IN THE UNITED ST ATES DISTRICT COURT 

FOR THE DISTRICT OF OREGON 

QUANTUM, INC., an Oregon corporation ) Civil No.: 3:16-cv-00334-JE 

Plaintiff, Counterclaim Defendant, 

v. 

AKESO HEALTH SCIENCES, LLC, a 

California corporation, 

Defendant, Counter-Claimant. 

Jon P. Stride, Steven Olson, Sarah Einowski 

Tonkon Torp LLP 

1600 Pioneer Tower 

888 SW Fifth Avenue, Suite 1600 

Portland, OR 97204-2099 

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FINDINGS OF FACT, 

CONCLUSIONS OF LAW, 

OPINION AND ORDER 

Attorneys for Plaintiff/Counterclaim Defendant 

Aaron M. Brian, Staci Jennifer Riordan 

Nixon Peabody LLP 

300 South Grand Avenue, Suite 4100 

Los Angeles, CA 90071-3151 

Attorneys for Defendant/Counter-Claimant 

FINDINGS OFF ACT, OPINION AND ORDER -- 1 

Case 3:16-cv-00334-JE Document 168 Filed 08/02/17 Page 1 of 25
JELDERKS, Magistrate Judge: 

Akeso Health Sciences, LLC is a California limited liability company and is the 

successor in interest to PR-Osteo (collectively referred to as "Akeso"). Akeso is in the business 

of developing and selling nutritional supplements. Curt Hendrix is the Chief Science Officer and 

primary spokesperson for Akeso. Quantum is an Oregon corporation based in Eugene, Oregon 

that is in the business of selling natural health products. Its president and primary spokesperson 

is David Shaw. 

This case involves numerous claims and counterclaims brought by Plaintiff /CounterDefendant Quantum and Defendant/ Counter-Claimant Akeso relating to their long-term 

business relationship involving the sale and distribution of a natural migraine relief formula. For 

ease of reference, the claims and counterclaims are listed below. 

Claims and Counterclaims 

I. Quantum's Claims 

Claim One seeks a declaration under the Declaratory Judgment Act that the 2002 Contract 

between the paiiies expired on October 31, 2004. 

Claim Two: 

Count One: Trademark Infringement of the MigreLieftrademark under 15 U.S.C. 

§1114. 

Count Two: Unfair Competition in violation of 15 U.S.C. §1125(a). Quantum alleges 

Akeso's use of the MigreLieftrademark after its right to do so tenninated has caused and will 

continue to cause customer confusion. 

Count Three: Common law trademark infringement and unfair competition tlnough 

Akeso's wrongful use of the MigreLieftrademark. 

FINDINGS OF FACT, OPINION AND ORDER -- 2 

Case 3:16-cv-00334-JE Document 168 Filed 08/02/17 Page 2 of 25
II. Akeso's Counterclaims 

Count 1: Declaratory Relief under the Declaratory Judgment Act that the 2002 Contract is valid 

and enforceable. 

Count 2: Breach of Contract/Specific Performance. Akeso seeks an Order that Quantum sell to 

Akeso the MigreLief trademark and any common law trademark rights to MigreLief for the price 

of$25,000. 

Count 3: Breach of contract through sales to improper accounts. 

Count 4: Breach of implied covenant of good faith and fair dealing through failure to honor the 

2002 Contract and the trademark purchase provisions therein. 

Count 5: Promissory Estoppel. Akeso alleges Quantum failed to fulfill promises with respect to 

Akeso's right to purchase the MigreLieftrademark for $25,000 or a later agreement to transfer 

the trademark to Akeso at no cost. Akeso seeks an Order that Quantum specifically perform in 

conformity with the terms of the 2002 Contract or in an alternative manner deemed equitable by 

the Court. Akeso alternatively asks the Cou1i to grant it the right to continue using the MigreLief 

trademark and/or transfer to Akeso the MigreLief trademark, the trademark application, any 

common law trademark rights and the goodwill attached. 

Count 6: Equitable Estoppel. Akeso asks the Comito order that Quantum specifically perform 

in conformity with the terms of the 2002 Contract or in an alternative manner deemed equitable 

by the Court with respect to Akeso's right to purchase or receive the MigreLieftrademark. 

Akeso alternatively asks the Court to grant it the right to continue using the MigreLief trademark 

and/or transfer to Akeso the MigreLieftrademark, the trademark application, any common law 

trademark rights and the goodwill attached. 

Count 7: Cancellation ofMigreLieftrademark. Akeso alleges that Quantum has not engaged in 

FINDINGS OF FACT, OPINION AND ORDER -- 3 

Case 3:16-cv-00334-JE Document 168 Filed 08/02/17 Page 3 of 25
substantially exclusive use or controlled the quality of the use of the MigreLieftrademark and 

has not had the use in commerce required to support the trademark registration. Akeso asks the 

Court to cancel and invalidate the MigreLief trademark or, alternatively, to grant Akeso the right 

to continue using the trademark due to its invalidity. 

Count 8: Cancellation of MigreLief trademark application. Akeso alleges Quantum has filed a ... •. 

second application for the MigreLieftrademark. It seeks a declaration that Quantum's continuing 

efforts to register the MigreLief trademark are an infringement of Akeso's rights and seeks an 

Order enjoining Quantum from filing futiher documents with the USPTO to complete or sustain 

registration of the MigreLieftrademark. 

Count 9: Breach oflmplied Contract/Specific Performance. Akeso seeks an Order compelling 

Quantum to sell or transfer to Akeso the MigreLief trademark, any common law trademark rights 

and the goodwill attached. 

Count 10: Breach oflmplied Contract through sales to improper accounts. Akeso alleges 

Quantum breached the parties' implied contract by selling MigreLief tablets outside the agreed 

upon sales channels. 

