Superior Consulting Services, Inc. v. Shaklee Corporation

Filing 90

ORDER denying 72 Motion to Dismiss Counterclaim. Signed by Judge Gregory A. Presnell on 6/30/2017. (CHT)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
SUPERIOR CONSULTING SERVICES,
INC.,
Plaintiff,
v.

Case No: 6:16-cv-2001-Orl-31GJK

SHAKLEE CORPORATION,
Defendant.

ORDER
This matter comes before the Court on the Motion to Dismiss Counterclaim (Doc. 72) filed
by the counter-defendant, Superior Consulting Services, Inc. (“Superior”), and the Response in
Opposition (Doc. 75) filed by the counter-plaintiff, Shaklee Corporation (“Shaklee”).
I.

Background
Shaklee presents two separate sets of facts to support its allegations. Counts I and III are

related to Superior’s alleged use of Shaklee trademarks and representations Superior makes when
marketing its services. Count II involves representations that Superior has allegedly made in the
registration of its own trademark.
A.

Shaklee’s Trademarks

According to the facts alleged in the counterclaim (Doc. 68), which are taken as true for
the purposes of this order, Superior operates a blood-testing company through its principal,
Eleanor Cullen. Cullen is a registered nurse who has researched the early detection of serious
health problems and turned that research into services offered by Superior. (Id. ¶ 5.) A customer
interested in Superior’s services orders a blood test packet through Superior’s website and then

gets blood drawn at a laboratory under contract with Superior. (Id. ¶ 6.) Once a client’s blood is
drawn, Superior analyzes the blood and provides a set of diagnoses and recommendations for
various supplements—some of which are Shaklee’s—to treat the client’s disease or pre-disease
conditions. (Id.)
In 2005, Shaklee became aware that Superior was marketing its blood-testing services
directly to Shaklee distributors. (Id. ¶ 11.) Due to a concern that Superior’s marketing could
implicate Shaklee in the unlicensed practice of medicine, Shaklee requested further information
from Superior. (Id. ¶ 12.) Superior provided some of the requested information and Shaklee
warned Superior against prescribing or recommending any Shaklee products to treat disease.
Despite these admonitions Superior continued. As a result, customers have contacted Shaklee
regarding confusing and misleading information provided by Superior related to the effectiveness
or appropriateness of Shaklee products. (Id. ¶ 16.)
In addition to the prescription of Shaklee products to treat disease, Superior has used
Shaklee trademarks within its marketing materials. 1 These materials were sent directly to Shaklee
distributors in an attempt to connect Superior to Shaklee, make sales, and use Shaklee distributors
and customers as a client base for Superior’s blood-testing services. (Id. ¶¶ 29–31.)
On these facts, Shaklee alleges that Superior’s use of its trademarks in marketing materials
constitutes trademark dilution. Further, Superior’s prescription of Shaklee nutritional supplements
to treat serious diseases is an unfair or deceptive act under the Florida Deceptive and Unfair Trade
Practices Act, Florida Statutes §§ 501.201–501.23.
1

Specifically, two marks were allegedly used by Superior. The first was registered on May
6, 1975, with registration number 1010096, and the second was registered on June 27, 1978, with
registration number 73089848. (Doc. 68 ¶¶ 17–21.) The first mark relates to food supplements,
whereas the second relates to merchandising of those supplements. (Id.) These marks can be found
at Docs. 20-3 and 20-5.

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B.

Superior’s Trademark Registration

On February 26, 2002, Superior was assigned a trademark for the word Healthprint. Soon
after, on July 22, 2002, Superior amended the mark and filed a registration with the United States
Patent and Trademark Office (“USPTO”) affirming that Superior used the mark in connection
with nutritional supplements for general health maintenance. 2 Superior included a sample
nutritional supplement of “Organic Zinc” bearing the Healthprint mark. (Doc. 68 at 26–27.)
Superior made similar representations on November 4, 2008, and October 25, 2012. (Id.)
Despite these representations, Superior has advertised that it does not sell nutritional
supplements because doing so would be a conflict of interest. (Id. at 27.) According to Superior’s
website and a book written by Cullen, Superior has not sold nutritional supplements since 2002.
(Id.) Shaklee claims that these facts support a declaratory judgment that Superior has committed
fraud on the USPTO and abandoned its Healthprint trademark under the Lantham Act, 15 U.S.C.
§§ 1051–1141.
II.

