Yeti Enterprises NPK Response

7/27/2019 Yeti Enterprises NPK Response

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Page 1 - DEFENDANT NPK, LLCS AND ORION TANGS ANSWER,AFFIRMATIVE DEFENSES, AND COUNTERCLAIMSTO PLAINTIFFS COMPLAINT

Rene E. Rothauge, OSB #[email protected] M. Edelson, OSB #[email protected], HERBOLD, GLADE& MEHLHAF, P.C.

1211 SW Fifth Avenue, Suite 3000Portland, OR 97204-3730Tel: (503) 295-3085Fax: (503) 323-9105

Attorneys for Defendant NPK, LLC

Robert B. Miller, OSB #[email protected] VOORHEES & LAURICK PC732 NW 19th AvenuePortland, OR 97209Tel: (503) 224-0055

Fax: (503) 222-5290Attorneys for Defendant Orion Tang

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF OREGON

PORTLAND DIVISION

YETI ENTERPRISES INCORPORATED,an Oregon corporation,

Plaintiff,

vs.

NPK, LLC, f/k/a N.P.K. DISTRIBUTORS,LLC, an Oregon Limited Liability Company,and ORION TANG, an individual,

Defendants.

CV No.: 3:13-cv-01203-ST

DEFENDANTS NPK, LLCS ANDORION TANGS ANSWER,

AFFIRMATIVE DEFENSES, ANDCOUNTERCLAIMS TO PLAINTIFFS

COMPLAINT

DEMAND FOR JURY TRIAL

Defendants NPK, LLC (NPK) and Orion Tang (Tang, and together with NPK,

Defendants) respond to plaintiffs (Yeti) complaint with the following answer, affirmative

defenses, and counterclaims:

Case 3:13-cv-01203-ST Document 6 Filed 07/24/13 Page 1 of 32 Page ID#: 58


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ANSWER RESPONDING TO ALLEGATIONS IN THE COMPLAINT

I. PARTIES, JURISDICTION AND VENUE1.

Defendants admit Yeti is a corporation incorporated under the laws of Oregon with its

principal place of business in Medford, Oregon, and engages in the business of manufacturing

and selling plant washes. Defendants are without knowledge or information sufficient to form a

belief as to the truth of the remaining allegations in paragraph 1 of the complaint, and therefore

deny them.

2.

In response to the allegations in paragraph 2 of the complaint, Defendants admit that

NPK is an Oregon limited liability company with a principal place of business in Medford,

Oregon, and sells and distributes horticulture products. Defendants deny all remaining

allegations in paragraph 2 of the complaint.

3.

Paragraph 3 of the complaint consists of plaintiffs legal conclusions and

characterizations of the claims in the complaint, and not factual allegations that require a

response. To the extent a response is required, Defendants deny the allegations in paragraph 3 of

the complaint.

4.

Defendants admit the allegations in paragraph 4 of the complaint for the purpose of venue

only.

II. GENERAL ALLEGATIONS5.

Defendants are without knowledge or information sufficient to form a belief as to the

truth of the allegations in paragraph 5 of the complaint, and therefore deny them.



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6.



7.



8.



9.

In response to the allegations in paragraph 9 of the complaint, Defendants admit that Yeti

and NPK entered into a Distribution Agreement dated November 11, 2010, attached as exhibit A

to the complaint. Defendants further state that the Distribution Agreement attached as exhibit A

to the complaint speaks for itself. Defendants deny all remaining allegations in paragraph 9 of

the complaint.

10.


after the Distribution Agreement dated November 11, 2010, attached as exhibit A to the

complaint was executed, Yeti and NPK executed an agreement titled Yeti Final Proposal, and

a tote is a plastic vessel that contains 260 gallons of liquid. Defendants further state that the

Yeti Final Proposal agreement speaks for itself. Defendants deny all remaining allegations in

paragraph 10 of the complaint.

11.

In response to the allegations in paragraph 11 of the complaint, Defendants state that the

Distribution Agreement attached as exhibit A to the complaint speaks for itself. Defendants

deny all remaining allegations in paragraph 11 of the complaint.



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12.


pursuant to the Distribution Agreement attached as exhibit A to the complaint, NPK bottled,

labeled, marketed, and physically distributed three plant washes: Mighty Wash, PM Wash,

and Power Wash. Defendants deny all remaining allegations in paragraph 12 of the complaint.

