1 Defendant KURT FULLE actively promotes, sells, and markets the accused products for

2 NIKKEN INC.

3 4. On information and belief, Defendant CHARLES COCHRAN resides at 1599

4 Chilton Street, Arroyo Grande, CA 93420 and acts as a corporate speaker on behalf of NIKKEN,

5 INC. for the accused products. Defendant CHARLES COCHRAN actively promotes the accused

6 products, in part, by lending his credentials as a doctor of chiropractics research to the active

7 compounds found in the accused products. As recently as March 2, 2011 Defendant Charles

8 Cochran delivered a presentation of the accused products at a NIKKEN INC. corporate

9 presentation specifically aimed at promoting and marketing the accused products. Further,

10 Defendant CHARLES COCHRAN has been contracted by NIKKEN to specifically develop

11 formulations of the accused products.

12 5. On information and belief, Defendant DAVID BALZER is employed at the

13 address of 52 Discovery Irvine, CA, 92618-3105 and is a product Consultant and Technical

14 Advisor /Sci-Board Chairman to NIKKEN INC. Defendant DAVID BALZER actively promotes

15 the accused products, and as recently as March 2, 2011 hosted a NIKKEN INC. corporate

16 presentation specifically aimed at the introduction of the recently re-formulated accused products

17 to distributors.

18 6. On information and belief, Defendants MAC MACDONALD and PATRICIA

19 TERRY are husband and wife, and reside at 10028 Point Ln SW Lakewood, WA 98499. These

20 defendants have entered into a sales/distribution contract with Defendant NIKKEN INC. to sell

21 NIKKEN’S product line, including the accused products. On information and belief, these

22 defendants have been extremely successful earning approximately $1,500,000 from the NIKKEN

23 INC. contracts, and earning the distinction of a “NIKKEN ROYAL AMBASSADOR” actively

24 promoting the products of NIKKEN INC. and acting as ambassadors of NIKKEN.

25 7. On information and belief, Defendants DAVE JOHNSON and VALERIE

26 JOHNSON are husband and wife, and reside at 718 Calvert Ln, Fort Washington, MD 20744-

27 6501. These defendants have entered into a sales/distribution contract with Defendant NIKKEN

28 INC. to sell NIKKEN’S product line, including the accused products. On information and belief,

2 COMPLAINT
 1 the these defendants have been extremely successful earning approximately $1,800,000 from the

2 NIKKEN INC. contracts, and earning the distinction of a “NIKKEN ROYAL AMBASSADOR”

3 actively promoting the products of NIKKEN INC. and acting as ambassadors of NIKKEN INC.

4 8. On information and belief, Defendants DENNIS WILLIAMS and RUTH

5 WILLIAMS are husband and wife, and reside at 12426 SW 276th St, Vashon, WA 98070-8305.

6 These defendants have entered into a sales/distribution contract with Defendant NIKKEN INC. to

7 sell NIKKEN’S product line, including the accused products. On information and belief, these

8 defendants have been extremely successful under the NIKKEN INC. contract earning the

9 distinction of a “NIKKEN ROYAL AMBASSADOR” actively promoting the products of

10 NIKKEN INC. and acting as ambassadors of NIKKEN.

11 9. Defendants NIKKEN INC., KURT FULLE, CHARLES COCHRAN, DAVID

12 BALZER, MAC MACDONALD, PATRICIA TERRY, DAVE JOHNSON, VALERIE

13 JOHNSON, DENNIS WILLIAMS, and RUTH WILLIAMS are referred to collectively herein as

14 “Defendants”.

15 10. On information and belief, Defendant NIKKEN INC. has numerous other

16 distributors within its distribution network that sell and market the accused products, but the

17 names and addresses are not currently known to Plaintiff. These individuals may include, but are

18 not limited to, those earning the distinction of “NIKKEN ROYAL DIAMOND” members. Once

19 these individuals are identified, Plaintiffs will petition this Court to individually name and serve

20 each distributor as defendants to this lawsuit.

