Hyperheal Hyperbarics, Inc. v. Shapiro

Filing 44

MEMORANDUM OPINION. Signed by Judge Richard D. Bennett on 9/6/2018. (kw2s, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
HYPERHEAL HYPERBARICS, INC.,

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Plaintiff,

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ERIC SHAPIRO,
Defendant.
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Civil Action No. RDB-18-1679

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v.

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MEMORANDUM OPINION
On June 18, 2018, this Court entered a Temporary Restraining Order upon a motion
by Plaintiff Hyperheal Hyperbarics, Inc. (“Plaintiff” or “Hyperheal”) against its founder,
former employee, and current minority shareholder Defendant Eric Shapiro (“Defendant”
or “Shapiro”), enjoining and restraining him from pursuing a trademark application for
“Hyperheal Hyperbarics, Inc.,” attempting to control the name “Hyperheal,” using in
commerce the trademarks “Hyperheal O2” and “Hyperheal,” and asserting control over
various Hyperheal domain names and social media accounts. (ECF No. 19.) Subsequently,
the Plaintiff filed a Motion for a Preliminary Injunction to continue to enjoin and restrain
Shapiro from the same until a final judgment on the merits of this case. (ECF No. 31.) The
issues are fully briefed, and this Court held hearings on August 15 and 17, 2018. (ECF Nos.
36, 39.)
After two days of hearings, a review of witness testimony, exhibits presented, the
parties’ submissions, and argument of counsel, it is clear to this Court that Hyperheal is
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entitled to injunctive relief against Shapiro on Counts I-IV of the Amended Complaint,
setting forth claims for breach of contract, tortious interference with business relations,
unfair competition, and declaratory relief. While Shapiro has sought to cast this case as a
trademark case in the context of Counts V and VI of the Amended Complaint, he faces
abundant evidence of his willful breach of contract and self-dealing. Accordingly, for the
following reasons, Plaintiff’s Motion for a Preliminary Injunction (ECF No. 31) is
GRANTED. 1
BACKGROUND
I.

Factual Background

In 2012, Defendant Eric Shapiro (“Defendant” or “Shapiro”) founded Plaintiff
Hyperheal Hyperbarics, Inc. (“Plaintiff” or “Hyperheal”) for the purpose of providing
hyperbaric oxygen therapy. 2 (ECF No. 14-2.) A website was created for the company 3 and
Shapiro registered various other domain names with GoDaddy.com to capture all variations
of the primary website address. In addition, Shapiro created LinkedIn, Facebook, and
Twitter accounts for the company. At this time, Shapiro was one of three directors and the
majority owner of Hyperheal. (Am. Compl., ECF No. 14 at ¶ 8.)
In February of 2014, with the business “failing,” Samer Saiedy, M.D. (“Dr. Saiedy”),
owner of Maryland Vascular Specialists and Vascular and Endovascular Surgery, agreed to
provide a cash infusion to Hyperheal. (ECF No. 14 at ¶ 11.) As a result, Dr. Saiedy also
1 Also pending is Plaintiff’s Motion to Issue a Scheduling Order relating to briefing the motion for a
preliminary injunction. (ECF No. 24.) This Motion is MOOT.
2 Hyperbaric oxygen therapy is a therapy that involves breathing pure oxygen in a pressurized room or tube
and is administered as treatment for a wide variety of medical conditions. (ECF No. 14 at ¶ 6.) Five years
earlier in 2007, Shapiro had formed Hyperheal Hyperbarics, LLC. (ECF No. 14-1.) In 2009, the LLC’s
corporate status was forfeited. (Id.)
3 See https://hyperhealhyperbarics.com/.