13.

In response to the allegations in paragraph 13 of the complaint, Defendants admit that the

U.S. Patent and Trademark Office granted NPK a trademark for Mighty Wash, U.S.

Trademark Registration No. 4,121,193. Defendants further state that U.S. Trademark

Registration No. 4,121,193 and any associated application materials speak for themself.

Defendants deny all remaining allegations in paragraph 13 of the complaint.

14.

In response to the allegations in paragraph 14 of the complaint, Defendants admit that the

U.S. Patent and Trademark Office granted NPK a trademark for Mighty Wash, U.S.

Trademark Registration No. 4,241,438. Defendants further state that U.S. Trademark

Registration No. 4,241,438 and any associated application materials speak for themself.

Defendants deny all remaining allegations in paragraph 14 of the complaint.

15.

In response to the allegations in paragraph 15 of the complaint, Defendants admit that on

March 29, 2012, the U.S. Environmental Protection Agency (EPA) issued a stop sale, use, or

removal order to NPK, which prohibited NPKs sale or distribution of Mighty Wash, PM

Wash, and Power Wash. Defendants deny all remaining allegations in paragraph 15 of the

complaint.

16.


after the EPA issued its stop sale, use, or removal order to NPK, NPK changed its labels for



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Mighty Wash, PM Wash, and Power Wash. Defendants further state that the labels speak

for themself. Defendants deny all remaining allegations in paragraph 16 of the complaint.

17.

Defendants deny the allegations in paragraph 17 of the complaint.

18.


19.



20.



21.



22.


23.

Defendants deny the allegations in paragraph 23 of the complaint that NPK is advertising

using Yetis Marks as defined by Yeti and causing consumer confusion in the marketplace.

Defendants further state they are without knowledge or information sufficient to form a belief as

to the truth of the remaining allegations in paragraph 23 of the complaint, and therefore deny

them.



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24.

Defendants admit NPK agreed to change any NPK ads that said From the Creators of

Mighty Wash to From the Distributors of Mighty Wash. Defendants deny all remaining

allegations contained in paragraph 24 of the complaint.

25.


26.


27.


28.


29.


30.

In response to the allegations in paragraph 30 of the complaint, Defendants deny that

NPK used Yetis Marks as defined by Yeti. Defendants further deny the remaining allegations in

paragraph 30 of the complaint.

31.


NPK filed a complaint for tortious interference with contractual relations against Yeti in Jackson

County Circuit Court, case no. 13CV01641, later stipulated to a voluntarily dismissal without

prejudice, and the Distribution Agreement attached as exhibit A to the complaint contains an

exclusive venue provision for Multnomah County. Defendants further state they are without

knowledge or information sufficient to form a belief as to the truth of the remaining allegations

in paragraph 31 of the complaint, and therefore deny them.



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III. CLAIM FOR RELIEFA. FIRST CLAIM FOR RELIEF (AGAINST NPK) Trademark infringement

and unfair competition 15 U.S.C. 1125(a).

32.

In response to the allegations in paragraph 32 of the complaint, Defendants incorporate

by reference each and every response set forth above.

33.


34.


35.


NPK used Yetis Marks as defined by Yeti. Defendants are without knowledge or information

sufficient to form a belief as to the truth of the remaining allegations in paragraph 35 of the

complaint, and therefore deny them.

36.


37.


38.


39.


40.


41.




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B. SECOND CLAIM FOR RELIEF (AGAINST NPK) False advertising 15 U.S.C. 1125(a).

42.



43.


44.


45.


46.


47.


48.


49.


50.


51.




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C. THIRD CLAIM FOR RELIEF (AGAINST NPK) Common lawinfringement and unfair competition.

52.



53.


NPK unlawfully used any marks owned by Yeti. Defendants are without knowledge or

information sufficient to form a belief as to the truth of the remaining allegations contained in

paragraph 53 of the complaint, and therefore deny them.

54.


NPK misappropriated any marks owned by Yeti. Defendants are without knowledge or

information sufficient to form a belief as to the truth of the remaining allegations contained in

paragraph 54 of the complaint, and therefore deny them.

55.


56.


57.


58.




