Vietal Nutrition secures Receiver approval over FFBM
Awakened hasn’t had the smoothest of launches.
The company pre-launched with an NFT cash grab, potentially grifting affiliates out of tens of millions.
Awakened’s flagship supplement Zenith has also been dogged by controversy, pertaining to a rights dispute between Vietal Nutrition and First Fruits Business Ministries.
I did my best to wade through the Zenith patent mess on September 1st. I came to the conclusion that, while Vietal Nutrition had a 2013 judgment against FFBM and owner Roger Catarino, practically speaking it was meaningless.
FFBM had clearly been manufacturing Trisynex supplements for well over a decade, regardless of any judgments Vietal Nutrition had obtained.
Zenith’s key ingredient is Trisynex, which falls under the patent 6,899,892. Anyone can look it up up and see it was assigned to FFBM in 2011.
The patent expired earlier this year, with the cynic in me believing this is why Awakend has launched with Zenith now.
Key to Awakend’s launch was the claim that it had worldwide exclusivity to Trisynex. This was supposedly purchased from Vietal Nutrition, which made no sense in light of the ‘892 patent.
After publishing that exploratory article I was contacted by Roger Catarino, who informed me he’d sent Awakend a cease and desist.
After covering the Awakend cease and desist, Vietal Nutrition’s attorney, Reid Winthrop, reached out.
Winthrop initially repeated the claims I was already mostly aware about and weighed as practically meaningless – for the reasons covered above.
No matter how many legal documents and judgments were provided, FFBM’s name was on the expired ‘892 patent and they continued to manufacture Trisynex.
Unless there was any substantial developments, it appeared Vietal Nutrition had sold the rights to a supplement formula they didn’t, practically speaking, own.
On September 13th the “substantial development” I was looking for happened. A California Judge ordered a Receiver take control of FFBM.
While FFBM owns the expired ‘892 patent, Winthrop claims Tripharma, Vietal Nutrition’s former trading name, owns exclusive rights to it.
TriPharma’s license 2006/2007, and subsequent further amendment (2013), provided TriPharma additional, valuable and exclusive intellectual property rights, to the exclusion of all others.
The valuable aspects of a patent is the right to exclude. A patent provides notice to anyone else that only the patent holder can “use” the patented process (or product), and reference the patent.
TriPharma had an exclusive license to the ‘892 Patent, even to the exclusion of the assignee/holder of the patent, First Fruits/Catarino.
Clear as mud? Yeah, I’m not 100% on it either but Winthrop puts forth that TriPharma obtained exclusivity from Imagenetix (the original ‘892 patent owner), and retained that exclusivity right even after the ‘892 patent was transferred over to FFBM in 2011.
If you’re still confused on how that works, don’t worry. Let’s put it aside and get up to speed with where things stand now.
Citing the 2013 $4.6 million million default judgment against Catarino and FFBM, the court broke down the history of the ‘892 patent as follows:
The Patent was previously the subject of an arbitration between Tripharma and Imagenetix, the entity which owned “substantially all the rights associated with the ’892 Patent” prior to assigning those rights.
The arbitration award in Tripharma’s favor generally affirmed Tripharma’s exclusive rights to the Patent under its sublicensing agreement with Imagenetix at that time.
The arbitrator found that this agreement had granted Tripharma exclusive rights to the Patent at that time and issued an “injunction” extending the license agreement to the Patent until October 2014.
Tripharma filed suit against FFBM for patent infringement in March 2012. FFBM didn’t answer the lawsuit and default judgment was awarded in April 2013.
After a hearing on the matter, the Court granted the application for default judgment on April 2, 2013, awarding Tripharma $4,659,990.
Judgment. On May 20, 2013, the Court denied First Fruits’ motion to vacate the default and default judgment and awarded Tripharma attorneys’ fees in the amount of $643,360.50.
After that judgment nothing much happened for the next year and a bit.
The October 2014 exclusivity injunction expired expired. And, as I understand it, FFBM either continued or went back to manufacturing Trisynex supplements.
In October 2021 TriPharma filed another lawsuit against FFBM. As noted by the court;
That suit remains ongoing. The rights to the Patent remain unsettled.
This echoes my sentiment with respect to the litigation and patent ownership, as discussed earlier.
As part of their October 2021 lawsuit, TriPharma sought appointment of a Receiver to take control of FFBM. This was an attempt to enforce the 2013 $4.6 million judgment.
On May 4, 2022, the Court denied Tripharma’s initial motion for appointment of a receiver in this action.
The Court found that Tripharma had not adequately demonstrated its attempts and subsequent failure to recover the Judgment through legal remedies.
TriPharma tried again on May 19th, this time filing for an ex-parte injunction ‘enjoining the disposition and/or fraudulent conveyance of intellectual property assets’.
The court granted the requested injunction on June 8th.
