Elf Cocoon v. Philip Stein - Teslar Trademark Complaint PDF

Case 1:16-cv-20571-FAM Document 13 Entered on FLSD Docket 03/30/2016 Page 1 of 117
THE UNITED STATES DISTRICT COURT FOR THE

SOUTHERN DISTRICT OF FLORIDA
Miami Division
Case No. 16-cv-20571-FAM
ELF COCOON, LLC, an Indiana limited
liability company; ILONKA HAREZI,
individually; and COURTLAND REEVES,
individually,
Plaintiffs,
vs.
PHILIP STEIN HOLDING, INC.,
a Florida corporation f/k/a PHILIP STEIN
INC.; PSTEIN, INC., a Florida corporation
f/k/a TESLAR INSIDE CORPORATION;
WILHELM STEIN; and RINA STEIN,
Defendants.
____________________________________/
AMENDED COMPLAINT
Plaintiffs ELF COCOON, LLC (Elf), ILONKA HAREZI (Harezi), and
COURTLAND REEVES (Reeves and, collectively with Elf Cocoon and Harezi, Plaintiffs),
by and through undersigned counsel, hereby file their Complaint against PHILIP STEIN
HOLDING, INC. (Philip Stein), a Florida corporation formerly known as Philip Stein, Inc.,
PSTEIN, INC., a Florida corporation formerly known as Teslar Inside Corporation (Stein II),
Wilhelm Stein (Wilhelm), and Rina Stein (Rina and, collectively with Philip Stein, Stein II,
and Wilhelm, Defendants), and allege as follows:
1.
Plaintiffs are bringing this action as a result of infringement of Plaintiffs
trademark, counterfeiting, erosion of both Plaintiffs good will and the distinctiveness of
Plaintiffs mark, false association and misrepresentations engaged in by Defendants, unfair
competition, passing off, and trademark dilution.1 Plaintiffs are also bringing this matter as a
result of Defendants breach of a Settlement Agreement between the parties dated October 1,
2009.
PARTIES
2.
Plaintiffs Harezi and Reeves are officers and owners of Elf, an Indiana Limited
Liability Company. Said Plaintiffs are residents of Franklin, Tennessee.

3.
Elf is the owner of the famous TESLAR trademark, which was registered on
November 6, 2001 with the U.S. Patent and Trademark Office and issued U.S. Trademark
Registration No. 2,504,442 (the TESLAR Mark). The TESLAR Mark is incontestable
pursuant to 15 of the Lanham Act (15 U.S.C. 1065) and is a fanciful mark. A true and correct
copy of a printout from the U.S. Patent and Trademark Offices online database showing the
status of the TESLAR Mark is attached herein as EXHIBIT A.
4.
Elf has been the owner of the TESLAR Mark at all material times discussed
herein, having received an assignment of all right, title, and interest in and to the TESLAR
Mark from Reeves in September, 2003. Plaintiffs and/or their licensees have been using the
TESLAR Mark and trade name in interstate commerce since the original registration of said
mark in 2001. Plaintiffs and/or their licensees have displayed the TESLAR Mark with the
symbol and/or with the words Reg. U.S. Pat & Tm. Off. or Registered in U.S. Patent and
Trademark Office continuously since the issuance of the registration on November 6, 2001.
5.
Harezi and Reeves invented TESLAR technology in 1986, and same is
engineered to reinforce the human bodys electromagnetic biofield and produce an enhanced
natural earth signal associated with calm, relaxation, meditation, and enhanced performance.2
1
This list of Defendants bad acts is not exhaustive.

2
SCHLESINGER & ASSOCIATES, P.A.
800 BRICKELL AVENUE SUITE 1400 MIAMI, FLORIDA 33131 TELEPHONE 305.373.8993 FAX 305.373.8098
6.
Plaintiffs and/or their licensees have spent significant sums marketing and
offering products featuring the TESLAR Mark since its creation, which has given rise to
consumer demand for TESLAR items around the world. Marketing and promotion for the
TESLAR brand has included Internet and print advertising in the United States and abroad, as
well as trade shows such as the 2012 Hong Kong Watch Fair. As such, the TESLAR Mark has
become widely known both domestically and internationally.
7.
Indeed, the TESLAR Mark has become associated to such an extent with the
sale of timepieces related to personal well-being that, as discussed infra, consumers and retailers
make reference to the TESLAR Mark (both in the sale of products and in social media) even in
its absence from a product.
8.
The TESLAR Mark has become famous as a result of:

i. its distinctiveness;
ii. the duration and extent of its use in interstate commerce over an extended
period of time;
iii. the duration and extent of the marketing and publicity it has received
throughout the years, which has been significant;
iv. the geographical extent of the trading area in which it is used (same has
been global in nature);
v. the channels of trade for the goods with which it is and has been used;
Continued from previous page

2 Engineered to reinforce the human bodys electromagnetic biofield, the TESLAR chip can be
used to create a zero-point (or scalar) non-Hertzian, non-linear waveformthat is, a
waveform which is completely balanced in energywhen placed in proximity to a
battery (which creates an electric field) and a quartz crystal (which creates a magnetic
field). This zero-point waveform corresponds to the earths natural frequency and
produces a calming, meditative effect when placed on the wrist.
3
vi. the degree of recognition of the TESLAR Mark in the trading areas and
channels of trade in which it is and has been used;
vii. the registration of the TESLAR Mark on the U.S. Patent & Trademark
Offices Principal Register.
9.
Philip Stein, a Florida corporation with a principal place of business in Miami,
Florida, owns the PHILIP STEIN trademark. Philip Stein manufactures, markets, and sells
wristwatches and other products under the mark PHILIP STEIN.
10.
The PHILIP STEIN mark was originally filed for registration on the Principal
Register by Teslar Inside Corporation (discussed infra) on February 13, 2006. The PHILIP
STEIN mark was registered on December 19, 2006 with registration number 3,187,112.
Recently, another PHILIP STEIN mark was applied for on October 10, 2014, and same has
been published for opposition but has not yet been registered by the U.S. Trademark Office.
11.
Defendants Rina and Wilhelm are residents of Miami-Dade County, Florida, are
over the age of eighteen, and are otherwise sui generis. Rina and Wilhelm are a married couple.
12.
Defendant Stein II is also a Florida corporation with its principal place of business
in Miami-Dade County, Florida.