Motion to Dismiss Standard
A Federal Rule of Civil Procedure 12(b)(6) motion to dismiss for failure to state a claim tests

the sufficiency of the complaint—it does not reach the merits of the case. Milburn v. United States,
734 F.2d 762, 765 (11th Cir. 1984). In ruling on a motion to dismiss, the Court accepts factual
allegations as true and construes the complaint in the light most favorable to the plaintiff. SEC v.
ESM Group, Inc., 835 F.2d 270, 272 (11th Cir. 1988). The Court limits its consideration to the
pleadings and any exhibits attached thereto. Fed. R. Civ. P. 10(c); see also GSW, Inc. v. Long Cty.,
Ga., 999 F.2d 1508, 1510 (11th Cir. 1993).

2

The serial number for Healthprint is 76047034. (Doc. 68 at 26.)

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Federal Rule of Civil Procedure 8(a)(2) mandates that pleadings contain “a short and plain
statement of the claim showing that the pleader is entitled to relief,” so as to give the defendant fair
notice of what the claim is and the grounds upon which it rests. Conley v. Gibson, 35 U.S. 41, 47
(1957), overruled on other grounds, Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007). The
plaintiff must allege facts that raise a right to relief above the speculative level and indicate the
presence of the required elements. Twombly, 550 U.S. at 555; Watts v. Fla. Int’l Univ., 495 F.3d
1289, 1302 (11th Cir. 2007). Conclusory allegations, unwarranted factual deductions, or legal
conclusions masquerading as facts will not prevent dismissal. Davila v. Delta Air Lines, Inc., 326
F.3d 1183, 1185 (11th Cir. 2003).
In Ashcroft v. Iqbal, the Supreme Court explained that a complaint need not contain detailed
factual allegations, “but it demands more than an unadorned, the-defendant-unlawfully-harmed-me
accusation. A pleading that offers ‘labels and conclusions’ or ‘a formulaic recitation of the elements
of a cause of action will not do.’ Nor does a complaint suffice if it tenders ‘naked assertion[s]’
devoid of ‘further factual enhancement.’” 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at
555, 557) (internal citations omitted). “[W]here the well-pleaded facts do not permit the court to
infer more than the mere possibility of misconduct, the complaint has alleged—but it has not
‘show[n]’—‘that the plaintiff is entitled to relief.’” Id. at 679 (quoting Fed. R. Civ. P. 8(a)(2)).
III.

Trademark Dilution
In Count I of its counterclaim, Shaklee seeks to enjoin Superior’s use of Shaklee

trademarks, claiming that said use constitutes trademark dilution under 15 U.S.C. § 1125.
Injunctive relief for trademark dilution is available under 15 U.S.C. § 1125(c)(1), which states:
Subject to the principles of equity, the owner of a famous mark that
is distinctive, inherently or through acquired distinctiveness, shall be
entitled to an injunction against another person who, at any time after
the owner’s mark has become famous, commences use of a mark or

