UNeMed Corporation et al v. Promera Health, LLC et al
ORDER granting Motion to Consolidate Cases (Filing No. 80 in case 8:16cv08). The two cases listed in this order are consolidated for all purposes. Case No. 8:15CV135 is hereby designated as the "Lead Case." Case number 8:16CV08 is hereby de signated as the "Member Case." The parties shall have until April 19, 2016, to meet, confer, and file either a planning report pursuant to Federal Rule of Civil Procedure 26(f) encompassing both cases or a stipulation with regard to the progression of the newly consolidated action. Any objection to this Order shall be filed with the Clerk within 14 days after being served with a copy of this Order. Ordered by Magistrate Judge Thomas D. Thalken. (JSF)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
UNEMED CORPPORATION and
VIREO SYSTEMS, INC.,
PROMERA HEALTH, LLC, and
HARVEST TRADING GROUP, INC.,
PROMERA HEALTH, LLC,
VIREO SYSTEMS, INC.,
This matter is before the court on Vireo Systems, Inc.’s (Vireo) Motion to
Consolidate (Filing No. 80 in case 8:16CV08). Vireo seeks to consolidate the abovecaptioned case with UNeMed Corporation, et al. v. ProMera Health, LLC, et al.,
Vireo filed a brief (Filing No. 81 in case 8:16CV08) in support of the
motion. ProMera Health, LLC (ProMera) filed a brief (Filing No. 89 in case 8:16CV08)
and an index of evidence (Filing No. 90) opposing consolidation. Vireo did not file a
“Vireo . . . develops and manufactures various dietary supplements, chemical
compounds, and nutraceuticals.” See Filing No. 1 in case 8:15CV135 - Complaint ¶ 24.
“Vireo’s CEO Mark Faulkner [(Faulkner)] co-invented. . . and Vireo subsequently
developed for commercial sale, and manufactures, creatine hydrochloride (C-HCl),”
which is covered by two patents, United States Patent No. 8,354,450 (the ‘450 Patent)
and United States Patent No. 8,962,685 (the ‘685 Patent). Id. ¶¶ 24-28. Vireo and
UNeMed Corporation (UNeMed) co-own the patents. Id. ¶ 29. Vireo marketed and sold
C-HCl products using the CONCRĒT and CON-CRĒT REINFORCED trademarks. Id.
¶¶ 31-34. On March 22, 2011, Vireo and ProMera entered into a Product Development
and Marketing Agreement (PDMA) memorializing the parties’ earlier oral agreement
allowing ProMera, exclusively, to market and distribute certain products including C-HCl
products using the CONCRĒT and CON-CRĒT REINFORCED trademarks. Id. ¶¶ 3540. ProMera sold the C-HCI products to affiliates, including Harvest Trading Group, Inc.
(Harvest), who sold them to resellers, retailers, or end users. Id. ¶ 42. In September
2014 ProMera applied to use the mark CONCRET BLACK for dietary supplements, but
has not marketed, distributed, or sold products bearing the mark. Id. ¶¶ 51-52. On
February 4, 2015, Vireo terminated the PDMA and ceased to supply C-HCl to ProMera.
Id. ¶ 55. ProMera located an alternative manufacturer and continues to sell C-HCl
products bearing the CONCRĒT and CON-CRĒT REINFORCED trademarks. Id. ¶ 56.
Based on these events, on February 27, 2015, ProMera filed an action in the
United States District Court for the District of Massachusetts. See Filing No. 1 in case
8:16CV08 - Complaint. ProMera, in a second amended complaint, seeks a declaratory
judgment holding its marketing and distribution of certain C-HCl dietary supplements
does not infringe upon Vireo. See Filing No. 57 in case 8:16CV08 - Second Amended
Complaint. Specifically, ProMera states, “ProMera is in need of a declaration of its
rights and a determination whether ProMera’s use of its CON-CRET Marks are tied to
the ‘450 or ‘685 patents or otherwise infringe or interfere with Vireo’s rights.” Id. ¶ 25.