JURISDICTION AND VENUE
13.
This Court has subject matter jurisdiction over this action pursuant to 15 U.S.C.
1121 and 28 U.S.C. 1331, 1338 and 1367 because the action involves claims arising
under the federal Lanham Act (beginning at 15 U.S.C. 1051) and trademark laws of the United
States, as well as related state claims for unfair competition and violations of Florida law. This
Court also has jurisdiction over the subject matter of this action pursuant to a Settlement
4
Agreement dated October 1, 2009 wherein this Court retained jurisdiction to enforce said
agreement.
14.
Venue is proper in the Southern District of Florida pursuant to 28 U.S.C.
1391(b) because substantial parts of the events and/or omissions giving rise to the claims
asserted herein occurred in the Southern District of Florida, and Defendants Rina and Wilhelm
reside within the Southern Districts jurisdictional borders. Furthermore, Defendants Philip Stein
and Stein II have their principle places of business in this District. Venue is also proper pursuant
to the parties October 1, 2009 Settlement Agreement.
FACTUAL BACKGROUND: PRIOR VENTURE AND LITIGATION
15.
In or around 2002, as a result of the reputation and good will of both the
TESLAR Mark and the TESLAR technology, Harezi, Reeves, and Elf entered into a joint
venture with Rina, Wilhelm, and Philip Stein to place TESLAR technology chips inside the
PHILIP STEIN line of wristwatches.
16.
Watches bearing the TESLAR Mark have also been sold at luxury department
stores across the United States such as Bloomingdales, Neiman Marcus, and Nordstroms. Such
TESLAR watches have also been sold around the world in comparable stores. The watches
with TESLAR technology that were sold via the joint venture with Defendants were under the
brand PHILIP STEIN TESLAR.
17.
TESLAR-branded watches quickly attracted notoriety after launch, were worn
by famous celebrities, and were selected as Oprah Winfreys Favorite Things in 2003 and
2005. Defendant Wilhelm often discusses this publically even in currently pending litigation in
state courtwith no mention of the fact that the watch made famous as a gift from Madonna to
Oprahcontained TESLAR technology.
5
18.
As discussed below, Defendants unabashedly and incessantly misrepresent that
the watches selected by Oprah Winfrey in 2003 and 2005 contained their allegedly proprietary
technology when, in fact, the watches contained TESLAR technology.
19.
Although the aforementioned joint venture between Plaintiffs and Defendants was
run as a successful partnership under an entity named Teslar Inside Corporation (TIC), the
relationship soured, and Philip Stein, Rina, and Wilhelm purchased the interests of Harezi,
Reeves, and Elf (the TESLAR interests) in TIC in 2008 through a FINAL SETTLEMENT
AND STOCK PURCHASE AGREEMENT.
20.
Because of the TESLAR Mark, TICs name had to be changed to PStein, Inc.
(Stein II).
21.
So as to latch on to the image that PHILIP STEIN watches continued to offer
the same technology that they did during the partnership with Plaintiffs, the Defendants created
what they term Natural Frequency Technology (NFT) after the 2008 buyout.
22.
NFT purports to cause more vivid dreams,3 make people feel more relaxed, help
them sleep longer, is allegedly for the flowing of the Chi,4 and can be utilized to turn metal,
glass, and ceramic5 into an antenna...[to]pick up natural, beneficial frequencies, enhance
them, and send them to our bodies.6
23.
A Philip Stein representative also made a statement to the effect that studies have
been conducted as to NFT at Stanford University and at Kennedy Space Center, a facility of the
Statement of Dr. Michael Breus from http://www.thesleepdoctor.com.
4 Statement of Wilhelm in a video entitled Philip Stein Watches Will Stein President of the
Philip Stein Group by Star Luxe.
5 Statement of Wilhelm in a video entitled Philip Stein Sport Diamond Collection Natural
Frequency Launch @ 10 N Orchard Singapore.
6 Id. at fn. 4.
3
6
National Aeronautics and Space Administration (which, apparently, allocated time away from
interplanetary space exploration, extragalactic astrophysics, and cosmology so as to study a
PHILIP STEIN product).7
24.
Unfortunately, since the 2008 purchase of the aforementioned interests by Rina,
Wilhelm, and Philip Stein, the conduct and activities of Defendants has been reprehensible,
culminating in a myriad of litigation by both sides. One such lawsuit was filed on April 6, 2009
(Case No. 09-20893 CIV-HUCK) and was settled by the parties on October 1, 2009. The 2009
litigation shall be referred to herein as the federal litigation.
25.
Plaintiffs brought the original Complaint in the federal litigation upon learning of
Defendants unauthorized manufacture and distribution of wristwatches and trade dress which
utilized the TESLAR Mark and which falsely stated connections with Plaintiffs, their brand,
and their technology.
26.
On or about October 1, 2009, Plaintiffs and Defendants filed a Joint Stipulation of
Dismissal with Prejudice in the federal litigation.