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trade name in commerce that is likely to cause dilution by blurring or
dilution by tarnishment of the famous mark, regardless of the
presence or absence of actual or likely confusion, of competition, or
of actual economic injury.
Id. Therefore, “to prove a dilution claim, a plaintiff must provide sufficient evidence that ‘(1) the
mark is famous; (2) the alleged infringer adopted the mark after the mark became famous; (3) the
infringer diluted the mark; and (4) the defendant’s use is commercial and in commerce.’”
PortionPac Chem. Corp. v. Sanitech Sys., 217 F. Supp. 2d 1238, 1250–51 (M.D. Fla. 2001)
(quoting Syndicate Sales, Inc. v. Hampshire Paper Corp., 192 F.3d 644, 649 (7th Cir. 1999)).
Superior argues that Shaklee has failed to sufficiently allege that its marks are famous and that
Superior adopted its marks after they became famous.
A mark is considered famous “if it is widely recognized by the general consuming public
of the United States as a designation of source of the goods or services of the mark’s owner.”
15 U.S.C. § 1125(c)(2)(A). To determine whether a mark is recognized by the public, courts
consider factors such as (1) the duration, extent, and geographic reach of advertising and publicity
of the mark; (2) the amount, volume, and geographic extent of sales of goods or services offered
under the mark; (3) the extent of actual recognition of the mark; and (4) whether the mark was
registered under the Act of March 3, 1881, or the Act of February 20, 1905, or on the principal
register. Id. To be famous, “a mark must have a degree of distinctiveness and strength beyond that
needed to serve as a trademark . . . [it] must be truly prominent and renowned.” Carnival Corp. v.
SeaEscape Casino Cruises, Inc., 74 F. Supp. 2d 1261, 1270 (S.D. Fla. 1999) (quotation omitted).
Here, Shaklee alleges that its marks have been used for more than thirty years within the
nutritional supplement market “to identify, market, and sell millions of products worldwide” and
that its marks are famous worldwide. (Id. ¶¶ 26, 27.) Taken as true, Shaklee has alleged facts that
give rise to an inference that its marks are famous in terms of the factors listed above—at least

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within the nutritional supplement market. PortionPac Chem. Corp., 210 F. Supp. 2d at 1310
(denying a motion to dismiss when a plaintiff alleged facts showing its trademark was famous
throughout the school sanitation market).
Next, Superior argues that Shaklee has not alleged the date that Superior began using its
marks, making it impossible to determine if the marks were famous when Superior began using
them. For support, Superior relies on Brain Pharma, LLC v. Scalini, 858 F. Supp. 2d 1349 (S.D.
Fla. 2012), where the court found that the plaintiff’s complaint was deficient, in part, because the
plaintiff alleged neither the date that the defendant began using the plaintiff’s mark nor that the
defendant used the mark after it had achieved its fame. But Shaklee’s allegations go beyond those
in Brain Pharma, LLC. While Shaklee never provides the specific date that Superior began using
the marks, Shaklee has alleged that Superior began using Shaklee’s marks after they became
famous. (Doc. 68 ¶ 28.) To succeed in its claim, Shaklee will have to prove when its mark
achieved fame and that Superior began using it after that date. PortionPac Chem. Corp., 217 F.
Supp. 2d at 1251. But at this stage in the case, Shaklee’s allegations are sufficient.
Finally, Superior contends that Shaklee has not established a claim for trademark dilution
because it only alleges that Superior has used marks identical to Shaklee’s, not separate and
distinct marks. But a separate or distinct mark is not required to establish a dilution claim. Indeed,
a defendant’s use of a plaintiff’s mark can be sufficient circumstantial evidence to establish the
third element of a dilution claim—that the defendant diluted the mark. Bentley Motors Ltd. Corp.
v. McEntegart, 976 F. Supp. 2d 1297, 1314 (M.D. Fla. 2013) (finding that defendants’ use of
marks identical to plaintiff’s famous and protected marks supported summary judgment in the
plaintiff’s favor). Therefore, Superior’s motion will be denied as it relates to Shaklee’s trademark
dilution claim.

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IV.

Trademark Abandonment or Fraud on the USPTO
In Count II, Shaklee seeks a declaratory judgment that Superior has abandoned its

Healthprint mark or, in the alternative, that Superior obtained the mark through fraud.
A.