Count 11: Federal Trademark Infringement of the MigreLieftrademark. Akeso alleges that it is 

the rightful owner of the MigreLief trademark. It further alleges that Quantum is selling under 

the MigreLief trademark and with the same or similar packaging, marketing and sales materials, 

a tablet containing an alternate fotmula to the Patented Fo1mula. 

Count 12: Akeso alleges Quantum engaged in unfair competition in violation of 15 U.S.C. 

§1125(a) through use of the MigreLieftrademark on tablets containing the Alternate Fo1mula. 

Count 13: Akeso asserts common law trademark infringement and unfair competition claims 

regarding use of the MigreLieftrademark on Alternate Formula tablets. 

FINDINGS OFF ACT, OPINION AND ORDER -- 4 

Case 3:16-cv-00334-JE Document 168 Filed 08/02/17 Page 4 of 25
Count 14: Akeso alleges Quantum violated state unfair and deceptive trade practices laws 

through its alleged use of the MigreLieftrademark. 

Count 15: Federal Trademark Infringement of the PURACOL trademark. Akeso alleges 

Quantum is using Akeso's PURACOL trademark to sell migraine relief tablets similar to what 

Akeso sells using the same trademark. 

Count 16: Akeso alleges Quantum engaged in unfair competition in violation of 15 U.S.C. 

§1125(a) with respect to the use of Akeso's PURA COL trademark. 

Count 17: Akeso asserts common law trademark infringement and unfair competition claims 

regarding Quantum's alleged use of the PURACOL trademark. 

Count 18: Akeso alleges Quantum violated state unfair and deceptive trade practices laws 

through its alleged use of the PURA COL trademark. 

Count 19: Akeso seeks injunctive relief. 

Procedural Background 

On March 31, 2017, Quantum filed a motion for summary judgment which this Court 

granted in part and denied in part by Opinion and Order dated June 5, 2017. (Dkt. #122). The 

Court's Order resolved in Quantum's favor Quantum's Claim One and Akeso's Counterclaims 1, 

2, 3, 4, 6, 11, 12, 13, 14, and 19. The Court then cleciclecl that trial on the remaining issues would 

be bifurcated with questions regarding trademark infringement being reserved for phase two. 

Due to the Court's concern regarding the parties' disagreement as to whether Akeso was entitled 

to a jury trial on Counterclaim 9, the Court advised the parties at the pretrial conference that, 

pursuant to the discretion granted it by Feel. R. Civ. Pro. 39(c), it would most likely consider the 

jury's verdict on that claim to be advisory. 

THE COURT: So even if the jury cleciclecl question two, in Akcso's -- question 

two - I mean, claim two, in Akeso's favor, I would probably make an independent 

FINDINGS OFF ACT, OPINION AND ORDER -- 5 

Case 3:16-cv-00334-JE Document 168 Filed 08/02/17 Page 5 of 25
determination. At least I would give it more thought, whether it was incumbent on 

me to make that independent determination, so that if there was an appeal, the 

case wouldn't be sent back by the Court of Appeals .... So I'm just putting that 

out there so it doesn't come as a surprise if we have some argument and issues of 

that nature after the jury comes in with a verdict. 

* * * 

Do you understand what I'm saying? 

MR. BRIAN: I do, Your Honor. 

THE COURT: Mr. Stride? 

MR. STRIDE: I understand, Your Honor .... 

(Pretrial Trans. 89:2-13; 89:24-90:2). 

A jury was empaneled and trial was held June 6, 7, 8, 9 and 12, 2017 on Akeso's 

Counterclaims 5, 9 and 10. As Akeso's counterclaims were the only issues for trial, it presented 

its case first. The jury heard evidence regarding Counterclaims 9 and l 0. At the close of Akeso's 

case Quantum moved for judgment as a matter of law or, in the alternative, on the merits on 

Counterclaims 9 and 5 and a potential unjust enrichment claim. (Dk!. # 134). The Court denied 

the motion and again indicated that even though Counterclaim 9 may go to the jury, the Court 

was inclined to treat the jury's verdict on that issue as advisory. (Trans. 437:15-438:16). At the 

close of the evidence presented to the jury, Quantum renewed its motion for judgment as a 

matter oflaw or, alternatively, on the merits, which the Court again denied. (Trans. 683:7-15). 

On June 1 i 11, while the jury was deliberating, additional evidence was presented to the Court 

concerning Counterclaim 5 and proposed Counterclaim 20. 

On June 12, 2017, the jury returned a verdict awarding Akeso damages on Counterclaim 

10 in the amount of$504,381.00. The jury also returned a verdict in Akeso's favor on 

FINDINGS OF FACT, OPINION AND ORDER-- 6 

Case 3:16-cv-00334-JE Document 168 Filed 08/02/17 Page 6 of 25
Counterclaim Nine, determining that the parties had an implied contract which required 

Quantum to transfer the MigreLieftrademark to Akeso for $25,000. (Trans. 836:11-837:13). 

Although the jury's verdict resolved the issue as to out of channel sales, there are several 

issues for resolution by the Court involving the MigreLief trademark and minor issues involving 

Akeso's PURA COL trademark. At a July 11, 2017 status conference, after allowing submission 

of post-trial briefing, the Court discussed the terms of a potential judgment and took additional 

argument. The Comt also granted leave to submit additional briefing on certain discrete issues. 

The parties submitted subsequent briefing by letter. 

Pursuant to Feel. R. Civ. P. 52(a), the Court now sets forth its findings of fact, conclusions 

of law, and opinion and order as to all remaining issues. 

I. Implied Contract - Specific Performance 

The Comt has concluded that the issue regarding transfer of the trademark is an equitable 

issue to be decided by the Court. As explained below, the Cmnt has determined that the parties 

had an implied contract which allowed Akeso to ultimately own the MigreLieftraclemark. 

Although it is clear that the parties both intended for Akeso to end up owning the trademark, they 

never reached a final agreement as to the details of the transfer. The Court is exercising its 

equitable power to fill in what it considers to be, within the greater context, minor details of the 

agreement. 