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became a minority owner of the business. (Id.) In September of 2015, Dr. Saiedy provided
another large cash infusion. (Id.) As a result of the second cash infusion and purchase of
stock from other minority shareholders, Dr. Saiedy’s ownership percentage in Hyperheal
increased to 97.62% and Shapiro’s decreased to 2.38%. (Id.)
In October of 2016, Shapiro was terminated from Hyperheal. 4 He remained,
however, a 2.38% shareholder in the company. The next month, on November 11, 2016,
Shapiro filed a Trademark Application for the name “Hyperheal Hyperbarics, Inc.” with the
United States Patent and Trademark Office (“USPTO”). (ECF No. 14-11.) He filed the
Trademark Application pursuant to 15 U.S.C. § 1051(a), representing that he was the owner
of the trademark and using it in commerce on or in connection with hyperbaric oxygen
services. (Id.) As a “specimen,” he attached a photo of the hyperhealhyperbarics.com website
and declared that the photo showed the mark being used in or connection with the
hyperbaric oxygen services. (Id.) On the Application, he also represented that he was the
“Owner” and that the mark had been used “in commerce” as early as May 11, 2012, and
“anywhere” at least as early as March 7, 2007. (Id.) For his contact information, Shapiro
listed his personal home address and cellphone, but listed the email [e-mail]. (Id.)
Shapiro testified that he did not tell anyone at Hyperheal about this Trademark Application.
(Aug. 15 Tr. 34:10-18.)
Shapiro testified that shortly after he filed his Trademark Application, he received an
email indicating that the trademark “was live.” (Aug. 15 Tr. 37:11-12.) Accordingly, he
This proved to be the first of two terminations of Shapiro’s association with Hyperheal. The record is
unclear at this time with respect to the reason for Shapiro’s first termination. At the hearing, Shapiro testified
that “I was terminated because Dr. Saiedy said that nobody wanted me to come back to the company and
that he would find a way to bring me back sometime in January.” (Aug. 15 Tr. 33:12-14.)
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“believed at the time [he] had a trademark,” and began trying to use the trademark in
commerce. (Id. at 37:11-14, 19-20.) Specifically, he testified that he approached potential
investors that he found through networking sites and that potential investors approached
him about using the mark. (Id. at 37:21-38:5.) The potential investors were in various parts of
the United States including Maryland, California, Florida, and Pennsylvania. (Id. at 40:15-19.)
On February 10, 2017, the USPTO sent Shapiro a Notice of Office Action relating to
his Trademark Application. (Def.’s Exh. 12.) The Notice stated “[r]egistration of the applied
mark is refused because of a likelihood of confusion with the mark in U.S. Registration No.
4969176.” (Id.) The Notice went on to say that No. 4969176 was a trademark for
“Hyperheal” that had been previously registered by Tommy Love on May 31, 2016. (Id.)
The Notice indicates that it was sent to Shapiro’s personal home address and the
[e-mail] email address, and it gave Shapiro six months to respond or the USPTO
would deem the Trademark Application abandoned. 5 (Id.) Shapiro testified that during this
time, he was living at “multiple addresses” and did not recall receiving this Notice. (Aug. 17
Tr. 154:7-10.)
One month later, on March 6, 2017, Plaintiff re-hired Shapiro as a Hyperbaric
Oxygen Therapy (“HBOT”) Technician. (ECF No. 14-3.) Shapiro and Hyperheal entered
into an employment agreement (the “Employment Agreement” or “the Agreement”)
whereby Shapiro would receive a starting salary of $80,000 per year, with an increase to
$100,000 per year after six months. (ECF No. 14-3.) Shapiro also still retained his 2.38%
share in the company, and through the Employment Agreement agreed to the following:
As explained below, Shapiro never responded and the USPTO sent Shapiro a letter that the Application was
deemed abandoned on September 8, 2017.

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You agree that you will not engage in any marketing on behalf of [Hyperheal]
without the express permission of the COO or its delegate.
You will not participate on social media on behalf of [Hyperheal], including,
but not limited to, email, Twitter, LinkedIn or Facebook. These social media
accounts will need to be turned over to the COO, IT Director and or
marketing department prior to the start of the job.
You hereby relinquish and transfer to [Hyperheal] any and all ownership or
other rights, if any, that you have in any intellectual property (including
without limitation trademarks, copyrights, and patents), social media accounts,
. . . or other property, tangible or intangible, that has ever been used in or with
respect to the business operated by [Hyperheal], regardless of whether or not
title to such property is currently in the name of [Hyperheal]; you will
immediately take such steps (by, among other things, providing passwords and
access codes) as are necessary to provide [Hyperheal] with access to and
complete control over all such property; and you will, at [Hyperheal’s] request,
sign such documents and take such other steps as may be necessary to
confirm that [Hyperheal] is the owner of all such property and accounts . . ..
(ECF No. 14-3.) Under “effect of termination,” the Agreement provided that “[u]pon
termination of this agreement for any reason, neither party shall have any further rights,
duties or obligations under this agreement, except to carry out the provisions which
contemplate performance after termination or expiration.” (Id.) Notably, the Employment
Agreement did not contain a non-compete clause.
Subsequently, Defendant Shapiro met with Scott Hughey, Director of Information
Technology for Hyperheal, to execute his obligations under the Employment Agreement to
relinquish and transfer any of his ownership or other rights in intellectual property, social
media accounts, or other property. Shapiro testified that during this meeting, he “gave up”
his rights to the domain names. (Aug. 17 Tr. 152:15-17.) Specifically, he provided Hughey
with the user name and password to the GoDaddy account associated with the registered
Hyperheal domain names. Shapiro also provided Hughey with the passwords for the
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company’s Facebook and LinkedIn pages, and Hughey removed Shapiro as an administrator
on those accounts. Shapiro also provided Hughey with the password for the Twitter
account.
It is undisputed that Shapiro did not mention his Trademark Application for
“Hyperheal Hyperbarics, Inc.” to Hughey or anyone else at Hyperheal during this meeting.
Accordingly, he also did not provide or notify any Hyperheal personnel of the USPTO’s
Notice of Office Action indicating that the trademark “Hyperheal Hyperbarics, Inc.”
conflicted with a Trademark already owned by Dr. Tommy Love. Shapiro did not mention
this trademark even though, as explained above, he believed that he had a valid trademark
and began trying to use it in commerce. Finally, Shapiro also did not tell anyone at
Hyperheal about the various investors he had spoken to in Maryland and elsewhere.
While employed by Plaintiff, Shapiro never responded to the USPTO’s Notice of
Office Action. Accordingly, on September 8, 2017, the USPTO issued a Notice of
Abandonment for Shapiro’s Trademark Application for “Hyperheal Hyperbarics, Inc.”
(Def.’s Exh. 12.) The Notice of Abandonment indicates that, like the Notice of Office
Action, it was sent to Shapiro’s personal home address and [e-mail] email
address. Shapiro testified, however, that he also did not recall receiving this Notice. 6 (Aug.
17 Tr. 153:13-23.) Shapiro repeatedly testified that it was his understanding that the contents
of his email were turned over to the company when he entered into his Employment
Agreement. (Id. at 138:18-19, 22-25.) Therefore, he asserts that the company would have had
access to his email and could have reviewed both USPTO Notices. Scott Hughey testified,

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Shapiro testified that he was no longer living at the listed personal home address. (Aug. 17 Tr. 153:22-23.)