27.
Defendants breached the 2009 Settlement Agreement by violating multiple
provisions of same, giving rise to causes of action by Plaintiffs against Defendants for breach of
the 2009 Settlement Agreement (as well as other causes of action).
28.
Also, pursuant to the terms of the 2009 Settlement Agreement and prior to
litigation, the parties were to make a good faith attempt to settle any differences arising out of the
Statement of Philip Stein representative in a video entitled Philip Stein Sport Diamond
Collection Natural Frequency Launch @ 10 N Orchard Singapore.
7
agreement through mediation. Said mediation took place on January 8, 2016 and an impasse was
reached.
GENERAL ALLEGATIONS: DEFENDANTS CONDUCT
29.
As in 2008-09, Plaintiffs have again learned that, years after PHILIP STEIN
TESLAR inventory should have been exhausted, Defendants have been continuing to
manufacture and sell PHILIP STEIN watches bearing the TESLAR Mark, have been using
the TESLAR Mark in commerce, and have also utilized the TESLAR Mark on product
packaging.
30.
In 2012, Defendants also interfered with the sale of products stemming from a
subsequent TESLAR venture with a Hong Kong entity,8 and Defendants conduct is the subject
of a state court case in the Eleventh Judicial Circuit Court in and for Miami-Dade County,
Florida, case number 2016-000741 CA 11.
31.
Moreover, subsequent to the 2009 Settlement Agreement, Defendants have been
purposefully passing off NFT as being TESLAR technology. This has occurred all over the
world and on the Internet, and Defendants shameless conduct is easily gleaned from the plethora
of materials widely available to this day online via websites such as YouTube.com. This is
especially damaging to Plaintiffs because, upon information and belief, most PHILIP STEIN
products are sold via the Internet, and, as such, consumers are likely to often be exposed to
Defendants statements and bad acts while in the course of looking to purchase timepieces.
32.
Several of the clear misrepresentations by the Defendants are as follows:
From 2010-2012, the TESLAR trademark and technology was licensed to be utilized in
CHOUETTE brand watches.
8
i. In 2003, actually, we put [NFT] into our watch brand and into our
watches and thats where it all started then. (Statement of Wilhelm in
video entitled Founder of Philip Stein talks about responsible luxury.)
ii. We were introduced to a technology frequency technologyin 2002.
(Statement of Wilhelm in video entitled Hong Kong Watch and Clock
Fair Honorary Guest Speaker Will Stein.)
iii. It all started, actually, in 2002, when, uh, my wife, uh, Rina and I were
introduced to frequency technology and, you know, we didnt know
anything about it but we were told that the frequency technology can
actually impact positively, uh, on your body. (Statement of Wilhelm in
video entitled Philip Stein Sport Diamond Collection Natural Frequency
Launch @ 10 N Orchard Singapore.)
iv. Well, Oprah, actually, she was one of the first personalities or celebrities,
um, that came across our brand and, uh, she called us and she said I loved
the fact that it has the dual time zone, cuz, you know, when she travels,
even from east to west coast, you have the ability to change, uh, the
different time zones. She liked the interchangeability, uh, of the bands
and, you know, the fact that it had the natural frequency technologies and
she introduced it on her show in, uh, in November of 2003, um, Oprahs
favorite things. (Statement of Wilhelm in video entitled Philip Stein
Watches Will Stein President of the Philip Stein Group.)
v. We started the company in 2003 in the United States and we started off
as a watch brand, uh, but its not just any watch but it was a watchit is a
watchwith natural frequency technology and its so to speak a wellbeing benefit watch. (Statement of Wilhelm in video entitled TFWA
2013 The Philip Stein Story with Robin Steinberg National Critics
Choice.)
33.
The statements above are purposeful misrepresentations designed to cause
consumer confusion between the TESLAR brand technology and NFT (and the PHILIP
STEIN brand).
34.
The statements cause a false association in the minds of the consuming public
between the TESLAR brand technology previously installed in PHILIP STEIN watches and
the current NFT that is used. Within the statements, Wilhelm, on behalf of himself and all
Defendants, outright misleads the consuming public that NFT has been in PHILIP STEIN
9
watches since 2003, thus passing off NFT and PHILIP STEIN as TESLAR so as to unfairly
take advantage of the marks good will and unfairly compete with TESLAR.
35.
NFT (and, thus PHILIP STEIN) has been the subject of ridicule by both
skeptics and litigants across the country.

36.
In Cara Shapiro v. Philip Stein Holding, Inc., case no. BC465645 (Superior Court
for the State of California for the County of Los Angeles), an individual filed suit on behalf of
herself and all consumers of PHILIP STEIN products for violations of the California Health &
Safety Code and Consumer Legal Remedies Act, false advertising, fraud, and other remedies
under California law. The Complaint in Cara is attached hereto as EXHIBIT B and is available
in the public records of the California judicial system, which, in turn, are available to any person
with Internet access, anywhere in the world.
37.
The allegations in the Cara Complaint are scathing, accusing Philip Stein of
culpability as a result of statements made with regard to NFT. Some of the allegations are as
follows:
i. In selling Defendants Products, Defendants made similar and consistent
misrepresentations through Defendants websites, in-store marketing, and
other forms of advertising, that the Natural Frequency Technology
contains properties that it does not. See Cara Complaint at 4.
ii. In lacking the requisite scientific substantiation required by law,
Defendants have committed per se violations of[California law]and
committed fraud. Id. at 5.
iii. In addition, Defendants advertising for the Defendants Products
violates numerous Federal Trade Commission (FTC) Guidelines on the
proper and legal way to advertise health devices, including the FTCs
recent Guides Concerning the Use of Endorsements and Testimonials in
Advertising. Id. at 6.
iv. As a result of Defendants marketing practices, Plaintiff and members of
the class have suffered injury in fact and have lost money by purchasing a
product that is scientifically impossible to be as advertisied. Id. at 7.
10
v. The complete absence of reliable scientific proof that the Natural

Frequency Technology does anything for consumers is equivalent to
Defendants selling consumers nothing more than an expensive sugar-pill.
Id.
vi. Defendants affirmatively misrepresented the health benefits of the
Defendants Products in order to convince the public to purchase and use
them, resulting in profits to Defendants, all to the damage and detriment of
the consuming public. Id. at 17.
vii. Given the complete lack of scientific evidence, any anecdotal reports of
the Defendants Products providing any of the advertised benefits is
nothing more than a demonstration of the placebo effect and cannot
serve as a legitimate scientific basis to support Defendants claims for
Defendants Products. Id. at 25.
38.
Clearly, every instance wherein Defendants pass off their technology as Plaintiffs
TESLAR-branded technology causes an association between both trademarks that harms

