agreement with Plaintiff, the Worldwide

16

Defendants was negligently interfering with Plaintiff’s existing marketing,

17

promotional, and sales activities involving, and business relationships with, its

18

customers, suppliers, and vendors.

19

94.

As a direct result of the Worldwide Defendants’ actions and omissions,

20

Plaintiff was damaged in an amount according to proof due to sudden loss of Ireland

21

as an ambassador, spokesperson, and promoter of Plaintiff’s Products after Plaintiff

22

had invested in substantial amounts of time and resources in developing marketing,

23

promotional, and sales campaigns featuring Ireland and in building a distribution

24

network for its Products.

25

EIGHTH CAUSE OF ACTION

26

(Conspiracy Against the NuGene Defendants and the Worldwide Defendants)

27
28

95. Plaintiff repeats and realleges each of the allegations contained in all of
the preceding paragraphs 1 through 94, inclusive, as if fully set forth at length herein.
- 20 COMPLAINT

Case 8:15-cv-01078-AG-JCG Document 1 Filed 07/08/15 Page 22 of 24 Page ID #:22

1

96. Plaintiff is informed and believes, and thereon alleges, that at all times

2

relevant hereto, the NuGene Defendants and the Worldwide Defendants, and each of

3

them, knowingly and willfully conspired and agreed among themselves to interfere

4

with Plaintiff’s Ambassador Agreement with Ireland by inducing Ireland to breach

5

the Agreement, as alleged in the Second and Fifth Causes of Action herein.

6

97. Plaintiff is informed and believes, and thereon alleges, that at all times

7

relevant hereto, the NuGene Defendants and the Worldwide Defendants, and each of

8

them, knowingly and willfully conspired and agreed among themselves to interfere

9

with Plaintiff’s prospective economic advantage by inducing Ireland to breach the

10

Agreement, as alleged in the Third, Fourth, Sixth, and Seventh Causes of Action

11

herein.

12

98. The NuGene Defendants and the Worldwide Defendants, and each of

13

them, did the acts and things herein alleged pursuant to, and in furtherance of, the

14

conspiracy and the above-alleged agreement.

15

99. Plaintiff is informed and believes and thereon alleges that the last overt

16

act in pursuance of the above-described conspiracy occurred on or after November 4,

17

2014, on which date NuGene and Kathy Ireland Worldwide entered into the NuGene

18

License Agreement.

19
20
21

100. As a proximate result of the wrongful acts herein alleged, Plaintiff has
been damaged in amount to be proven at the time of trial.
101. In doing the acts and things herein alleged, the NuGene Defendants and

22

the Worldwide Defendants, and each of them, acted willfully and with the intent to

23

cause injury to Plaintiff. The NuGene Defendants and the Worldwide Defendants,

24

and each of them, were therefore guilty of malice and/or oppression and/or fraud in

25

conscious disregard of Plaintiff's rights, thereby warranting an assessment of punitive

26

damages in an amount appropriate to punish the NuGene Defendants and the

27

Worldwide Defendants, and each of them, and to deter others from engaging in

28

similar misconduct.
- 21 COMPLAINT

Case 8:15-cv-01078-AG-JCG Document 1 Filed 07/08/15 Page 23 of 24 Page ID #:23

1

PRAYER

2

WHEREFORE, Plaintiff prays for judgment against Defendants NuGene

3

International, NuGene, Inc., Mohammad Ali Kharazmi, Mohammed Saeed Kharazmi,

4

Kathy Ireland Worldwide, Stephen Roseberry, Steve Rosenblum, and Erik Sterling as

5

follows:

6

A.

As against Defendants NuGene International, NuGene, Inc., Mohammad

7

Ali Kharazmi, Mohammed Saeed Kharazmi (collectively, the “Copyright

8

Defendants”), jointly and severally,
(1)

9

A declaration that:
a.

10

The Copyrights Defendants, and each of them, have

11

infringed the federally registered copyright U.S. Copyright Registration #

12

PA0001947991 in violation of 17 U.S.C. § 501; and
b.

13

The Copyright Defendants’ infringement of Plaintiff’s

14

copyrights was intentional, willful and, at a minimum, with willful blindness and

15

reckless disregard of Plaintiff’s rights.
(2)

16

A preliminary and permanent injunction prohibiting each of the

17

Copyright Defendants and their respective directors, principals, officers, agents,

18

representatives, servants, employees, attorneys, successors and assigns, and all others

19

in active concert or participation with NuGene, from imitating, copying, or making

20

any other infringing use or infringing distribution of Plaintiff’s copyrighted videos

21

covered by U.S. Copyright Registration # PA0001947991.
(3)

22
23

the Copyright Defendants’ infringing videos.
(4)

24
25
26

An order, pursuant to 17 U.S.C. § 503, impounding all copies of

An award of damages and the Copyright Defendants’ profits

pursuant to 17 U.S.C. § 504(b).
(B)

As against Defendants NuGene, Inc., Mohammad Ali Kharazmi,

27

Mohammed Saeed Kharazmi, Kathy Ireland Worldwide, Stephen Roseberry, Steve

28

Rosenblum, and Erik Sterling, jointly and severally, consequential damages in an
- 22 COMPLAINT

Case 8:15-cv-01078-AG-JCG Document 1 Filed 07/08/15 Page 24 of 24 Page ID #:24

1
2

amount according to proof.
(C)

As against Defendants NuGene, Inc. Mohammad Ali Kharazmi,

3

Mohammed Saeed Kharazmi, Kathy Ireland Worldwide, Stephen Roseberry, Steve

4

Rosenblum, and Erik Sterling, jointly and severally, punitive damages in an amount

5

according to proof.

6

(D)

For reasonable attorneys’ fees according to proof;

7

(E)

For costs of suit herein incurred; and

8

(F)

For such other and further relief as the Court may deem just and proper.
Trial by Jury

9
10
11

Pursuant to the Seventh amendment to the constitution of the United States of
America, Plaintiff is entitled to, and demand, a trial by jury.

12
13

Dated: July 7, 2015

BUCHANAN INGERSOLL & ROONEY LLP

14
15
16

By: /s/ Robert J. Parks
ROBERT J.PARKS, ESQ.
Attorneys for Plaintiff Stemage Skin Care,
LLC

17
18
19
20
21
22
23
24
25
26
27
28
- 23 COMPLAINT