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however, that Shapiro and Hughey did not discuss Shapiro’s [e-mail] email
address during their meeting. (Id. at 222:12-14.) Nor did Shapiro tell Hughey or anyone else
at Hyperheal that he had listed his hyperheal.org email address as a point of contact for a
trademark application. Rather, Hughey testified that he assumed Shapiro would still be using
the email, he did not have Shapiro’s password to the email account, and accordingly he did
not examine Shapiro’s email. (Id. at 222:1-18.) Therefore, no one at Hyperheal ever received
notice of Shapiro’s Trademark Application, the USPTO Notice of Office Action, or the
USPTO Notice of Abandonment.
A year after entering into his Employment Agreement, Shapiro was terminated in
March of 2018 for “unprofessional, unethical or fraudulent conduct.” The Amended
Complaint asserts that Shapiro was terminated because Hyperheal determined that he was
responsible for improper billing practices that resulted in a federal investigation and
Hyperheal agreeing to repay $278,579.85 in March of 2018. (ECF No. 14 at ¶¶ 13, 17-18.) At
the hearing, the parties agreed that this was the stated reason for his termination, although
Shapiro continues to deny that he engaged in overbilling.
After his termination, Shapiro took several actions related to the “Hyperheal” name.
On May 1, 2018, he filed a new Trademark Application for “Hyperheal Hyperbarics, Inc.”
(ECF No. 14-4.) He testified that he saw online that his previous application had been
deemed abandoned and that no one currently owned the mark. (Aug. 15 Tr. 73:16-25.) For
this application, he listed the email [e-mail]. (ECF No. 14-4.) Two weeks
later, on May 16, 2018, Shapiro met with Dr. Love and bought the interests in the
trademarks “HyperHeal” and “HyperHeal O2”. (Aug. 17 Tr. 148:15-16.) He testified that he
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learned of Dr. Love’s marks by doing a search for “Hyperheal” on the USPTO’s website. (Id.
at 147:24-148:1.) He then contacted Dr. Love and purchased the two marks. Notably, the
“Hyperheal” trademark was the mark that the USPTO determined created a likelihood of
confusion with his first Trademark Application for “Hyperheal Hyperbarics, Inc.” 7
Shapiro also contacted GoDaddy.com and represented that he was the proper owner
of the Hyperheal domain names that he had previously transferred and requested that they
be transferred back into his account. Shapiro testified that he believed he was the proper
owner because he was still paying fees for the domain names and Hyperheal had not taken
over the payments since his termination. After Shapiro contacted GoDaddy, Scott Hughey
received an email indicating that there was a pending transfer of the domain names out of
Hyperheal’s account to another account. (ECF No. 11-6.) Less than twenty-four hours later,
he received another email indicating that the transfer had occurred. (Id.) The notification
indicated that the new registrant’s email was [e-mail]. (Id.) Hughey then
filed a complaint with GoDaddy, stating that the domain names had been transferred
incorrectly and requesting their return. Finally, Shapiro contacted LinkedIn and stated that
Hyperheal was infringing on his trademark. Hughey testified that control of the site was
almost immediately removed from Hyperheal. Shapiro also contacted Twitter and Facebook.
(Aug. 17 Tr. 207:25-208:3.)

Further, Shapiro testified that Dr. Love told him that he knew about Hyperheal Hyperbarics, Inc. when he
applied for the two trademarks. (Aug. 15 Tr. 78:20-22.) After obtaining the trademarks, Dr. Love never
objected to the company’s use of “Hyperheal.” (Id. at 78:25-79:2.)
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II.

Procedural Background

On May 30, 2018, Plaintiff Hyperheal filed a Verified Complaint and Motion for
Temporary Restraining Order in the Circuit Court for Baltimore County, Maryland. (ECF
Nos. 2, 4.) That same day, the Circuit Court issued a Temporary Restraining Order: (1)
enjoining and restraining Shapiro from asserting control over various Hyperheal domain
names, the Hyperheal LinkedIn, Facebook, and Twitter accounts, and any other intellectual
property using the name “Hyperheal”; (2) ordering him to transfer to Plaintiff any and all
ownership in the same that Shapiro controlled; (3) enjoining and restraining Shapiro from
pursuing his May 1, 2018 Trademark Application; and (4) enjoining and restraining him from
attempting to control the name “Hyperheal.” (ECF No. 5.)
On June 7, 2018, Shapiro removed the case to this Court on the basis of federal
question jurisdiction under 28 U.S.C. §1331, given the Complaint’s references to intellectual
property and trademark law. 8 (ECF No. 1.) After this Court held a teleconference with the
parties, Hyperheal filed an Amended Complaint and Supplemental Motion for Temporary
Restraining Order. (ECF Nos. 14, 15.) The six-count 9 Amended Complaint asserts claims
for: breach of contract (Count I), tortious interference with business relations (Count II),
unfair competition- misappropriation of products (Count III), declaratory relief (Count IV),
Lanham Act, 15 U.S.C. § 1501, et seq., violations (Count V), and declaratory relief regarding
trademark rights (Count VI). (ECF No. 14.)

