Nutrivida, Inc. v. Inmuno Vital, Inc.

• Decision Date: 06 December 1998
• Docket Number: No. 95-2250-Civ.,95-2250-Civ.
• Parties: NUTRIVIDA, INC. Plaintiff/Counterdefendant, v. INMUNO VITAL, INC. and Andres Garcia Garcia, Defendants/Counterclaimants.
• Court: U.S. District Court — Southern District of Florida

46 F.Supp.2d 1310

NUTRIVIDA, INC. Plaintiff/Counterdefendant, v. INMUNO VITAL, INC. and Andres Garcia Garcia, Defendants/Counterclaimants.

No. 95-2250-Civ.

United States District Court, S.D. Florida.

December 6, 1998.

COPYRIGHT MATERIAL OMITTED

Robert Martin Schwartz, Miami, FL, Gonzalo Ramon Dorta, Gonzalo R. Dorta, P.A., Coral Gables, FL, Amy B. Goldsmith, James Reisman, Gottlieb Rackman & Reisman PC, New York City, for plaintiff.

Jeffrey David Feldman, James Anthony Gale, Komal H. Bhojwani, John C. Carey, Feldman Gale & Weber, Miami, FL, Jeffrey M. Kaden, Gottlieb Rackman & Reisman PC, New York City, for Inmuno Vital, Inc., defendant.

Juan Jose Rodriguez, Rodriguez & Machado, Miami, FL, for Andres Garcia Garcia, defendant.

MEMORANDUM OPINION

TURNOFF, United States Magistrate Judge.

On June 10, 1996, all proceedings in this action were referred to this Court pursuant to 28 U.S.C. § 636 and by consent of the parties. On February 28, 1997, this Court granted summary judgment as to liability in favor of Inmuno Vital, Inc. ("Inmuno Vital") under Count VIII of Inmuno Vital's Amended Counterclaim, and dismissed Counts IV and VI of the Second Amended Complaint filed by Nutrivida, Inc. ("Nutrivida"). Based upon the entry of partial summary judgment, a preliminary injunction was entered against Nutrivida on March 5, 1997. The case was also set for trial in March 1997; however, on or about the eve of trial, Nutrivida filed a voluntary petition for bankruptcy which stayed this matter pursuant to 11 U.S.C. § 363. Thereafter, the bankruptcy matter was dismissed, and this action reset for further proceedings. Subsequent to the bankruptcy dismissal, Nutrivida's counsel withdrew from their representation in this matter. In light of Nutrivida's failure to thereafter obtain new counsel or to otherwise prosecute this action, this Court on July 20, 1998 granted default judgment as to liability in Inmuno Vital's favor under each of the remaining counts in Inmuno Vital's Amended Counterclaim, and dismissed each of Nutrivida's affirmative claims for relief with prejudice.¹ On October 23, 1998, this Court held a hearing to determine the monetary damages to be awarded Inmuno Vital under its Counterclaims.² The rulings made herein by the Court thus bring this matter to an end.

I. INTRODUCTION

This action involves the unauthorized and infringing use by Nutrivida of three forms of Inmuno Vital's intellectual property: (1) Inmuno Vital's exclusive right to use the name, likeness and image of its celebrity endorser Andres Garcia in the commercial promotion of cat's claw products, (2) Inmuno Vital's exclusive right to use the name "Oscar Schuler Egg" in the commercial promotion of cat's claw products, and (3) Inmuno Vital's distinctive Seal Design used on the packaging of cat's claw products.³

The extent to which Nutrivida has unjustly profited from its infringing conduct—as revealed by its own business records—is significant. From July 1995 through February 1997, the relevant period of infringement, Nutrivida generated profits of more than $12 million on sales of approximately 540,000 bottles of cat's claw. Under the governing legal authorities and the circumstances of this case, Inmuno Vital is entitled to the disgorgement of Nutrivida's ill-gotten gains as compensation for Nutrivida's acts and to deter similar acts of unjust enrichment in the future. Moreover, based on the knowing and continuing nature of Nutrivida's infringement for almost two years after receipt of a cease and desist letter, punitive damages and an award of attorneys' fees are warranted by applicable law.

II. FACTUAL BACKGROUND

Inmuno Vital manufactures and distributes on a nationwide and international basis a product known as "cat's claw," which derives from a plant native to the jungles of South America.⁴ Cat's claw is sold in capsule form by both Inmuno Vital and Nutrivida.

Andres Garcia Garcia is an internationally renowned actor residing in Mexico City. At various times throughout 1994 and 1995, Garcia publicly credited his use of cat's claw, specifically the brand sold by Inmuno Vital, with curing him of prostate cancer. Moreover, by written agreement dated September 1994, Garcia granted Inmuno the exclusive right to make use of his name in the promotion of cat's claw products. Specifically, the license agreement states:

"Andres Garcia grants to Inmuno Vital, Inc. the exclusive right with licensing rights to use his name on any product containing any form of Cat's Claw (Uncaria Tomentosa)."