The jury's role as to Counterclaim 9 was purely advisory. The Court agrees with the 

jury's conclusion that there is clear and convincing evidence that there was an implied contract 

to transfer the MigreLieftraclemark to Akeso. However, the Court does not agree that Akeso 

proved by clear and convincing evidence that the implied contract dictated transfer of the 

trademark for $25,000 and, therefore, the Court's final decision on Akeso's Ninth Counterclaim 

FINDINGS OF FACT, OPINION AND ORDER-- 7 

Case 3:16-cv-00334-JE Document 168 Filed 08/02/17 Page 7 of 25
departs from the jury's advisory verdict on that issue. 

Akeso asserts that treatment of the jury as advisory would be obvious procedural error 

because "(i]n the Ninth Circuit, Rule 39 requires that the Court notify the parties the jury will be 

advisory before the onset of trial, and ce1tainly before the verdict is reached." (Akeso Letter to 

Court of July 14, 2017). The Court has considered this argument carefully and disagrees. 

Rule 39(c) does not expressly require advance notice to the parties of the court's intention 

to treat the jury as advisory. See Fed. R. Civ. Pro. 39(c); 1vierex A.G. v. Fairchild Weston Sys., 

Inc., 29 F.3d 821, 827 (2d Cir. 1994). The Ninth Circuit has not expressly addressed this issue 

but has found in a similar context that because of the "significant tactical differences in 

presenting a case to a court, as opposed to a jury[,] the parties are entitled lo know at the outset 

of the trial whether the decision will be made by the judge or the jury." Pradier v. Elespuru, 641 

F.2d 808, 811 (9th Cir.1981 ). Nevertheless, multiple circuits have held that failure to give parties 

advance notice, absent demonstrable prejudice, is not a basis for reversal. 1\1erex A.G., 29 F.3d at 

827; Indiana Lwnbermens Jviut. Ins. Co. v. Timberland Pallet & Lumber Co., 195 F.3d 368, 375 

(8th Cir. 1999). Here, Akeso was on notice no later than at the pretrial conference that the Court 

would most likely treat the jury as advisory on the Ninth Counterclaim. Thus, there was no 

"demonstrable prejudice." 

If Akeso was correct that it was entitled to a jury determination rather than an equitable 

decision by the Court on the issue of the transfer of the MigreLief trademark, I would conclude, 

in the alternative, that Quantum was entitled to judgment as a matter of law, due to a failure of 

proof as to the $25,000 portion of the jury's verdict. 1 

1 The Court's decision to address the jury issue in this manner was dictated by considerations of judicial efficiency 

and practicality. If the Court had not allowed Akeso to try the trademark issue in front of a jury and, on review, this 

detennination \Vas found to be erroneous, a second trial \vould be required, at greater expense to the parties and in 

detriment to the efficient use of judicial resources. !fa reviewing court were to determine that Akeso had a right to a 

FINDINGS OF FACT, OPINION AND ORDER-- 8 

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The jury in this case found that the parties impliedly agreed to a transfer of the trademark 

and the Court agrees with that conclusion. Nevertheless, while a term entitling Akeso to 

ultimately obtain the trademark was a certain and definite aspect of the parties' implied contract, 

the monetary consideration, if any, necessary for such transfer was not. Therefore, the Court does 

not independently agree with or adopt that portion of the jury's verdict. 

A. Conclusions of Law 

Under Oregon law, a contract must be based on the parties' communications and overt 

acts. Ken Hood Const. Co. v. Pac. Coast Const., Inc., 201 Or. App. 568, 578, 120 P.3d 6 (2005), 

opinion adhered to as mod/fled on reconsideration, 203 Or. App. 768, 126 P.3d 1254 (2006). 

Courts will not consider the parties' "uncommunicatcd subjective understanding." Newton/Boldt 

v. Newton, 192 Or. App. 386, 392, 86 P.3d 49 (2004) (internal citation omitted). 

An implied-in-fact contract has the same legal effect as an express contract. Staley v. 

Taylor, 165 Or. App. 256, 262, 994 P.2d 1220 (2000) (citing Restatement (Second) of Contracts 

§ 4 comment a (1979)). Like an express contract, an implied contract "is based on mutual 

expressions of assent. That assent and the terms of the parties' agreement may be inferred from 

the parties' conduct." Jaqua v. Nike, Inc., 125 Or. App. 294, 297, 865 P.2d 442 (1993); see also 

Staleyv. Taylor, 165 Or. App. 256, 262 n.6, 994 P.2d 1220 (2000) ("Frequently, implied-in-fact 

contracts arise because an accepted course of conduct would permit a reasonable [fact-finder] to 

find that the parties understood that their acts were sufficient to manifest an agreement."). A party 

may manifest its assent to an implied in fact contract over time through its course of conduct. 

,\Jontez v. Roloff Farms, Inc., 175 Or.App. 532, 536-37, 28 P.3d 1255 (2001). 

ju1y trial on the trade1nark issue it could also detennine \Vhether the evidence \Vas sufficient to support the jury's 

verdict. 

FINDINGS OF FACT, OPINION AND ORDER-- 9 

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An implied-in-fact contract can also arise when a written agreement expires and, without 

more, the parties continue to perform as before. Depending on the conduct of the parties, the 

implied contract might incorporate some or all of the terms and conditions of the expired express 

contract. Nat'! Union Fire Ins. Co. v. Showa Shipping Co., 166 F.3d 343, n.6 (9th Cir. 1999) 

(citing with approval ·Martin v. Campanaro, 156 F.2d 127, 129 (2d Cir.1946) (New York law) 

and Cloverdale Equip. Co. v. Manitowoc Eng'g. Co., 964 F.Supp. 1152, 1162 (E.D.Mich.1997) 

(Michigan law)). However, the contract "must be definite in all material aspects," with nothing 

material left to future negotiation. Poveyv. Clow, 146 Or. App. 760, 763-64, 934 P.2d 528 (1997) 

(requirements for specific performance of a contract). 