At that time, Hyperheal did not bring any causes of action against Shapiro specifically under the Lanham
Act, 15 U.S.C. § 1501, et seq. (ECF No. 2.)
9 The Amended Complaint improperly labels both its fifth and sixth counts as “Count V.” Accordingly, this
Court treats Plaintiff’s sixth claim for declaratory relief regarding trademark rights as Count VI.
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On June 19, 2018, this Court held a hearing on Plaintiff’s Supplemental Motion for
Temporary Restraining Order and for the reasons stated on the record, granted the motion.
(ECF No. 19; TRO Tr., ECF No. 30.) The Temporary Restraining Order issued by this
Court ordered that Shapiro was enjoined and restrained, until further Order of this Court
after a preliminary injunction hearing, from:
A. Asserting control over the Hyperheal domain names Hyperhealbarics.com,
[various other domain names], any other web domains containing
“Hyperheal,” the Hyperheal LinkedIn webpage, Facebook page, and
Twitter account and any other intellectual property using the name
“Hyperheal”;
B. Pursuing the “Hyperheal Hyperbarics, Inc.” trademark application filed on
May 1, 2018;
C. Attempting to control the name “Hyperheal”; and
D. Using in commerce the trademarks “Hyperheal O2” and “Hyperheal.”
(ECF No. 19.) This Court also ordered Hyperheal to post a $25,000 bond. (Id.)
Subsequently, on August 2, 2018, Plaintiff filed the subject Motion for Preliminary
Injunction. (ECF No. 31.) The proposed Preliminary Injunction seeks to continue to enjoin
and restrain the Defendant Shapiro from the same activities as the Temporary Restraining
Order until such time as this Court or a jury renders a final judgment on the merits of
Plaintiff’s claims. 10 The next day, Defendant filed a response in addition to an Answer to the
Amended Complaint. (ECF Nos. 32, 33.) On August 15 and 17, 2018, this Court held
hearings on Plaintiff’s Motion. (ECF No. 39.)
At the hearing, Shapiro testified that—despite his actions with GoDaddy and the
social media accounts following his termination—he does not claim any rights in the domain
The proposed Preliminary Injunction Order is identical to the current Temporary Restraining Order with
the exception that under Section B, the proposed Preliminary Injunction Order omits “filed on May 1, 2018.”
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names subject to the Temporary Restraining Order or social media accounts. (Aug. 15 Tr.
86:21-87:2.) Despite Shapiro’s representations, Hughey testified that Hyperheal still does not
truly have control over Hyperheal’s domain names because GoDaddy requires a final
judgment to fully transfer them back to the company. (Aug. 17 Tr. 208:22-25.) Therefore,
Plaintiff asserts that its control over its websites remains tenuous until a final judgment in
this case. Shapiro also testified that the name “Hyperheal” is important to him because he
“need[s] to make a living” and “use it in commerce.” (Id. at 155:7.) He stated that at this time
he is, “for lack of a better term, crippled at being able to do what [he does.]” (Id. at 155:1011.) Shapiro also admitted, however, that neither the Employment Agreement nor Hyperheal
is barring him from continuing to work in the hyperbaric industry. (Id. at 157:13-17.)
STANDARD OF REVIEW
As the United States Court of Appeals for the Fourth Circuit stated in United States v.
South Carolina, 720 F.3d 518 (4th Cir. 2013), “[t]he purpose of a preliminary injunction is
merely to preserve the relative positions of the parties until a trial on the merits can be held.”
720 F.3d at 524 (quoting University of Texas v. Camenisch, 451 U.S. 390, 395, 101 S. Ct. 1830
(1981)). In determining whether to issue a preliminary injunction, the Court must follow the
test set forth by the United States Supreme Court in Winter v. Natural Res. Def. Council, Inc.,
555 U.S. 7, 129 S. Ct. 365 (2008) which requires that the plaintiff show that: (1) the movant
is likely to succeed on the merits; (2) the movant is likely to suffer irreparable harm absent
preliminary relief; (3) the balance of equities favors the movant; and (4) that an injunction is
in the public interest. 555 U.S. at 20, 129 S. Ct. 365. While a plaintiff need not establish a
“certainty of success,” he or she must make a “clear showing that he is likely to succeed at
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trial.” Di Biase v. SPX Corporation, 872 F.3d 224, 230 (4th Cir. 2017); Int’l Brotherhood of
Teamsters v. Airgas, Inc., 239 F. Supp. 3d 906, 912 (D. Md. 2017) (“Because a preliminary