Plaintiffs reputation, and it also undermines the distinctiveness of Plaintiffs mark.
39.
The consumer confusion that is stemming from Defendants acts can be easily
demonstrated. A search for the words Philip Stein, Teslar, or Philip Stein Teslar on social
media sites such as Twitter.com, on auction websites such as eBay.com, or through a search
engine immediately reveals how consumers have been made to believe that the TESLAR Mark
and technology remain available within PHILIP STEIN products and/or are associated with
PHILIP STEIN products to this day.
40.
The attached COMPOSITE EXHIBIT C showcases how consumers are
referring to PHILIP STEIN as Philip Stein Teslar even in the complete absence of the
TESLAR Mark anywhere on the product or its packaging. Indeed, as the picture below shows,
11
even sophisticated jewelry dealers such as J.R. Dunn Jewelers have been and are confusing the
two:10
Again, this is the result of the continuous, on-going, and rampant misrepresentations by
Defendants and the resulting infringement upon Plaintiffs mark and good will.
41.
Perhaps the most flagrant violation of Plaintiffs trademark rights by Defendants
is the creation and sale of counterfeit products and trade dress that have been sold and distributed
around the world.
42.
Pictured herein is a watch that was not sold, distributed, or manufactured for
distribution during the PHILIP STEIN TESLAR joint venture. The watch is referred to as the
Philip Stein Mens Teslar Sports Rubber Strap Chronograph Watch (the race track watch),
which, as demonstrated by the attached COMPOSITE EXHIBIT D, was advertised for sale in
10
The picture embedded in the instant Complaint is a J.R. Dunn advertisement for PHILIP
STEIN TESLAR but showing conventional PHILIP STEIN watches that should have
no association to TESLAR.
12
Esquire Magazine and also sold subsequent to October 2009 via the Internet on websites such as
Overstock.com and Ashford.com.
The race track watch is, by definition, a counterfeit 11 product as it purports to be a genuine
TESLAR item and is not.
43.
Defendants also created a subsequent product similar to the race track watch but
without the TESLAR Mark. Unfortunately, consumer confusion with relation to the origin of
the race track watch continues as resellers and consumers to this day believe the later watch is
also a TESLAR item. See the ebay.com listing attached herein as part of COMPOSITE
EXHIBIT C.
44.
Moreover, although Defendants represented in the October 1, 2009 Settlement
Agreement that at that time they only had 76 PHILIP STEIN TESLAR watches in inventory,
there are hundreds of watches bearing the TESLAR Mark being advertised on Internet
websites, such as Amazon.com. Many of these watches for sale are represented to have
11
The Lanham Act defines the term counterfeit in the trademark context: A counterfeit is a
spurious mark which is identical with, or substantially indistinguishable from, a
registered mark.
13
TESLAR technology when, in fact, they have NFT and thereby injure the TESLAR brand by
creating a false association (regardless of dilution).
45.
Defendants have purposefully refrained from instructing their dealers as to the
fact that NFT is being used in PHILIP STEIN watches in lieu of TESLAR chips, a
requirement under Section 2(a) of the 2009 Settlement Agreement.
46.
Although Section 2(a) of the October 1, 2009 Settlement Agreement required
Defendants to instruct their active distributors and resellers to remove all point of sale materials
bearing the TESLAR mark from public display, watches have been sold in the Caribbean with
NFT but in boxes that utilize the TESLAR Mark.
47.
Defendants have also failed to take commercially reasonable steps to ensure their
active distributors and resellers remove all point of sale materials which bear the TESLAR
mark, and Defendants failed to take steps to ensure that both they, as parties to the 2009
Settlement Agreement, and their active distributors and resellers did not use the TESLAR
Mark in commerce.
48.
Furthermore, Defendants are using the TESLAR Mark to sell and advertise their
products on their own website, philipstein.com.