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D. FOURTH CLAIM FOR RELIEF (AGAINST NPK AND TANG)1. Fraud Federal Trademark Registration, Count I.

59.



60.


61.


62.


63.


2. Fraud Federal Trademark Registration, Count II.64.



65.


66.


67.


68.




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E. FIFTH CLAIM FOR RELIEF (AGAINST NPK) Common law fraud.69.



70.

In response to the allegations in paragraph 70 of the complaint, Defendants admit that on

March 29, 2012 the U.S. Environmental Protection Agency (EPA) issued a stop sale, use, or

removal order to NPK, which prohibited NPKs sale or distribution of Mighty Wash, PM

Wash, and Power Wash. Defendants deny the remaining allegations in paragraph 70 of the

complaint.

71.


72.


73.


74.


F. SIXTH CLAIM FOR RELIEF (AGAINST NPK)1. Breach of contract, Count I.

75.



76.


Yeti and NPK executed a Distribution Agreement dated November 11, 2010, attached as exhibit



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A to the complaint. Defendants further state that the Distribution Agreement attached as exhibit

A to the complaint speaks for itself. Defendants deny all remaining allegations in paragraph 76

of the complaint.

77.


78.


79.


80.


2. Breach of contract, Count II.81.



82.





of the complaint.

83.


84.




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85.


86.

Defendants deny the allegations in paragraph 86 of the complaint.3. Breach of contract, Count III.

87.



88.





of the complaint.

89.


90.


91.


92.


4. Breach of contract, Count IV.93.





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94.





of the complaint.

95.


96.


97.


98.


G. SEVENTH CLAIM FOR RELIEF (AGAINST NPK) Breach of impliedcovenant of good faith and fair dealing.

99.



100.





of the complaint.

101.




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102.





of the complaint.

103.


104.


105.


H. EIGHTH CLAIM FOR RELIEF (AGAINST NPK) Declaratory judgment,ORS Chapter 28.

106.



107.

Defendants admit that there is a controversy between the parties. Defendants deny all

remaining allegations contained in paragraph 107 of the complaint.

108.

Defendants admit the allegations in paragraph 108 of the complaint for the purpose of

venue only.

109.




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110.

Except as specifically admitted, Defendants deny each and every allegation in the

complaint.

AFFIRMATIVE AND ADDITIONAL DEFENSES

111.

Defendants assert the following affirmative defenses, without assuming any burden that

would otherwise rest with plaintiff.

FIRST AFFIRMATIVE DEFENSE(Failure to State a Claim)

112.

Plaintiffs complaint and the purported causes of action set forth therein fail to state a

claim against Defendants upon which relief can be granted.

SECOND AFFIRMATIVE DEFENSE(Failure to Allege Fraud with Particularity)

113.

Some or all of plaintiffs claims fail to allege fraud with particularity.

THIRD AFFIRMATIVE DEFENSE

(Laches)

114.

Plaintiff is not entitled to maintain some or all of its claims because of the doctrine of

laches. Plaintiff waited an unreasonable length of time to bring its trademark infringement

claims. Plaintiff was aware that NPK continuously used the trademarks for Mighty Wash,

PM Wash, Power Wash, the Power Button, and the Frequency Logo (NPKs Marks)

for more than two years. Plaintiff failed to inform NPK of, or enforce, its purported ownershipof NPKs Marks. Plaintiffs delay in bringing its trademark claims prejudiced NPK because of

its substantial investment in promotion and advertising of NPKs Marks.



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FOURTH AFFIRMATIVE DEFENSE(Estoppel, Waiver, and Acquiescence)

115.

Plaintiff is not entitled to maintain some or all of its claims because of the doctrine ofestoppel, waiver, and acquiescence. NPKs Marks have been in open, continuous and extensive

use by NPK for more than two years prior to the filing of this complaint, to the knowledge of

plaintiff, with no attempt on plaintiffs part to obtain a judicial determination of its alleged rights

with respect to NPKs use of its marks. NPK has relied to its detriment upon plaintiffs

acquiescence and delay, and has continued use of its marks and invested substantial sums in

promotion and advertising of said marks. For these reasons, plaintiff is estopped to allege that

any acts of Defendants now constitute an infringement of plaintiffs alleged trademark rights.

FIFTH AFFIRMATIVE DEFENSE(Abandonment)

116.