injunction is ‘an extraordinary remedy,’ it ‘may only be awarded upon a clear showing that
the plaintiff is entitled to such relief.’” (quoting Winter, 555 U.S. at 22, 129 S. Ct. 386)).
ANALYSIS
Plaintiff Hyperheal Hyperbarics, Inc. seeks to enjoin and restrain the Defendant Eric
Shapiro until a final judgment on the merits of this case from:
A. Asserting control over the Hyperheal domain names Hyperhealbarics.com,
[various other domain names], any other web domains containing
“Hyperheal,” the Hyperheal LinkedIn webpage, Facebook page, and
Twitter account and any other intellectual property using the name
“Hyperheal”;
B. Pursuing the “Hyperheal Hyperbarics, Inc.” trademark application;
C. Attempting to control the name “Hyperheal”; and
D. Using in commerce the trademarks “Hyperheal O2” and “Hyperheal.”
(ECF No. 31-3.) Shapiro’s testimony during the hearings clearly shows that in the absence
of a preliminary injunction, he will resume attempting to use and control the name
“Hyperheal,” including the trademarks “Hyperheal O2” and “Hyperheal”. Further, absent a
preliminary injunction, nothing prevents him from attempting to reassert control over the
domain names or pursuing the “Hyperheal Hyperbarics, Inc.” trademark. Any of these
actions would result in confusion and irreparable harm to the Plaintiff. As explained below,
Shapiro’s main argument for why the Plaintiff is not entitled to a preliminary injunction
revolves around Hyperheal’s likelihood of success on its Lanham Act and declaratory relief
regarding trademark rights claims (Counts V, VI). Without delving into the intricacies of
those two claims on the current record, however, Plaintiff has shown that it is likely to
succeed on the merits of its breach of contract, tortious interference, misappropriation of
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products, and related declaratory injunctive relief claims (Counts I-IV). The balance of
equities also weighs in favor of Hyperheal given the potential irreparable harm if an
injunction is not issued and the fact that the injunction does not prohibit Shapiro from
pursuing employment in the hyperbaric industry. Finally, Plaintiff has demonstrated that
injunctive relief is in the public interest. Therefore, as discussed in more detail below,
Plaintiff is entitled to a preliminary injunction.
A. Likelihood of success on the merits
The Amended Complaint alleges the following causes of action: breach of contract
(Count I), tortious interference with business relations (Count II), unfair competitionmisappropriation of products (Count III), declaratory relief (Count IV), Lanham Act
violations (Count V), and declaratory relief regarding trademark rights (Count VI). (ECF No.
14.) The majority of the Defendant’s argument under this prong of the Winter analysis
focuses on Plaintiff’s trademark claims. In essence, Defendant argues that at most Plaintiff
has a common-law trademark in “Hyperheal” in the geographical areas in which Plaintiff
actually uses the mark, which Defendant argues is limited to Baltimore County and Anne
Arundel County, Maryland. Therefore, Defendant argues that Shapiro has the right to use
the trademarks he purchased from Dr. Love outside of those two counties. In response, the
Plaintiff provided evidence challenging both the validity of Dr. Love’s marks, given that Dr.
Love acknowledged Hyperheal’s prior use of “Hyperheal” before he applied for the
trademarks, and the Defendant’s assertion that the Plaintiff’s use of the mark is limited to
Maryland. On the latter point, Hyperheal emphasized that the company sponsored a national
seminar and Shapiro himself interacted with potential investors outside of Maryland.
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As explained below, this Court finds that Plaintiff has demonstrated a likelihood of
success on the merits of its breach of contract, tortious interference, misappropriation of
products, and related declaratory injunctive relief claims and is entitled to the preliminary
injunction it seeks under the remaining Winter factors. Plaintiff has clearly shown that it
could succeed at trial on its argument that by entering into the Employment Agreement,
Shapiro forfeited his right to attempt to control the name “Hyperheal” or pursue any of the
trademarks at issue. While Shapiro has emphasized trademark issues in his response, there is
a likelihood of success on Counts I-IV of the Amended Complaint. Therefore, at this time
this Court does not make any determinations on the likelihood of success on Plaintiff’s
remaining claims.
i.