49.
As the below screen shots of the PHILIP STEIN homepage evince, the
TESLAR Mark is listed as a search result on the PHILIP STEIN website and is being used as
a meta-tag, and, when clicked, the results are PHILIP STEIN items that have nothing to do
with Plaintiffs, their mark, or their brand.
14
The search results for Teslar mens watch list at least one item in every product category on
the PHILIP STEIN homepage. Although the words are difficult to see because the central
15
banner image on the PHILIP STEIN homepage partially obscures results,12 the word Teslar
appears no less than twenty-two times as a proposed search term/tag on the homepage. Indeed,
even words associated solely with TESLAR technology and not NFT such as the terms
scalar wave and quantum technologyalso appear with the TESLAR Mark.
50.
As Plaintiffs have discovered, use of the TESLAR Mark in commerce by
Defendants and their distributors/resellers comes in varying forms, from listing the mark on
products and Internet sale displays to using the mark as meta-tags in the source code of Internet
pages in violation of Plaintiffs trademark rights. See attached EXHIBIT E, a report dated
September 11, 2015 which catalogues various use of the TESLAR Mark in source code and on
the Internet to sell PHILIP STEIN products.
51.
The aforementioned September 11, 2015 report outlines that the TESLAR Mark
is being used as a meta-tag on the pages of several PHILIP STEIN distributors such as
Nordstroms, Topper Jewelers, Neiman Marcus, and Gemnation. The use of the TESLAR
Mark in this way causes not only source confusion, but also initial interest confusion that drives
income-generating Internet traffic to the websites of both Defendants and the sellers of PHILIP
STEIN products.
52.
On or about May of 2015, Plaintiffs representative, Helen Williams
(Williams), inquired as to and purchased a PHILIP STEIN watch over the Internet that was
advertised as containing a TESLAR chip. The watch was not manufactured prior to October
2009, and is in fact one of Defendants newer watch models, FRUITZ.
12
When the central image of the homepage fades to a different picture, the obscuration wanes
and the other search results/tags are clearly visible.
16
53.
The representative of the website, Ashford.com, whom Williams chatted with
online, specifically explained that the website purchased the watches directly from the
manufacturer (Philip Stein), and also that the PHILIP STEIN watches had TESLAR chips in
them. The watch was advertised on the website as a PHILIP STEIN TESLAR watch, and
Williams copied and pasted the watch advertisement information from the website page for the
particular watch into the chat to confirm same. Subsequently, Williams received an email from
Ashford.com stating as follows:
This is in response to your feedback that the watch you received was advertised as
having Teslar technology and when you received it it shows as having natural
frequency technology. We have been in touch with the manufacturer and they
have assured us that it is the same technology. If you would like to contact them
yourself to confirm you can do so at:
Philip Stein
169 East Flagler St
Suite 1500
Miami, Fl 33131
855-533-3939
A true and correct copy of the chat log and email are attached herein as EXHIBIT F.
54.
Naturally, so as to confuse the public as to what is and has been inside PHILIP
STEIN watches over the years, Defendants have also failed to provide information on their
website (as required by Section 4 of the Settlement Agreement) that it no longer uses TESLAR
chips in new watches and, instead, uses NFT.
55.
Additionally, although Defendants were required to order a watch strap machine
to remove the TESLAR marking from watch straps, there is no evidence that such a machine
has been ordered, and there are continuing sales of straps bearing the TESLAR mark on the
Internet.
17
56.
As described above, the unlicensed and unauthorized use in commerce of the
TESLAR Mark and trade name by Defendants has caused massive consumer confusion, is
likely to continue causing same, and has diluted the TESLAR Mark and brand by associating it
with Plaintiffs NFT technology. Defendants have also infringed upon Plaintiffs rights in the
TESLAR Mark by blurring its distinctiveness and engaging in conduct which was designed
toand actually didsecure for Defendants the good will associated with and attributable to the
TESLAR Mark.
57.
The goodwill associated with the TESLAR Mark and brand is being, and will
continue to be, negatively and severely impacted if Defendants are not prohibited from engaging
in the aforementioned activity that creates a likelihood of consumer confusion about the origin of
products, the sponsorship of products, and the association between sources.
58.
Defendants actual use of Plaintiffs protected trademark and their attempts to
misrepresent and latch onto the good will of the TESLAR brand and technology both before
and after the 2009 Settlement Agreementclearly demonstrates a likelihood that Defendants
will continue to dilute and harm the TESLAR Mark, and, as such, that Plaintiffs would be
harmed if an injunction were not to issue. The high probability of harm is clearly evinced by the
litany of infringing activities the Defendants have historically engaged in despite multiple
promises in the 2008 STOCK PURCHASE AGREEMENT and the 2009 Settlement Agreement
to refrain from doing so.
59.
Plaintiffs are entitled to recover their attorneys fees based upon the terms of the
2009 Settlement Agreement between the parties, as well as a result of Defendants willful,
wanton, and reckless conduct, which renders the instant case exceptional as defined in 15
U.S.C. 1117(a) (Lanham Act 35).
18
60.
All conditions precedent to this action have been satisfied, waived, excused, or
performance would be futile.

COUNT I
BREACH OF SETTLEMENT AGREEMENT
61.
Plaintiffs re-allege paragraphs 1 through 60 as if they were specifically set forth
herein and further allege as follows.

62.
This is an action for breach of the 2009 Settlement Agreement, a true and correct
copy of which is attached herein as EXHIBIT G.

63.
The October 1, 2009 Settlement Agreement resolved the prior litigation between
the same parties involved in the instant case, and it was executed by Plaintiff Harezi as
Managing Director of Plaintiff Elf, Plaintiff Harezi in her individual capacity, Plaintiff Reeves in
his individual capacity, Defendant Wilhelm in his capacity as President of Defendant Philip Stein
and as President of Defendant Stein II, Defendant Rina in her individual capacity, and Defendant
Wilhelm in his individual capacity.13
64.
By engaging in the following activities,14 Defendants have breached the 2009
Settlement Agreement:
i. using the TESLAR mark in interstate and international commerce
without authorization or license;
ii. engaging in misrepresentations and making false statements designed to
associate TESLAR with NFT (and, generally, the PHILIP STEIN
brand);
Although the signatures of Defendants Rina and Wilhelm are not on the signature page, they
initialed pages 1-12 of the 2009 Settlement Agreement in their individual capacities.
14 This list of Defendants acts in violation of the Settlement Agreement is not exhaustive.
13
19
iii. creating, distributing, and selling counterfeit products and other products
bearing the TESLAR mark;
iv. failing to instruct sellers, distributors, and re-sellers of PHILIP STEIN
products as to the fact that NFT is being utilized in PHILIP STEIN
watches in lieu of TESLAR chips;
v. failing to take commercially reasonable steps to ensure that active
distributors and resellers remove point of sale materials bearing the
TESLAR mark;
vi. failing to provide information on its website that it no longer uses
TESLAR chips in new watches and, instead, uses NFT;
vii. failing to order the required watch strap machine.
65.
The aforementioned actions breach, at minimum, the following provisions of the
Settlement Agreement: Section 2, Section 4, Section 7, and Section 13.

66.
The 2009 Settlement Agreement is/was supported by adequate and sufficient
consideration, namely the prior resolution of the litigations and promises exchanged by the
parties.
67.
Plaintiffs have fulfilled all of their obligations under the 2009 Settlement
Agreement.
68.
As described, Defendants have breached the 2009 Settlement Agreement.
69.
Defendants acts have been willful, wanton, and intended to benefit Defendants at
Plaintiffs expense.
20
70.
As a direct and proximate result of Defendants breach of the 2009 Settlement
Agreement, Plaintiffs have been damaged in an amount to be proven at trial, but believed to be
not less than $10 million USD ($10,000,000.00).
WHEREFORE, Plaintiffs respectfully request that this Honorable Court enter a
judgment in their favor for damages, interest, costs and attorneys fees (pursuant to both Section
11(b) of the Settlement Agreement and 15 U.S.C. 1117), and any such other and further relief
as this Honorable Court deems just and proper.
COUNT II
TRADEMARK INFRINGEMENT LANHAM ACT 32
71.
Plaintiff Elf re-alleges paragraphs 1 through 60 as if they were specifically set
forth herein and further alleges as follows.

