Derma Pen v. 4EverYoung Limited et al

Filing 1049

**REDACTED VERSION OF 1046 FINDINGS OF FACT AND CONCLUSIONS OF LAW/ORDER** granting 938 Plaintiff's MOTION to Strike MOTION for Entry of Default as to 4EverYoung Limited, BioSoft (AUST) Pty Ltd, Equipmed International Pty Ltd, and Stene Marshall, MOTION for Default Judgment as to defendant(s) 4EverYoung Limited, BioSoft (AUST) Pty Ltd, Equipmed International Pty Ltd, and Stene Marshall; 943 Plaintiff's MOTION for Findings of Fact and Conclusions of Law; [9 52] MOTION for Sanctions; 944 Plaintiff's MOTION for Attorney Fees; 945 MOTION for Attorney Fees; 1015 MOTION for Attorney Fees and Award of Costs; 1017 MOTION for Attorney Fees;finding as moot 651 MOTION in Limine to Exclude Derma Pen 's Valuation Expert Reports and Testimony; 706 MOTION to Stay re 651 MOTION in Limine to Exclude Derma Pen's Valuation Expert Reports and Testimony; and awarding damages, injunctive relief and atty fees and costs. Signed by Judge David Nuffer on 5/9/17 (alt) Modified on 5/22/2017: added links to all related motions (alt)

Case 2:j-3-cv-00729-DN-EJF Document 1046

*SEALED* Filed 05i09i1-7 Page 1of 54

IN THE UNITED STATES DISTRICT COURT
IN Ai\D FOR THE DISTRICT OF UTAH, CENTRAL DIVISION
DERMA PEN, LLC,
Plaintiff,
VS.

4EVERYOUNG LIMITED, BIOSOFT
(AUST) PTY LTD d/b/a
DERMAPENWORLD, EQUIPMED
INTERNATIONAL PTY LTD d/b/a
DERMAPENWORLD, and STENE
MARSHALL dlb I a DERMAPENWORLD,
Defendants.

FILED UI\DER SEAL
FINDINGS OF FACT AND
CONCLUSIONS OF LAW;
ORDER
. GRANTING Í938,943,9520944,,945,
101,5, and 10171 MOTIONS,
o FINDING N'IOOT [651 and 706]
MOTIONS; AND
FINAL JUDGMENT A\üARDING
DAMAGES, INJUNCTIVE RELIEF, AND
ATTORNEY'S FEES AND COSTS

**REDACTED**
Case No. 2:13-cv -00729-DN-EJF

District Judge David Nuffer
Magistrate Judge Evelyn J. Furse

An evidentiary hearingl was held pursuant to Fed. R. Civ. P. 55(bX2) to supplement the
record which is relied on determining the appropriate sum of damages and equitable relief to grant

to the plaintiff, in line with the relief requested in the First Amended Complaint. Based on that
hearing and the entire record, the following findings of fact and conclusions of law are entered:

I Minute Order, docket no. 1010, entered March 1,2017

Case 2:13-cv-00729-DN-EJF Document L046 *SEALED'k Filed 05i09/L7 Page 2 of 54

I.

FINDINGS OF FACT.

J

A.
B.

PARTIES

J

JURISDICTION......

4

C.

MATERIAL FACTS

4

1.

Ownership of the DERMAPEN@ trademarks in the USA and the domain
www.dermapen.com.

4

2.
3.

The Sales Distribution Agreement.

4.

Defendants have used copyrighted materials on their website without authorization. .. 16

5.

Defendants have engaged in false

6.

Stene Marshall's conduct in Australia.

7.

Defendants

8

Defendants never paid value for the DERMAPEN Marks or the Domain Name, but
nonetheless have been using a reproduction or counterfeit of the marks to sell microneedling products in the USA
.. t2

advertising.

willfully published false statements about Derma

.....17
....

l9

Pen, LLC to third parties.

......21

8. 4EverYoung, Equipmed, Biosoft and Mr. Marshall are alter egos of each other. .........23
9. 4EverYoung and Equipmed failed to prosecute their claims for specific performance. 24
10. Derma Pen, LLC's Damages.
il.

CONCLUSIONS OF LAW

ORDER

38

49

2

Case 2:L3-cv-00729-DN-EJF Document 1-046

I.

*SEALED* Filed 05/09/1-7 Page 3 of 54

FINDINGS OF FACT

A.

PARTIES

l.

Derma Pen, LLC is a limited liability company organized and existing under

Delaware law, with its principal place of business in Salt Lake City, Utah.2

2.

4EverYoung Limited ("4EverYoung") dba DermapenWorld purportedly

is

a

private limited company organizedunder United Kingdom law, with its principal place of business
in London, England.3

3.

BioSoft Pty. Limited ("Biosoft") dba DermapenWorld purportedly is an Australian

private company organized under the laws of Australia, with its principal place of business in
Sydney, Australia.a

4.

Defendant Equipmed International Pty Ltd. dba DermapenWorld ("Equipmed")
a

principal place of business located in Sydney,

Stene Marshall dba DermapenWorld

("Mr. Marshall") is an individual citizen of

purportedly is an Australian private company, with
Australia.s

5.

Australia, who maintains his principal residence in New South Wales, Australia.6

6.

Biosoft, Equipmed, and Mr. Marshall are collectively the "Defendants."

2

First Amended Complaint ("FAC") tf 1, docket no. I18, filed May 1,2014

3

Id.\2.

Id.n3.
5Id.n4.

4

6

rd.n5.

J

Case 2:l-3-cv-00729-DN-EJF Document 1046 *SEALED* Filed 05/09/1-7 Page 4 oÍ 54

B.

JURISDICTION

O.fhis case involves claims arising underthe Lanham Act, l5 U.S.C $ l05l et seq.,the
Copyright Act, 17 U.S.C. $ 101 e/ seq., and state-law claims arising under the same common
nucleus of operative facts as the claims raising a federal question.T

T.Defendants voluntarily waived their rights to litigate this case in the United Kingdom
under the forum selection and choice of law provisions of the Sales Distribution Agreement and
consented to jurisdiction in this Court.s

C.

MATERIAL FACTS
1

Ownership of the DERMAPEN@ trademarks
domain www.dermapen.com.

in the USA and

the

S.Derma Pen, LLC was founded by Michael Morgan ("Mr. Morgan") and Chad

Milton in 201 1.e
9.

Derma Pen, LLC was a provider of Class

I

FDA registered micro'needling and skin

treatment devices and systems.lo

10.

Derma Pen, LLC's micro needling products included, but were not limited to, the

DERMAPEN@ Medical Model micro needling device and the DERMAPEN@ Aesthetic Model
micro needling device.

1

I

7

rd.nn7-tr.

8

Memorandum Decision and Order RE: Choice of Law for August 2014 Proceedings at 4-5, docket no. 213, entered

June26,2014.
e

FAC T 12.

\o

Id.nß.

1t

Id.nru.

4

*SEALED* Filed'05/09/1-7 Page 5 of 54
Case 2:j-3-cv-00729-DN-EJF Document 1046

11.

Derma Pen, LLC only sold its micro needling devices to trained and certified

aestheticians and medical directors , i.e., medical professionals.12

12.

Derma Pen, LLC did not sell, and has never sold, a micro needling device for

personal use by individuals who were not trained, licensed, or certified to use such devices.13

13.

Derma Pen, LLC established, through continuous, long-term use in commerce

common law rights

in the DERMAPEN Mark in the USA and in the use of the phrase

"DERMAPEN" as atrade name ol part of a trade name. From June 2011 through February 2015,
Derma Pen, LLC used the DERMAPEN Mark continually throughout the USA in interstate
commerce to identify certain of its goods and services and to distinguish such goods and services

from those made and sold by others.la

14.

Derma Pen, LLC obtained a registration from the United States Patent and

Trademark Office for a DERMAPEN@ Mark, U.S. Registration No. 4,096,295, for use in
connection

with skin treatment devices using multiple needles in a vibrating method for

performing skin treatment procedures (the "295 Registration"). The 295 Registration was filed on
June 29

, 20ll ,prior to any agreement with the Defendants and issued on February 7 ,2012, and is

now outstanding and valid.l5

15.

Derma Pen, LLC also offered a line of DERMAPEN@ approved consumables,

which included topical products, replacement needle tips, and cleaners, among others. The

t2Id.nß.
Id.n 16.
t4Id.n20.
13

Pen, LLC's federally-registered and common law marks shall be hereinafter referred to collectively

ts

Id.n Ig.Derma

as

the "DERMAPEN Marks."

5

Case 2:l-3-cv-00729-DN-EJF Document 1046 *SEALED* Filed.05i09/1-7 Page 6 of 54

DERMAPEN@ micro needling skin treatment devices and related accessory products sold under

the DERMAPEN Marks shall hereinafter be refemed to collectively as the "DERMAPEN@
Products."l

16.

Derma Pen,

LLC expended considerable time, resources, and effort in promoting

the DERMAPEN Marks and developing substantial goodwill associated therewith throughout the

United States of America.lT

17.

The DERMAPEN Marks are arbitrary and inherently distinctive when used in

connection with Derma Pen, LLC's goods and services.ls

18.

Due to the continual use of the DERMAPEN Marks by Derma Pen, LLC the

DERMAPEN Marks came to indicate a single source of Derma Pen, LLC's goods and services.
The DERMAPEN Marks further came to indicate Derma Pen, LLC as the single source of such
quality goods and services.le

19.

Derma Pen, LLC and its use of the DERMAPEN Marks in the skin treatment

industry was and is well-known.2o

20.

Derma Pen, LLC's first use in commerce of the DERMAPEN Marks predates any

use by Mr. Marshall, 4EverYoung, Equipmed or Biosoft.2l

t6

Id.nn.

t7

Id.n22.

t8

Id.n23.

te

Id.n24.

20

Id.n25.

2I

Id.n5ot.

6

Case 2:j-3-cv-00729-DN-EJF Document 1-046

21.

*SEALED* Filed 05/09/1-7 Page 7 of 54

As such, Derma Pen, LLC and the DERMAPEN Marks are associated with high-

quality medical and cosmetic skin treatment products and services.22

22.

Through Derma Pen, LLC's use of the DERMAPEN Marks in commerce, it

became famous.23

23.

During the course of the current litigation, Michael Anderer, as creditor of Derma

Pen, LLC, purchased the DERMAPEN Marks and the Domain Name at a foreclosure sale
authorized by this Coutt.2a

24.

Mr. Anderer then transferued the DERMAPEN Marks and the Domain Name to

Dermagen International.

25.

