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Assailing Telemundo and its law firm, Miami-based Adorno & Zeder, for “egregious and dilatory behavior,” U.S. District Judge K. Michael Moore of the Southern District of Florida last month invoked what he called “the ultimate sanction” and issued a default judgment against the Spanish-language television network in a trademark infringement lawsuit. The ruling came one week before trial in the hotly contested suit brought by Miami-based herbal remedy company Inmuno Vital against Hialeah, Fla.-based Telemundo. At issue was the extent to which a television network is liable for broadcasting commercials that may violate trademark law. Telemundo, the second-largest Spanish-language TV network in the U.S., aired commercials by an Inmuno competitor — a New York-based herbal remedy company named Nutrivida — despite being warned that the Nutrivida commercials might infringe Inmuno’s trademark. With Inmuno fighting Nutrivida in court over the trademark, Telemundo decided to keep the commercials on the air until the litigation was resolved. That turned out to be a costly decision. In a stinging ruling issued Oct. 1, Moore concluded that Telemundo and Adorno & Zeder engaged in an array of “discovery abuses and violations of court orders.” Moore determined that Telemundo and its counsel “attempted to prevent, or at least would not facilitate,” the deposition of former Telemundo CEO, Roland Hernandez. He found the network to have displayed “unduly uncooperative behavior” in responding to mediation orders, and criticized the broadcaster for having “stymied not only plaintiff’s access to discoverable documents, but also the efficient functioning of the adversarial process in this litigation.” Proclaiming that Telemundo and its attorneys had “established a pattern of egregious and dilatory behavior,” Moore granted Inmuno a default judgment on liability. In an unsuccessful motion asking Judge Moore to reconsider, Telemundo complained that the default judgment was “draconian” and was wrongly reached without an evidentiary hearing. Following Moore’s order, a trial was to be held on damages in U.S. District Court in Miami. But on Oct. 23, the two parties reached an undisclosed settlement agreement. According to court records, Inmuno — represented by the Miami firm Feldman Gale & Weber — was seeking damages in excess of $40 million. The settlement, following Moore’s Oct. 1 order, ends a seven-year legal battle that involved two lawsuits and saw one of the original parties go out of business. None of the parties involved was willing to comment on the record. ACTOR’S PROSTATE CANCER ‘CURE’ The case dates back to September 1994, when Mexican telenovela star Andres Garcia granted Inmuno the exclusive right to use his name and likeness for marketing its Cat’s Claw herbal product, which is made from a South American root. Garcia had been diagnosed in 1994 with prostate cancer and began putting Inmuno’s Cat’s Claw in his tea. The cancer subsequently disappeared. As a thank you, Garcia gave Inmuno his exclusive endorsement, including the use of his name and likeness, for free. Beginning in September 1994, Inmumo began running TV and print ads in the U.S. featuring Garcia endorsing Cat’s Claw. At that same time, in the mid-1990s Cat’s Claw went from being an obscure nostrum to a popular herbal remedy. TV personality Pedro Sevcec called Cat’s Claw “the most extraordinary phenomena of modern medicine” and went to the Peruvian jungle to get video footage of the fecund source of the supposed miracle remedy. In early 1995, Brooklyn-based Nutrivida began actively courting Inmuno and its star endorser, Garcia. Nutrivida proposed jointly publishing a book, establishing a research center in Mexico where clinical studies could be performed and signing a distribution and marketing agreement. No deal was ever struck. ENDORSED RIVAL’S PRODUCT In 1995, even though he had signed an exclusive endorsement agreement with Inmuno, Garcia inexplicably agreed to be videotaped touting Nutrivida’s version of the Cat’s Claw product. By the middle of 1995, Nutrivida began running the ads on Telemundo. But Garcia maintained that he never meant to commercially endorse Nutrivida’s Cat’s Claw. In August 1995, Inmuno twice told Nutrivida to stop running the spots. Three months later, Garcia’s lawyer notified Telemundo that the ads were produced without the actor’s consent. Nevertheless, the Nutrivida ads continued to run until March 1997. In response, Inmuno ran ads of Garcia disavowing any endorsement of the Nutrivida product. Nutrivida sued Inmuno for false advertising, claiming that it did indeed have Garcia’s consent to run the commercial. Inmuno counterclaimed that Nutrivida had engaged in unauthorized and infringing use of Inmuno’s exclusive right to Garcia’s name and image. Out of these competing claims, in March 1997, U.S. District Judge Donald L. Graham enjoined Nutrivida from running the Garcia commercial. Then, for reasons that remain unclear, Nutrivida’s attorneys withdrew. In July 1998, Inmuno was granted a default judgment on all its claims while Nutrivida’s claims were dismissed. In a Dec. 6, 1998, ruling by U.S. Magistrate Judge William C. Turnoff, Inmuno was awarded $15,042,197 in damages. Nutrivida subsequently filed for bankruptcy and has never paid any of the money owed. The company is no longer in operation. BROADCASTER LIABLE? The second phase of the legal battle then began. In 1999, Inmuno, represented by Jeffrey Feldman, a partner at Feldman Gale & Weber in Miami, turned its legal sights to Telemundo, which had broadcast the infringing ads. Inmuno claimed that Telemundo was liable because it had aired the Nutrivida ads despite knowing that the spots illegally infringed on Inmuno’s exclusive agreement with Garcia. The company also claimed that Telemundo earned millions of dollars airing the ads while making Inmuno’s Garcia ads worthless. Inmuno sued for trademark violations under the Lanham Act. In response, Telemundo, which was represented by Alan Rosenthal, a partner at Adorno & Zeder, argued that it continued to air the spots only because, at the time, it remained legally uncertain whether the Nutrivida ads violated Inmuno’s trademark. Due to the fact Nutrivida claimed to Telemundo that it had Garcia’s consent to run the ads, and with Nutrivida and Inmuno locked in a court battle over the purported infringement, Telemundo contended that it had the right to keep airing the Cat’s Claw spots. “Telemundo’s management and counsel decided to defer to the judicial system rather than become the arbiter of the dispute between Inmuno and Nutrivida,” the broadcaster argued in court filings. Telemundo noted that as soon as Nutrivida was ordered by the court to stop running the ads in March 1997, it pulled the spots. According to some observers, Telemundo may have had solid legal grounds for continuing to run the ads. While there is debate on the issue, in order for a broadcaster to be held liable for airing infringing commercials the law appears to require that the broadcaster be shown to have demonstrated “actual malice.” Inmuno would have had to show that Telemundo knew, or should have known, that the Nutrivida commercials violated Inmuno’s trademark. Because the issue was being litigated when Telemundo aired the ads, it may have been difficult to meet the actual malice standard. In the wake of Judge Moore’s sweeping order, however, those legal issues are now moot. Following the ruling, Telemundo brought in Parker Thomson from the Miami office of the law firm Hogan & Hartson to broker a settlement with Inmuno. Four or five attorneys, including Thomson and Inmuno attorneys Jeffrey Feldman and James Dickey of Miami, met over a three-day period to reach settlement terms. Despite the settlement, sources say Telemundo plans to appeal Moore’s ruling.

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