21

22 JURISDICTION AND VENUE

23 11. Defendants are subject to personal jurisdiction in the Central District of California

24 (the “District”) because Defendants have caused tortious injury in this District through acts

25 committed both inside and outside the District, including the unlawful conduct relating to the

26 patent-in-suit and as further detailed below.

27 12. Defendant NIKKEN INC. maintains a place of business in the District at 52

28 Discovery Irvine, CA, 92618-3105. NIKKEN INC. is subject to personal jurisdiction in the

3 COMPLAINT
 1 District because NIKKEN INC. regularly solicits business in the District or derives substantial

2 revenue from sales of goods –including the accused products – in the District. Additionally,

3 NIKKEN INC. has engaged in a persistent course of conduct in the District.

4 13. On information and belief, Defendant KURT FULLE is subject to personal

5 jurisdiction because he is a resident of the State and is employed by Defendant NIKKEN INC. at

6 52 Discovery Irvine, CA, 92618-3105. Defendant KURT FULLE actively promotes, sells and

7 markets the accused products for NIKKEN INC.

8 14. On information and belief, Defendant CHARLES COCHRAN is subject to

9 personal jurisdiction in that he is a resident of this State and has entered into distribution and

10 promotion contract with NIKKEN INC. in this District to sell and actively promote the accused

11 products, has ordered and received the accused products from this District and has sold those

12 products throughout this State including within this District. As part of his contractual

13 obligations, Defendant CHARLES COCHRAN actively promotes the accused products, in part,

14 by lending his credentials as a doctor of chiropractics research the active compounds found in the

15 accused products. As recently as March 2, 2011 Defendant Charles COCHRAN made a

16 corporate presentation specifically aimed at promoting and marketing the accused products.

17 Further, Defendant CHARLES COCHRAN has entered into contracts with NIKKEN INC. to

18 specifically develop formulations of the accused products.

19 15. On information and belief, Defendant DAVID BALZER is subject to personal

20 jurisdiction in that it is believed that he has entered into a product consultant and product

21 technology advisory contract with NIKKEN INC. in this District to sell and actively promote the

22 accused products, has ordered and received the accused products from this District and has sold

23 those products throughout this State including within this District. As part of his contractual

24 obligations, Defendant DAVID BALZER actively promotes the accused products, in part, by

25 creating and publishing corporate presentations targeted specifically at the accused products,

26 including a presentation as recently as March 2, 2011.

27 16. On information and belief Defendant MAC MACDONALD is subject to personal

28 jurisdiction in that he has entered into distribution sales contract with NIKKEN INC. in this

4 COMPLAINT
 1 District to sell the accused products, has ordered and received the accused products from this

2 District and has sold those products throughout this State including within this District. On

3 information and belief, Defendant MAC MACDONALD has earned the distinction of a

4 “NIKKEN ROYAL AMBASSADOR” (a distinction given only to NIKKEN INC.’s top sales

5 agents), and actively promotes the accused products and acts as an ambassador of NIKKEN.

6 17. On information and belief, Defendant PATRICIA TERRY is subject to personal

7 jurisdiction in that she has entered into distribution sales contracts with NIKKEN INC. in this

8 District to sell the accused products, has ordered and received the accused products from this

9 District and has sold those products throughout this State including within this District. On

10 information and belief, Defendant PATRICIA TERRY has earned the distinction of a “NIKKEN

11 ROYAL AMBASSADOR” (a distinction given only to NIKKEN’S top sales agents), and

12 actively promotes the accused infringing products and acts as an ambassador of NIKKEN INC.

13 18. On information and belief, Defendant DAVE JOHNSON is subject to personal

14 jurisdiction in that he has entered into distribution sales contract with NIKKEN INC. in this

15 District to sell the accused products, has ordered and received the accused products from this

16 District and has sold those products throughout this State including within this District. On

17 information and belief, Defendant DAVE JOHNSON has earned the distinction of a “NIKKEN

18 ROYAL AMBASSADOR” (a distinction given only to NIKKEN’S top sales agents), and

19 actively promotes the accused infringing products and acts as an ambassador of NIKKEN INC.