Breach of contract (Count I)

To prove breach of contract under Maryland law, 11

the

Plaintiff

must

present

“evidence of a contractual obligation owed by the Defendant[] to the Plaintiff[] and a breach
of that obligation by the Defendant[].” EndoSurg Med., Inc. v. EndoMaster Med., Inc., 71 F.
Supp. 3d 525, 540 (D. Md. 2014) (citing RRC Northeast, LLC v. BAA Maryland, Inc., 413 Md.
638, 655, 994 A.2d 430, 440 (Md. 2010)). The Defendant does not dispute that on March 6,
2017, he entered into the Employment Agreement with Plaintiff. In exchange for his
employment and beginning salary of $80,000 per year, he agreed:
You agree that you will not engage in any marketing on behalf of [Hyperheal]
without the express permission of the COO or its delegate.
In diversity jurisdiction cases, this Court applies the choice of law rules of the state in which it sits. Klaxon
Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496–97, 61 S. Ct. 1020 (1941). Maryland courts generally follow the
principle of lex loci contractus and apply the law of the jurisdiction where the contract was made. Key Gov’t Fin.,
Inc. v. E3 Enterprises Inc., 2 F. Supp. 3d 741, 745 (D. Md. 2014) (citing Allstate Ins. Co. v. Hart, 327 Md. 526, 611
A.2d 100 (1992)).
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You will not participate on social media on behalf of [Hyperheal], including,
but not limited to, email, Twitter, LinkedIn or Facebook. These social media
accounts will need to be turned over to the COO, IT Director and or
marketing department prior to the state of the job.
You hereby relinquish and transfer to [Hyperheal] any and all ownership or
other rights, if any, that you have in any intellectual property (including
without limitation trademarks, copyrights, and patents), social media accounts,
. . . or other property, tangible or intangible, that has ever been used in or with
respect to the business operated by [Hyperheal], regardless of whether or not
title to such property is currently in the name of [Hyperheal]; you will
immediately take such steps (by, among other things, providing passwords and
access codes) as are necessary to provide [Hyperheal] with access to and
complete control over all such property; and you will, at [Hyperheal’s] request,
sign such documents and take such other steps as may be necessary to
confirm that [Hyperheal] is the owner of all such property and accounts . . ..
(ECF No. 14-3.)
In evaluating Plaintiff’s breach of contract claim, this Court considers the
Defendant’s actions both when he entered the Agreement and was employed by Hyperheal,
and the actions he took after he was terminated. It is undisputed that despite his agreement
to “relinquish and transfer to [Hyperheal] any and all ownership or other rights, if any, that
you have in any intellectual property (including without limitation trademarks, copyrights,
and patents),” Plaintiff did not transfer his “Hyperheal Hyperbarics, Inc.” Trademark
Application to Hyperheal. Relatedly, he did not tell anyone at Hyperheal about the
Application or that the trademark was available. Shapiro’s argument that by entering into the
Employment Agreement, Hyperheal had access to his email and therefore the Trademark
Application, is without merit. It is also undisputed that while employed by Hyperheal,
Shapiro did not transfer to Hyperheal or otherwise notify the company that his Application
was rejected by the USPTO because “of a likelihood of confusion” with Dr. Love’s
“Hyperheal” trademark. (Def.’s Exh. 12.) Turning to Shapiro’s actions after he was
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terminated, it is undisputed that on May 1, 2018 Shapiro filed a second Trademark
Application for “Hyperheal Hyperbarics, Inc.” After he filed this application, he contacted
Dr. Love and purchased the trademarks “Hyperheal O2” and “Hyperheal.” Further, he
contacted GoDaddy and the various social media websites to reassert control over them.
The Plaintiff has shown that it is likely to succeed at trial in proving that by
undertaking these actions, Shapiro breached his Employment Agreement. By attempting to
reassert control over the domain names and social media websites, he breached his
agreement to relinquish and control his rights with regard to the domain names and to not
participate on social media on behalf of Hyperheal and to turn over such accounts. Further,
it is undisputed that at the time he entered the Employment Agreement, Shapiro had applied
for, and in fact thought he was the owner of, the trademark for “Hyperheal Hyperbarics,
Inc.” Yet, he did not take any steps to transfer or relinquish any rights he actually possessed
in the trademark. As to the Dr. Love trademarks, Defendant argues that because he did not
own the “Hyperheal” and “Hyperheal O2” trademarks at the time he entered into the
Agreement, he did not have any rights in those marks to relinquish or transfer. However, it
is undisputed that Shapiro knew that the phrase “Hyperheal” was being used in commerce as
early as May 11, 2012, when he founded the company, and “anywhere” at least as early as
March 7, 2007, when he initially founded the LLC, as he represented on his first Trademark
Application. (ECF No. 14-11.) Accordingly, Plaintiff has shown that it is likely to succeed on
the merits that Defendant breached, and in the absence of the proposed Preliminary
Injunction would continue to breach, the Employment Agreement.

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ii.

Tortious interference with business relations (Count II)

To prevail on a tortious interference with business relations claim, a plaintiff must
show: “(1) intentional and willful acts; (2) calculated to cause damage to the plaintiff; (3)
done to cause damage and loss, without right or justifiable cause on the part of the
defendant[] (which constitutes malice); and (4) damage resulting.” Press v. United States, No.
JKB-17-1667, 2018 WL 1211537, at *8 (D. Md. Mar. 8, 2018) (citing Kwang Dong Pharm. Co.
v. Han., 205 F. Supp. 2d 489, 496 (D. Md. 2002)) (applying Maryland law). Plaintiff asserts
that as a result of entering into the Employment Agreement and his status as a shareholder,
Shapiro’s attempts to prohibit Hyperheal from controlling its intellectual property are
unlawful and intentional acts interfering with Hyperheal’s business relationships with existing
and potential clients, including LinkedIn and GoDaddy.com. (ECF No. 14 at ¶¶ 43-45.)
As explained above, Plaintiff has shown a likelihood of success of proving at trial that
Shapiro violated his Employment Agreement by taking multiple steps related to Hyperheal
both when he entered into his Employment Agreement and was employed at Hyperheal and
after he was terminated. This includes not transferring his “Hyperheal Hyperbarics, Inc.”
Trademark Application to Hyperheal or notifying anyone of his Application and the
subsequent USPTO Notices, filing a second Trademark Application for “Hyperheal
Hyperbarics, Inc.” after he was terminated, and contacting GoDaddy and the various social
media websites to reassert control over the domain names and websites that he had
previously transferred during his meeting with Scott Hughey. Shapiro took these actions
with the intent to market himself to investors looking to set up hyperbaric treatment centers
throughout the country, including Maryland, and he therefore acted with the tortious intent
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to harm Hyperheal financially. See Press, 2018 WL 1211537, at *8 (“Here, [p]laintiff alleges
that the [defendants] acted with tortious intent to harm [p]laintiff financially, and that they
acted without authorization when they posted the [i]ncident [r]eport and [a]ddendum. Those
are sufficient allegations to support a claim for tortious interference with business
relations.”) Accordingly, Plaintiff has shown that it is likely to succeed on the merits of its
claim that Defendant committed tortious interference with Hyperheal’s business relations.
iii.

