Tishcon Files Suits Against Nature's Way, Shaklee

SALT LAKE CITY--Tishcon Corp., based in Westbury, N.Y., filed two lawsuits in U.S. District Court here last week alleging unfair competition and trademark infringement on its CoQ10 product. Each suit seeks $30 million in lost sales and punitive damages, as well as destruction of product and immediate injunction on sales of infringing products. The suits were filed by Aufrichtig Stein & Aufrichtig in New York together with Howard, Phillips & Andersen in Salt Lake City.

The first suit was filed against Nature's Way Products, based in Springville, Utah. The claims include trademark infringement on Tishcon's "STAYWELL" line and unfair competition stemming from use of the name. Raj Chopra, owner of Tishcon (www.tishcon.com), holds the name "Stay-Well" (Registration No. 1,380,004) with a registration date of Jan. 28, 1986, and assigned the mark to the company.

Nature's Way filed the name "Staywell" in August 2001. According to Peter Aufrichtig, partner with Tishcon's New York firm, hyphenation does not make a difference in trademark law, and the complaint said Nature's Way was refused registration in October. In the complaint, Tishcon alleged damages to its business and loss of sales are in excess of $10 million. Tishcon asked the court for an injunction from sale of any product with the Staywell mark and compensatory and punitive damages in excess of $30 million.

At press time, executives at Nature's Way (www.naturesway.com) had not returned a call from INSIDER requesting comment about the suit.

The second suit was filed against Shaklee Corp., with corporate headquarters in Pleasanton, Calif. Claims include unfair competition stemming from false descriptions and representations of fact. Tishcon's complaint alleges Shaklee's advertisements for its CoQHeart product made unsubstantiated claims about its bioavailability and unsubstantiated absorption claims that referred to Tishcon's Q-GEL product. In addition, the suit said Shaklee claimed the product was made with a patented ingredient, which was untrue and "for the purpose of deceiving the public." Tishcon asked the court for an injunction against referring to the product as patented until such a patent is issued and for compensatory and punitive damages in excess of $30 million. It also asked that Shaklee be fined $500 for each advertisement containing the patent information.

Marjorie Fine, general counsel for Shaklee Corp. (www.shaklee.com), commented on the suit. She said before publishing its bioavailability claims on the CoQHeart product, the company retained a third-party lab to conduct studies. She added that the absorption comparison was worded to compare the product to a "leading" softgel CoQ10, which she said was not Tishcon's product. "We have independent third-party research to corroborate our bioavailability claims, and any comparative claims we made were not with Tishcon's product," Fine said.

Regarding the patent issue, Fine said it was an honest mistake by the supplier. "The patent has been reviewed, fully approved and the issue fee paid, but the supplier made a mistake in the license to us," she said. "Our materials have been changed to refer to `patent pending,' and the patent will be issued soon." She added that punitive damages were not warranted "because Shaklee acted in good faith."