20 19. On information and belief, Defendant VALERIE JOHNSON is subject to personal

21 jurisdiction in that she has entered into distribution sales contracts with NIKKEN INC. in this

22 District to sell the accused products, has ordered and received the accused products from this

23 District and has sold those products throughout this State including within this District. On

24 information and belief, Defendant VALERIE JOHNSON has earned the distinction of a

25 “NIKKEN ROYAL AMBASSADOR” (a distinction given only to NIKKEN’S top sales agents),

26 and actively promotes the accused products and acts as an ambassador of NIKKEN INC.

27 20. On information and belief, Defendant DENNIS WILLIAMS is subject to personal

28 jurisdiction in that he has entered into distribution sales contract with NIKKEN INC. in this

5 COMPLAINT
 1 District to sell the accused products, has ordered and received the accused products from this

2 District and has sold those products throughout this State including within this District. On

3 information and belief, Defendant DENNIS WILLIAMS has earned the distinction of a

4 “NIKKEN ROYAL AMBASSADOR” (a distinction given only to NIKKEN’S top sales agents),

5 and actively promotes the accused products and acts as an ambassador of NIKKEN INC.

6 21. On information and belief, Defendant RUTH WILLIAMS is subject to personal

7 jurisdiction in that she has entered into distribution sales contracts with NIKKEN INC. in this

8 District to sell the accused products, has ordered and received the accused products from this

9 District and has sold those products throughout this State including within this District. On

10 information and belief, Defendant RUTH WILLIAMS has earned the distinction of a “NIKKEN

11 ROYAL AMBASSADOR” (a distinction given only to NIKKEN’S top sales agents), and

12 actively promotes the accused products and acts as an ambassador of NIKKEN INC.

13 22. Venue for this action is proper in the District pursuant to 28 U.S.C. §§ 1391 and

14 1400 because a significant portion of Defendants’ infringing activities have occurred in the

15 District.

16 23. This Court has subject matter jurisdiction pursuant to the patent laws of the United

17 States, 35 U.S.C. §§ 1 et seq., and pursuant to 28 U.S.C. §§ 1331 and 1338(a). The state law

18 unfair competition claim arises under, inter alia, California Business and Professions Code §

19 17200 et seq. The Court has supplemental jurisdiction over the related state law claims pursuant

20 to 28 U.S.C. §1367.

21

22 BACKGROUND FACTS

23 24. On October 29, 1996, the United States patent Office duly issued United States

24 Patent No. 5,596,676 entitled “METHOD FOR THE TREATMENT OF OSTEOARTHRITIS” to

25 Harry W. Diehl. A true copy of the ‘676 Patent is attached hereto as Exhibit A. The ‘676 patent

26 relates to a method of treating “the symptoms of non-rheumatoid arthritis by administering to the

27 afflicted subject a therapeutically effective amount of cetyl myristoleate either orally, topically,

28 or parenterally.” ‘676 Patent Abstract.

6 COMPLAINT
 1 25. The ‘676 Patent has been assigned to Plaintiff by virtue of an assignment dated

2 April 8, 2009 and recorded with the United States Patent Office on January 6, 2010, which can be

3 found at reel/frame 023731/0714.

4 26. The original inventor of the ‘676 Patent, Harry Diehl, is a highly recognized figure

5 in the bone/joint wellness fields, and in particular is recognized as the pioneer of cetyl

6 myristoleate. In fact, during a NIKKEN INC. corporate presentation on March 2, 2011, hosted

7 by Defendants Dr. CHARLES COCHRAN and DAVID BALZER, Defendants state:

“In our joint compound, and this is the newly formulated joint compound, and I’m
8 proud to say that it not only uses and is endorsed by the Diehl Estate, we call it
9 “The Real Diehl”, this formulation was put together by Dr. Charles Cochran, Dr.
Chuck Cochran, who’s going to join us in a couple of minutes to talk about what
10 he’s done, to talk about his life with CM [cetyl myristoleate] and why he put this
formulation together the way he did.”
11
27. A complete copy of the slides presented and published by Defendants CHARLES
12
COCHRAN, DAVID BALZER, and NIKKEN INC. during this presentation are attached hereto
13
as Exhibit B.
14
28. NIKKEN INC. produces several products, including Kenzen® Joint and CM
15
Complex Cream for human use, both of which are advertised to contain cetyl myristoleate to
16
support bone and joint health. NIKKEN INC. also produces Kenzen® Pet Joint for dogs and
17
cats, which is also advertised to contain cetyl myristoleate to support bone and joint health.
18
Plaintiffs pre-litigation testing confirms that Kenzen® Joint, CM Complex Cream and Kenzen®
19
Pet Joint (i.e., the accused products) all contain cetyl myristoleate, as do the publications from the
20
Defendants. See Exhibits B and C.
21
29. Defendants actively promote these products for the treatment of osteoarthritis.
22
Defendants further promote the active ingredient in these products – cetyl myristoleate – as the
23
component responsible for beneficial treatment of osteoarthritis. See Exhibits B and C. During a
24
NIKKEN INC. corporate presentation conducted by Defendants CHARLES COCHRAN and
25
DAVID BALZER on March 2, 2011, Defendants states:
26 “It’s a high potency CM [cetyl myristoleate] complex supporting collagen, bone,
and connective tissue repair, lubricates the joints, aids in joint mobility, is highly
27
bio available, and, of course, is endorsed by the Diehl Estate. And you can see
28 from the supplement facts that are here that what we’ve done is we have focused
extraordinarily at keeping it clean, keeping it simple, keeping it effective. We
have a high potency CM complex which is more than a gram. It’s 1155

7 COMPLAINT
 1 milligrams composed of no less than 40% cetyl myristoleate.”
2 30. Defendants have been and are infringing, contributing to infringement, and/or

3 inducing others to infringe the ‘676 Patent by making, using, offering for sale, selling and/or

4 importing the accused products. Defendants’ acts of infringement have occurred within this

5 district and elsewhere throughout the United States.

6 31. Defendants have willfully infringed the ‘676 Patent by continuing its acts of

7 infringement after being on notice of this patent.

8 32. Defendants have made and continue to make willfully false statements regarding

9 the accused products, and as a result of those statements Plaintiff has suffered injury.

10

11 COUNT 1: PATENT INFRINGEMENT

12 33. Plaintiff hereby realleges and incorporates by this reference paragraphs 1 through

13 32 above as though fully set forth herein.

14 34. In violation of 35 U.S.C. § 271, Defendants have infringed and are continuing to

15 infringe, literally and/or under the doctrine of equivalents, the ‘676 patent by practicing one or

16 more claims of the ‘676 patent, in its manufacture, use, offering for sale, sale and importation of

17 the accused products, and by contributing to this infringement and inducing others to infringe.

18 35. Plaintiff currently estimate the present and future damages of approximately

19 $10,300,000 based on the Defendants’ historical sales of these products, as has been discerned by

20 Plaintiff. However Plaintiff reserves the right to adjust this damages estimate based on evidence

21 adduced at trial.

22 36. Because Defendants infringement is willful, Plaintiff further requests under 35

23 U.S.C. § 284that the damages be tripled, resulting in a total patent damages estimate of

24 $31,000,000.

25 37. Plaintiff has been damaged by Defendants’ infringement and, unless Defendants are

26 enjoined Defendants will continue their infringing activity and Plaintiffs will continue to be

27 damaged.