The general rule is that all elements of a claim for specific performance must be proved by 

clear and convincing evidence. See Riverside Homes, Inc. v. lvfurray, 230 Or. App. 292, 301, 214 

P.3d 835 (2009); A1urrayv. Laugsand, 179 Or. App. 291, 294, 39 P.3d 241 (2002). However, this 

rule is not as strict as it sounds when combined with Oregon law dealing with implied contracts 

and the equitable power of the court. 

The signed September 2005 "MigreLief Agreement Memo" memorialized the parties' 

contemplated transfer of the trademark in an anticipated future contract. The Agreement Memo in 

all terms other than the release provision was explicitly not, however, a final agreement. Although 

agreements to agree are generally not enforceable in and of themselves, the terms of the signed 

September 2005 Agreement Memo serve as the underpinning of an implied contract that formed 

through the parties conduct over the next 10 plus years, particularly when viewed in light of their 

conduct in the three years leading up to the 2005 Agreement Memo. 

Virtually every written document recording the parties' intent as to the terms of a future 

written contract includes the transfer of the MigreLieftrademark from Quantum to Akeso. 

FINDINGS OF FACT, OPINION AND ORDER -- 10 

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Furthermore, the evidence shows that there were three constant aspects to the parties' business 

relationship spanning more than 13 years: 1) Quantum would have the right to sell Akeso's 

patented formula under the MigreLief trademark; 2) Quantum would be restricted to certain sales 

channels for their sales ofMigreLieftablets; and 3) by some means, Akeso would end up owning 

the MigreLief trademark. In addition, Akeso utilized and developed the MigreLief trademark as if 

it were its own, securing MigreLief domain names, putting considerable effort into marketing and 

building confidence in the brand, and attaching the MigreLief name to other products it developed 

and sold that were not sold by Quantum. I find credible both the testimony that Quantum never 

told Akeso that it was unwilling to transfer the trademark and the testimony that Quantum never 

specifically affirmed that Akeso had the continued right to purchase the trademark. However, I 

conclude that Quantum's acquiescence in and acknowledgment of Akeso's treatment of the 

trademark, coupled with the absence of any specific denial to Akeso's repeated assertions that the 

trademark would transfer, constitutes overt conduct manifesting assent. Staley, 165 Or. App. at 

262 n.6 ("Frequently, implied-in-fact contracts arise because an accepted course of conduct would 

permit a reasonable juror to find that the parties understood that their acts were sufilcient to 

manifest an agreement."). Accordingly, I conclude, as the jury did, that the implied contract 

included a term that entitled Akeso to obtain the MigreLieftrademark. 

As noted above, despite concluding that the parties impliedly agreed to a transfer of the 

trademark, the Court does not independently agree with or adopt the portion of the jury's verdict 

that found, under a clear and convincing standard, that $25,000 monetary consideration for such a 

transfer was a certain and definite aspect of the parties' implied contract. However, under the 

circumstances of this case, the absence of certainty as to this detail does not defeat Akeso' s 

implied contract claim. Once the parties began doing business, the potential monetary 

FINDINGS OF FACT, OPINION AND ORDER -- I I 

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consideration was a relatively minor issue. 

Akeso requests specific performance on its implied contract claim. Although there has 

been some contrary discussion, it is clear from the pleadings, the arguments and the law that this 

claim is in equity. Since specific performance is an equitable remedy, this Court sitting in equity 

has broad discretion to "fashion equitable remedies based upon rules different from those applied 

for remedies at law." Cameron v. Benson, 295 Or. 98, I 03, 664 P .2d 412 (1983). This is so 

because "the general principle underlying equitable remedies ... is to grant such relief as will best 

accomplish the ends of justice." Id. (citations omitted). 

Although a contract must be definite in all material respects, the law "leans against * * * 

the destruction of contracts because of uncertainty; and it will, if feasible, so construe agreements 

as to carry into effect the reasonable intentions of the parties ifthat can be ascertained." Delmar 

Crm1ford, Inc. v. Russell Oil Co., 106 Or. App. 524, 527, 808 P.2d 1021 (199l)(internal citations 

and quotations omitted); see also, 25 Williston on Contracts§ 67:5 (4th ed.). Furthermore, 

"[w]hen the conduct or expressions of parties to an agreement indicate a sufficient intent to make 

a contract, a court has latitude to fill in the gaps and, by its decree of specific performance, to 

formulate subordinate details of the agreement." Yeon St. Partners v. Envtl. Consulting Servs., 

Inc., 125 Or. App. 501, 505, 865 P.2d 1325 (l 993)(citations omitted); see also, Booras v. Uyeda, 

295 Or. 181, 192, 666 P.2d 791 (1983). In compelling circumstances, a court may make definite 

subordinate details of an agreement by using "'courageous common sense' to imply fair and 

reasonable terms that give effect to the pmiies' intentions." Dalton v. Robert Jahn C017J., 209 Or. 

App. 120, 140, 146 P.3d 399, 411 (2006)(quoting Hughes, 189 Or.App. at 266, 76 P.3d 111 

(citation omitted)); see also Restatement (Second) of Contracts§ 362 (1981). Following the 

guidance of the above-cited case law and applying this Court's own common sense and notions of 

FINDINGS OF FACT, OPINION AND ORDER-- 12 

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justice, I conclude that although the agreement concerning the monetary consideration necessary 

for transfer of the MigreLieftrademark was indefinite, it is within my discretion to order specific 

performance to effect the parties' intent. As I have previously indicated, the evidence is clear and 

convincing that the parties intended for Akeso to end up owning the trademark. 