While ProMera asserts it is the exclusive owner of the CON-CRET Marks, Vireo
alleges it and Faulkner “jointly applied for federal trademark registration for CON-CRĒT”
and the CON-CRĒT REINFORCED marks. Compare Id. ¶¶ 10-12 with Filing No. 1 in
case 8:15CV135 - Complaint ¶¶ 32, 34.
On April 22, 2015, the Vireo and UNeMed filed an action in the United States
District Court for the District of Nebraska.
See Filing No. 1 in case 8:15CV135 -
Complaint. The plaintiffs allege both ProMera and Harvest infringed on the ‘450 and
‘685 patents (Count I and II), and Vireo alleges ProMera and Harvest infringed on
Vireo’s trademarks (Count III) and for declaratory judgment (Count IV) preventing
ProMera and Harvest from future use of the CONCRĒT, CON-CRĒT REINFORCED,
and CONCRET BLACK marks. Id. ¶¶ 69-102. Specifically, Vireo and UNeMed allege
ProMera and Harvest infringed the ‘450 and ‘685 patents by distributing and marketing
products under the CONCRĒT and CON-CRĒT REINFORCED marks despite having
changed the composition of the C-HCl products. Id. at 14-16. On October 13, 2015,
the court denied a motion to dismiss or, in the alternative, to transfer to the United
States District Court for the District of Massachusetts. See Filing No. 35. The parties
began discovery and the court scheduled a patent claim construction hearing for June
20, 2016, and related deadlines. See Filing No. 40.
On January 8, 2016, the Massachusetts case was transferred to this court. See
Filing Nos. 59-60. The transferring court held:
the instant action should be transferred to the District of
Nebraska. It cannot resolve the remaining trademark claim
for declaratory relief without first addressing the patent
infringement claims in the parallel action. That is because,
in this case, ProMera seeks a declaratory judgment that its
use of the CON-CRET trademarks does not violate any of
Vireo’s rights, patent or otherwise. This Court declines to
adjudicate patent claims that are properly before the
Nebraska Court, particularly in light of its observation that
the declaratory judgment sought in the Nebraska action is
substantially the same as the declaratory judgment sought
Filing No. 59 in case 8:16CV08 - Order p. 11.
After transfer, Vireo moved to consolidate the two actions in the interest of
convenience and judicial economy. See Filing No. 80 in case 8:16CV08 - Motion p. 1-2.
Vireo argues the trademark claims are mirror images of each other and the central issue
in both cases is whether ProMera’s conduct infringes on Vireo’s patents. Id. at 2. Vireo
contends there is substantial overlap in the evidence. Id.
ProMera oppose consolidation. See Filing No. 89 in case 8:16CV08 - Response.
ProMera argues that while the cases are related, only two of the parties are involved in
the trademark action from Massachusetts and separation of the cases allows the court
to use a tailored approach to resolve the patent and trademark claims independently.
Id. at 1-2. ProMera contends it will soon move for a stay on the patent issues pending
resolution of patent challenges before the United States Patent and Trademark Office,
which stay need not delay the trademark matters. Id. at 4-5.
Federal Rule of Civil Procedure 42 governs consolidation of separate actions and
provides: “If actions before the court involve a common question of law or fact, the
court may: (1) join for hearing or trial any or all matters at issue in the actions; (2)
consolidate the actions; or (3) issue any other orders to avoid unnecessary cost or
delay.” Fed. R. Civ. P. 42. “Consolidation of separate actions presenting a common
issue of law or fact is permitted under Rule 42 as a matter of convenience and economy
in judicial administration. The district court is given broad discretion to decide whether
consolidation would be desirable and the decision inevitably is contextual.” 9 Charles A.
Wright & Arthur R. Miller, Federal Practice & Procedure § 2383 (2d ed. 1994).