28

8 COMPLAINT
 1 COUNT 2: UNFAIR COMPETITION
CAL. BUSINESS AND PROFESSION CODE § 17200
2
38. Plaintiff hereby realleges and incorporates by this reference paragraphs 1 through
3
37 above as though fully set forth herein.
4
39. Defendants CHARLES COCHRAN, DAVID BALZER and NIKKEN INC. have
5
made statements that the Diehl estate has endorsed the accused products:
6 “In our joint compound, and this is the newly formulated joint compound, and I’m
7 proud to say that it not only uses and is endorsed by the Diehl Estate, we call it
‘The Real Diehl.’ …
8
The Kenzen joint compound, as it has been formulated by Dr. Cochran, our new
9 formulation, what we’re allowed to say is, yes, it’s a high potency complex. It
supports collagen, bone, and connective tissue repair, lubricates the joints, aids in
10 joint mobility, is highly bio available, and, of course, endorsed by the Diehl
11 Estate.”
40. On information and belief, this statement is willfully false and intended to form an
12
endorsement and connection between the inventor of the ‘676 Patent, Harry Diehl, and the
13
accused products.
14
41. Defendants prominently display the words “Real Diehl” on its products and in its
15
promotional marketing materials, along with a logo on its label, intending to further create an
16
endorsement and connection between the inventor of the ‘676 Patent and the accused products.
17

18

19

20

21
The “Real Diehl” Logo Placed on NIKKEN INC. Products
22 that Contain Cetyl Myristoleate

23 42. Defendants false statement have caused injury to Plaintiffs by deceptively

24 suggesting to the public that the accused products are endorsed by the ‘676 Patent inventor and

25 therefore cannot infringe the ‘676 Patent in violation of California Business and Profession Code

26 § 17200 et seq. Defendants false statements are intended to create the appearance that the

27 accused products are legitimately made and sold.

28 43. In addition to the damages to Plaintiff, a civil penalty of two thousand five hundred

dollars ($2,500) for each sale, which constitutes a violation of the Cal. Business and Professional

9 COMPLAINT
 1 Code Sec. 17200, is appropriate and will result in severe multi-million dollar penalties.

2 44. Unless enjoined by the Court, Defendants will continue to perform the acts

3 complained of herein and cause said damage and injury, all to the immediate and irreparable

4 harm of Plaintiff.

5
COUNT 3: UNFAIR COMPETITION
6 CAL. BUSINESS AND PROFESSION CODE § 17200
7 45. Plaintiff hereby realleges and incorporates by this reference paragraphs 1 through
8 44 above as though fully set forth herein.
9 46. Defendants have made statements that the formulation of the accused products will
10 yield better therapeutic results:
11 “We have a high potency CM complex which is more than a gram. It’s 1155
milligrams composed of no less than 40% cetyl myristoleate. …
12
We started with a 40% cetyl myristoleate product, and the original formula, Dave,
13 had anywhere from 25% to 30% cetyl myristoleate. We’ve been able to
concentrate that and distill that to a point where now we can actually make a 40%
14
cetyl myristoleate product available, but we’ve also increased the levels of the
15 cetyl oleate. …

16 Q: An in a nutshell, what you’ve essentially told us is that you have the correct
balance, the correct proportions of these various cetyl esters so that we get the
17 maximum effect from what you’ve put together in the complex.
18
A: Exactly. And, at the same time, eliminated some of the other potentially,
19 maybe, fatty acids that were not really conducive to proper health. So we got rid
of some of the bad guys and we increased the really good guys to really
20 therapeutic levels.” March 2, 2011 Presentation.
21
47. Defendants have also made statements that the accused products containing cetyl
22
myristoleate are superior to the competition because the cetyl myristoleate in the accused
23
products is in liquid form.
24
48. On information and belief, Defendants have absolutely no scientific or factual basis
25
for these statements or suggestions. These statements are completely unsupported and intended
26
to induce the public into purchasing the accused products over other competing products,
27
including those produced by Plaintiffs. NIKKEN INC. provides marketing materials on various
28
NIKKEN INC. distributor internet websites which reference clinical study results which were

10 COMPLAINT
 1 conducted using Plaintiff’s product and falsely stating the study results were as a result of using

2 the newly reformulated accused products.