2s

To comply with an order of the Court, Mr. Anderer subsequently caused Derma

Pen IP Holdings,

LLC to acquire the DERMAPEN Marks in the USA and the Domain Name,

which acquisition the Court expressly recognized

26.

as proper.26

Derma Pen, LLC was the owner via assignment of copyrights in certain textual and

audiovisual content displayed on its website located at www.dermapen.com (the "Copyrighted
Content").27

22Id.nt8.
231d.\596.
Order Granting Emergency Motion for Approval of Alternative Remediation Relating to Contempt Ruling at 2,
docket no. 729, entered March 30, 2015.

24

2s

Id.

26

Id. at 2-4; Notice and Report of Compliance with March 31,2015 Deadlines in Court's Order Granting Emergency

Motion for Approval of Alternative Remediation Relating to Contempt Ruling, docket no. 732, filed March 31,2015.
27

FACn26.

7

Case 2:13-cv-00729-DN-EJF Document 1-046 *SEALED* Filed 05/09i1-7 Page

27.

The Copyrighted Content is the subject

applications or registrations: Application

I

of 54

of the following USA copyright

No. I-926932146; Registration No. TX-7-731-

746; Registration No. TX-7- 731-750; Registration No. PA l-844-I51.28

2,
29

.

The Sales Distribution Agreement.

During the Summer of 201 1, there were business discussions between Mr. Morgan

and Mr. Marshall about a distribution agreement for the sale of micro-needling devices and the
related disposable tips throughout the USA.30

30.

At the time of the discussions, Mr. Marshall was the owner of 4BverYoung.3i

31.

During negotiations, Mr. Marshall represented to Derma Pen, LLC that

a

manufacturer, Sunwoo, with whom 4EverYoung had contracted, had worldwide patents on a
certain micro-needling device and related tips, that 4EverYoung had exclusive, worldwide rights

to distribute the products, and that 4EverYoung could grant and protect Derma Pen, LLC's
exclusive right to sell the same in the USA.32

32.

In fact, Sunwoo did not have worldwide patents on the device or the tips; its patent

was only effective in South Korea.33

28

Id.n27.

2e

Review of DERMAPEN@ Trademark Valuations at 44, docket no. 610, filed February 20,2015

30

FAC fll28-30.

t'Id..nnß4-70.
tt rd..nn34-36.
t, 1d..ffi4042.

I

Case 2:l-3-cv-00729-DN-EJF Document 1-046

33.

*SEALED* Filed OSlOglLT Page 9 of 54

Mr. Marshall made this misrepresentation for the purpose of inducing Derma Pen,

LLC to act upon it by entering into the Sales Distribution Agreement.3a

34.

In reliance3s on these representations made by Mr. Marshall, on August

l,20ll,

Derma Pen, LLC was induced to enter into an agreement (the "Sales Distribution Agreement" or

"SDA") with 4EverYoung.

36

,o

Id.nn4042.

"

Id..\n39

36

The Sales Distribution Agreement ("SDA"), docket no. 25, filed October 10,2013

and 43.

9

Case 2:1-3-cv-00729-DN-EJF Document 1-046

4r

FAC

*SEALED* Filed 05/09/17 Page L0 of 54

1199.

10

Case 2:i-3-cv-00729-DN-EJF Document 1046

*SEALED* Filed.05/09/1-7 Page tL oÍ 54

'

FAC

fi

100 and 101

1l

Case 2:l-3-cv-00729-DN-EJF Document 1-046 *SEALED* Filed 05/09/l-7 Page L2 of 54

3.
35.

Defendants never paid value for the DERMAPEN Marks or the
Domain Name, but nonetheless have been using a reproduction or
counterfeit of the marks to sell micro-needling products in the USA.

Within the USA, Mr. Marshall, 4EverYoung, Equipmed and BioSoÍt have used in

interstate commerce

-

via websites, tradeshows and in-person solicitations

-

a reproduction,

counterfeit, copy, or colorable imitation of the DERMAPEN Marks in connection with the sale,
offering for sale, distribution, or adveftising of micro-needling devices and accessories, including
micro-needling tips. Indeed, from at least August 2013 through February 2015, Mr. Marshall,
4EverYoung, Equipmed and Biosoft sold, offered to sale and marketed micro-needling devices
and micro-needling tips in the USA that bore a reproduction, counterfeit or colorable imitation

of

the DERMAPEN Marks ,41 eventhough they did not have the right to use the DERMAPEN Marks

in tlie USA.a8

36.

Such'use was likely to cause and did cause confusion, mistake or deception as to

the source, nature, and quality of the goods sold by Mr. Marshall, 4EverYoung, Equipmed and
BioSoft.ae

37.

The trade names and marks used by Mr. Marshall, 4EverYoung, Equipmed and

BioSoft are colorable imitations of and confusingly similar to the DERMAPEN Marks.s0

38. Mr.

Marshall, 4EverYoung, Equipmed and Biosoft sold, offered

for

sale,

distributed and marketed micro-needling devices and tips bearing a reproduction, counterfeit or
colorable imitations of the DERMAPEN Marks in the USA, without the right to do so, in wanton

47

FAC

ot

Id.\n

4e

ld.n499.

50

Id.n506.

tT 198.

103 and 107

l2

Case 2:i-3-cv-00729-DN-EJF Document 1046

*SEALED* Filed 05/09/1-7 Page

disregard for Derma Pen, LLC's rights to the DERMAPEN Marks and with the

1-3

of 54

willful intent and

purpose of improperly taking or benefitting from the favorable reputation and valuable goodwill

which Derma Pen, LLC had established in the DERMAPEN Marks, as illustrated by the
following:sl

a)

Defendants repeatedly and publicly asserted that the Sales Distribution

Agreement gave them the right to use the DERMAPEN Marks in the USA or otherwise
misrepresented that they owned or had the right to use the DERMAPEN Marks in the USA
when, in fact, the Sales Distribution Agreement conferred no such rights. Defendants made
these representations to potential buyers

of micro-needling products and to Derma

LLC's existing customers via mass emails,s2 in-person
websites,sa or in-person solicitations of Derma Pen,

Pen,

sales at tradeshows,s3 their various

LLC's customers at the customers'

places of business.ss

b)

Defendants hired former employees of Derma Pen, LLC. Defendants used

some of these former employees to obtain unauthorized access to Derma Pen, LLC's
database and steal Derma Pen,

then used the customer list

LLC's customer list and pricing information. Defendants

to actively solicit

Derma Pen, LLC's customers using

reproductions, counterfeits or colorable imitations of the DERMAPEN Marks.s6

t' n.nn 103, 105, 253,

t

and 504-05.

rd.nn337459.

t Id.nn23F3g.
'o

ld.flnß8-230.

tt úd.ffi240-336, specifically f'lÌ280 and 751.
56
Deposition of Rebecca Bell at 68:l-86:24, docket no. 910-2, filed July 29,2016; Transcript of March 1,2017
Hearing before the Honorable David Nuffer ("Rule 55(b)(2) Hearing") at29:811, docket no' 1011, filed March 7,

13

Case 2:l-3-cv-00729-DN-EJF Document 1-046

c)

*SEALED* Filed 05/09/l-7 Page 14 oÍ 54

Defendants attended tradeshows

in the USA. At

these tradeshows,

Defendants used signage and other marketing materials that bore reproductions,
counterfeits,

or colorable imitations of the DERMAPEN Marks. On more than one

occasion, the organizers

of a tradeshow prevented Derma Pen, LLC from attending the

tradeshow on grounds that no more than one company could sell or market goods at the
tradeshow under the DERMAPEN Marks.

At

least one of these tradeshows, Defendants

knew that Derma Pen, LLC had been precluded from attending the tradeshow but did not
abdicate their spot at the tradeshow or otherwise clarify with the tradeshow organizers that

Derma Pen, LLC owned the right to use the DERMAPEN Marks in the usA.s7

d)

Mr. Marshall expressed

a desire

to "white ant" Derma Pen, LLC, which is

Australian slang for destroying the company from the inside.58

39.

Mr. Marshall, 4EverYoung, Equipmed and BioSoft have sold micro-needling

products bearing a reproduction, counterfeit, copy or colorable imitation of the DERMAPEN
Marks directly to individuals who were not trained, licensed or certified to use such devices.5e

40.

Derma Pen, LLC never approved, permitted or endorsed such use.60

41.

Such use occurred after Derma Pen, LLC had established extensive and valuable

goodwill in connection with its goods and services identified by the DERMAPEN Marks.61

2017:, Casey Isom Testimony February 18, 2015 Hearing before the Honorable David Nuffer at 10:8-10:10, docket
no. 605, filed February 20,2015.
57

Rule

5 5

(bX2) Hearing at 26 :Ç29 :7, 32:5-3 4 :23,

5

5

:

58

Stene Marshall Dep. at 94'.4-96:9, docket no. 938-7,

5e

FAC

uo

:

Id.nn500 and 510.

6t

9-60 9.

Id.n5oo.

llf

filed October 17,2016.

5os*14.

t4

Case 2:1-3-cv-00729-DN-EJF Document 1-046

42.

1-5

of 54

Mr. Marshall, 4EverYoung, Equipmed and Biosoft had actual notice of Derma Pen,

LLC's rights in the DERMAPEN Marks at least

43.

*SEALED* Filed 05i09/1-7 Page

as early as August 2,201I.62

4EverYoung never paid any value to Derma Pen, LLC for the DERMAPEN Marks

or the DomainName, nor did they ever purchase the DERMAPEN Marks or Domain Name form

Derma Pen, LLC.63

Defendants never have had any right to use the DERMAPEN Marks in the USA or to transfer that

right to do so to anyone else.6a

45.

Defendants have used the DERMAPEN Marks and the "DERMAPEN" trade name

for their own commercial gain.6s

46.
Defendants

In using the DERMAPEN Marks and "DERMAPEN" trade name in the USA,

willfully traded on the goodwill

47.

associated with the mark and tradename.66

Defendants' use of the DERMAPEN Marks and "DERMAPEN" trade name in the

USA has diluted the distinctive quality of the mark and tradename and harmed Derma Pen, LLC's
reputation.6T

u,

Id.nn502-03.

u'

Id.nnrc647

65

FAC T 597.

66

ld.n647.

67

ld.1648.

and 504.

l5

Case 2:l-3-cv-00729-DN-EJF Document 1-046 *SEALED* Filed 05/09/l-7 Page

48.