Trademark Abandonment

Under the Lantham Act, 15 U.S.C. §§ 1051–1141, a trademark is deemed abandoned
“[w]hen its use has been discontinued with intent not to resume such use.” Id. § 1127. To prove
abandonment of a trademark a defendant must establish two elements: “[1] that the plaintiff has
ceased using the mark in dispute and [2] that he has done so with an intent not to resume its use.”
Cumulus Media, Inc. v. Clear Channel Commc’ns, Inc., 304 F.3d 1167, 1174 (11th Cir. 2002). For
the purposes of the Lantham Act, “use” is defined as “the bona fide use of such mark made in the
ordinary course of trade, and not made merely to reserve a right in a mark.” 15 U.S.C. § 1127.
“Thus, neither promotional use of the mark on goods in a different course of trade nor mere token
use constitute ‘use’ under the Lantham Act.” Emergency One, Inc. v. Am. FireEagle, Ltd., 228
F.3d 531, 536 (4th Cir. 2000) (citing Imperial Tobacco, Ltd. v. Phillip Morris, Inc., 899 F.2d
1575, 1592–83 (Fed. Cir. 1990)). Further, an intent not to resume use of a trademark “may be
inferred from the circumstances.” 15 U.S.C. § 1127.
Superior argues that Shaklee has failed to state a claim of abandonment because it has not
alleged “how long Superior has . . . abandoned its marks” and whether “Superior has an intent not
to use its marks.” (Doc. 72 at 11–12.) But Shaklee’s counterclaim shows otherwise. Shaklee
alleges that Superior requested registration of the Healthprint trademark on July 22, 2002, in
connection with “nutritional supplements for general health maintenance.” (Doc. 68 at 27.) As part
of its registration, Superior included a picture of a bottle of “Organic Zinc” bearing the Healthprint
trademark. (Id.) Shaklee also alleges that, as early as 2002, Superior’s marketing materials and

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Cullen’s book both state that Superior “sells no supplements because doing so would be a conflict
of interest” (Id.) and that, instead, Superior offers a blood-testing service designed to help its
clients detect disease and “prevent or solve problems ranging from cancer to heart disease to
digestive disorders.” (Id. ¶¶ 7–8.)
In other words Shaklee alleges that, given Superior’s own marketing materials, Superior
has not “used” the Healthprint mark as contemplated by the Lantham Act. Rather, it has used the
mark in a “different course of trade” than that in which it is registered. This change in the nature of
the goods and services offered under the mark—a change from the sale of nutritional supplements
to blood testing—supports a claim of abandonment. See 3 McCarthy on Trademarks and Unfair
Competition § 17:24 (4th ed.) (“a sudden and substantial change in the nature or quality of the
goods sold under a mark may so change the nature of the thing symbolized that the mark becomes
fraudulent and/or that the original rights are abandoned”). Superior’s marketing materials also lead
to an inference that it does not intend to use the mark in its registered course of trade. 15 U.S.C.
§1127. Therefore, Shaklee has sufficiently plead abandonment under the Lantham Act.
B.

Fraud on the USPTO

“Fraud in obtaining a trademark occurs ‘when an applicant knowingly makes false,
material representations of fact in connection with an application’ or in a verified declaration.”
Spiral Direct, Inc., 151 F. Supp. 3d at 1277 (quoting Traffic Control, Inc. v. Shadow Network Inc.,
104 F.3d 336, 340 (Fed. Cir. 1997)). Under Federal Rule of Civil Procedure 9(b), a complaint
alleging fraud must set forth “(1) precisely what statements were made, (2) the time and place of
each statement and the person responsible for the same, (3) the content of such statements and
how they misled the plaintiff, and (4) what the defendants gained through the fraud.” Id. (citing

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Ziemba v. Cascade Int’l, Inc., 256 F.3d 1194, 1202 (11th Cir. 2001)). Superior argues that Shaklee
has failed to meet Rule 9(b)’s requirements.
Shaklee’s fraud allegations rest on representations Superior made to the USPTO from 2002
to 2012. Namely, Superior allegedly filed declarations on July 22, 2002; November 4, 2008; and
October 25, 2012, affirming that it used the Healthprint trademark in connection with “nutritional
supplements for general health maintenance.” Each declaration was accompanied by a sample
nutritional supplement bearing the Healthprint mark. (Doc. 68 at 27–28.) Yet, from 2002 on,
Superior’s marketing materials as well as a book written by Cullen have unequivocally stated that
Superior “sells no supplements because doing so would be a conflict of interest.” (Id.) Thus,
Shaklee claims that Superior gained its Healthprint trademark protections by knowingly
misrepresenting the nature of the services offered under the Healthprint mark on three separate
occasions. Accordingly, Shaklee has sufficiently plead fraud on the USPTO. Spiral Direct, Inc.,
151 F. Supp. 3d at 1277.
In addition to its Rule 9(b) challenge, Superior argues that Shaklee’s allegations are
“repugnant to the evidence in the record” and references evidence outside of Shaklee’s
counterclaim. (Doc. 72 at 14.) It is Superior’s position that the Court should review these
documents because Superior “makes a factual attack” on Shaklee’s fraud allegations. (Id. at 13
n.4.) However, factual attacks are used to challenge jurisdiction, not the merits of a claim.
Morrison v. Amway Corp., 523 F.3d 920, 925 (11th Cir. 2003). And Superior only uses the extracounterclaim evidence to attack the merits of Shaklee’s claim. Therefore, the Court declines
Superior’s invitation to review documents outside the counterclaim and, instead, has limited its
review to the counterclaim and the documents that it references. St. George v. Pinellas Cty., 285