Plaintiff is not entitled to maintain some or all of its claims because it has abandoned

rights in the marks by either discontinuing its use of the marks with express or implied intent not

to continue use, or failing to exercise adequate quality control over the goods sold under the

trademarks.

SIXTH AFFIRMATIVE DEFENSE(Plaintiff is Not the True Owner of the Marks)

117.

Plaintiff is not entitled to maintain some or all of its claims because it is not the true

owner of NPKs Marks by either NPK being the first to use its marks in the marketplace,

consumers associating NPKs marks with NPK, NPKs registration of the Mighty Wash markwith the U.S. Patent and Trademark Office, or agreement between NPK and Yeti.



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SEVENTH AFFIRMATIVE DEFENSE(Continuous Prior Use)

118.

Some or all of plaintiffs claims are barred by the doctrine of continuous prior use.

EIGHTH AFFIRMATIVE DEFENSE(Good Faith)

119.

Some or all of plaintiffs state claims are barred by the doctrine of good faith.

NINTH AFFIRMATIVE DEFENSE(Unclean Hands)

120.

Some or all of plaintiffs claims are barred by the doctrine of unclean hands because

plaintiff engaged in conduct including, but not limited to, knowingly filing an application for

registration of the mark That Stuff Mighty Wash with the U.S. Patent and Trademark Office,

Serial No. 85806351, after NPK already registered its marks for Mighty Wash, refusing to

supply NPK with plant washes, and adding obligations to NPK that the parties never agreed to,

or bargained for, in order for Yeti to supply NPK with plant washes pursuant to the Distribution

Agreement and its amendments.

TENTH AFFIRMATIVE DEFENSE(Statute of Limitations)

121.

Some or all of plaintiffs state claims are barred by statute of limitations.

ELEVENTH AFFIRMATIVE DEFENSE(Repudiation)

122.

Some or all of plaintiffs claims are barred because plaintiff repudiated the Distribution

Agreement and its amendments.



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TWELFTH AFFIRMATIVE DEFENSE(Payment)

123.

Some or all of plaintiffs claims are barred by the doctrine of payment.

THIRTEENTH AFFIRMATIVE DEFENSE(Accord and Satisfaction)

124.

Some or all of plaintiffs claims are barred by the doctrine of accord and satisfaction.

FOURTEENTH AFFIRMATIVE DEFENSE(Waiver)

125.

Some or all of plaintiffs contract related claims are barred by the doctrine of waiver.

FIFTHEENTH AFFIRMATIVE DEFENSE(Commercial Impossibility or Impracticability)

126.

Some or all of plaintiffs claims are barred by the doctrine of commercial impossibility or

impracticability.

SIXTEENTH AFFIRMATIVE DEFENSE(Unconscionable Contract or Terms)

127.

Some or all of plaintiffs claims are barred because of an unconscionable contract or

unconscionable contract terms.

SEVENTEENTH AFFIRMATIVE DEFENSE(Failure of Consideration)

128.

Some or all of plaintiffs claims are barred due to failure of consideration because

plaintiff refused to supply contractual goods to NPK.



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EIGHTEENTH AFFIRMATIVE DEFENSE(Immaterial Breach)

129.

Some or all of plaintiffs claims are barred because any alleged breach of contract was an

immaterial breach.

NINETEENTH AFFIRMATIVE DEFENSE(Sufficiency of Notice)

130.

Some or all of plaintiffs claims are barred because of insufficient notice of any alleged

violations or breaches.

TWENTIEENTH AFFIRMATIVE DEFENSE(Additional Defenses)

131.

Defendants may have additional defenses that cannot now be articulated due to the

generality of plaintiffs pleadings and the fact that discovery has not yet begun. Accordingly,

Defendants expressly reserve the right to supplement the foregoing and to plead any and all

additional defenses available under the law.


132.

Defendants demand a jury trial in this action.

WHEREFORE, having fully answered plaintiffs complaint and having asserted

affirmative and additional defenses, Defendants respectfully pray for judgment as follows:

A. That plaintiffs claims against Defendants be dismissed in their entirety and

with prejudice;

B. That plaintiff takes nothing;

C. That the Court enter judgment in Defendants favor;

D. That Defendants recover reasonable attorney fees, expenses, and costs; and



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E. For any other just relief.