1-6

of 54

Defendants' use of the DERMAPEN Marks and "DERMAPEN" trade name in the

USA has lessened the capacity of the mark and trade name to identify and distinguish Derma Pen,

LLC's goods and

49.

services.68

As the owner or primary officer of 4EverYoung, Equipmed and BioSoft, Mr.

Marshall was actively and personally involved in, ratifìed or directed others

to

engage in

Defendants' willful and wanton use of the DERMAPEN Marks in the USA.6e
Defendants have used copyrighted materials on their website without
authorization.

4.

50.

Defendants have operated at least one website through which they sell or attempt

to sell micro-needling

products. On the website, Defendants have included unauthorized

reproductions (the "Infringing Content") of Derma Pen, LLC's Copyrighted Content.T0

51.

The Infringing Content is identical or substantially similar to Derma Pen, LLC's

Copyrighted Content.

52.

7

1

Defendants obtained the Infringing Content from the domain www.dermapen.com,

which Derma Pen, LLC owned and controlled at the time of access.72

53.

Defendants used the Infringing Content knowingly,

willfully or with

reckless

disregard for the copyright interests of Derma Pen, LLC.73

68ld.n649.
6e

rd.

70

ld.n497.

ï

190.

" 1d..nn498, 608,613, 618 and623]'
" 1d.nn609,614,619 and 624.
" Id.. nn 6ll, 616, 62l and 626.

ld. exhibit 22,docketno.123-2, fited May 1,2014

t6

Case 2:1-3-cv-00729-DN-EJF Document l-046

5.
54.

*SEALED* Filed 05/09/17 Page

17 ot 54

Defendants have engaged in false advertising.

Defendants acted as Derma Pen, LLC's competitors

in selling micro-needling

devices in the USA.74

55. In so doing, Defendants made promotional

claims about their micro-needling

products that bear the DERMAPEN Marks.Ts

56.

These promotional claims were false and misleading.'u

57.

The claims misrepresented the source, sponsorship, approval, or certification of

Defendants' products that bear the DERMAPEN Marks by stating or implying that Defendants'
goods originated from Derma Pen, LLC,77 by stating or implying that Defendants micro-needling

products bearing the DERMAPEN Marks had approval from the Food and Drug Administration
when in fact they did not, by stating or implying that Equipmed manufactured micro-needling
devices when in fact it did not, and by stating or implying the Defendants owned the DERMAPEN
Marks.78

58.

The claims misrepresented the nature, characteristics, qualities, source or

geographic origin of Derma Pen, LLC's products, services or commercial activities by stating or

implying that Defendants

-

not Derma Pen, LLC

-

owned the rights to the DERMAPEN Marks,

that Derma Pen, LLC had lost a lawsuit to Defendants, that Derma Pen, LLC did not have the right

to sell or distribute products bearing the DERMAPEN Marks in the USA, that Derma Pen, LLC

74Id.ns7o.
,t ld.nn231496,572.
76ld.n571.
77

Id.n 574.

"

Id. ffi 23 1496, specifi cally 280, 4601 3, 47 5,

57

5,

75

I

17

Case 2:13-cv-00729-DN-EJF Document 1-046 *SEALED* Filed,05/09/17 Page 1-8 of 54

would no longer be able to supply micro-needling products, and that Derma Pen, LLC owed
Defendants money when in fact it did not.7e

59.

The claims misrepresented the nature, characteristics, qualities, source or

geographic origin of Derma Pen, LLC's products, services or commercial activities by stating or

implying that Derma Pen, LLC's DERMAPEN@ Products originated fiom Defendants, by stating
or implying that Derma Pen, LLC did not have the right to sell or distribute products bearing the

DERMAPEN Marks, and by stating or implying that Derma Pen, LLC's DERMAPEN@ Products
were "knock offs" when in fact they were not.80

60.

Defendants made these misrepresentations

willfully, knowingly, intentionally and

maliciously and did so with the intent to mislead and deceive.8r

61.

Defendants' false

or

misleading statements concerning their micro-needling

devices that bear DERMAPEN Marks were material and likely to influence and did

in fact

influence existing and potential buyers of micro-needling devices generally, existing and potential
buyers of Defendants' micro-needling devices or accessories bearing reproductions, counterfeits

or colorable imitations of the DERMAPEN Marks, and existing and potential buyers of Derma
Pen, LLC's DERMAPEN@ Products.s2

62.

Buyers of Defendants' micro-needling products often had no choice but to accept

Defendants' promotional claims as true.

"

Id. nn 23 1496, specifi cally

to 1d.

8' 1d.
ut

,1TT

tT

TT

280,

3 5

83

4, 363, 426,

49

6

and

75

|

23T496, specifically TlT354, 404,416,441.

585.

ld.ffi576

and 579.

t, Id.
Tf 580, 699

and 702.

18

Case 2:t-3-cv-00729-DN-EJF Document 1-046

63.

*SEALED* Filed 05/09/1-7 Page

1-9

of 54

Defendants' false and misleading promotional claims about their micro-needling

devices bearing reproductions, counterfeits or colorable imitations of the DERMAPEN Marks
have actually deceived or have the capacity to deceive a substantial portion of the statements'
intended audience.sa

64.

Defendants introduced their false and misleading promotional claims into interstate

commerce through in-person solicitations, telephone, and email

of potential and existing

customers.85

65.

Defendants false

or misleading claims injured Derma Pen, LLC by directly

diverting sales from Derma Pen, LLC to Defendants and by decreasing the goodwill associated
with Derma Pen, LLC's DERMAPEN@ Products.86

6.
66.

Stene Marshall's conduct in Australia.

In20ï4, the Australian Securities and Investments Commission ("ASIC"), acting

under subsection 206F(1) of the Corporations Act 2001, disqualifìed Mr. Marshall from managing

corporations based on Mr. Marshall's business dealings in Australia.sT ASIC has prepared a
comprehensive report describing the purpose of and basis for the disqualification (the "ASIC
:

Report").ss

67.

According to the ASIC Report, the purpose of Mr. Marshall's disqualification was

to protect "all those persons who deal with corporøtions from the consequences of the actions of

84

Id.

85

1d.n582.

tu

Id.n 583 and

f 581.
586.

the matter of s206F of the Corporatíons Act 2001 and Stene Brían Mørshal, Report of the Australia Securities
and Investments Commission dated September 3,2014 at 1, docket no. 910-3, filed July 29,2016.
87

In

t9

Case 2:1-3-cv-00729-DN-EJF Document 1-046 *SEALED* Filed 05/09/1-7 Page 20 oÍ 54

those corporate fficeholders who, either through incompetence or dishonesty or a combination

of the two, bring about thefailure of corporations and thus cause loss to others

68.

According to the ASIC Report, the disqualif,rcation arises from Mr. Marshall's

extensive involvement in at least eight companies that "have failed with debts, in some cases
substantial debts, to unsecured creditors."e0

69.

For instance, according to the ASIC Repoft, Cell Share Consortium Pty Ltd. ("Cell

Share") failed owing sixteen unsecured creditors atotal of $767,232.00,e1 and EA Supplies Pty

Ltd. ("EA Supplies") failed owing at least one creditor at least $138,561.00.e2 Additionally, the
ASIC Report identifies five other companies connected with Mr. Marshall that have failed; these
companies carried aggregate deficiencies of at least

70.

$l million

upon failure.e3

Though these failures perhaps result from poor management, the ASIC Report hints

at something more nefarious. As the ASIC Report notes, companies connected with Mr. Marshall
owe at least $602,808.70 in unpaid taxes to the Australian Taxation office.ea

7I.

Additionally, the ASIC Report also found that Mr. Marshall has engaged in what

Australian jurisprudence terms "phoenix" activity, which occurs when a director transfers the
assets

of an indebted company into a new company of which he is also'a director and then places

the initial company into liquidation with no assets to pay creditors, meanwhile continuing the

8e

ASIC Report, at 18-19, tf 79 (emphasis in original)

eo

ASIC Report,

el

ASIC Report, at7,n28.

e2

ASIC Report, at

e3

ASIC Report, at L7-18,176.

e4

ASIC Report, at 7, 17-18, nn 28, 7 6.

at2l,l92.
14,l6l.

20

Case 2:l-3-cv-00729-DN-EJF Document 1-046

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business using the new company structure. In Mr. Marshall's case, he

o'transferred the business

of

Cell Share into [EA Supplies] leaving Cell Share with no assets to pay creditors while continuing
what was essentially the same business fvia EA Supplies]."es Indeed, according to the ASIC
Report, both Cell Share and EA Supplies operated as "medical equipment distributorls]."e6

72.

Although the ASIC Report stops short of finding that Equipmed

current litigation

- is another phoenix-like

- a party to the

incarnation of Cell Share, the report expresses concerns

that that may be the case.eT

73.

Finally, although the ASIC Report stops short of finding that, under Mr. Marshall's

direction, Cell Share took on $541,903.43 in debts under circumstances in which Mr. Marshall
knew or should have known that Cell Share was insolvent or may become insolvent as a result of
the $541,903.43 indebtedness, the report suggests that there is some evidence to that effect.es

7.
7

4.

Defendants witlfully published false statements about Derma Pen, LLC
to third parties.

Defendants

willfully

and intentionally published false statements about Derma Pen,

LLC to third parties, including:ee

a)

False statements that Derma Pen,

LLC did not have the right to distribute

micro-needling devices bearing the DERMAPEN Marks;100

e5

ASIC Report, at 13-16, nn 64-70

e6

ASIC Report, at 6,14,1n25,64.

ei

ASIC Report, at 14-17 , ffi 65,

e8

ASIC Report, at

ee

FAC T 751.

t00

ll-13,\fl

.

7lJ3

47-57.

Id.

2t

Case 2:l-3-cv-00729-DN-EJF Document 1-046

b)

*SEALED* Filed 05/09/1-7 Page 22 ol 54

False statements that Derma Pen,

LLC breached an agreement with

Equipmed;lol

c)

micro-needling devices;

d)

LLC

False statements that Derma Pen,

was offering inferior or unsafe

102

False statements that Derma Pen, LLC's principals lack substantive

knowledge about micro¡reedling devices and procedures or the aesthetic medicine
irrdustry;l03

e)

False statemerús that Derma Pen,

Ð

False statements that Derma Pen,

LLC lost the cunent lawsuit;104 and

LLC would run out of product and

be

unable to continue servicing its customers.los

75.

Defendants made the foregoing statements

willfully and maliciously or with

reckless disregard for their truth.106

76.

These false statements caused Derma Pen,

LLC to suffer damages, including loss

of goodwill, harm to reputation, loss of upstanding in the micro-needling community, loss of
business opportunities, and loss of revenue.107

tot

Id.

t02

Jd.

to3

Jd.

to4

Jd.