72.
Plaintiff Elf is the owner of a federal trademark registration for the mark
TESLAR, a mark which is itself both fanciful and inherently distinctive. The TESLAR mark
has been used in interstate commerce for goods and services for an extended period both prior to
and subsequent to registration with the U.S. Patent & Trademark Office.
73.
As a result of its registration of the TESLAR Mark, extensive use of the mark in
interstate and international commerce, and widespread marketing and advertising of the mark
and its products, Plaintiff Elf has created a strong association in the minds of consumers between
the TESLAR Mark and the sale of wristwatches, timepieces, and well-being technology
embedded in wristwatches and timepieces.
74.
Without Plaintiff Elfs authorization, consent, and without any license whatsoever
from Plaintiff Elf, Defendants have used the TESLAR Mark and/or marks that are confusingly
similar to the TESLAR Mark to promote its own products, to sell its own products, and to
21
improperly create an association between the TESLAR Mark and brand, TESLAR
technology, the PHILIP STEIN brand, and Philip Steins NFT.
75.
Defendants
acts
which
include
counterfeiting
and
purposeful
misrepresentationshave caused actual consumer confusion and have deceived consumers as to

the source, sponsorship, endorsement, and affiliation of Defendants goods and have deceived
consumers into believing that Defendants goods are associated with, endorsed, sponsored, or
authorized by Plaintiff Elf and the TESLAR Mark/brand.
76.
As a result of Defendants aforementioned conduct and activities, Plaintiff Elf has
suffered monetary and other damages.

77.
Defendants unlawful acts have been willful, wanton, and intended to benefit
Defendants at Plaintiff Elfs expense and the expense of the TESLAR Mark and brand.
78.
Defendants acts constitute trademark infringement in violation of 15 U.S.C.
1114 (Lanham Act, 32).

79.
There is no adequate remedy at law to fully compensate Plaintiff Elf and make it
whole for the damages that have been caused by Defendants unlawful acts and any subsequent
and additional infringement of Plaintiff Elfs TESLAR Mark by Defendants, unless future
unlawful acts and infringement of this nature are permanently enjoined by this Court.
80.
All of Defendants infringing activities have been performed through use in
interstate and international commerce.

81.
Given all of the aforementioned, this is an exceptional case under 15 U.S.C.
1117.
WHEREFORE, Plaintiff Elf prays for judgment against defendants for damages
including Defendants profits, damages sustained by Plaintiff Elf, damages in an amount of three
22
times Defendants profits pursuant to 15 U.S.C. 1117(b) or statutory damages under 15 U.S.C.
1117(c) (whichever is greater), interests, costs, attorneys fees, and any other further relief as
the Court deems just and honorable.
COUNT III
COUNTERFEITING LANHAM ACT 32
82.

83.
Plaintiff Elf is the owner of a federal trademark registration for the mark
TESLAR, a mark which is itself both fanciful and inherently distinctive. The TESLAR mark
has been used in interstate commerce for goods and services for an extended period both prior to
and subsequent to registration with the U.S. Patent & Trademark Office.
84.
As a result of its registration of the TESLAR Mark, extensive use of the mark in
interstate and international commerce, and widespread marketing and advertising of the mark
and its products, Plaintiff Elf has created a strong association in the minds of consumers between
the TESLAR Mark and the sale of wristwatches, timepieces, and well-being technology
embedded in wristwatches and timepieces.
85.
Without Plaintiff Elfs authorization, consent, and without any license whatsoever
from Plaintiff Elf, Defendants have created products sold in interstate and international
commerce such as the race track watchthat use the TESLAR Mark and which purport to
emanate from Plaintiff Elf but which in fact do not.
86.
The products created by Defendants bearing the unauthorized TESLAR Mark
i.e., the counterfeit goodsare for the same goods and services for which the TESLAR Mark
is registered.
23
87.
Defendants acts have caused actual consumer confusion and have deceived
consumers as to the source, sponsorship, endorsement, and affiliation of Defendants goods and
have deceived consumers into believing that Defendants goods bearing the TESLAR Mark are
genuine TESLAR Mark products.
88.
As a result of Defendants aforementioned conduct and activities, Plaintiff Elf has
suffered monetary and other damages.

89.
Defendants unlawful acts have been willful, wanton, and intended to benefit
Defendants at Plaintiff Elfs expense and the expense of the TESLAR Mark and brand.
90.
Defendants actions constitute unlawful and actionable counterfeiting of a
trademark.
91.
There is no adequate remedy at law to fully compensate Plaintiff Elf and make it
and additional counterfeiting of Plaintiff Elfs TESLAR Mark by Defendants, unless future
unlawful acts and infringement of this nature are permanently enjoined by this Court.
92.
All of Defendants activities have been performed through use in interstate and
international commerce.
93.
1117.
WHEREFORE, Plaintiff Elf prays for judgment against defendants for damages
including Defendants profits, damages sustained by Plaintiff Elf, damages in an amount of three
times Defendants profits pursuant to 15 U.S.C. 1117(b) or statutory damages under 15 U.S.C.
1117(c) (whichever is greater), interests, costs, attorneys fees, and any other further relief as
the Court deems just and honorable,
24
COUNT IV
UNFAIR COMPETITION LANHAM ACT 43(a)
94.