COUNTERCLAIMS

NPK alleges as follows:

PARTIES, JURISDICTION, AND VENUE

1.

NPK is a limited liability company incorporated under the laws of Oregon with its

principal place of business in Medford, Oregon.

2.

NPK is engaged in the business of manufacturing, distributing, and marketing garden

supplies and materials.

3.

Orion Tang (Tang) is an individual who resides in Medford, Oregon and is NPKs vice

president.

4.

Yeti is a corporation incorporated under the laws of Oregon with its principal place of

business in Medford, Oregon.

5.

Yeti is engaged in the business of manufacturing and selling plant washes.

6.

This Court has original jurisdiction over plaintiffs and NPKs trademark claims under 28

U.S.C. 1331, 28 U.S.C. 1338, and 15 U.S.C. 1125, NPKs and Tangs federal declaratory

judgment claims under 28 U.S.C. 2201 and 28 U.S.C. 2202, and supplemental jurisdiction

over NPKs remaining state law claims pursuant to 28 U.S.C. 1367.

7.

Venue is proper in the United States District Court for the District of Oregon pursuant to

28 U.S.C. 1391 because NPK and Tang reside in the State of Oregon and sells products in the



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State of Oregon. Venue is also proper in the Portland Division pursuant to LR 3-2 because the

contract at issue contains an exclusive venue provision for Multnomah County.

FIRST CLAIM FOR RELIEF(Breach of Contract)

8.

NPK realleges and incorporates all previous paragraphs of its counterclaim as if fully

stated herein.

9.

On November 11, 2010, NPK and Yeti executed a ten year Distribution Agreement,

attached as exhibit A to the complaint, for NPK to bottle, label, market, and physically distribute

three different plant washes supplied by Yeti.

10.

On February 17, 2012, NPK and Yeti executed an agreement titled Yeti Final Proposal

that modified certain terms of the Distribution Agreement and expressed other terms of the

parties business relationship. On April 4, 2013, Yeti further modified certain delivery terms of

the Distribution Agreement.

11.

The Distribution Agreement and its amendments are valid and binding contracts between

NPK and Yeti.

12.

Yeti breached the Distribution Agreement and its amendments in, at least, the following

particulars:

a) Yeti unilaterally and arbitrarily increased prices for plant washes without

sufficient notice;

b) Yeti also unilaterally and arbitrarily shortened the due date for payment of

invoices;



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c) Yeti stopped supplying NPK with plant washes unless NPK immediately agreed

to Yetis unilateral and arbitrary changes to the terms of the parties agreements;

d) Yeti repudiated the Distribution Agreement before the ten year term expired.

13.

NPK has substantially performed its obligations under the Distribution Agreement and its

amendments or is otherwise excused from such performance by Yetis actions.

14.

As a result of Yetis breach, NPK has suffered damages in an amount to be determined at

trial, but in any event, not less than $6,787,250.40. NPK is entitled to prejudgment interest at the

statutory rate.

15.

NPK is entitled to recover its reasonable attorney fees, expenses, and costs incurred in

this action, pursuant to paragraph 21 of the Distribution Agreement.

SECOND CLAIM FOR RELIEF(Breach of the Implied Covenant of Good Faith and Fair Dealing)

16.


stated herein.

17.

The Distribution Agreement and its amendments have an implied covenant of good faith

and fair dealing.

18.

The parties had objectively reasonable expectations that Yeti would perform its

obligations under the Distribution Agreement and its amendments in good faith.



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19.

Yeti violated the parties reasonable expectations and breached its duty of good faith and

fair dealing by adding obligations to NPK that the parties never agreed to, or bargained for, in

order for Yeti to supply NPK with plant washes pursuant to the Distribution Agreement and its

amendments.

20.

NPK has substantially performed its obligations under the Distribution Agreement and its

amendments or is otherwise excused from such performance by Yetis actions.

21.

As a result of Yetis breach, NPK has suffered damages in an amount to be determined at

trial, but in any event, not less than $6,787,250.40. NPK is entitled to prejudgment interest at the

statutory rate.

22.

NPK is entitled to recover its reasonable attorney fees, expenses, and costs incurred in

this action, pursuant to paragraph 21 of the Distribution Agreement.

