Professional Documents
Culture Documents
12 DISTRICT OF NEVADA
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BOSTON DENTAL GROUP, LLC, a Nevada Case No.: 2:16-cv-01636-RFB-CWH
14 limited liability company,
20 Plaintiff, Boston Dental Group, LLC (Plaintiff or BDG), by and through its
21 attorneys, hereby files this reply brief in support of its motion for partial summary judgment on
22 the issue of trademark priority - unlawful use. This reply is based on the following:
23 1. Trademark priority is an issue in every trademark infringement case. In addition
24 to priority being a core prong of trademark infringement, the affirmative defenses of unclean
25 hands and unenforceability were clearly pled by BDG. Moreover, the specific allegations that
26 Defendants trademark is unenforceable due to its violation of Nevada law has been in issue
27 throughout this case, including throughout discovery.
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Reply - Trademark Priority - Unlawful Use 1
Case 2:16-cv-01636-RFB-CWH Document 68 Filed 08/25/17 Page 2 of 16
1 2. As set out in more detail in BDGs Motion to Strike, S. Paul Steelman was never
2 disclosed as a witness in this case. His declaration attached to BDGs opposition should be
3 stricken and not considered by this court. In addition, the Vegas Financial Statements and Vegas
4 Fee Statements were never disclosed as evidence in this case during discovery and should be
7 undisclosed documents, it is clear that Defendant Affordable Cares arrangement with its
8 Nevada dentist is in violation of Nevada law. Affordable Cares supposed fixed fee fluctuates
9 quarterly based on the gross revenue of the dental office with the apparent goal of keeping the
12 secondary meaning as BDG is not alleging trademark infringement. The relevant priority date
13 for BDG (which is being accused of infringement) is simply when BDG began using its
14 allegedly infringing trademark, namely January 2008. In contrast, the relevant priority date for
15 Affordable Care is when (if ever) it has obtained enforceable trademark rights for dental
16 services due to the fact that its agreements with its licensees appear to be illegal and/or based on
17 naked licenses.
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Reply - Trademark Priority - Unlawful Use 2
Case 2:16-cv-01636-RFB-CWH Document 68 Filed 08/25/17 Page 3 of 16
2 I. INTRODUCTION
3 The question of the legality of Affordable Cares management agreements with dentists
4 goes straight to the heart of whether Affordable Care has enforceable trademark rights. All of
5 Affordable Cares claimed rights in its dental services trademarks are purportedly through
6 oral licenses it has with independent dental offices around the country. If the financial
7 arrangements with those dental offices are illegal, this illegal activity cannot form the basis of
8 any trademark rights, and Affordable Cares has trademarks are unenforceable.
9 Before this case was filed, while the prior Trademark Trial and Appeal Board (TTAB)
10 proceeding was active, counsel for BDG repeatedly told counsel for Defendant that Affordable
13 Affordable Cares management agreement was an issue throughout this case and multiple
15 Despite the numerous discovery requests, Affordable Care refused to identify any
16 witnesses or produce any financial documents on this issue. Regardless, Defendant did produce
17 its 2007 Management Services Agreement which is illegal on its face (prior to this case being
18 filed Affordable Care produced an unsigned copy of this document which began the
20 Now for the first time, Affordable Care decides to bring forth a witnesses and a handful
21 of select documents to claim that the 2007 illegal management agreement was just a copy-and-
22 paste template and the fact that both it and the Nevada dental office signed the agreement was
24 Nevertheless, even if these witnesses and documents -- which were never identified in
25 discovery -- were considered (which they should not be) as set out in detail below,
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2 II. ARGUMENT
5 Affordable Cares assertion that trademark priority is not part of any of the claims or
6 defenses in this matter is without merit. Trademark priority is an issue in every trademark
7 infringement case. It is axiomatic in trademark law that the standard test of ownership is
8 priority of use. . . . [I]t is not enough to have invented the mark first or even to have registered it
9 first; the party claiming ownership must have been the first to actually use the mark in the sale
10 of goods or services. Sengoku Works Ltd. v. RMC Intl, Ltd., 96 F.3d 1217, 1219 (9th Cir.
11 1996).