3 49. Defendants’ false statements have caused injury to Plaintiffs by deceptively

4 suggesting a superior product with no scientific basis, and these statements were made solely to

5 promote the accused products over the competition in violation of California Business and

6 Profession Code § 17200 et seq.

7 50. In addition to the damages to Plaintiff, a civil penalty of two thousand five hundred

8 dollars ($2,500) for each sale, which constitutes a violation of the Cal. Business and Professional

9 Code Sec. 17200, is appropriate and will result in severe multi-million dollar penalties.

10 51. Unless enjoined by the Court, Defendants will continue to perform the acts

11 complained of herein and cause said damage and injury, all to the immediate and irreparable

12 harm of Plaintiff.

13
COUNT 4: UNFAIR COMPETITION
14 LANHAM ACT, 15 U.S.C. § 1125
15 52. Plaintiff hereby realleges and incorporates by this reference paragraphs 1 through
16 51 above as though fully set forth herein.
17 53. Defendants have made statements that the Diehl estate has endorsed the accused
18 products as described above. On information and belief, those statements are willfully false and
19 misleading. This statement is literally false and not mere puffery.
20 54. That statement actually deceived and had the capacity to deceive a substantial
21 segment of the audience, and this deception was material, in that it was likely to influence the
22 purchasing decision.
23 55. The Defendants sold the accused products through interstate commerce.
24 56. Defendants false statement have caused injury to Plaintiffs by deceptively
25 suggesting to the public that the accused products are endorsed by the ‘676 Patent inventor and
26 therefore cannot infringe the ‘676 Patent in violation of 15 U.S.C. § 1125. Defendants false
27 statements are intended to create the appearance that the accused products are legitimately made
28 and sold.

11 COMPLAINT
 1 57. Unless enjoined by the Court, Defendants will continue to perform the acts

2 complained of herein and cause said damage and injury, all to the immediate and irreparable

3 harm of Plaintiff.

4
COUNT 5: UNFAIR COMPETITION
5 LANHAM ACT, 15 U.S.C. § 1125
6 58. Plaintiff hereby realleges and incorporates by this reference paragraphs 1 through
7 57 above as though fully set forth herein.
8 59. Defendants have made statements regarding the therapeutic effects of its
9 formulation, and that the active ingredient (i.e., cetyl myristoleate) is superior to the competition
10 because the cetyl myristoleate in the accused products is in liquid form, as detailed above. On
11 information and belief, these statements are literally false and it is believed lack scientific
12 substantiation and not mere puffery
13 60. These statements actually deceived and had the capacity to deceive a substantial
14 segment of the audience, and this deception was material, in that it was likely to influence the
15 purchasing decision.
16 61. The Defendants sold the accused products through interstate commerce.
17 62. Defendants’ false statements have caused injury to Plaintiffs by deceptively
18 suggesting a superior product with no scientific basis, and these statements were made solely to
19 promote the accused products over the competition in violation of 15 U.S.C. § 1125.
20 63. Unless enjoined by the Court, Defendants will continue to perform the acts
21 complained of herein and cause said damage and injury, all to the immediate and irreparable
22 harm of Plaintiff.
23 64. WHEREFORE, Plaintiff prays that this Court enter judgment in its favor on each
24 and every claim for relief set forth above and award it relief, including, but not limited to the
25 following:
26  a preliminary and permanent injunction restraining and enjoining Defendants,
27 their principals, officers, agents, servants, employees, attorneys, successors
28 and assigns and all those in active concert or participation with Defendants

12 COMPLAINT
  
 
 
EXHIBIT A 
   
  
 
 
EXHIBIT B 
   
 
 
 
 
 
 
 
 
 
 
  
 
 
EXHIBIT C  
 Section IX. (b) VENUE 

Defendant MAC MACDONALD‐ Washington 

Defendant PATRICIA MACDONALD‐ Washington 

Defendant DENNIS WILLIAMS‐ Washington 

Defendant RUTH WILLIAMS‐ Washington 

Defendant DAVID BALZER‐ Unknown