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F.3d 1334, 1337 (11th Cir. 2002). Consistent with the above analysis, Shaklee’s fraud claim
survives the motion.
V.

The Florida Deceptive and Unfair Trade Practices Act
Superior challenges Shaklee’s claim under the Florida Deceptive and Unfair Trade

Practices Act (“FDUTPA”), Florida Statutes §§ 501.201–501.23, with two arguments: (1) that
Shaklee lacks Article III standing to bring its claim, and (2) that Shaklee has failed to state a claim
for declaratory judgment under FDUTPA.
FDUTPA broadly prohibits any unfair or deceptive acts or practices committed in the
conduct of any trade or commerce. Fla. Stat. § 501.204(1). FDUTPA’s purpose is “[t]o protect the
consuming public and legitimate business enterprises from those who engage in unfair methods of
competition, or unconscionable, deceptive, or unfair acts or practices in the conduct of any trade or
commerce.” Id. § 501.202(2). FDUTPA achieves its goal by creating an action for damages and an
action for declaratory or injunctive relief. Id. § 501.211. Shaklee only brings an action for
declaratory or injunctive relief and has not alleged any actual damages.
Florida Statutes § 501.211(1), which establishes the cause of action for declaratory or
injunctive relief under FDUTPA, provides in pertinent part:
Without regard to any other remedy or relief to which a person is
entitled, anyone aggrieved by a violation of this part may bring an
action to obtain a declaratory judgment that an act or practice violates
this part and to enjoin a person who has violated, is violating, or is
otherwise likely to violate this part.
Id. (emphasis supplied). Thus, under FDUTPA “anyone aggrieved” can pursue injunctive relief
even where the aggrieved would not directly benefit. Dapeer v Neutrogena Corp., 95 F. Supp. 3d
1366, 1373 (S.D. Fla. 2015) (citing Davis v. Powertel, Inc., 776 So. 2d 971, 974 (Fla. 1st DCA
2000)); see Smith v. Wm. Wrigley Jr. Co., 663 F. Supp. 2d 1336, 1339 (recognizing that FDUTPA
makes declaratory and injunctive relief available to a broader class of plaintiffs than those that

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could recover damages). But, as Superior properly points out, such expansive relief cannot
undermine Article III standing requirements. Dapeer, 95 F. Supp 3d at 1373.
“To have standing, a plaintiff must show (1) he has suffered an injury in fact that is (a)
concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the
injury is fairly traceable to conduct of the defendant; and (3) it is likely, not just merely
speculative, that the injury will be redressed by a favorable decision.” Kelly v. Harris, 331 F.3d
817, 819–20 (11th Cir. 2003). Superior argues that Shaklee has not alleged any injury in fact and
has only accused Cullen of practicing medicine without a license with no supporting facts.
In its counterclaim, Shaklee alleges that Superior has violated FDUTPA by “advertis[ing]
its blood testing and diagnosis services with the promise of identifying, diagnosing, and treating a
wide range of diseases and disorders, including but not limited to asthma, diabetes, cancer, and
heart disease.” (Doc. 68 ¶ 52.) Shaklee further alleges that Superior markets its blood-testing and
diagnosis services to Shaklee distributors and customers, often “prescribing” Shaklee products as
treatment for diseases, ultimately causing confusion as to the efficacy and appropriate usage of
Shaklee’s products. (Id. ¶¶ 11–16, 53–55.) Finally, Shaklee alleges that it has been uniquely
aggrieved by Superior’s deceptive and misleading conduct—that is, Superior’s recommendation of
Shaklee supplements to Shaklee’s distributors and customers to treat diseases. (Id. ¶ 56.)
Said another way, Superior’s continued and allegedly deceptive practice of recommending
Shaklee’s nutritional supplements as treatment for serious diseases—such as cancer and
diabetes—is causing Shaklee harm because those supplements are, unsurprisingly, ineffective or
inappropriate for such uses. It can plausibly be inferred from such allegations that Shaklee’s
reputation is therefore harmed. Spiral Direct, Inc. v. Basic Sports Apparel, Inc., 151 F. Supp. 3d
1268, 1274 (M.D. Fla. 2015) (“At the motion to dismiss stage, a court must evaluate all plausible