12 Moreover, the specific allegations that Affordable Cares trademark is unenforceable and
13 that it has unclean hands due to a violation of Nevada law has been in issue throughout this case,
20 In addition to the pleadings, both before and after this lawsuit was filed, counsel for
21 BDG repeatedly informed Affordable Care that its management agreement with its Nevada
22 dentist was illegal under Nevada law. This is apparently what prompted Affordable Care to
23 amend its management agreement with its Nevada dentist and back-date it to January 1, 2016.
24 Attached as Exhibit 3 to this Reply is an email chain including an email from the Nevada
25 practice owner Dr. Cher Chang. In the email, dated June 1, 2016,
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Reply - Trademark Priority - Unlawful Use 4
Case 2:16-cv-01636-RFB-CWH Document 68 Filed 08/25/17 Page 5 of 16
7 It is unclear when this January 1, 2016 management agreement was signed by Dr.
8 Chang.
11 The argument set out in BDGs Motion for Partial Summary Judgment (Trademark
12 Priority - Unlawful Use) is a simple one, and one clearly within the pleadings of this case--
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15 Affordable Cares actions constitute the illegal practice of dentistry in Nevada and cannot form
18 by this Court
19 As set out in more detail in BDGs Motion to Strike, Affordable Care failed to name Mr.
20 Steelman as witnesses and failed to produce the financial information it now claims address
22 trademarks. This declaration and these documents should be stricken and not considered by this
23 court.
24 Not only was this witness not identified during discovery and these documents not
25 produced, BDG requested this information and Defendant Affordable Care refused to produce
26 it. Specifically, BDG requested an identification of all witnesses and documents related to
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Reply - Trademark Priority - Unlawful Use 5
Case 2:16-cv-01636-RFB-CWH Document 68 Filed 08/25/17 Page 6 of 16
3 Affordable Cares and any Nevada or California Licensees monthly and annual
4 net profit from goods for services sold under Affordable Care Marks from 2007 to
5 the present.
7 Care objects to this request as irrelevant to this action and not reasonably
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16 Please state in detail the factual basis, including, but not limited to,
17 identification of all documents and persons, all sums and amounts received by
20 Care objects to this Interrogatory because the revenue that Affordable Care has
21 received from its affiliated practices in Nevada and California is not relevant to
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Reply - Trademark Priority - Unlawful Use 6
Case 2:16-cv-01636-RFB-CWH Document 68 Filed 08/25/17 Page 7 of 16
2 Please state in detail the factual basis, including, but not limited to,
4 not limited to, fee-for-service methods of reimbursements paid to you and/or paid
8 with its affiliated practices in Nevada and California is not relevant to Plaintiffs
9 claims and defenses, or Affordable Cares counterclaims, which all relate to the
14 Affordable Care cannot refuse to produce this information or identify witnesses during
15 discovery and then attempt to get into evidence a new witness and select documents because it
18 Law
21 In addition to the fact that Affordable Cares surprise declaration and exhibits were
22 never produced and should not be considered, this untimely evidence contradicts the evidence
23 that is properly of record in this case, including the sworn testimony of Affordable Cares only
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Reply - Trademark Priority - Unlawful Use 7
Case 2:16-cv-01636-RFB-CWH Document 68 Filed 08/25/17 Page 8 of 16
8 This was echoed by Dr. Cher Y. Chang who owns the Nevada dental practice. She
9 testified as follows
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Reply - Trademark Priority - Unlawful Use 8
Case 2:16-cv-01636-RFB-CWH Document 68 Filed 08/25/17 Page 9 of 16
5 See Exhibit 6, Cher Y. Chang, DMD Deposition, p. 12, line 16 - p. 13, line 19.
6 The evidence and witnesses of record in this case, including Affordable Cares only
9 As set out in detail in BDGs Motion, this is a clear violation of Nevada law. See NRS
10 631.395 (A person is guilty of the illegal practice of dentistry or dental hygiene who . . . 10.