Ios

Jd.

to6Id.n753
to1

Id.n76l

22

Case 2:13-cv-00729-DN-EJF Document 1-046 *SEALED* Filed 05/09/1-7 Page 23 o154

8.
77.

4EverYoung, Equipmed, Biosoft and
each other.

Mr. Marshall are alter egos of

Mr. Marshall has ownership or control of 4EverYoung, Equipmed and Biosoft,

including 100 percent ownership of 4EverYoung and Equipmed.108

78.

Mr. Marshall is the primary officer of 4EverYoung, Equipmed and BioSoft.10e

79.

As owner and primary officer of 4EverYoung and Equipmed, Mr. Marshall exercises

complete control over 4EverYoung and Equipmed, including domination

of

each company's

finances, policies and business transactions, such that these companies do not have separate minds,

wills or existences of their own.l10

80.

There are common business addresses between Mr. Marshall (or a companies owned

by Mr. Marshall), 4EverYoung, Equipmed and BioSoft.111

81.

Mr. Marshall,4EverYoung, Equipmed and BioSoft all operate under a common

fictitious name : DermapenWorld.

82.

1

1

2

4EverYoung and Equipmed are both undercapitalized,having less share capital than

total net liabilities, while Biosoft has only issued one share for which the amount paid was de
minimus.113

83.

BioSoft and 4EverYoung own websites that advertise micro-needling products.

These websites purport to sell products from Equipmed. The waranty advertised on these websites

'08

tot

Id. TT t6+-70.

ld.TT 162-63 and

190

Id tTtT 188-94.
ttt Id.nl95.
"o

ttt Id.nn2-5 and 129.

tt3Id.nt95.

23

Case 2:13-cv-00729-DN-EJF Document 1046 *SEALED* Filed 05/09/l-7 Page 24 of 54

purportedly comes from Equipmed.

All

websites list info@.equpmed.com as the contact email

address. The terms and conditions contained on these websites are identical, while much of the other
content is almost identical. Mr. Marshall knowingly and actively participated in, authorized, ordered,

controlled, approved and ratified operation of these websites.lla

9.

4EverYoung and Equipmed failed to prosecute their claims for specifìc
performance.

I.

a claim for specific
of the Sales Distribution

4EverYoung and Equipmed brought
performance

Agreement, and the Court established

a framework for

overseeing the sale.

84.

4EverYoung and Equipmed brought a claim against Derma Pen, LLC for specific

performance, "including to offer the IDERMAPEN Marks and the Domain Name] to 4EverYoung

for purchase."

1ls

85. In response to 4EverYoung's request for specific performance, the Court
established protocols for valuing the DERMAPEN Marks and the Domain Name and otherwise
overseeing a potential sell.116

b

Defendants' failed to retain counsel and otherwise to comply
with the Court's orders.
r

86.

Attorneys from the law firm Magleby & Greenwood, P.C. (the "Magleby Firm")

appeared in the cunent litigation on behalf of 4EverYoung and Equipmed on October 16,2013.117

tto

Id.nn 135-61.

r15

Fourth Amended Counterclaim and Demand for Jury Trial'lf'!f 219-27, docket no. 711, filed March 23,2015.

r16

Memorandum Decision and Order Granting 4EverYoung's 241 Motion for Partial Summary Judgment on Specific
Performance and Granting in Part Defendants' l4l Motion for Preliminary Injunction at 9_l4, docketno. 476, entered
January 12.2015.
rr7

Notices of Appearance, docket nos. 32-34, filed October 16,2013.

24

Case 2:13-cv-00729-DN-EJF Document 1046

87.

*SEALED* Filed 05/09/1-7 Page 25 oÍ 54

In May 2015, attorneys from the law firm Kirton McConkie (the "Kirton Firm")

replaced the Magleby Firm as counsel for all Defendants.lls

88.

Approximately seven months later, the Kirton Firm moved to withdraw as counsel

because Defendants had incurred "significant outstanding amounts"

of

attomey fees but

nonetheless "failed to pay . . . for services rendered," creating "irreconcilable conflicts."l1e The

Court granted the Kirton Fitm's motion on December 29,2015.120

89.

Following the Kirton Firm's withdrawal, attorneys from the law firm Manning

Curtis Bradshaw & Bednar, PLLC (the "Manning Firm") appeared on behalf of the Defendants,l2l

while attorneys from the law firm Morgan, Lewis & Bockius, LLP (the "Morgan Firm") requested

to

appear pro hac vice on Defendants' b.ehalf,t22

90.

which request the Court granted.r23

Four months later, both the Manning Firm and the Morgan Firm moved to withdraw

as counsel because Defendants had incurred "significant outstanding amounts" of attorney fees

rls Substitution of Counsel, docket no. 798, filed May 1,2015;Notices of Appearance, docket nos' 803-04 and 80G07, filed respectively on May 19,2015 and May 20,2015.
as Counsel for Defendants and Counterclaim Plaintiffs 4EverYoung, LTD. And Equipmed
Pty Ltd.; and Defendants Biosoft (AUST) Pty Limited and Stene Marshall; and Request for Termination
International
of Electronic Notices at 21, docket no. 827, filed December 4,2015 .
rre

Motion to Withdraw

r2o
Order Granting Motion to Withdraw as Counsel for Defendants and Counterclaim Plaintiffs 4EverYoung, Ltd. And
Equipmed Internãtional Pty Ltd.; and Defendants Biosoft (Aust) Pty Limited and Stene Marshall, docket no. 833,
entered December 29, 2015.

r2t

Notices ofAppearance, docket nos. 840-42, filed January 19,2016.

r22

Motions for Admission Pro Hac Vice, docket nos. 836-37 and 845, filed on January 19,2016 and January 22,

201s.
r23
Docket Text Orders Granting Motions for Admission Pro Hac Vice, docket nos. 839,843,846, entered respectively
on January 19,21 and22,2016.

25

Case 2:1-3-cv-00729-DN-EJF Document 1046 *SEALED* Filed 05/09/1-7 Page 26 of 54

but nonetheless "ha[d] failed to pay Counsel fully for services rendered."l2a The Court granted the

motion on May 31,20I6.t2s

9L

About the same time that the Manning Firm and the Morgan Firm were seeking to

withdraw as Defendants' counsel, the Magleby Firm filed a complaint against Defendants and
others in the United States District Court for the District of Utah, case number 2:16-cv-0042I (the

"Magleby Complaint"), in which the Magleby Firm sought to recover 5772,898.21 in unpaid
expenses and legal fees.126

92.

In addition to asserting claims for breach of contract and breach of the covenant of

good faith and fair dealing, the Magleby Complaint alleges that Mr. Marshall is the alter ego

of

parties 4EverYoung, Equipmed and Biosoft and the nonparty DermapenWorld, LLC because these
companies do not comply with corporate formalities, because Mr. Marshall routinely paid each

company's debts and has commingled his assets with each company's assets, and because Mr.

Marshall actively participated in each company's wrongdoing.l2T Indeed, the Magleby Firm
believes that Mr. Marshall has used 4EverYoung, Equipmed, Biosoft and DermapenWorld, LLC

"to promote injustice and fraud."128

93.

In connection with the withdrawal of the Manning Firm and the Morgan Firm, the

Court issued the following order:

Within 2l days after entry of this order, fDefendants] shall file a notice of appearance of
new counsel. fDefendants] are advised that pursuant to DUCivR 83-1.3, no corporation,
association, partnership, limited liability company or other artificial entity may appear pro
r2a

Motion for Leave to Withdraw as Counsel at 2, docket no. 890, filed May 26,2016.

r2s

Order Granting Motion for Leave to \Mithdraw as Counsel, docket no. 893, entered }day 31,2016.

126

Magleby Complaint, docket no. 910-1, filed July 29,2016.

,,, Id.nn3o-36.

t28ld.134.

26

Case 2:i-3-cv-00729-DN-EJF Document 1-046

*SEALED* Filed 05/09/1-7 Page 27 ot 54

se, but must be represented by an attorney who is admitted to practice in this couft. Mr.
Marshall may, however, appear pro se.

Failure to timely file a notice of appearance of new counsel may subject [Defendants] to
sanctions pursuant to Federal Rule of Civil Procedure 16(fX1), including but not limited to
dismissal or default judgment.l2e
g4

.

The original deadline to comply with the order was June 2I , 2016.130

95.
and

4EverYoung, Equipmed and Biosoft did not appoint counsel before June2I,2016,

Mr. Marshall did not file a notice of pro

96.

se appearance before that date.

On June 24,2016, the Court docketed the following order, in which the Court

revealed that an alleged representative of Defendants had contacted the Court

ex

parte:

DOCKET TEXT ORDER: On May 31,2016, an Order was entered requiring new counsel
to appear on or before June 21,2016 for [4EverYoung, Equipmed and Biosoft]. The court
received a voicemail from Collin Murray at Baker & McKenzie LLP earlier this week. Mr.
Murray informed the court that [4EverYoung, Equipmed and Biosoft] are in the process of
retaining him for this case, but that he would need a few additional days to find local
counsel andfnalizethe engagement letter. If no appearance of counsel is made by Monday,
June 27,2016, an order to show cause regarding dismissal will issue accordingly. Signed
t"
by Judge David Nuffer on June 24,2016. (kt)

97.

Attorneys from Ballard Spahr, LLP (the "Ballard Firm"), not Collin Munay,

appeared on behalf of 4EverYoung and Equipmed on June 27,2016.132 No counsel appeared on

behalf of Biosoft or Mr. Marshall, and Mr. Marshall filed nothing to indicate that he intended to
ptoceed

pro

se.

12e

Order Granting Motion for Leave to Withdraw as Counsel

t3o

Docket Text Order, docket no. 900, entered lune24,2016.

r32

docket no. 893, entered May 31,2016

Id.

13r

at21,

Notice ofAppearance, docket no. 901, filed June 27,2016.

27

Case 2:l-3-cv-00729-DN-EJF Document 1-046 *SEALED'k Filed 05i09/L7 Page 28 of 54

98.

Approximately three weeks after appearing as counsel the Ballard Firm moved to

withdraw because 4EverYoung and Equipmed "failed to timely provide a retainer as required by
the engagement [contract]."133 The Court granted the motion to withdraw on July 14,2016.134
99

.

That same day the Court issued the following order: "on or before August 1,2016

[Defendants] must show cause . . . why default judgment should not be entered against them."135

100. At no time before August 1,2016 did any of the Defendants fîle anl.thing

in

response to the Court's July 14, 2016 order to show cause.