Unfair competition – misappropriation of products (Count III)

To prevail on a misappropriation cause of action, a “species of unfair competition
under Maryland common law,” a plaintiff must show: (1) “time, labor, and money . . . in the
creation of the product misappropriated”; (2) “a competitive relationship [existed] between
the plaintiff and the defendant”; and (3) “commercial damage to the plaintiff.” Agora Fin.,
LLC v. Samler, 725 F. Supp. 2d 491, 496 n. 3 (D. Md. 2010) (citing GAI Augio of N.Y., Inc. v.
Columbia Broadcasting Sys., Inc., 27 Md. App. 172, 189-90 (1975)). Plaintiff asserts that since
2012, the company has successfully spent time, labor, and money creating and developing
the “Hyperheal” brand and related intellectual property. The Plaintiff further asserts that
Shapiro, without the consent or approval of the Plaintiff, has wrongfully misappropriated or
attempted to wrongfully misappropriate the company’s intellectual property for his own use
in competition with the Plaintiff. As a result, Hyperheal has suffered and continues to suffer
commercial damage including the inability to control its domain names and the name
“Hyperheal Hyperbarics, Inc.” (ECF No. 14 at ¶¶ 48-51.)
Defendant himself acknowledged on his first Trademark Application that the name
“Hyperheal Hyperbarics, Inc.” had been used “in commerce” as early as May 11, 2012, and
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“anywhere” at least as early as March 7, 2007. (ECF No. 14-11.) During the hearing, he also
clearly acknowledged the significance that the “Hyperheal Hyperbarics, Inc.” name has in
the hyperbaric industry, given that he testified that he purchased Dr. Love’s trademarks
“Hyperheal” and “Hyperheal O2” so that he could “market himself” and “use them so that
[he] could then enter into conversations and use them in commerce and make money.”
(Aug. 17 Tr. 148:18-20.) Shapiro took these actions both before and after his termination,
interfering with Hyperheal’s ability to control its name “Hyperheal,” its domain names, and
its social media accounts, and causing damage to the company in addition to irreparable
harm if an injunction is not issued. Therefore, Plaintiff has shown that it is likely to succeed
on the merits that Defendant committed misappropriation of products.
iv.

Declaratory relief (Count IV)

Count IV of the Amended Complaint seeks temporary, preliminary, and permanent
injunctive relief ordering Shapiro to cease attempting to control the domain names and
social media accounts, withdraw or assign to Hyperheal his Trademark Application, and
cease using the name “Hyperheal” or intellectual property associated with the name
“Hyperheal.” As this Court is granting the Plaintiff’s Motion for a Preliminary Injunction,
the pertinent inquiry is whether the Plaintiff has shown a clear likelihood of success on
obtaining permanent injunctive relief. “The standard for a permanent injunction is
‘essentially the same’ as for a preliminary injunction, ‘with the exception that the plaintiff
must show . . . actual success [on the merits]’ when seeking a permanent injunction.” Young v.
Ditech Financial, LLC, No. PX-16-3986, 2017 WL 3066198, at *8 (D. Md. 2017) (quoting
Amoco Production Co. v. Village of Gambell, 480 U.S. 531, 546 n. 12 (1987)). For the reasons
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explained above, Plaintiff has shown a clear likelihood of success on its claims for breach of
contract, tortious interference with business relations, and misappropriation of products. As
explained below, the Plaintiff has also satisfied the remaining irreparable harm, balance of
equities, and public interest factors of the Winter analysis. Therefore, as to this declaratory
relief claim (Count IV), 12 Plaintiff has shown a likelihood of success on the merits of its
claim for a permanent injunction.
B. Irreparable harm
This factor of the Winter analysis considers whether the Plaintiff has demonstrated
that it is likely to suffer irreparable harm without a preliminary injunction. As the Fourth
Circuit stated in Di Biase v. SPX Corporation, 872 F.3d 224 (4th Cir. 2017), “a plaintiff must
demonstrate more than just a ‘possibility’ of irreparable harm.” 872 F.3d at 230. Further,
“[m]ere injuries, however substantial, in terms of money, time and energy necessarily
expended in the absence of a stay are not enough. The possibility that adequate
compensatory or other corrective relief will be available at a later date . . . weighs heavily
against a claim of irreparable harm.” Sampson v. Murray, 415 U.S. 61, 90, 94 S. Ct. 937 (1974).
Plaintiff argues that it will suffer irreparable harm in the absence of the proposed
Preliminary Injunction because it will be prevented from controlling its own intellectual
property in furtherance of operating its business and Shapiro will attempt to use the name to
compete directly with Hyperheal. On the other hand, Defendant Shapiro argues that Plaintiff
will not suffer irreparable harm because—since this Court’s entering of the Temporary
Restraining Order—he no longer seeks to control the relevant domain names and he has
Plaintiff has pled a separate declaratory relief claim related to trademark rights (Count VI) that this analysis
does not address.

12

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abandoned his application for “Hyperheal Hyperbarics, Inc.” Therefore, he asserts that any
injuries to Plaintiff up to this date can be calculated in monetary damages.
Scott Hughey testified, however, that GoDaddy will not transfer the domain names
back to the Plaintiff until a final judgment is rendered in this case. (Aug. 17 Tr. 208:22-25.)
Accordingly, he testified that Plaintiff currently does not truly have control over the domain
names. (Id. at 208:22.) With respect to Defendant’s assertion that he has abandoned his
trademark application, this argument is undermined by the very fact that this application is
Shapiro’s second for “Hyperheal Hyperbarics, Inc.” 13 Accordingly, at this time there is
nothing preventing Shapiro from attempting to reassert control over the domain names or
filing an additional trademark application.
Further, with respect to the restrictions concerning the name “Hyperheal” generally
and the “Hyperheal” and “Hyperheal O2” trademarks, the USPTO itself declared that there
is a likelihood of confusion between “Hyperheal Hyperbarics, Inc.” and Dr. Love’s
trademark for “Hyperheal.” (Def.’s Exh. 12.) Therefore, notwithstanding an analysis of the
technical trademark issues in this case, permitting Shapiro to use these trademarks in
violation of his Employment Agreement would result in a likelihood of confusion and
irreparable harm to the Plaintiff. See Rainbow School, Inc. v. Rainbow Early Education Holding
LLC, 887 F.3d 610, 619 (4th Cir. 2018) (noting Fourth Circuit precedent that the irreparable
harm component of trademark infringement cases flows from an established likelihood of
confusion and mark dilution (citing Scotts Co. v. United Indus., 315 F.3d 264, 273 (4th Cir.
The USPTO Notice of Abandonment recognizes Shapiro’s right to reserve rights and claims with regard to
the Trademark: “[T]he applicant hereby expressly abandons the application for trademark registration made
under the serial number identified above. . . [T]he fact that an application has been expressly abandoned shall
not, in any proceeding in the United States Patent and Trademark Office, affect any right that the applicant
may have in the mark which is the subject of the abandoned application.” (Def.’s Exh. 9.)
13