11 Except as otherwise provided in NRS 631.385, owns or controls a dental practice, shares in the
12 fees received by a dentist or controls or attempts to control the services offered by a dentist if
13 the person is not himself or herself licensed pursuant to this chapter.) emphasis added; See also
14 NRS 631.215(2)(h)(1) (stating that a person who provides goods or services to a dental practice
15 may not, [p]rovide such goods or services in exchange for payments based on a percentage or
17 A declaration from an undisclosed witnesses and documents should not be allowed into
18 evidence to attempt to contradict the documents of record in this case and the sworn testimony
19 of Affordable Cares only witnesses along with the sworn testimony of the Nevada dentist who
22 Documents the Arrangement between Affordable Care and the Nevada Dental
24 Even if this Court were to consider the declaration of Mr. Steelman and the undisclosed
25 Vegas Financial Statements and Vegas Fee Statements, the arrangement between Affordable
26 Care and its Nevada dental office appears to be illegal under Nevada law.
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Reply - Trademark Priority - Unlawful Use 10
Case 2:16-cv-01636-RFB-CWH Document 68 Filed 08/25/17 Page 11 of 16
1 (See 2016 Management Services Contract, Doc. 54-1 as Exhibit A-4, p. 21 AFCA 0009190).
6 Mr. Steelmans claim that the amounts paid by the Nevada dental practice are
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11 Affordable Cares arrangement with the Nevada dental office is analogous to a company
12 which provides services to a law firm, such as a runner service, making an agreement with a
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15 Affordable Cares
16 sham fixed fee simply does not stand up to scrutiny and is illegal under Nevada law.
17 Moreover, Affordable Care has not identified a single state where this type of arrangement
18 would be legal. Affordable Cares business practices appear to violate the laws of every, or
21 Affordable Cares arrangement with the Nevada dental office is illegal under Nevada
22 law and cannot form the basis of any trademark rights. CreAgri, Inc. v. USANA Health Scis.,
24 In response, Affordable Care argues that a case in the Western District of Washington,
25 Vosk Intl Co. v. Zao Gruppa Predpriyatij Ost, 2013 U.S. Dist. LEXIS 147011, which was an
26 appeal of a Trademark Trial and Appeal matter stands for the proposition that once a party has
27 obtained priority in a trademark subsequent illegal activities are irrelevant. That district court
28 case, however, is not similar to the case at bar. Vosk Intl Co involved a company that was
Reply - Trademark Priority - Unlawful Use 11
Case 2:16-cv-01636-RFB-CWH Document 68 Filed 08/25/17 Page 12 of 16
1 notified by the FDA of two beverage labeling defects-- one in 2005 involving a single shipment
2 of product that contained a color additive prohibited by the FDA and a second violation in 2008
3 involving an unspecified color additive. In contrast, in this case there is no evidence that
4 Affordable Care has made any legal use of its trademark for dental services. Affordable Care is
5 unable to supervise or oversee its licensees trademark use in all fifty states (naked licensing)
6 and it is apparently in financial arrangements with various dentists in violation of most, if not all
7 state laws.
8 Next, Affordable Care argues that its illegal financial arrangements might be
9 immaterial to its trademark rights. CreAgri, 474 F.3d at 633; S. California Darts Assn v.
10 Zaffina, 762 F.3d 921, 931 (9th Cir. 2014) (trademark protection might not be withheld on
11 account of unlawful conduct that is collateral, namely where there is an insufficient nexus
12 between the unlawful behavior and the use of the mark in commerce.).
13 Unlike S. California Darts Assn which involved a companys failure to incorporate and
14 was unrelated to the trademark at issue, the unlawful activity here relates directly to the
15 arrangement between Affordable Care and its licensee dental practices regarding the practice of
16 dentistry under the brand Affordable Dentures. Violating the Nevada dental statutes such that
17 the violations constitute the illegal practice of dentistry in Nevada is hardly collateral or
18 immaterial when the case at bar concerns trademarks for dental services.
21 Finally, Affordable Care argues vigorously that BDGs motion cannot be granted as
22 BDG has not shown when enforceable trademark rights began in Boston Dental Groups
23 Affordable Dental mark. Defendant alleges that BDGs Affordable Dental mark is descriptive
24 and therefore BDG must make a showing of acquired distinctiveness and secondary meaning.