THIRD CLAIM FOR RELIEF(Declaratory Judgment, Count I)

23.


stated herein.

24.

In accordance with 28 U.S.C. 2201 and 2202, an actual and justiciable controversy

exist between NPK and Yeti with regard to NPKs ownership of the trademarks for Mighty

Wash, PM Wash, Power Wash, the Power Button, and the Frequency Logo (NPKs

Marks).



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25.

NPK invented, paid for, and has continuously used NPKs Marks in commerce.

26.

Consumers identify and associate NPKs Marks with NPK because NPK has invested

substantial sums in promotion and advertising of NPKs marks.

27.

NPK registered the Mighty Wash mark with the U.S. Patent and Trademark Office,

U.S. Trademark Registration Nos. 4,121,193 and 4,241,438 on July 7, 2011 and March 19, 2012

respectively.

28.

As a result, NPK requests this Court declare that NPK is the owner of the trademarks for

Mighty Wash, PM Wash, Power Wash, the Power Button, and the Frequency Logo,

not Yeti.

(Declaratory Judgment, Count II)

29.


stated herein.

30.


exist between NPK and Yeti with regard to NPKs ability to sell plant washes from any source

using NPKs Marks, sell other products using NPKs Marks, and Yetis ability to sell its plant

washes using NPKs marks.

31.

NPK invented and paid for NPKs marks in September 2010.



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32.

NPKs logo, NPK Industries, appeared on the original labels for the following three

plant washes sourced by Yeti: Mighty Wash, PM Wash, and Power Wash (the

Products).

33.

NPK maintained the quality and uniformity of the Products.

34.

Consumers identified the Products with NPK.

35.

Consumers made complaints to NPK about the Products.

36.

NPK possesses the good will associated with the Products.

37.

Yeti has stopped supplying NPK with the Products.

38.

NPK requests this Court declare that NPK can use NPKs Marks to sell plant washes

from any source, sell other products using NPKs Marks, and Yeti cannot use NPKs Marks to

sell Yetis plant washes without NPKs written consent.

(Declaratory Judgment, Count III)

39.

NPK and Tang reallege and incorporate all previous paragraphs of its counterclaim as if

fully stated herein.

40.


exist between NPK and Yeti with regard to whether NPK and Tang knowingly made false

declarations, in registering the trademark for Mighty Wash with the U.S. Patent and



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Trademark Office, U.S. Trademark Registration Nos. 4,121,193 and 4,241,438, and induced the

trademark examiner to act or refrain from acting in reliance upon any alleged false declarations.

41.

NPK and Tang, in good faith, stated NPK was the owner of the trademark for Mighty

Wash in registering that trademark with the U.S. Patent and Trademark Office, U.S. Trademark

Registration Nos. 4,121,193 and 4,241,438, on July 7, 2011 and March 19, 2012 respectively.

42.

NPK and Tang, in good faith, stated NPK first used the Mighty Wash trademark in

commerce at least as early as 11/01/2010 in registering that trademark with the U.S. Patent and

Trademark Office, U.S. Trademark Registration Nos. 4,121,193 and 4,241,438, on July 7, 2011

and March 19, 2012 respectively.

43.

NPK invented the Mighty Wash trademark in September 2010.

44.

NPK has continuously used the Mighty Wash trademark in commerce since, at least,

October 2010.

45.

Consumers identify and associate the Mighty Wash trademark with NPK because NPK

has invested substantial sums in promotion and advertising of the Mighty Wash trademark.

46.

NPK requests this Court declare that NPK and Tang did not knowingly make false

declarations, in registering the trademark for Mighty Wash with the U.S. Patent and

Trademark Office, U.S. Trademark Registration Nos. 4,121,193 and 4,241,438, and did not

induce the trademark examiner to act or refrain from acting in reliance upon any alleged false

declarations.



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(Declaratory Judgment, Count IV)

47.


stated herein.

48.