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2002))). For these reasons, the Plaintiff is likely to suffer irreparable harm without a
preliminary injunction.
C. Balance of equities
Plaintiff argues that while it will suffer immediate, substantial and irreparable harm
without the preliminary injunction, Shapiro will suffer no harm by having to abide by the
terms of the proposed Preliminary Injunction. Plaintiff asserts that this is because Shapiro
agreed to relinquish and transfer any right in Hyperheal intellectual property when he
entered into the Employment Agreement, and the proposed Preliminary Injunction does not
prevent him from competing with Hyperheal. Rather, it prohibits him from using
Hyperheal’s own intellectual property in the name “Hyperheal.” On the other hand,
Defendant Shapiro argues that the balance of equities weighs against the proposed
Preliminary Injunction because it prevents “his ability to work in a heavily regulated national
industry” and he would be “functionally unable to advertise himself to any industry investor
who wants to work quickly to find staff and enter the market.” (ECF No. 33 at 12, 14.)
Defendant asserts that “[b]y contrast, Plaintiff has no reasonable expectation of intellectual
property rights outside Baltimore County and Anne Arundel County.” (Id. at 12.)
The proposed Preliminary Injunction does not prohibit Shapiro from working in the
hyperbaric industry in Maryland or throughout the United States. Rather, it merely prohibits
him from using the same name as Hyperheal in an identical industry in order to prevent him
from creating confusion and irreparable harm until there is a trial on the merits on Plaintiff’s
claims. With respect to Defendant’s intellectual property argument, it depends on the
trademark issues in this case. He asserts that he acquired valid trademarks from Dr. Love,
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and Plaintiff may “interfere in that bargain only to the extent permitted by law,” referring to
Plaintiff’s exclusive rights to use “Hyperheal Hyperbarics, Inc.” only in the two Maryland
counties. (Id. at 12, 13.) As explained above, the validity of Defendant’s argument given the
evidence thus far that Plaintiff uses its name throughout Maryland and in other states
remains questionable. More importantly, this case involves more than a trademark dispute.
Given the potential irreparable harm to the Plaintiff if Shapiro is permitted to continue to
use “Hyperheal,” which the USPTO has already indicated has a likelihood of confusion with
“Hyperheal Hyperbarics, Inc.” and that Shapiro is not being prohibited from working in the
hyperbaric industry in general, the balance of equities weighs in Plaintiff’s favor.
D. Public interest
The final Winter factor requires that the Plaintiff show that the injunctive relief is in
the public interest. Winter, 555 U.S. at 20. The Plaintiff asserts that the public interest is best
served by preventing individuals from “falsely and fraudulently asserting control [over
intellectual property] solely to harass the rightful owner and gain business advantage –
particularly when such actions are in material breach of a bargained for agreement.” (ECF
No. 14 at ¶ 58.) The public interest is served by ensuring that legitimate contracts are
enforced. Asheboro Paper and Packaging, Inc. v. Dickinson, 599 F. Supp. 2d 664, 678 (M.D.N.C.
2009) (citation omitted); RLI Insurance Co. v. Nexus Services, Inc., No. 5:18-CV-00066, 2018
WL 3244413, at *11 (W.D. Va. July 2, 2018) (collecting cases). There are also public interests
in preventing a prior employee from tortuously interfering with business relations and
misappropriating products. These interests, coupled with the fact that the Defendant cannot
claim that his freedom to pursue employment in the hyperbaric industry is being restricted,
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demonstrates that injunctive relief is in the public interest and Plaintiff has satisfied this
prong of the Winter analysis.
Therefore, Plaintiff Hyperheal Hyperbarics, Inc. has shown a likelihood of success on
the merits with respect to its claims for breach of contract (Count I), tortious interference
with business relations (Count II), misappropriation of products (Count III), and declaratory
relief (Count IV). The merits of Plaintiff’s Lanham Act and declaratory relief regarding
trademark rights claims (Counts V, VI) will await final judgment in this case. Plaintiff has
also shown that it will suffer irreparable injury in the absence of preliminary injunctive relief,
the balance of equities favors Plaintiff, and injunctive relief is in the public interest.
Accordingly, Plaintiff’s Motion for a Preliminary Injunction (ECF No. 31) is GRANTED.
CONCLUSION
For the reasons stated above, Plaintiff’s Motion for a Preliminary Injunction (ECF
No. 31) is GRANTED.
A separate order follows.
Dated: September 6, 2018

/s/
Richard D. Bennett
United States District Judge

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