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inferences derived from the facts of the complaint in favor of the plaintiff.”) (citation omitted).
Thus, Shaklee has sufficiently alleged an injury in fact that satisfies Article III’s standing
requirements. Koziara v. City of Casselberry, 392 F.3d 1302, 1305 (11th Cir. 2004) (for the
purposes of standing “[a] plaintiff must point to some type of cognizable harm, whether such harm
is physical, economic, reputational, contractual, or even aesthetic”).
Besides its standing argument, Superior contends that Shaklee has failed to allege
sufficient facts to state a claim under FDUTPA. To state a claim seeking declaratory or injunctive
relief under FDUTPA a plaintiff must allege that “the defendant engaged in a deceptive act or
practice in trade or commerce, § 501.204(1), and that the plaintiff [is] a person ‘aggrieved’ by the
deceptive act or practice.” Klinger v. Weekly World News, Inc., 747 F. Supp. 1477, 1480 (S. D.
Fla. 1990). Superior does not challenge the allegation that its “prescription” of Shaklee
supplements to treat disease is an unfair or deceptive practice, rather, it only disputes whether
Shaklee has adequately alleged it is “aggrieved.”
In Ahearn, Florida’s First District Court of Appeal recognized that FDUTPA provides no
specific definition for the term “aggrieved.” Ahearn v. Mayo Clinic, 180 So. 3d 165, 172–73 (Fla.
1st DCA 2015). But the court found that a plaintiff is sufficiently aggrieved if he has alleged an
injury that is more than merely speculative. Id. at 173. Indeed, some specific past, present, or
future grievance must be shown. Id. Ultimately, the court used another statutory definition of
“aggrieved” for guidance, which states that the grievance alleged “may be shared in common with
other members of the community at large but must exceed in degree the general interest in
community good shared by all persons.” Id. (quoting Fla. Stat. § 163.3215(2)). Put plainly, a
plaintiff is “aggrieved” under FDUTPA when the deceptive conduct alleged has caused a non-

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speculative injury that has affected the plaintiff beyond a general interest in curbing deceptive or
unfair conduct. Id.
Here, Shaklee has sufficiently alleged facts showing that it is aggrieved under FDUTPA.
Shaklee has alleged that its customers and distributors have become confused about the “efficacy”
and “appropriate usage” of its supplements because of Superior’s allegedly deceptive
representations. (Doc. 68 ¶ 16.) In other words, customers and distributors have lost faith in
Shaklee’s products or have become confused about the proper use of these products. As a result,
Shaklee claims that it has been “uniquely aggrieved;” a conclusion supported by Shaklee’s status
as the manufacturer of these products. (Doc. 68 ¶ 56.) Taking these allegations as true and drawing
all inferences in a light most favorable to Shaklee, Shaklee’s FDUTPA claim survives the motion.
VI.

Conclusion
It is, therefore,
ORDERED that Superior’s Motion to Dismiss Counterclaim (Doc. 72) is DENIED.
DONE and ORDERED in Chambers, Orlando, Florida on June 30, 2017.

Copies furnished to:
Counsel of Record
Unrepresented Party

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