101.

Via an

ex

parte letter dated August 2,2016, which the Court lodged via docket

number 915, Mr. Marshall requested a one-week extension for 4EverYoung and other companies

that he claims to "represent" to appoint counsel.136 The sole reason that Mr. Marshall gives for

failing to appoint counsel is "the summer vacation period."l37

I02.

In the

ex

parte letter, Mr. Marshall expresses an intent to "lodge aî appearance pro

until [] new counsel enters their appearance."138 This was the first time since the Court's May

se

31,2016, order that Mr. Marshall filed anything with the Court indicating an intent to proceed pro
se.

Mr. Marshall never actually

103.

appeared

pro

se.

Derma Pen, LLC objected to the August 2letler on several grounds, not least of

which is that Mr. Marshall

-

a non-attomey

-

cannot file documents on behalf of corporate entities

133

Motion for Withdrawal of Counsel at 3, docket no. 906, filed July 13,2016.

r3a

Order Granting Motion for withdrawal of Counsel, docket no. 908, entered July 14,2016.

135

Order to Show Cause, docket no. 909, entered

136

Letter from Stene Marshall to Judge David Nuffer dated August 2,2016, docket no. 915, lodged August 2,2016.

t37

Id.

t38

Id.

luly 14,2016.

28

Case 2:j-3-cv-00729-DN-EJF Document 1046

*SEALED* Filed 05i09/17 Page 29 of 54

like 4EverYoung, Equipmed and Biosoft, and that the request for an extension came after the
Court's deadline to respond to the July 14 order to show

104. No attorney

appeared on behalf

cause.13e

of Defendants by August 9,

which, under the most liberal reading of Mr. Marshall's

ex

2Q16, the date by

parte letter, Mr. Marshall told the Court

that counsel would appear.

105.

On August I0,2016, Mr. Marshall sent the Court an ex parte email, in which

Mr'

Marshall informed the Court that he "anticipate[s] that new Counsel will enter its appearance in
the next 48 hours. The new Counsel

Plaintiffs."

will

appear for all of the Defendants and all Counter Claim

lao

106.

No attorney appeared on behalf of Defendants within 48 hours of that date.

107. On October 31, 2016,

attorneys from the law firm

of

Workman Nydegger

(".Workman") appeared on behalf of Defendants.lal

108.

Workman moved to withdraw as Defendants' counsel on January 12,2017, on

grounds that Defendants failed to "pay [Workman] fully for services rendered and maintain a
retainer as required by the retainer agreement" and on grounds that Workman was not "able to
communicate with Defendants

...

as they ha[d] stopped responding to telephone calls and

emails."142

r3e

Objection to and Motion to Strike Docket Entry 915, docket no. 918, filed August 3,2016.

rao

Email from Stene Marshall to Judge David Nuffer dated August 10,2016, docket no. 923, lodged August

rar

Notices ofAppearance, docket nos. 953, 954 and 956, filed October 3L,2016 and November 1,2016.

raz

Motion for Leave to withdraw

as

ll,2016

counsel at 3, docket no. 992, filed January 12,2017.

29

Case 2:l-3-cv-00729-DN-EJF Document 1046 *SEALED* Filed 05/09/L7 Page 30 of 54

109.

On January 20,2017, the Court granted Workman's motion to withdraw and

ordered Defendants to appear with new counsel by 12:00 p.m. on January 30,2017.143
I

10.

On January 30, 2017, at 1 1:48 a.m., Stene Marshall sent an email ex parte to the

Court requesting a one-week extension to appear with new counsel.l4a
11

1.

Attached to the email was a document titled "Request for Continuance to File a

Notice of Appearance of New Counsel," which asked for an extension until February 28,2017,to
appear with new counsel.l4s

ll2.

Nowhere in the email or document attached to the email did Mr. Marshall express

an intent to proceed

I

13.

inthe

case

pro

se.

l2:00 p.m. on January 30, 2017 , passed, and Defendants did not appear with new

counsel as ordered by the Coud, nor did Stene Marshall file a notice of pro se appearance as
required by DUCivR 83-1.a(c)(3).

Il4.

The Court's clerk entered a default certificate against Defendants on January 31,

2017.146

I

15.

On February 28,2017 at 5:26 p.m., Mr. Marshall sent an email to the Court ex parte

requesting another extension.

147

ra3

Order Granting Motion for Leave to Withdraw as Counsel, docket no. 998, frled January 20,2017.

r44

Email from Stene Marshall to Judge David Nuffer dated January 30,2017, docket no. 1000, lodged January 30,

2017.
la5

Request for continuance to

file a Notice ofAppearance ofNew Counsel, docket no. 1000-1, lodged January 30,

2017.
146

Default certificate

t47

Email from Stene Marshall to Judge David Nuffer, dated February 20,2017, docket no. 1004, lodged Febru ary 28,

as

to All Defendants, docket no. 10020 entered January 31,2017.

20t7.

30

Case 2:13-cv-00729-DN-EJF Document 1-046

ll6.

*SEALED* Filed 05/09/1-7 Page 3L ot 54

The Court issued a docket text order on February 28,2017 ,holding that "[t]he email

received and lodged as docket no. [1004] is not in proper form and not filed as a motion."148

I

17

.

On February

27

, 2017 , Mr. Marshall sent an email to the Court

ex

parte, requesting

that the Court "delay the evidentiary hearing scheduled for the 1't of March 2917.rtae
1

18.

At the hearing held on March I,2017, the Court ruled that the extension requested

on February 27,2017,was not in the form of or filed as a motion and, therefore, denied the request.

119.

Additionally, given the multiple opportunities that the Court has given Defendarfs

to appear with counsel and the significant delays caused by Defendants failure to appear with
counsel, the Court hereby fînds that there was not good cause

to grant the February 27, 2017,

extension.

c.
I20.

Defendants'failed to participate in outstanding discovery.

On or about December 4,2015, Derma Pen IP Holdings, LLC served Defendants

with requests for production of documents and electronically stored information.lso

l2l.

On of February 25,20l6,Defendants' then-counsel acknowledged receipt of the

requests and promised to begin producing documents by no later than March

I22.

15

, 2016.1s1

None of the Defendants have produced any documents in response to the requests

for production.ls2

ra8

Docket Text Order, docket no. 1005, filed February 28,2017.

Emails from Stene Marshall to Judge Nuffer dated February 27,2017 and February 28,2017, Doçkg!-ug.-l-Q09,
filed February 28,2017.
rae

Derma Pen IP Holdings, LLC's 12104/2015 Requests for Production of Documents and Electronically Stored
Information to Defendants, docket no. 938-2, filed Octobet 17,2016.
r50

r5r

Email chain between Carla Oakley and David W. Scofield, docket no. 938-3, filed Octobet 17,2016.

r52

Declaration of David W. Scofield, docket no. 938-4, filed Octobei 17,2016.

3l

Case 2:13-cv-00729-DN-EJF Document l-046

123.

*SEALED* Filed 05/09/1-7 Page 32 ot 34

Among other things, these requests sought discovery into the following: the

structure of the various companies within and without the USA in which Defendants held an
interest or that Defendants controlled; Defendants' communications concerning the DERMAPEN

Marks or micro-needling devices bearing the DERMAPEN Marks; marketing materials created or
used by Defendants that bore the DERMAPEN Marks; Defendants' financial records; Defendants'
sales records conceming micro-needling devices and accessories; Defendants' vendor and

freight

records.

d.

The Court dismissed 4EverYoung's claims for

specific

performance.

124.

The Court struck and dismissed 4EverYoung's and Equipmed's counterclaims on

August 29,2016, for failure to appear or appoint counsel and otherwise prosecute its claims.l53

125.

4EverYoung failed

to comply with the post-termination terms of the

Sales

Distribution Agreement with which it had to comply to purchase the DERMAPEN Marks and
Domain Name.ls4

126.

4EverYoung also failed to comply with the processes outlined by the Court that

would have enabled it to exercise its purported right of specific performance.lss

127.

Indeed, 4EverYoung failed

to meaningfully participate in a valuation of

the

DERMAPEN Marks and the Domain Name.ls6

r53

Memorandum Decision and Order ("Dismissal Order"), docket no. 928, entered August 29,2076.

(dismissing 4EverYoung's claim for specific performance
Hearing at 1 4:24-15 :14.
r55

; see also Dismissal Order
Sales Distribution Agreement); Rule 55(b)(2)

Rule 55(bX2) Hearing at 14:24-15:14

t56

of the

Id.

32

Case 2:13-cv-00729-DN-EJF Document 1046

*SEALED* Filed 05/09/l-7 Page

33 of 54

.

128.

Moreover, 4EverYoung never purchased the DERMAPEN Marks or Domain Name

from Derma Pen, LLC.I'7

10.
129.

Derma Pen, LLC's Damages.

On March 1,2017, the Court held a hearing under Federal Rule of Civil Procedure

55(bX2) to "determine the amount of damages," "establish the truth of any allegation by evidence,"
and "investigafe any other matter."ls8

130.

At the March l,2017,hearing, the Court heard testimony from Michael Hennefer,

Jeremy Jones, and Michael Anderer.ise

131.

The Court fînds Mr. Hennefer's testimony at the March 1,2017 hearing to be

generally credible.

132.

The Court finds Mr. Jones testimony at the March 1,2017 hearing to be generally

credible.

133.

The Court finds Mr. Anderer's testimony at the March 1,2017 hearing to be

generally credible, and further finds Mr. Anderer qualified to testifu as to the value of Derma Pen,

LLC

as a company given his personal experience in buying and selling companies. However, his

testimony of valuation was without convincing foundation.

t57

Id;FACn106.

r58

Federal Rule of Civil Procedure S5(b)(2); Rule 55(b)(2) Hearing af 4:20-6:16.

r5e

Rule 55(b)(2) Hearing, passim.

33

Case 2:13-cv-00729-DN-EJF Document 1-046 *SEALED* Filed 05/09/1-7 Page 34 oÍ 54

135.

Though Derma Pen, LLC sustained growth for a few months after Defendants

began infringing the DERMAPEN Marks in the USA and otherwise actively soliciting Derma Pen,

LLC's customers via illegal use of the DERMAPEN@ Marks and via the misrepresentations
described above, Derma Pen, LLC's revenues showed a general downward trend after Defendants
began infi'inging the trademark and making aforementioned misrepresentations.l6l

136.