The question thus becomes one of inferring the parties' intent regarding the monetary 

consideration, if any, to be given to Quantum for transfer of the trademark. After an extensive and 

detailed review of the documentary evidence and testimony at trial, I have concluded that 

monetary consideration in an amount of $100,000 is a "fair and reasonable term[] that give[ s] 

effect to the parties' intentions." Dalton, 209 Or. App. at 140. The July 2005 Memo Agreement 

draft that was prepared by David Shaw contemplates the immediate transfer of the trademark 

from Quantum to Akeso without mention of price and provides that if Akeso cancels for any 

reason other than breach they may retain the trademark in exchange for a $100,000 fee. (Tr. Ex. 

397). Shaw had communicated in an email two weeks prior his amenability to the transfer of the 

trademark with ownership returning to Quantum if Akeso cancelled for reasons other than 

noncompliance. (Tr. Ex. 11 ). At trial, Shaw described the July 2005 draft as the begim1ing of 

negotiations and acknowledged that if this agreement had come to be, Akeso would have 

immediately owned the trademark. (Trans. 562:5-6; 562:9-13). He noted the $100,000 fee, 

testifying "you'll notice the price changed. We were looking for more." (Trans. 562:6-7). Shaw 

emphasized that the term was meant to provide a consequence that would protect the trademark, 

testifying that "I was not giving this thing away for nothing. There was always some kind of 

something attached to it." (Trans. 563:3-4). 

Although, the July 2005 Agreement memo draft was just that, a draft, it communicates 

Quantum's willingness to transfer the MigreLieftrademark to Akeso for no money upon the 

FINDINGS OF FACT, OPINION AND ORDER -- 13 

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signing of a final agreement and assigns a $100,000 retention cost for Akeso to keep the 

trademark with no strings attached. I recognize that neither the subsequent signed September 

2005 Agreement Memo prepared by Quantum or the Distribution Agreement prepared by Akeso 

and revised by Quantum contain the $100,000 fee. These documents all do, however, contain 

provisions that would, upon finalization of the contemplated future agreement, transfer the 

trademark to Akeso. These documents, as well as the parties' entire prior history, are totally 

inconsistent with David Shaw's trial testimony that "it was always in my mind to control that 

mark .... " (Trans. 559:20-21). The specification of the $100,000 smn indicated Quantum's 

valuation for a no-strings-attached transfer of ownership at a time in close proximity to three 

written documents that were either prepared or edited by Quantum and that reflect Quantum's 

willingness to transfer the trademark to Akeso. The terms of the July 2005 Agreement Memo 

draft, the September 2005 Agreement Memo, the detailed October/November 2005 Distribution 

Agreement and David Shaw's redline edits of that document, though not binding in and of 

themselves, adequately convey the parties' intentions regarding the trademark. These written 

documents, supported by the evidence presented at trial of the value of the brand to each party and 

of each party's conduct vis-a-vis each other and the trademark, itself, satisfy this Court that the 

sum of$100,000 is a fair amount to give effect to both parties' intentions. 2 

Additionally, it is evident to me that denying equitable relief in this case would cause 

severe harm to Akeso. "Courts of equity may examine the effect of granting or denying equitable 

relief." Yeon St. Partners, 125 Or. App. at 506. (citing Public ~Market Co. v. Portlancl, 160 Or. 

155, 167, 83 P.2d 440 (1938)). Without MigreLief, the name attached to its primary product line, 

2 In addition, Akeso has invited this Court to choose an atnount 11 it dee1ns just" for \Vhich Quantutn 1nust transfer the 

trademark. (Akeso's Supplemental Post-trial Brief at 20, Dkt. #152). Likewise, Quantum has little room to complain 

because the Court is awarding it the highest monetary value it ever placed on the trademark when a non-frivolous 

argu1nent can be tnade to fix the con1pensation at zero. 

FINDINGS OF FACT, OPINION AND ORDER-- 14 

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Akeso would lose its significant investment in the brand and, potentially would have to rebuild its 

entire business. 

This Court concludes that the pmties had an implied-in-fact contract that included an 

agreement to transfer the lvligreLieftrademark to Akeso. Furthermore, the Court, invoking its 

equitable powers and mindful of the fact that Quantum benefited from its ability to sell Akeso's 

patented formula for over a decade, determines that the parties' intent is best accomplished by 

setting fair and reasonable monetary consideration for that transfer at $100,000. Accordingly, 

upon proof that Akeso is "ready, willing, and able"3 to tender payment in the amount of$100,000 

or is agreeable to having the Court reduce the jury's verdict on Counterclaim 10 by $100,000, the 

Court will grant Ake so's request for specific performance and will order Quantum to transfer to 

Akeso United States Trademark Registration No. 2,002,902 and United States Trademark 

Application Serial No. 86/857160 in accordance with Section 10 of the Lanham Act (15 U.S.C. 

§1060). 

B. Findings of Fact 

The following findings of fact support the conclusion that the implied contract between 

Akeso and Quantum included a term that entitled Akeso to purchase the lvligreLieftrademark 

from Quantum and that $100,000 is a fair and reasonable amount for Akeso to pay to effect the 

transfer. 

Prior to 2002, Akeso owned the patent to a migraine relief formula it registered under the 

trademark PURA COL and Quantum owned the trademark lvligreLief. (Joint Pretrial Order, Dkt. 

#93). 

The parties thought that it was in their mutual interest for each of them to market a 

migraine relief product using Quantum's trademark, Akeso's patented formula, and with each 

3 Riverside Homes, Inc. v. Murray, 230 Or. App. 292, 301, 214 P.3d 292 (2009). 

FINDINGS OF FACT, OPINION AND ORDER-- 15 

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party selling in certain designated sales channels. (Id.). 

The parties' contemplation of the transfer of the trademark dates from the beginning of 

their business relationship. An undated, unsigned document that preceded their 2002 Letter 

Agreement states "[ Akeso] wishes to purchase the name Migrelief from Quantum, Inc. The 

companies have agreed that Quantum will transfer ownership of the name to [ Akeso] in 

exchange for ceitain distribution rights of the [ Akeso] product known as Migra-Lieve. In order to 

facilitate this action, Quantum will license the [trademark to Akeso] for a 30-month period after 

which ownership of the [trademark] shall transfer to [Akeso.]" (Tr. Ex. 2, p.l). 