95.
Defendants above-referenced activities such as the passing off of NFT as
TESLAR technology, false associations and designations of origin for products, and improper
use of the TESLAR Markcause irreparable injury to Plaintiffs in violation of 15 U.S.C.
1125(a) (Lanham Act, 43(a)).
96.
Defendants conduct has deceived and unless restrained will continue to
deceivethe consumers and the public at large, and Defendants conduct has injured and (unless
restrained) will continue to injure Plaintiffs and the public, including consumers, causing
damages to Plaintiffs in an amount to be determined at trial, as well as other irreparable injury to
the goodwill and reputation of Plaintiff Elf and the TESLAR Mark and brand.
97.
Defendants conduct has been designed to limit the competition it received from
Plaintiffs, as well as to unfairly compete with Plaintiffs by latching onto the good will of the
TESLAR brand by creating false and misleading associations. All of the aforementioned
actions by Defendants from passing off one technology as the otheris utterly unjust and
unfair.
98.
Defendants actions have caused mistake, have deceived as to affiliation,
connection, and association with the TESLAR Mark and TESLAR products, and have
deceived as to the origin, sponsorship, and approval of PHILIP STEIN products by Plaintiffs
and the TESLAR brand.
99.
Defendants have also engaged in commercial advertising and promotions that
misrepresent the nature, characteristics, and qualities of their products by improperly associating
25
PHILIP STEIN products and technology with that of Plaintiffs goods, services, and
commercial activities.
100.
There is no adequate remedy at law to fully compensate Plaintiffs and make them
and additional unfair competition by Defendants, unless future unlawful acts and unfair
competition of this nature are permanently enjoined by this Court.
101.
All of Defendants improper activities have been performed through use in
interstate and international commerce.

102.
Plaintiffs have been damaged by Defendants bad acts.
103.
1117.
WHEREFORE, Plaintiffs respectfully request that this Court enter a judgment in their
favor for damages, costs, interest, attorneys fees, and any such other and further relief as this
Court deems just and proper.
COUNT V
UNFAIR COMPETITION FLORIDA LAW
104.

105.
Defendants above-referenced activities such as the passing off of NFT as
TESLAR technology, false associations and designations of origin for products, and improper
use of the TESLAR Markcause irreparable injury to Plaintiffs.
106.
Defendants conduct has deceived and unless restrained will continue to
deceivethe consumers and the public at large, and Defendants conduct has injured and (unless
restrained) will continue to injure Plaintiffs and the public, including consumers, causing
26
damages to Plaintiffs in an amount to be determined at trial, as well as other irreparable injury to

the goodwill and reputation of Plaintiff Elf and the TESLAR Mark and brand.
107.
Defendants conduct has been designed to limit the competition it received from
Plaintiffs, as well as to unfairly compete with Plaintiffs by latching onto the good will of the
TESLAR brand by creating false and misleading associations. All of the aforementioned
actions by Defendants such as passing off one technology as the otheris utterly unjust and
unfair.
108.
Defendants actions have caused mistake, have deceived as to affiliation,
connection, and association with the TESLAR Mark and TESLAR products, and have
deceived as to the origin, sponsorship, and approval of PHILIP STEIN products by Plaintiffs
and the TESLAR brand.
109.
Defendants have also engaged in commercial advertising and promotions that
misrepresent the nature, characteristics, and qualities of their products by improperly associating
PHILIP STEIN products and technology with that of Plaintiffs goods, services, and
commercial activities.
110.
There is no adequate remedy at law to fully compensate Plaintiffs and make them
and additional unfair competition by Defendants, unless future unlawful acts and unfair
competition of this nature are permanently enjoined by this Court.
111.
All of Defendants improper activities have been performed through use in
intrastate, interstate, and international commerce.

112.
Plaintiffs have been damaged by Defendants bad acts.
27
WHEREFORE, Plaintiffs respectfully request that this Honorable Court enter a

judgment in their favor for damages, costs, interest, attorneys fees, and any such other and
further relief as this Honorable Court deems just and proper.
COUNT VI
TRADEMARK DILUTION LANHAM ACT 43(c)
113.

114.
The actions of Defendants as described supra have diluted the reputation,
distinctiveness, and value of Plaintiff Elfs famous TESLAR Mark.

115.
Defendants misrepresentations and statements that associate NFT with the
TESLAR trademark and the TESLAR technology cause dilution by tarnishment.

116.
Defendants aforementioned activities also cause dilution by blurring by
impairing the distinctiveness of the TESLAR trademark.

117.
Defendants, in connection with the marketing and promotion of their goods,
services, and the conduct of their business, have used in interstate and international commerce
the words, terms, names, symbols or any combinations thereof related to Plaintiff Elf famous
TESLAR trademark.
118.
Defendants conduct was willfully intended and targeted to tarnish the reputation,
distinctiveness, and value of Plaintiff Elfs famous TESLAR trademark.

119.
Defendants violations of the 43(c) of the Lanham Act have damaged Plaintiff
Elf and will continue damaging said party unless enjoined by the Court.
120.
Plaintiff Elf has suffered monetary damages as a result of Defendants unlawful
acts in an amount to be determined at trial.

121.
This is an exceptional case under 15 U.S.C. 1117.

28
WHEREFORE, Plaintiff respectfully requests that this Court enter a judgment in its
favor for damages, costs, interest, attorneys fees, and any such other and further relief as this
Court deems just and proper.
COUNT VII
TRADEMARK DILUTION Fla. Stat. Sec. 494.151
122.

123.
The actions of Defendants as described supra have diluted the reputation,
distinctiveness, and value of Plaintiff Elfs famous TESLAR Mark.

124.
Defendants misrepresentations and statements that associate NFT with the
TESLAR trademark and the TESLAR technology cause dilution by tarnishment.

125.
Defendants aforementioned activities also cause dilution by blurring by
impairing the distinctiveness of the TESLAR trademark.

126.
Defendants, in connection with the marketing and promotion of their goods,
services, and the conduct of their business, have used in intrastate (in Florida), interstate, and
international commerce the words, terms, names, symbols or any combinations thereof related to
Plaintiff Elf famous TESLAR trademark.
127.
Defendants conduct was willfully intended and targeted to tarnish the reputation,
distinctiveness, and value of Plaintiff Elfs famous TESLAR trademark.

128.
Defendants violations of Plaintiff Elfs trademark rights have damaged Plaintiff
Elf and will continue damaging said party unless enjoined by the Court pursuant to Fla. Stat.
495.151.
129.
Plaintiff Elf has suffered monetary damages as a result of Defendants unlawful
acts in an amount to be determined at trial.