The decline in Derma Pen, LLC's revenues accelerated around the time when

Defendants obtained unauthorized access to Derma Pen,

LLC's

database and stole Derma Pen,

LLC's customer list and pricing information, and began contacting Derma Pen, LLC's customers
directly.162

160

Rule 55(bX2) Hearing at38:744:7; Rule 55(b)(2) Hearing exhibit 2, docket no. 1010-2, entered March 1,2017;

and Rule 55(bX2) Hearing exhibit 3, docket no. 1010-3, entered March 1,2017.
t6t

Id.

t62

Id.

t63

Id.

r

64

Rule

55

(bX2) Hearing ar 3 l :5-32:1, 45 ;3-5

5 : 8.

34

Case 2:l-3-cv-00729-DN-EJF Document 1-046

139.

,

*SEALED* Filed 05/09/1-7 Page 35 of 54

Derma Pen, LLC had a recurring revenue model. It sold micro-needling devices to

doctors, who then created "recurring revenue" for the company by subsequently purchasing microneedling tips and other accessories to use in conjunction with the devices previously purchased'16s

140.

Before Defendants began infringing the DERMAPEN Marks and otherwise making

the misrepresentations described ubou", Derma Pen, LLC had a low attritio n rate with its
customers. Doctors who purchased micro-needling devices almost always returned to Derma Pen,

LLC to purchase tips and other

accessories.

This is the case even though there were other

competitors in the market providing tips and other accessories for micro-needling devices.l66

I42.

After Defendants began infringing the DERMAPEN Marks and making the

misrepresentations described above, Derma Pen,

LLC's

sales dropped, the attrition rate on their

customers escalated, and the margins for the sales of tips and other accessories narrowed.168

143.

The drop in sales, rise in attrition rate, and narrowing of the margins was directly

attributable to Defendants' infringing activity, misrepresentations, and stealing Derma Pen, LLC's

customer list and pricing data. Rather than being a fertile grounds for making new sales,
tradeshows became arenas where Derma Pen, LLC had to "battle

t65

Id.

166

Id.

t68

Customer

Id. at 45:3-55:8.

t67

for [its] name."

Id. at 26,,24-12'.10, 38:744:7

at

45:3-55:8, 72:4-90:25.

35

Case 2:1-3-cv-00729-DN-EJF Document 1046

*SEALED* Filed 05/09/17 Page 36 of 54

confusion caused by Defendants' infringing the DERMAPEN Marks caused customers to leave
Derma Pen, LLC or to buy products from Defendants, causing Derma Pen, LLC to lose revenue.l6e

144.

Defendants infringing activity and misrepresentations, coupled with the legal fees

in this action, caused Derma Pen, LLC's quarterly earnings to plummet.170

I45.

Mr. Anderer based his valuation on facts or data, as his valuation derives from the

actual revenues of Derma Pen, LLC over the course of the company's history.l7l

146.

Mr. Anderer's valuation was based on the following analysis.172

t6e

Id.

t?o

Id.

t7t

Id. at75:916:2.

t7s

Id. at93:9-94:4.

t7s

Id. at93:9-94:4.

at

26:24-32:10,

3B:7

44:7, 52:23-5 4:1

36

*SEALED* Filed 05/09/1-7 Page 37 of 54
Case 2:j-3-cv-00729-DN-EJF Document 1046

147.

Because

of

Defendants' infringing the DERMAPEN Marks, making the

misrepresentations, and otherwise actively attacking Derma Pen, LLC and soliciting its customers

by illegal means, the value of the DERMAPEN Marks and the DomainName declined markedly.

In short, Defendants' willful, wanton and illegal use of the DERMAPEN Marks caused the failure
of Derma Pen, LLC.17s

t1s

Jd. at93l.9-94:4.

t1s

Id. at93:9-94:4.

r77

28 U.S.C. $ 1331;28 U.S.C. $ 1367(a).

3t

Case 2:l-3-cv-00729-DN-EJF Document 1046 *SEALED* Filed 05/09/L7 Page 38 of 54

II.
l.

CONCLUSIONS OF LAW

This Court has subject matter jurisdiction under 28 U.S.C. $ 1331 over the Lanham

Act and Copyright Act claims

as these claims present a federal question.

This Court also has

jurisdiction under 28 U.S.C. $ 1367(a) over Derma Pen, LLC claims arising under Utah law.177

2.

Under Federal Rules of Civil Procedure 16(f) and 37(b), Defendants answers to

Derma Pen, LLC's Amended Complaint are stricken.lTs

3.

The well-pled factual allegations in Derma Pen, LLC's Amended Complaint are

deemed admitted.lTe

4.

4EverYoung's and Equipmed's counterclaims are dismissed.180

5.

Through continuous, long-term use in eommerce, Derma Pen, LLC established

common law rights in the DERMAPEN Marks and in the use of the phrase "DERMAPEN" as a
trade name or part of a trade name.181

6.

None of the Defendants ever have owned or had the right to use the DERMAPEN

Marks, the Domain Name or the trade name "DERMAPEN" in the USA.l82

7.

None

of the Defendants ever owned any right to

license

or transfer the

DERMAPEN Marks or the trade name "DERMAPEN" in the USA to any third party.ls3

177

28 U.S.C. $

r78

Federal Rules of Civil Procedure 16(f) and 37(bX2XA).

l33l;

28 U,S.C. g 1367(a).

t1e

Id. Onc-e a default is entered against aparty, all allegations, except those regarding damages, in the cornplaint are
taken as true. See Dundee Cement Co. v. Howard Pipe & Concrete Products, Inc.,722F.2d l3lg,1323 (2d Cir.
l e83).
r8o

Dismissal Order at 7-8.

18r

Section LC.l supra.

r82

Sections

183

LCJ,LC.2 andI.C.3 supra.

Id.

38

Case 2:13-cv-00729-DN-EJF Document 1046

*SEALED* Filed 05/09/L7 Page 39 of 54

8.

The Sales Distribution Agreement terminated on or about August 7,2013.184

9.

Because 4EverYoung failed to reasonably participate in proceedings to establish

the DERMAPEN Marks' value as required by the Sales Distribution Agreement and this Court's
orders, any rights that 4EverYoung may have had to purchase the DERMAPEN Marks or Domain
Name terminated in the course of the current litigation.

10.

Indeed, by failing

to fully

prosecute

18s

its claim for specific performance in

a

reasonably timely manner after being given the opportunity to do so by this Court, 4EverYoung
repudiated, waived, abandoned and is estopped from assefting what rights,

if any, it may

under the Sales Distribution Agreement to purchase now or at any time

have had

in the future the

the Sales Distribution

DERMAPEN Marks or the Domain Name under
Agreement.186

11.

By willfully infringing the DERMAPEN@ Mark, making the misrepresentations

described in section I.C.5 supra, actively attacking Derma Pen, LLC and soliciting its customers

by illegal means, and willfully using Derma Pen, LLC's copyrighted content, Defendants
violated Utah Code $$ 13-1

l-l

et seq., entitling Derma Pen,

LLC to actual damages of lost

profiß187 of $7,307,320.00 plus costs of suit and reasonable attorney fees.lss

r8a

Memorandum Decision and Order Granting 4EverYoung's 238 Motion for Partial Summary Judgment on

Rescission at

6,9-ll,

docket no. 397, entered August 4,2014-

r8s

Rule 55(bX2) Hearing at14,'24-15:14.

t86

Id.

Utah Code $ l3-11-19(2) states that "A consumer who suffers a loss as a result of a violation of this chapter may
recover . . . actual damages or $2,000, whichever is greater, plus court costs." The statute and relevant case law do
not clarifu how damages should be calculated. Lost profits is a reasonable measure for determining whether Derma
,'suffer[ed] a loss as a resulf'ofthe defendants' violation ofthis chapter.
Pen LLC
I87

r88UtahCode$$ 13-ll-1 etseq.(providingforactualdamages,costsandattorneyfees).

39

Case 2:1-3-cv-00729-DN-EJF Document 1-046 *SEALED* Filed 05/09/17 Page 40 ot 54

:

12.

The amount of Derma Pen's lost profits was estimated, based on the figures found

in Exhibit 2Derma Pen LLC Profit and Loss Spreadsheet.lse

18e

Docket no. 1010-1, filed under seal March 1,2017

40

Case 2:j-3-cv-00729-DN-EJF Document 1-046

13.

*SEALED* Filed 05/09/1-7 Page 4L of 54

By willfully infringing the DERMAPEN Marks, making the misrepresentations

described above, actively attacking Derma Pen, LLC and soliciting its customers by illegal means'

willfully using Derma

and

lla-l

Pen,

LLC's copyrighted content, Defendants violated Utah Code $$ l3-

etseq., thus entitling Derma Pen, LLC to actual damages of lost profiß1e0 of $7,307,320.00

plus costs and reasonable attorney fees.lel

14.

By willfully infringing the DERMAPEN Marks, making the misrepresentations

described above, actively attacking Derma Pen, LLC and soliciting its customers by illegal means'
and

willfully using Derma

Pen, LLC's copyrighted content, Defendants interfered and disrupted

Derma Pen, LLC's ongoing, existing, and prospective business and contractual relationships by

improper means,1e2 thus entitling Derma Pen, LLC

to actual

damages

of lost profitsle3 of

57,307,320.00 plus costs of suit.

15.

By making the false statements described above or the misrepresentations described

above, Defendants have defamed or disparaged Derma Pen,

LLC in violation of Utah common

Again, neither the statute or case law clarifies how damages should be calculated. Lost profit is a reasonable
measure for determining actual damages.
reo

rerUtahCode$$

l3-lla-l

etseq.;UtahCode$ l3-lla-4(providingforactualdamages,costsandattorneyfees)'
ts2
Leigh Furniture & Carpet Co. v. Isom, 657 P .2d 293, 304 (Utah Sup.Ct . l9S2) (recognizing cause of action for
tortioui interference with iontractual relations where a defendant (1) "intentionally interfere[s] with the plaintiffs
existing or potential economic relations," (2) "for an improper purpose or by improper means," (3) "causing injury to
the

plaintiff')

te3

TruGreen Companies, L.L.C. v. Mower Brothers, lnc.,199 P'3d 929,934-935'

4t

Case 2:l-3-cv-00729-DN-EJF Document 1-046 *SEALED* Filed 05/09i1-7 Page 42 of 54

law,1e4 entitling Derma Pen, LLC to actual damages of lost profits le5 of $7,307 ,320.00 plus costs

of suit.

16.