The parties' early intentions are also outlined in a July 6, 2000 email from David Shaw to 

Curt Hendrix in which Shaw writes" ... we would be amenable to your request to sell you all 

rights to our trademarked name, Migrelief .... [W]e feel that a price of $25,000 would be fair .. 

" 

In February, 2002, they reduced their agreement to writing in what is referred to as the 

"Letter Agreement." (Joint Pretrial Order, Dkt. #93). The Letter Agreement states "If [Akeso] 

chooses to cancel this agreement it may continue to use the trademark by purchasing all rights to 

the trademark from Quantum for $25,000." (Tr. Ex. 4, p.2). 

This Court has ruled that the Letter Agreement expired by its own terms in October 2004. 

(Opinion and Order, Dkt. # 122). 

On May 4, 2004, Akeso proposed to Quantum a new agreement with Akeso acquiring 

the MigreLief trademark "for no money in perpetuity" based on Akeso paying Quantum a 

royalty on certain sales and allowing Quantum to continue marketing MigreLief in health food 

stores. (Tr. Ex. 6). 

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On July 28, 2004, Akeso summarized its expectations regarding its continued business 

relationship with Quantum in an email to Shaw. Point 3 states "[Akeso] gets the rights to the 

Migrelief trademark, which it will license to Quantum in perpetuity. For this, [ Akeso] will pay 

Quantum $1.50 per bottle sold through VMS stores over the next two years." (Tr. Ex. 7). Shaw 

responded to each of Akeso's points by email on August 3, 2004, stating "[Point]3. OK, but if 

you go out of business you turn trademark to us." He also wrote "I think that if we are going to 

give you the trademark ... then you should drop the minimum purchase requirement." (Id.). 

The above communications did not lead to a new agreement and on November 29, 2004, 

Quantum contacted Akeso suggesting an interim agreement in which Quantum would "have the 

rights to continue as the exclusive distributor" of the MigreLief product in certain sales channels 

and, in turn, Quantum would extend Akeso's right to the use the MigreLieftrademark. Quantum 

did indicate that a contract was in the works which would transfer the trademark to Akeso with 

the trademark returning to Quantum if Akeso went out of business. Quantum indicated that the 

agreement should be drawn by Ake so's attorneys and submitted to Quantum for review. There is 

no indication in the record that Akeso followed up on these 2004 proposals and counter 

proposals. (Tr. Ex. 204). 

By letter of April 29, 2005, Akeso's lawyer wrote to Quantum stating that the 2002 Letter 

Agreement was still in effect and that Akeso's right to purchase the trademark for $25,000 

remained in place. (Tr. Ex. 9). Shaw conceded at trial that he received this letter in April of2005. 

(Trans. 40:20-41: 16). There is no evidence that Quantum responded in writing to this letter, and 

Shaw could not recall if he spoke with Hendrix about the letter. (Trans. 42:4-6). 

On June 28, 2005, Akeso contacted Quantum with seven major points which required 

Quantum's agreement in order to proceed to a contract. Point 4 was that "[w]e get ownership of 

FINDINGS OFF ACT, OPINION AND ORDER -- 17 

Case 3:16-cv-00334-JE Document 168 Filed 08/02/17 Page 17 of 25
trademark immediately, which we license back to Quantum as long as they remain licensee of 

MigreLief." (Tr. Ex. 10). Quantum responded on June 29, 2005, stating, as to Point 4, "we'll 

assign all rights for the Migrelief name to you but the agreement should unequivocally state that 

if you cancel the agreement while we are in compliance, ownership returns to us." (Tr. Ex. 11 ). 

The record includes an unsigned document prepared by Quantum titled "MigreLief 

Agreement Memo July 12, 2005." Paragraph 7 reads, "Trademark Transfer: Upon signing of a 

new agreement, Quantum will transfer registration of the MigreLief trademark to AH4 and AH 

will license the right to use the trademark back to Quantum. If AH cancels this agreement for any 

reason other than breach, AH will transfer the trademark registration back to Quantum 

immediately or pay Quantum a fee of$100,000." The last sentence in Paragraph 3 states, "This 

memo releases both parties from prior agreements and any and all obligations." (Tr. Ex. 397). 

On September 27, 2005, the parties signed a document prepared by Quantum titled 

"MigreLief Agreement Memo." It is a modified version of the July 12'h unsigned memo. 

Paragraph 3 continues to state, "This memo releases both parties from prior agreements and any 

and all obligations." Paragraph 7 was modified to read, "Trademark Transfer: Upon signing of a 

new agreement, Quantum will transfer the registration to the Migrelief trademark lo AH and AH 

will license the right to use trademark back to Quantum as long as Quantum remains licensee. If 

AH cancels this agreement for any reason other than breach or expiration, AH will transfer the 

trademark registration back to Quantum." Paragraph 13 states, "This document is not the final 

agreement." Paragraph 14 states that Akeso will prepare and submit a final agreement within six 

weeks. (Tr. Ex. 213). 

In October or November of2005 (within six weeks of the agreement to agree) an 

extensive 25 page document titled "Distribution Agreement," was prepared for Akeso and 

4 AH refers to Akeso Health. (Trans. 563: 17-18). 

FINDINGS OF FACT, OPINION AND ORDER -- 18 

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modified by Quantum with redline changes. (Tr. Ex. 220; Trans. 564:8-565: 1 ). The unsigned 

November 2005 draft "Distribution Agreement," contemplated that the parties would enter into a 

contemporaneous Trademark Purchase Agreement that would transfer the MigreLief trademark to 

Akeso. (Tr. Ex. 220). Paragraph D of the document states, "Concurrently, herewith, and as forther 

consideration and a condition hereto, the Parties shall enter into that certain Trademark Purchase 

Agreement of event date herewith." There is no such agreement in the record and, obviously, if 

one was prepared it was not signed by the parties. While the "Distribution Agreement" does not 

purport to govern such a transfer, the document does contain a detailed section titled 

"TRADEMARKS AND BRANDING" that discusses Akeso's license of the MigreLieftrademark 

back to Quantum. (Id.). Although Quantum made changes to other sections of the initial draft, this 

section reflects no changes or objections by Quantum to the terms transferring the trademark to 

Akeso. The document also states that if the Agreement expires or is terminated Quantum will 

have no further right to use the MigreLief trademark unless written consent is obtained from 

Akeso. Redline changes indicate only that the word "Trademarks" was changed to "Marks." (Id.). 