First Fruits then filed an ex parte application requesting clarification regarding the scope of the preliminary injunction.
First Fruits asserted that the preliminary injunction only intended to ensure that First Fruits did not sell, assign, transfer, or otherwise dispose of any intellectual property First Fruits owned or controlled and did not apply to any revenues that First Fruits received from use of the intellectual property.
Tripharma had sought the revenues for satisfaction of the Judgment.
FFBM’s application prompted a hostile response from the court.
The Court denied First Fruits’ application and stated: “The Court is prepared to revisit its earlier ruling denying the appointment of a receiver.”
This prompted TriPharma to file a second motion seeking appointment of a Receiver.
This time around the court reasoned;
Since the Court denied Tripharma’s initial request for a receiver, Tripharma has made substantial efforts to locate assets and collect on the Judgment, including by serving post-judgment discovery, obtaining an exemplified judgment and beginning collection proceedings in South Carolina, making further demands for payment of monies towards the Judgment and Order, and filing for an injunction enjoining First Fruits from perpetrating further harm on Tripharma.
Tripharma argues that a receivership is the only means of recovering the judgment owed because Tripharma has attempted over the course of nine years, and more recently engaged in substantial post-judgment efforts, to collect the Judgment; and all of these efforts have been ineffective.
Further, Tripharma contends that First Fruits have no assets that a receiver would be able to attach in order to satisfy the Judgment other than the intellectual property assets.
FFBM argued TriPharma sought appointment of a Receiver ‘to circumvent the litigation over the IP rights by gaining control over the IP assets in dispute, like the Patent.’
First Fruits argues that Tripharma has not thoroughly attempted to enforce the Judgment through less drastic remedies available to Tripharma.
In support, First Fruits asserts that it attempted to come to an agreement with Tripharma to pay 25 percent of all incoming monthly revenues for the Trimfit for Life product.
Tripharma refused, which First Fruits contends indicates that Tripharma is not interested in being paid, but rather seeks to gain control of the IP assets and to prevent First Fruits from being able to defend itself in the parallel litigation over the rights to these assets.
The court disagreed…
Contrary to First Fruits’ assertion of its cooperation, First Fruits has avoided the satisfaction of the Judgment at every turn for over nine years.
First Fruits’ proposal of monthly payments of 25 percent of the profits of one of their products, the Trimfit for Life product, is inadequate, both in substance and timing.
…but was wary of turning over control of FFBM’s “IP assets”.
The Court agrees that the Proposed Order grants the Receiver an unnecessarily broad scope of authority.
The Proposed Order currently contains several clauses that would give the Receiver managerial and operational authority, as well as the assignment of all of First Fruits’ IP assets to Tripharma.
The Court rejects that these powers are necessary for the purposes discussed at this time.
The Court subsequently went on to appoint a FFBM Receiver, with the aim of
collect all revenues and income generated from the Receivership Property; and to levy such Property as necessary to aid in the collection of the Judgment.
As per the Court’s September 13th order, TriPharma has been given fourteen days to submit a new Proposed Order for the court to consider, minus the “IP assets” stuff.
What the appointment of a Receiver does is basically stop FFBM from profiting off the sale of Trisynex supplements, till the $4.6 million judgment against them is satisfied.
I don’t know what FFBM’s annual revenue looks like but that could be some time.
Unfortunately with respect to getting to the bottom of the sale of exclusive rights to Awakend, a definitive ruling is tied to the outcome of Tripharma LLC v. First Fruits Business Ministry LLC et al (case number: 8:21-cv-01806).
This is the relatively newly filed October 2021 case referenced by the Court. As noted by the court, pending the outcome of the case, ‘the rights to the Patent remain unsettled.’
As such I’m adjusting my prior conclusion of Vietal Nutrition selling the rights to a product they don’t appear to own, to Vietal Nutrition selling the rights to a product the ownership of which remains unresolved.
Certainly the appointment of a Receivership is going to impact FFBM’s business operations and, dare I say it, tip the scales in favor of TriPharma in the October 2021 case.
Pending an earlier resolution, a jury trial has been scheduled for March 28th, 2023.
For now both sides have dug their heels in. TriPharma filed a Second Amended Complaint on May 19th. FFBM filed a First Amended Counterclaim on August 19th.
Decisions on filed Motions to Dismiss both the Complaint and Counterclaim are pending.
I’ve added Tripharma LLC v. First Fruits Business Ministry LLC to BehindMLM’s case docket for tracking. Dare I say it the future of Awakend depends on the outcome of the case.
In the meantime I maintain Awakend should definitely not have been launched until this patent mess is resolved.
Update 20th October 2022 – FFBM’s counterclaims have been dismissed, with the option of filing an amended counterclaim left open.
FFBM also filed for Chapter 11 bankruptcy on October 7th.
Update 20th January 2023 – The March 28th patent trial has been rescheduled to November 14th, 2023.