Defendants elected either actual damages or statutory damages for defendants'

trademark and copyright infringements.le6 Because damages

for trademark and copyright

infringement remain "uncertain"leT and statutory and actual damages cannot both be awarded
under the Lanham and Copyright Acts,le8 statutory damages

will

be awarded. Statutory damages

have the dual purpose of compensating the aggrieved party and punishing the wrongdoer. Statutory
damages require courts to

consider-with whatever information is available-actual damages, but

"thsre is no necessary mathematical relationship between the size of such an award fof statutory
damages] and the extent or profitability of the defendant's wrongful activities."lee Coufts typically

justif,

the amount of statutory damages by weighing factors such as willfulness of infringements,

efforts to mislead and conceal the infringements, defiance of attempts at deterrence, size of

tea

Jacob v. Bezzant,2009 UT 37,n21,212P.3d,535 (recognizing a prima facie case for defamation arises where "(l)
the defendant published the statements [in print or orally]; (2) the statements were false; (3) the statements were not
subject to privilege; (4) the statements were published with the requisite degree of fault; and (5) the statements resulted
in damages") (citation and internal quotation marks omitted) (alteration in original).
res
Numerous cases use lost profits as the appropriate means for measuring damages from business defamation.
Restatement (Second) ofTorts S 561 (1977) (collecting cases).
re6

See Proposed Findings of Fact and Conclusions

of Law at3942,1[tT 1l-19, docket no.

2017.

1019

^See

, filed}y'rarch 27,

te7
See Sara Lee Corp. v. Bøgs of New York, Inc.,36 F.Supp.2d 16l, 165-170 (S.D.N.Y. 1999) (relating the history
and purpose ofstatutory damages under both the Lanham and Copyright Acts and stating that where actual damages
attributable to the infringing activity are uncertaino the court should choose statutory damages.

te8
l5 U.S.C. $ I 117(c) ("the plaintiff may elect, at any time before final judgment is rendered by the trial court, to
recover, instead of actual damages and proJìts under subsection (a) of this section, an award of statutory damages");
17 U.S.C. $ 50a(c)(1) ("the copyright owner may elect, at any time before final judgment is rendered, to recover,
instead of actual damages andprofits, an award of statutory damages for all infringements involved in the action")

(emphasis added).
tee

Sara Lee Coryt.,36 F.Supp.2d at 165 (internal quotation marks omitted).

42

*SEALED* Filed 05/09/L7 Page 43 oÍ 54

Case 2:13-cv-00729-DN-EJF Document L046

counterfeiting operation, profits and losses (whatever is ascertainable), and the amount that would
prevent future infractions.

17.

2oo

Defendants have used a counterfeit mark as defined by 15 U.S.C. $ 1116(d) in

connection with two types of products: micro-needling devices and tips. Accordingly, under

u.s.c. $

1117(c), Derma Pen, LLC is entitled

to $4,000,000.00 in statutory

considering the above factors-reflected in the fîndings of facts-awarding the

15

damages. After

full $2,000,000.00

for each type of counterfeit is warranted. Defendants' infringements were willful, in defiance of
numerous attempts at deterrence, and extensive.2O1

18.

By knowingly and willfully reproducing, distributing or publicly displaying the

Infringing Content on their website without Derma Pen, LLC's permission or authorization,
Defendants infringed Derma Pen, LLC's copyright interest

in Copyrighted

Content,2o2 thus

entitling Derma Pen, LLC to statutory damages of $600,000.00203 and attomey fees and

19.

costs.204

The "traditional American rule, subject to cefiain exceptions, is that attorney fees

cannot be recovered by

a

prevailing party unless a statute or contract authorizes such an award."205

Also, the Supreme Court stated that "in narrowly defined circumstances federal coufts have

2oo

Id. (collecting

201

Sections I.C.3-5 supra.

202

see Section I.C.l T 27 (listing four copyright applications or registrations).

cases).

U.S.C. $ 50a(cX3) ("the court in its discretion may increase the award of statutory damages to a sum of not
more than $150,000" per copyrighted work).
203

17

204

l7 U.S.C. $$ 50a(c)

2os

Kealømakia, Inc. v. Kealømakia, 213

and 505.
P

.3d 13, 15 (Utah Ct. App. 2009).

43

Case 2:1-3-cv-00729-DN-EJF Document 1046 *SEALED* Filed 05/09/L7 Page 44 ot 54

inherent power to assess attorney's fees against counsel."206 One circumstance includes "when a

party has acted in bad faith, vexatiously, wantonly, or for oppressive reasons."2o7

21.

Because Derma Pen is the prevailing party under the Sale Distribution Agreement,

the Copyright Act,z0e the Lanham Act,210 and relevant Utah statutes,2ll Defendants are liable for
costs and attorney's fees. And because defendants have acted in bad faith, vexatiously, wantonly,

and for oppressive reasons, as outlined

in

Sections

I.C.l-s supra,

defendants are liable for

attomey's fees and costs.

22.

Derma Pen, LLC's Motion for Cost and Attorney Fees212 attaches numerous

affidavits from various law firms in support of the motion for attorneys' fees. The Motion for Cost
and Attorney Fees and the attached affidavits comply with Federal Rule

of Civil

Procedure

54(2)(B) and DUCivR 54-2. The fees of the various attorneys are reasonable as defined by Díxie
State

B

ank v. Bracken.2l3

206

Chambers v. NASCO,

207

Id. at 46.

2oe

17

2ro

l5 u.s.c. tttT(a).

2rr

utalr code g 70-3a-404; utah code g l3-5a-103; utah code g l3-l l-19; urah code g l3-l la-4.

2r2

Docket no. I 017, filed March

2t3

764 p.2d 985,989-90 (utah 1988),

u.s.c.

g

Inc.,50l U.S.

32, 45 (1991).

5oa(c)(l)

17

,

2017

.

44

Case 2:l-3-cv-00729-DN-EJF Document l-046

23.

*SEALED* Filed 05/09/L7 Page 45 of 54

Derma Pen, LLC is granted attorney's fees and costs2l4 under the Sale Distribution

Agreement and the state and federal statutes listed above.

24.

Derma Pen IP Holdings is granted attomey's fees and costs2ls under the state and

federal statutes listed above

25.

Jeremy Jones, Chad Milton, Mike Morgan, and Michael Anderer are entitled

attonrey's fees and costs2l6 under the inherent power of the court to grant an award of attomey's
fees.

26.

Derma Pen LLC, Michael Anderer, Jeremy Jones, Michael Morgan, and Chad

Milton are also awarded costs under Federal Rule of Civil Procedure 54(d)(l)

as the prevailing

party in this action or as the prevailing parties in successfully avoiding liability as counterclaim
defendants.
27

.

28.

Defendants are alter egos of each other.217

Any rights created in favor of Defendants by the Court's "Memorandum Decision

and Order Granting 4EverYoun g's 238 Motion for Partial Summary Judgment on Rescissioh,''2l8

"Memorandum Decision and Order Granting 4F.verYoung's 240 Motion for Partial Summary

Judgment Directed Against Derma Pen, LLC's Defenses

to

Specific Performance,"2le

"Memorandum Decision and Order Granting 4EverYoung's 241 Motion for Partial Summary

214

In the amounts listed in the Motion for Cost and Attorney Fees at 3-4.

2rs

In the amounts listed in the Motion for Cost and Attorney Fees at 4.

216

In the amounts listed in the Motion for Cost and Attorney Fees at 4.

?r7

Section I.C.8 supra.

2r8

Docket no. 397.

zre

Docket no. 465, entered December 30,2014.

45

Case 2:13-cv-00729-DN-EJF Document 1046 *SEALED* Filed 05/09/l-7 Page 46 of 34

Judgment on Specific Performanc e"220 are nullified and void because the underlying claims are
stricken.22l

29.
as

Mr. Marshall has used and continued to use 4EverYoung, Equipmed and BioSoft

his alter ego and as a corporate fiction to shield him from personal liability.222

30.

Derma Pen, LLC or any subsequent owner(s) of the DERMAPEN Marks or

Domain Name, including but not limited to Derma Pen IP Holdings, are entitled to destroy any
and

all items that (1) Defendants together or individually have used in commerce and (2) have

been marked with a reproduction, counterfeit, copy, or colorable imitation of the DERMAPEN

Marks in accordance to 15 U.S.C. $ 1118.223

31.

Derma Pen, LLC or any subsequent owner(s) of the DERMAPEN Marks or

Domain Name, including but not limited to Derma Pen IP Holdings, LLC, also are entitled to a
permanent injunction. Accordingly, Defendants are hereby permanently enjoined and restrained
as follows:224

a.
and anyone

Defendants, their officers, agents, servants, employees, attorneys, licensees,

in active concert or

participation with, aiding, assisting,

or

enabling

Defendants, are hereby permanently enjoined and restrained from using the DERMAPEN

Marks

-

including any variants thereof or similar wording

22o

Federal Rules of Civil Procedure

222

Section I.C.8 supra.

223

l5 u.s.c. $$ 1116 and I I18,

22a

or the "DERMAPEN"

Docketno. 476.

?2r

-

FederalRule Civil Procedure 65; l5 U.S.C. $$ I I l6 and I I l B

l6(f)

and 37(bX2XA).

46

Case 2:t-3-cv-00729-DN-EJF Document L046

*SEALED* Filed 05/09/1-7 Page 47 of 54

tradename in the USA in connection with advertising, promoting, selling, offering for sale,

distributing or importing any good or service;

b.

Defendants, their officers, agents, servants, employees, attorneys, licensees,

and anyone in active concert or participation with, aiding, assisting, or enabling Defendants
are permanently enjoined and restrained from stating, representing, or implying orally or

in writing (including, but not limited to, email communications, print

adveftisements,

mar.keting materials, websites, blogs, social media) any statements or representations: (1)

that are likely to cause others to mistakenly believe that Defendants are affiliated,
connected

or

associated with Derma Pen,

DERMAPEN Marks; (2) that are likely

LLC or any subsequent owner(s) of

to cause others to

the

mistakenly believe that

Defendants have or ever had rights to use the DERMAPEN Marks in the USA; (3) that

misrepresent

the nature, characteristics, qualities, source, or geographic origin of

Defendants' micro needling devices; (4) that are about Derma Pen, LLC, about its current
or former investors, officers, members or employees, or about any subsequent owner(s)

of

the DERMAPEN Marks and that are false, deceptive or misleading; (6) that are contrary

to or inconsistent with any of the Court's factual fìndings; (7) fhat misrepresent the
outcome of this lawsuit;

c.