As noted above, this document was never signed and the record contains no additional evidence 

regarding the "Trademark Purchase Agreement" it references. 

On March 2, 2007, Akeso contacted Quantum stating that the parties had been working 

without a contract regarding the distribution by Quantum of MigreLief into the health food store 

category and stated that in order for Quantum to continue to sell the patented formulation into 

that category, Quantum would need to assign the "Migreliefname" to Akeso. In exchange for the 

assignment and a price increase, Akeso would agree to allow Quantum to market Akeso's 

formulation for 36 months. Akeso (Hendrix) asked Quantum to contact him as soon as possible 

to discuss the price increase and assignment of the trademark. (Tr. Ex. 236). 

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On March 3, 2007, an internal Quantum email from Shaw to Quantum's then-President, 

Eve McClure, indicates that Shaw spoke with Hendrix and that they discussed prices and 

quantities. In relation to the "deal," Shaw wrote "I told him a contract was a good idea but what 

did he have in mind after the three year period? He had no idea. I suggested we buy his business 

or he buy ours .... He wanted to think about buying ours." (Tr. Ex. 237). 

Quantum's email to Hendrix on March 5, 2007 confirming the phone conversation only 

refers to prices and sales and does not mention the MigreLief trademark. In any event, the 

"Migreliefname" was not assigned lo Akeso and Quantum continued to market Akeso's 

formulation for much longer than 36 months. (Tr. Ex. 238). 

On May 2, 2014, Shaw prepared a document titled "CONFIDENTIAL 

MEMORANDUM: Migrelief' which was intended to be an internal Quantum document but was 

also inadvertently sent to Akeso. The memorandum discusses a variety of issues regarding the 

relationship with Akeso. In a section titled "Trademark Issues," the document states "[i]n 2005 

Quantum attempted to renegotiate a new agreement including an enforceable licensing 

agreement with Akeso but Akeso abandoned the process and the resull is that the two companies 

have been operating under a verbal agreement, as mentioned above." The section on trademark 

issues discusses a potential challenge to the trademark on the ground that Akeso is using it 

without adequate quality controls but discusses nothing about Akeso challenging the ownership 

of the trademark. The memorandum also addresses, "The importance of granting a license to 

AKESO" (the evidence suggests that the parties had been operating without a formal licensing 

agreement for many years) and has a section titled "The MigreLiefbrand power VS[ sic] a new 

brand." This section has proven to be prophetic as it states, 

Petersen sees all sorts of potential issues with AKESO if we decide to market our 

own formula under the MigreLief brand. Petersen believes that AKESO would 

FINDINGS OF FACT, OPINION AND ORDER-- 20 

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sue based on what they perceive as a long history of us only selling his mark and 

that the intent of the original arrangement was such. Petersen believes we would 

prevail but no guarantees. Even so, it has the potential to get very messy in many 

other unpredictable ways. Despite the license, Hendrix could disrupt our supply, 

or interfere with key retailers such as Vitamin Shoppe. I realize he'd be taking 

risks in doing so, but you just don't know. It's his baby. Keep in mind that 

Hendrix has put considerable effort into gaining confidence for the brand among 

health professionals and consumers. 

(Tr. Ex. 68)( emphases added). 

On June 3, 2014, Quantum (Shaw) emailed Akeso stating "Curt, I'm very open to a 

universal agreement. After speaking to our attorney, this agreement would be comprised of a 

trademark license as well as a patent agreement and these can be rolled into one agreement." (Tr. 

Ex. 280). 

On August 19, 2014, Akeso (Hendrix) emailed Quantum (Shaw) with the subject 

"Discussion of potential new trademark license and product license agreements." As to the 

trademark, the email states, 

1- In the original agreement, Akcso had the open ended right to purchase the 

trademark for $25,000. If we draft a new agreement, I would like for Akeso to 

continue to have that right. Akeso will agree that if it purchases the trademark, 

then Quantum will have the right to use it in the markets that it is licensed to sell 

MigreLief. (In essence, it is just flipping the roles of each of the companies). 

* * * 

3-Akeso intends to whenever possible to continue to create MigreLief line 

extensions. . . It is not clear to me if a new trademark agreement has to take this 

into consideration but certainly a new product licensing agreement would have to 

limit Quantum to selling migraine formulations that fall under the patents. 

4-If a new trademark agreement is reached it would need to be exclusive to 

Akeso. 

(Tr. Ex. 284). The email concludes, "! cannot be certain that I have thought of every point that 

may come up in trying to agree on these two agreements but we had to start somewhere. (Id.). In 

an internal email dated the same clay, Shaw indicated in response to Akeso's Point 1, "we won't 

do this." (Tr. Ex. 285). 

FINDINGS OF FACT, OPINION AND ORDER-- 21 

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A letter from Akeso to Quantum dated November 30, 2015, gave notice that Akeso was 

terminating the 2002 Agreement and was exercising its right to purchase the MigreLief 

trademark for $25,000. The letter also explored the possibility of continuing the business 

relationship subject to certain terms. (Tr. Ex. 86). 