29
WHEREFORE, Plaintiff respectfully requests that this Court enter an injunction against
Defendants, as well as a judgment in its favor for damages, costs, interest, attorneys fees, and
any such other and further relief as this Court deems just and proper.
JURY DEMAND
Plaintiffs demand a jury trial on all causes of action alleged herein which are triable by
jury.
Dated: March 9, 2016.
Respectfully submitted,
Attorneys for Plaintiff
800 Brickell Avenue, Suite 1400
Miami, FL 33131
Phone: (305) 373-8993
Facsimile: (305) 373-8098
E-mail: mjs@mjsjd.com
E-mail: rjimenez@mjsjd.com
E-mail: eservice@mjsjd.com
By:
/s/ Michael J. Schlesinger
MICHAEL J. SCHLESINGER
Florida Bar No. 141852
ROBERT R. JIMENEZ
Florida Bar No. 72020
30
EXHIBIT G

Elf Cocoon v. Philip Stein - Teslar Trademark Complaint PDF

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Case 1:16-cv-20571-FAM Document 13 Entered on FLSD Docket 03/30/2016 Page 1 of 117

THE UNITED STATES DISTRICT COURT FOR THE

Plaintiffs are bringing this action as a result of infringement of Plaintiffs

Case 1:16-cv-20571-FAM Document 13 Entered on FLSD Docket 03/30/2016 Page 2 of 117

Liability Company. Said Plaintiffs are residents of Franklin, Tennessee.

Harezi and Reeves invented TESLAR technology in 1986, and same is

This list of Defendants bad acts is not exhaustive.

Case 1:16-cv-20571-FAM Document 13 Entered on FLSD Docket 03/30/2016 Page 3 of 117

The TESLAR Mark has become famous as a result of:

Continued from previous page

Case 1:16-cv-20571-FAM Document 13 Entered on FLSD Docket 03/30/2016 Page 4 of 117

Philip Stein, a Florida corporation with a principal place of business in Miami,

in Miami-Dade County, Florida.

Case 1:16-cv-20571-FAM Document 13 Entered on FLSD Docket 03/30/2016 Page 5 of 117

Venue is proper in the Southern District of Florida pursuant to 28 U.S.C.

TESLAR-branded watches quickly attracted notoriety after launch, were worn

Case 1:16-cv-20571-FAM Document 13 Entered on FLSD Docket 03/30/2016 Page 6 of 117

As discussed below, Defendants unabashedly and incessantly misrepresent that

So as to latch on to the image that PHILIP STEIN watches continued to offer

Case 1:16-cv-20571-FAM Document 13 Entered on FLSD Docket 03/30/2016 Page 7 of 117

Unfortunately, since the 2008 purchase of the aforementioned interests by Rina,

On or about October 1, 2009, Plaintiffs and Defendants filed a Joint Stipulation of

Dismissal with Prejudice in the federal litigation.

Defendants breached the 2009 Settlement Agreement by violating multiple

Case 1:16-cv-20571-FAM Document 13 Entered on FLSD Docket 03/30/2016 Page 8 of 117

Moreover, subsequent to the 2009 Settlement Agreement, Defendants have been

Several of the clear misrepresentations by the Defendants are as follows:

Case 1:16-cv-20571-FAM Document 13 Entered on FLSD Docket 03/30/2016 Page 9 of 117

The statements above are purposeful misrepresentations designed to cause

Case 1:16-cv-20571-FAM Document 13 Entered on FLSD Docket 03/30/2016 Page 10 of 117

skeptics and litigants across the country.

Case 1:16-cv-20571-FAM Document 13 Entered on FLSD Docket 03/30/2016 Page 11 of 117

v. The complete absence of reliable scientific proof that the Natural

TESLAR-branded technology causes an association between both trademarks that harms

The attached COMPOSITE EXHIBIT C showcases how consumers are

Case 1:16-cv-20571-FAM Document 13 Entered on FLSD Docket 03/30/2016 Page 12 of 117

Perhaps the most flagrant violation of Plaintiffs trademark rights by Defendants

Case 1:16-cv-20571-FAM Document 13 Entered on FLSD Docket 03/30/2016 Page 13 of 117

Moreover, although Defendants represented in the October 1, 2009 Settlement

Case 1:16-cv-20571-FAM Document 13 Entered on FLSD Docket 03/30/2016 Page 14 of 117

Defendants have purposefully refrained from instructing their dealers as to the

Although Section 2(a) of the October 1, 2009 Settlement Agreement required

products on their own website, philipstein.com.

Case 1:16-cv-20571-FAM Document 13 Entered on FLSD Docket 03/30/2016 Page 15 of 117

Case 1:16-cv-20571-FAM Document 13 Entered on FLSD Docket 03/30/2016 Page 16 of 117

As Plaintiffs have discovered, use of the TESLAR Mark in commerce by

On or about May of 2015, Plaintiffs representative, Helen Williams

Case 1:16-cv-20571-FAM Document 13 Entered on FLSD Docket 03/30/2016 Page 17 of 117

The representative of the website, Ashford.com, whom Williams chatted with

Additionally, although Defendants were required to order a watch strap machine

Case 1:16-cv-20571-FAM Document 13 Entered on FLSD Docket 03/30/2016 Page 18 of 117

As described above, the unlicensed and unauthorized use in commerce of the

Defendants actual use of Plaintiffs protected trademark and their attempts to

Case 1:16-cv-20571-FAM Document 13 Entered on FLSD Docket 03/30/2016 Page 19 of 117

performance would be futile.

Plaintiffs re-allege paragraphs 1 through 60 as if they were specifically set forth

herein and further allege as follows.

copy of which is attached herein as EXHIBIT G.

By engaging in the following activities,14 Defendants have breached the 2009

Case 1:16-cv-20571-FAM Document 13 Entered on FLSD Docket 03/30/2016 Page 20 of 117

The aforementioned actions breach, at minimum, the following provisions of the

Settlement Agreement: Section 2, Section 4, Section 7, and Section 13.