Garcia has also acknowledged that this grant to Inmuno extended to use of his photograph and likeness, as well as his name.

From September 1994 through 1996, Inmuno Vital used Garcia's name and likeness in extensive Spanish-language print and television advertising for Inmuno's Vida Vital brand of cat's claw. From the latter part of 1994 through August 1995, Inmuno's advertising for its Vida Vital brand cat's claw generated average monthly sales of approximately 50,000 bottles. By virtue of Inmuno's extensive advertising using the name, photograph and likeness of Andres Garcia, the consuming public came to associate the name and likeness of Andres Garcia with Inmuno and its Vida Vital brand of cat's claw. Moreover, Inmuno's use of the name and likeness of Andres Garcia in its advertising for Vida Vital cat's claw distinguished Inmuno's product from the products of other competitors.

Apart from the use of the Garcia name and image, and pursuant to an exclusive license and distributorship agreement between Inmuno and non-party Tracker, S.A., from about March 1994 to July 1995, Inmuno's packaging of its bottles of Vida Vital cat's claw also bore the name "Oscar Schuler Egg Certified." Oscar Schuler Egg is the supposed discoverer of cat's claw, and his heirs' Peruvian company (Tracker, S.A.) was for a time Inmuno's supplier of ground cat's claw root.

Nutrivida, located in Brooklyn, New York, is a nationwide distributor of various vitamin products and nutritional supplements. By letter agreement dated February 24, 1995, Nutrivida and Inmuno entered into a "private label" arrangement whereby Inmuno agreed to package, bottle and label its Vida Vital cat' claw product with Nutrivida's name on the label for distribution and re-sale by Nutrivida. Under this February 24, 1995 private label agreement, Inmuno also granted Nutrivida, for the term of the agreement, the right to use the name "Oscar Schuler Egg" on Nutrivida's cat's claw (which in reality was merely Inmuno's Vida Vital in a Nutrivida-labeled bottle). Inmuno did not, however, grant Nutrivida by means of the private label agreement the right to use the name or likeness of Andres Garcia to promote any of Nutrivida's products, including the product produced for Nutrivida under the private labeling agreement described above.

From at least as early as July 1995, and until preliminarily enjoined by this Court in February 1997, it is uncontroverted that Nutrivida nevertheless produced and caused to be broadcast on the Spanish-language television network Telemundo, television commercials and "infomercials" containing the name, photograph and likeness of Andres Garcia. To also promote its competing uña de gato product, Nutrivida distributed flyers which contain the name and likeness of Andres Garcia.

Upon first becoming aware of Nutrivida's commercials using Garcia's name and likeness in about July 1995, Inmuno's Dexter Backus and Cecilia Iturriaga contacted Nutrivida's Dr. Norma Pestano to object to Nutrivida's commercial advertising campaign and to insist that Nutrivida stop using Garcia's name and likeness. Also in July 1995, Inmuno advised Nutrivida that it could no longer supply cat's claw product with the name "Oscar Schuler Egg," but it could continue to supply Vida Vital using cat's claw product from another source. Nutrivida declined this offer, and instead withheld payment from Inmuno for shipments already received by Nutrivida. The parties then terminated their relationship by agreement dated August 2, 1995. All business relations between Nutrivida and Inmuno ceased as of that date.

In August 1995, Nutrivida was twice warned in writing to cease and desist from airing television commercials containing Andres Garcia's name, photograph or likeness. Notwithstanding its receipt of the cease and desist letters, it is undisputed that Nutrivida continued to use the name, photograph and likeness of Andres Garcia in its commercial television advertising until enjoined from doing so by this Court in February 1997.

It is clear that because both Inmuno and Nutrivida used the name and likeness of Andres Garcia in the promotion of their respective cat's claw products, consumers of cat's claw products were confused and deceived regarding which source of cat's claw Andres Garcia actually endorses and promotes. Moreover, the Court finds that not only has Nutrivida profited substantially from its improper use of the name and likeness of Andres Garcia, such acts have caused damage to Inmuno Vital's sales, its reputation and its goodwill with the consuming public.

III. COMPENSATORY DAMAGES

Monetary recovery for violations of the Lanham Act, 15 U.S.C. § 1125(a), is provided for by 15 U.S.C. § 1117. Pursuant to Section 1117, Inmuno Vital is entitled to recover: (1) Nutrivida's profits, (2) any damages sustained by Inmuno, and (3) costs of the action. The Court has wide discretion in assessing these damages, which may be awarded even when they are not susceptible to precise calculations. Ramada Inns, Inc. v. Gadsden Motel Company, 804 F.2d 1562, 1564-65 (11th Cir.1986).

In this case, Inmuno Vital has elected to recover and has introduced evidence regarding the profits made by Nutrivida on infringing sales of cat's claw product. An award of an infringer's profits has traditionally been viewed under the Lanham Act and the common law of unfair competition as a way of compensating the plaintiff for sales lost to the...