Whether to grant a Rule 42(a) motion to consolidate is within the sound discretion of the
court. United States Envtl. Prot. Agency v. Green Forest, 921 F.2d 1394, 1402-03
(8th Cir. 1990). The “court [must] weigh the saving of time and effort that consolidation
under Rule 42(a) would produce against any inconvenience, delay, or expense that it
would cause . . . .” Wright & Miller, supra, § 2383. “[D]istrict courts generally take a
favorable view of consolidation . . . .” Id. Furthermore, “[a]ctions involving the same
parties are apt candidates for consolidation.” Id. § 2384. However, under Fed. R. Civ.
P. 42(b), consolidation is considered inappropriate “if it leads to inefficiency,
inconvenience, or unfair prejudice to a party.” EEOC v. HBE Corp., 135 F.3d 543, 551
(8th Cir. 1998).
Upon review of the cases, the court is convinced these actions involve the same
parties and the same issues. Although the one action involves four parties and the
other two, it appears the cases involve common questions of law and fact. Indeed the
case involving four parties raises both the patent issues and the trademark issues.
Nevertheless, ProMera admits in the Massachusetts “trademark” case, it “is in need of a
declaration of its rights and a determination whether ProMera’s use of its CON-CRET
Marks are tied to the ‘450 or ‘685 patents or otherwise infringe or interfere with Vireo’s
See Filing No. 57 in case 8:16CV08 - Second Amended Complaint ¶ 25.
Clearly, the patent issues are integral to the outcome of both cases as pled by ProMera
and determined by the transferring court. Id.; Filing No. 59 in case 8:16CV08 - Order p.
11. Additionally, due to the similarity in the cases, the parties will likely present similar
motions and arguments during discovery. Consolidation during the discovery phase will
avoid duplicative parallel activities.
Both cases are at an early stage of litigation.
Consolidation for discovery will promote the goals of efficient use of judicial resources
without leading to inconvenience, delay, unfair prejudice, or additional expense. In the
event patent proceedings within or outside this court cause delay, such delay will likely
impact the trademark issues in both cases equally. The parties and the court may
minimize any prejudice arising from the patent delay by proceeding, if appropriate, with
the trademark issues in both matters. Upon consideration,
IT IS ORDERED:
The defendant’s Motion to Consolidate (Filing No. 80 in case 8:16CV08) is
The two above-captioned cases are consolidated for all purposes.
Case No. 8:15CV135 is hereby designated as the “Lead Case.” Case
number 8:16CV08 is hereby designated as the “Member Case.”
The court’s CM/ECF System has the capacity for “spreading” text among
the consolidated cases. If properly docketed, the documents filed in the Lead Case will
automatically be filed in all Member Cases. To this end, the parties are instructed to file
all further documents related to discovery (except those described in paragraph 5) in the
Lead Case, No. 8:15CV135, and to select the option “yes” in response to the System’s
question whether to spread the text.
The parties may not use the spread text feature to file complaints,
amended complaints, and answers; to pay filing fees electronically using pay.gov; or to
file items related to service of process.
If a party believes that an item in addition to those described in paragraph
4 should not be filed in all the consolidated cases, the party must move for permission
to file the item in one or more member cases. The motion must be filed in all the
consolidated cases using the spread text feature.
The parties shall have until April 19, 2016, to meet, confer, and file either
a planning report pursuant to Federal Rule of Civil Procedure 26(f) encompassing both
cases or a stipulation with regard to the progression of the newly consolidated action.
Pursuant to NECivR 72.2 any objection to this Order shall be filed with the Clerk
of the Court within fourteen (14) days after being served with a copy of this Order.
Failure to timely object may constitute a waiver of any objection. The brief in support of
any objection shall be filed at the time of filing such objection. Failure to file a brief in
support of any objection may be deemed an abandonment of the objection.
Dated this 30th day of March, 2016.
BY THE COURT:
s/ Thomas D. Thalken
United States Magistrate Judge
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