26 meaning, however, are irrelevant to this case. BDG is not asserting trademark infringement
27 against Affordable Care. The analysis as to when BDG obtained a protectable mark -- or even if
28 it has a protectable mark -- would only be relevant if BDG was asserting a claim of trademark
Reply - Trademark Priority - Unlawful Use 12
Case 2:16-cv-01636-RFB-CWH Document 68 Filed 08/25/17 Page 13 of 16
1 infringement against Affordable Care. Only in that case would it be relevant as to when BDG
2 obtained enforceable trademark rights in relation to when the alleged infringement occurred. See
3 S. California Darts Assn 762 F.3d at 16-17 (when a trademark infringement claim is brought
4 based on a descriptive mark, whether the descriptive mark has acquired secondary meaning is
5 relevant to the first prong of a trademark infringement claim, namely whether the trademark
6 holder has a valid, protectable trademark); see also La Quinta Worldwide LLC v. Q.R.T.M., S.A.
7 de C.V., 762 F.3d 867 (9th Circuit 2014) (the strength of the alleged infringers mark in a
9 In this case, BDG, a company owned by a licensed Nevada dentist, is merely seeking a
10 declaratory judgment that Affordable Cares trademarks for dental services are invalid and
11 should be cancelled. Affordable Care (not BDG) filed a counterclaim for trademark
12 infringement. Thus, while Affordable Cares priority date in this case is when it first obtained
13 enforceable trademark rights in order to bring its counterclaim, the relevant priority date for
14 BDG is when it first began using its allegedly infringing mark, namely when it opened its first
16 As detailed above, Affordable Cares illegal practice of dentistry in Nevada was not
17 lawful commercial use and cannot form the basis of any trademark rights which pre-date BDGs
18 use of its Affordable Dental mark. Plaintiff Boston Dental Groups trademark rights in its
19 Affordable Dental mark, which began at least as early as January 2008, therefore have priority
21 This court should therefore grant partial summary judgment in BDGs favor on the issue
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Reply - Trademark Priority - Unlawful Use 13
Case 2:16-cv-01636-RFB-CWH Document 68 Filed 08/25/17 Page 14 of 16
1 IV. CONCLUSION
2 For the foregoing reasons, BDG respectfully requests that the Court grant partial
3 summary judgment in its favor on the issue of priority of trademark rights as it relates to
4 Defendants Counterclaims.
8
/s/ Mark Borghese
9 Mark Borghese, Esq.
10161 Park Run Drive, Suite 150
10 Las Vegas, Nevada 89145
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Reply - Trademark Priority - Unlawful Use 14
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1 CERTIFICATE OF SERVICE
2 I am a resident of Clark County, Nevada and am over the age of 18 years and not a party
3 to the action. My business address is: 10161 Park Run Drive, Suite 150, Las Vegas, Nevada,
4 89145.
5 On August 25, 2017, I served this document on the parties listed on the attached service
6 list via one or more of the methods of service described below as indicated next to the name of
20 I declare that under penalty of perjury under the laws of the State of Nevada that the
21 above is true and correct. I further declare that I am employed in the office of a member of the
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/s/ Mark Borghese
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An employee of BORGHESE LEGAL, LTD.
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Reply - Trademark Priority - Unlawful Use 15
Case 2:16-cv-01636-RFB-CWH Document 68 Filed 08/25/17 Page 16 of 16
1 SERVICE LIST
2
ATTORNEYS PARTIES METHOD OF
3 OF RECORD REPRESENTED SERVICE
4 Scott R. Cook, Esq. Attorneys for Personal service
Jonathan D. Blum, Esq. Defendant Email
5 Kolesar & Leatham E-File
400 South Rampart Blvd., Suite 400 Fax service
6 Las Vegas, NV 89145 Mail service
7 Email: scook@klnevada.com,
jblum@klnevada.com
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Edward F. Malone, Esq. Attorneys for Personal service
10 Scott J. Slavick, Esq. Defendant Email
Sharon E. Calhoun, Esq. E-File
11 Barack Ferrazzano Kirschbaum & Fax service
Nagelberg LLP Mail service
12 200 W. Madison St., Suite 3900
Chicago, IL 60606
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Email: edward.malone@bfkn.com,
14 sharon.calhoun@bfkn.com,
scott.slavick@bfkn.com
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