A letter dated February 26, 2016, from Akeso's lawyer to Quantum's lawyer reasserted 

Akeso's belief that the 2002 Agreement was in effect until Akeso terminated it on November 30, 

2015. (Tr. Ex. 300). It informed Quantum that Akeso was exercising its right to purchase all 

rights to the MigreLieftrademark for $25,000. (Id.). The letter also stated that "Akeso is no 

longer interested in supplying product to Quantum." (Id.). 

A third letter, from Quantum's lawyer to Akeso's lawyer dated March 3, 2016, indicated 

that Quantum disagreed with the statements in Akeso's letter and purported to revoke Akeso's 

permission to use the MigreLieftrademark. (Tr. Ex. 302). 

The parties had continued to do business with each other without a written contract from 

October 2004 until Akeso terminated the relationship by letter dated November 30, 2015. (Dkt. 

#93; Tr. Ex. 86). At no time prior to November 2015 did Quantum terminate the parties' ongoing 

contractual relationship. Quantum did not stop purchasing the Patented Formula or exercising its 

exclusive distribution and licensing rights. Nor did Quantum dispute Akcso's right to use the 

MigreLieftrademark. (Dkt. #93). 

During the course of the business relationship, Akeso developed and sold derivative 

products for specific customer categories that it sold under the MigreLief name, including 

MigreLief +M, Children's MigreLief, and MigreLiefNow. (Trans. 130:9-131 :25). Quantum only 

sold the original MigreLief product. (Trans. 131 :21-22). Akeso sold its products in a number of 

ways including on its website, migrelief.com. 

FINDINGS OF FACT, OPINION AND ORDER -- 22 

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The parties agree that they had an ongoing enforceable agreement regarding sales 

channels and that Quantum breached that agreement. (Id.). Quantum disagreed as to the extent of 

its breach but that issue was resolved by the jury's verdict on June 12, 2017, awarding Akeso 

$504,381.00 in damages. (Dkt. #145). There is no question regarding Akeso's permission to use 

Quantum's trademark or Quantum's permission to sell Akeso's patented product in designated 

channels prior to November 30, 2015. 

The Court finds that any increase in the value of the trademark from 2005 to the time of 

trial was clue primarily to the efforts of Akeso. Akeso spent considerable time, effort and an 

outlay of more than $1 million in promoting the trademark. During the parties' business 

relationship, the trademark was used exclusively on Akeso's patented formula and Akesoclevelopecl variants of that formula. The MigreLiefvariants were marketed and sold exclusively 

by Akeso. (Trans. 130:9-131:25; 131:21-22). 

The Court has weighed, evaluated, and considered all the evidence presented at trial and 

all of the arguments of counsel. Having completed its deliberation and based on its Findings of 

Fact and Conclusions of Law herein as required under Feel. R. Civ. Pro. 52(a), the Court 

concludes that Akeso has established by clear and convincing evidence that the parties had an 

implied-in-fact contract that included an agreement to transfer the MigreLieftraclemark to 

Akeso. Furthermore, the Court, invoking its equitable powers, concludes that the parties' intent 

is best accomplished by setting fair and reasonable monetary consideration for the transfer of the 

MigreLieftrademark at $100,000. For these reasons, the Court finds in favor of Akeso on the 

issue of implied contract-specific performance (Counterclaim 9) and dismisses Akeso's 

promissory estoppel claim (Counterclaim 5) as moot. 

FINDINGS OF FACT, OPINION AND ORDER-- 23 

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II. Trademark Infringement, Unfair Competition and Unfair and Deceptive Trade Practices 

Claims 

Under the facts of this case, which are different from any reported case I have been able to 

find, I conclude that both parties were entitled to use the disputed trademark pending resolution of 

this litigation. Prior to the termination of their business relationship, the parties conducted 

business for more than 12 years. Written contracts were in effect only a small fraction of that 

time. Curt Hendrix likely had a good opportunity to immediately secure the trademark for Akeso 

by following through and signing a final agreement as contemplated by the Memo Agreement of 

September 27, 2005. However, the parties' negotiations bogged down over relatively minor 

details. In the span of the next ten years, despite engaging in forther negotiations that involved a 

variety of terms related to the transfer of the trademark and distribution rights, and despite the 

continuing business relationship while Akeso worked to build the MigreLief trademark, a final 

agreement was never signed that provided for Akeso's receipt of the trademark. 

The parties' relationship ended in large part because of Quantum's out-of-channel sales. It 

was apparent at trial that David Shaw had no acceptable explanation for Quantum's breach of the 

sales agreement and, more importantly, Mr. Shaw's failure to correct a significant breach when it 

came to his attention. The breaches by Quantum not only affected the parties' relationship but 

also prolonged this litigation. The sales issues necessitated substantial discovery, expensive expert 

reports, and the calling of a jury to resolve the amount of damages. 

Until this Court rendered this Opinion and Order, each party had a good faith belief that it 

was entitled to use the MigreLief trademark. Quantum had ownership of the trademark and Akeso 

had a legitimate basis to believe that it was entitled to obtain the trademark when the parties' 

business relationship concluded. Because I conclude that both parties had a right to use the 

FINDINGS OF FACT, OPINION AND ORDER -- 24 

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trademark until the conclusion of this litigation, I dismiss with prejudice the parties' remaining 

MigreLieftrademark claims in their entirety. (Quantum Claim 2; Akeso Counterclaims 7, 8, 11, 

12, 13, 14). I also conclude, based on the evidence submitted at summary judgment and, in light 

of the circumstances of this case as a whole, that any infringement of the PURA COL trademark 

as alleged in Akeso's Counterclaims 15 throughl8 was unintentional, promptly rectified and 

sufficiently de minim is that no award of damages is warranted. I, therefore, also dismiss those 

counterclaims. 

III. Attorneys' Fees 

The Court will not entertain claims for attorneys' fees by either party. No final agreement 

was ever reached as to attorney fees, each party prevailed on some of its claims, and the actions 

or failures to act by both parties led to this litigation. 

DATED this 211rl day of August, 2017. 

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