Defendants, their offrcers, agents servants, employees, and attorneys,

licensees and anyone in active concert or participation with, aiding, assisting or enabling

Defendants are hereby permanently enjoined and restrained from the following: (1)
committing any defamation, any business disparagement, or any unfair business practices
directed toward obtaining the business or customers of Derma Pen, LLC or any subsequent

47

Case 2:l-3-cv-00729-DN-EJF Document 1046 *SEALED* Filed 05/09/l-7 Page 48 oÍ 54

owner of the DERMAPEN Marks; and (2) committing any other deceptive or unfair
business practices directed toward devaluing or diminishing the goodwill and reputation
associated with Derma Pen,

d.

LLC or any subsequent owner(s) of the DERMAPEN Marks;

Defendants and their offîcers, agents, servants, employees, attorneys, and

anyone in active concert or participation with, aiding, assisting or enabling Defendants are

hereby enjoined to deliver up to Derma Pen, LLC or destroy all packaging, containers,

devices, products, literature, advertising and any other material bearing

(1)

the

DERMAPEN Marks or any variants thereof or similar wording, (2) the "DERMAPEN"
trade name, or (3) the Copyrighted Content;

e.

Defendants and their officers, agents, selvants, employees, attorneys,

licensees, and anyone in active concert or participation with, aiding, assisting or enabling

Defendants are hereby enjoined to deliver up to Derma Pen, LLC a list and contact

information
persons

-

including name, telephone, email address and physical address

or entities to whom Defendants their ofhcers, agents, servants,

attomeys, licensees and anyone

in active

-

of all

employees,

concert or participation with have sold,

distributed, offered to sell, or marketed products bearing the DERMAPEN Marks in the
USA;

f.

Defendants and their officers, agents, servants, employees, attorneys,

licensees, and anyone

in active concert or participation with, aiding, assisting or enabling

Defendants are hereby enjoined from selling micro-needling device(s) or micro-needling

tip(s)

-

whether or not the micro-needling device(s) or tip(s) bear the DERMAPEN Marks

- to any person or entity to whom Defendants and their officers, agents, servants,

48

Case 2:1-3-cv-00729-DN-EJF Document 1046 *SEALED* Filed 05/09/17 Page 49 of 54

employees, attorneys, licensees and anyone in active concert or participation with, aiding,
assisting or enabling Defendants previously have sold micro-needling device(s) or tip(s)
bearing the DERMAPEN Marks in the USA;

g.

Defendants and their offrcers, agents, servants, employees, attorneys,

licensees and anyone in active concert or participation with, aiding, assisting, or enabling

Defendants are hereby enjoined

to deliver up and destroy all packaging, containers,

devices, products, literature, advertising and any other material bearing any literally false
or impliedly false and deceptive statements regarding Defendants' micro-needling devices

or regarding Derma Pen, LLC or its current or former investors, officers, members or
employees;

h.

Defendants are hereby enjoined to file with this Court and serve on Derma

Pen, LLC within thirty days after the service of this order, a report in writing under oath,

setting forth in detail the manner and in which they have complied with the permanent

injunction order.

ORDER
IT IS HEREBY ORDERED that in accordance with the above frndings of fact and
conclusions of law that the following motions are GRANTED:

1.

Motions and Supporting Memorandum to Strike Answers of Defendants, for Entry of
Default, and for Default Judgment;225

2.

Motion for Entry of Findings of Fact and Conclusions of Law;226

22s

Docket no. 938, filed October

226

Docket no. 943, filed October 21,2016.

17

,2016.

49

Case 2:13-cv-00729-DN-EJF Document 1-046

3.

*SEALED* Filed 05/09/L7 Page 50 of 54

Motion for Terminating Sanctions and for Clarification that the Benefit of the
Terminating Sanctions in the August29,2016 (Doc. No. 928) Order Apply to

Non-4EY Parties and Memor

4. Motion

All

andum;227

for Attorneys Fees;228

5.

Motion for an Award of Damages, Costs and Attorney

6.

Motion for an Award of Costs and Attorney

7.

Derma Pen, LLC's Motion for Cost and Attorney Fees.23l

Fees;22e

Fees;230 and

IT IS FURTHER HEREBY ORDERED that the following motions are now MOOT:

1. 4EverYoung's

Motion In Limineto Exclude Derma Pen's Valuation Expert Reports

and Testimony;232 and

2.

Ex-Parte Motion for Stay of Response to Defendants' Motion in Limine to Exclude
Derma Pen's Valuation Expert Reports and Testimony Until Issues of Trademark's
Status and Feasibility of Specifrc Performance Are Resolved.233

IT IS FURTHER HEREBY ORDERED that judgment shall be entered in favor of Derma
Pen LLC and against 4EverYoung Limited, Biosoft (Aust) PTY

LTD dlblaDermapenworld,

227

Docket no. 952, filed Octobe r 25, 2016.

228

Docket no. 944, filed October 21,2016. Derma Pen LLC is no longer required to pay 4EverYoung's attorney's
Attorneys' Fees (ECF No. 736), docket no. 801, entered llay 7,2015.

fees. See Order Granting
22e

Docket no. 9 45, filed October 21, 2016.

230

Docket no. 1015, filed March 77,2017.

231

Docket no. 1017, filed March

232

Docket no. 651, filed Match 5,2015.

233

Docket no. 706, filed March 19,2015.

17

,

2017

.

50

Case 2:13-cv-00729-DN-EJF Document 1046

*SEALED* Filed 05/09/L7 Page 51 of 54

Equipmed International PTY LTD d/bla Dermapenworld, and Stene Marshall dlblal
Dermapenworld in the amount of $11,907,320.00.234
are permanently enjoined and

IT IS FURTHER HEREBY ORDERED that defendants
restrained according to the terms described above.235

IT IS FURTHER HEREBY ORDERED that Derma Pen LLC is awarded and defendants,

jointly

and severally, shall pay the sum of $3,668,007.53 which represents the following

attomeys' fees and costs:

Client and Firm
Derma Pen, LLC

Attorneyts Fees

Baker, Donelson, Bearman,

Costs

st,068,027.76

$97,618.86

Caldwell & Berkowitz,
P.C.236

Christensen

&

Jensen,

$87,330.50

P.C.237

Douglas R. Short238

Durham Jones &. Pinegar23e
Snell & Wilmer, LLP¿4u
Stoel Rives,LLP24I
Derma Pen IP Holdings,

s205,237.50
$3 12,

1

$1,858.27

89.95

$13,516.62

$650,202.50
$87,086.50

$8"899.91

LLC
Peters Scofield2a2

s3r0,264.17

This includes 57,307,320.00 for lost profits, $4,000,000.00 for willful violation of the Lanham Act, and $600,000
for willful violation of the Copyright Act. Though there are numerous bases for awarding lost profits, lost proftts
may only be awarded once.
234

235

Section II,

236

Declaration of Samuel F. Miller, docket no. 1017-1, filed March 17, 2017

237

Declaration of Nathan Alder, docket no. 1017-3, filed March 17,2017

238

Declaration of Douglas R. Short, docket no. 1017-5, filed March 17,2017.

TtT

29-30 (including every subsection).
.

.

Affidavit of J. Mark Gibb Re Attorney Fees Incuned by Derma Pen While Employing Durham Jones & Pinegar,
docket no. 1017-6, filed March 17,2017.

23e

2a0

Declaration of Douglas P. Far, docket no. 1017-9, filed March 17,2017

2at

Declaration of Marc T. Rasich, docket no. 1017-11, filed March 17,2017.

2a2

Declaration of David W. Scofield, docket no. l017-8, filed March 17,2017.

.

51

Case 2:1-3-cv-00729-DN-EJF Document l-046'tSEALED* Filed 05/09/1-7 Page 52 of 54

Jeremy Jones
Callister Nebeker &
McCullough2a3
Christensen & Jensen,

$71.30

968,782.25

$15,968.50

P.C.244

Chad Milton and Mike
Morqan
Christensen & Jensen

$72,755.50

$1,085.05

s124,352.00

s2,146.43

P.C.24s

Michael Anderer
Christensen & Jensen
P.C.246

David Vy'. Scofreldza/
Anderson & Kanenberg,

s136,642.36
$15,338.00

P.C.248

Zimmerman Jones

$161,286.00

92,347.60

Booher2ae

Mark Anderson25o

$225,000.00

IT IS FURTHER HEREBY ORDERED that the clerk of the court is directed to CLOSE
this case

IT IS FURTHER HEREBY ORDERED that, within fourteen days after filing of this
order, the parties shall send a redacted version of this document to di.nuffer@,utd.uscourts.sov

243

Declaration of James D. Gilson, docket no. 1017-2, filed March 17,2017.

2aa

Declaration of Nathan Alder, docket no. 1017-3, filed March 17,2017.

245

Declaration of Nathan Alder, docket no. 1017-3, filed March 17,2017

.

2a6

Declaration of Nathan Alder, docket no.

.

2a7

ld.arch 16,2017 Declaration of David W. Scofield Re; Michael E. Anderer Personal Fees, docket no.

I0I

7-3, filed March

17

,

2017

l0l7-4,

fìled March 17,2017.
248

Attorney Fee Declaration of Stephen P. Horvat, docket no. 1017-10, filed March 17,2017.

2ae

Declaration of Clemens A. landau, docket no.

250

Declaration of Mark Anderson, docket no. 1017-7, filed March 17,2017

1

0

l7- 12, filed March

17

,

2017

.

.

52

Case 2:13-cv-00729-DN-EJF Document 1046

*SEALED* Filed 05/09117 Page 53 of 54

The redacted version shall obscure all protected information and shall be a text-based PDF. If the
redactions are acceptable to the court, the redacted version

will

be placed on the docket.

Dated I|l4ay 9,2017.

BY THE

David Nuffer
United States District Judge

53

Case 2:L3-cv-00729-DN-EJF Document 1046 *SEALED* Filed b5/09/1-7 Page 54 of 54

United States District Court
for the
District of Utah
May 9, 2017
*

RE:

i< i< {<

*

tlvL{ILING CERTIFICATE OF TI{E CLERK*

Derma Pen v. 4EverYoung Limited et al
2:13cv729 DN-EJF

Michael B. Bemrett
590 S STATE ST
OREM, UT 8405
Bryson R. Brown

CHRISTENSEN & JENSEN PC
2s7 E 200 S STE 1100
SALT LAKE CITY, UT 84111
4EverYoung Ltd.
BioSoft
Equipmed International
Stene Marshall
56 MYOORA ROAD
TERREY HILLS NSW 2084

AUSTRALIA
James E. Magleby

MAGLEBY CATAXINOS & GREENWOOD
170 S MAIN ST STE 11OO
SALT LAKE CITY, UT 84101

Aimee Trujillo

:

**x*

I