In accordance with 28 U.S.C. 2201 and 2202 and Or. Rev. Stat. Ann. 28.010 (2013),

an actual and justiciable controversy exist between NPK and Yeti with regard to whether Yeti

breached or repudiated the Distribution Agreement and its amendments prior to any alleged

breach by NPK; whether Yetis repudiation of the Distribution Agreement and its amendments

excused NPKs performance; whether NPK had reasonable grounds for insecurity with respect to

Yetis performance of the Distribution Agreement and its amendments; whether NPKs request

for assurances suspended NPKs obligation to perform under the Distribution Agreement and its

amendments; whether the Distribution Agreement and its amendments either required monthly

minimum purchases by NPK and any alleged breach of one or more installments did not

substantially impair the value of the whole contract, or required yearly minimum purchases by

NPK and NPKs time for performance had not expired; and whether Yeti wrongfully terminated

the entire agreement.

49.

In January 2010, Yeti demanded NPK change an advertisement for two NPK gardening

products Multiply and Stack that said From the Creators of Mighty Wash.

50.

On January 28, 2010, Yeti demanded NPK sell all Mighty Wash, PM Wash, and

Power Wash manufactured by Yeti to NPKs exclusive distributor, Sunlight Supply, Inc.

(Sunlight). Yeti also demanded NPK turnover its customer lists, materials supplier lists, label

maker accounts, supply account for a plant wash ingredient, assign its Mighty Wash trademark

to Yeti, stop using NPKs trademark for the Power Button, sign an agreement with Yeti that



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Yeti is free to make a direct distribution deal with Sunlight, and pay all money owed to Yeti.

Yeti also stopped supplying the Products for a period of time.

51.

In good faith, NPK agreed to change any advertisements that said From the Creators of

Mighty Wash to From the Distributors of Mighty Wash.

52.

In good faith, NPK paid off the full balance of $31,608.30 owed to Yeti.

53.

Despite NPKs good faith efforts to perform its obligations under the Distribution

Agreement and its amendments, Yeti unilaterally and arbitrarily increased prices for plant

washes without sufficient notice to NPK.

54.

Yeti also unilaterally and arbitrarily shortened the due date for payment of invoices.

55.

Yeti then stopped supplying NPK with plant washes unless NPK immediately agreed to

Yetis unilateral and arbitrary changes to the terms of the parties agreements.

56.

As a result, NPK had reasonable grounds for insecurity with respect to Yetis

performance of the Distribution Agreement and its amendments.

57.

On May 15, 2013, NPK sent Yeti a request for assurances of Yetis continued

performance of the Distribution Agreement and its amendments.

58.

NPKs request for assurances suspended any obligation of NPK to perform its obligations

under the Distribution Agreement and its amendments.



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59.

Yeti terminated the Distribution Agreement before the ten year term expired.

60.

The Distribution Agreement and its amendments either required monthly minimum

purchases by NPK and any alleged breach of one or more installments did not substantially

impair the value of the whole contract, or required yearly minimum purchases by NPK and

NPKs time for performance had not expired.

61.

NPK requests that this Court declare that Yeti breached or repudiated the Distribution

Agreement and its amendments prior to any alleged breach by NPK; Yetis repudiation of the

Distribution Agreement and its amendments excused NPKs performance; NPK had reasonable

grounds for insecurity with respect to Yetis performance of the Distribution Agreement and its

amendments; NPKs request for assurances suspended NPKs obligation to perform under the

Distribution Agreement and its amendments; the Distribution Agreement and its amendments

either required monthly minimum purchases by NPK and any alleged breach of one or more

installments did not substantially impair the value of the whole contract, or required yearly

minimum purchases by NPK and NPKs time for performance had not expired; and Yeti

wrongfully terminated the entire agreement.


62.

NPK demands a jury trial in this action.

PRAYER FOR RELIEF

WHEREFORE, NPK respectfully prays for relief as follows:

A. On NPKs First Claim for Relief (Breach of Contract), judgment against

Yeti for damages in an amount to be determined at trial, but in any event, not less than

$6,787,250.40;



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B. On NPKs Second Claim for Relief (Breach of the Implied Covenant of Good

Faith and Fair Dealing), judgment against Yeti for damages in an amount to be determined at

trial, but in any event, not less than $6,787,250.40;

C. On NPKs Third Claim For Relief (Declaratory Judgment, Count I), judgment

entered in NPKs favor and against Yeti declaring that NPK is the owner of the trademarks for

Mighty Wash, PM Wash, Power Wash, the Power Button, and the Frequency Logo,

not Yeti;

D. On NPKs Third Claim For Relief (Declaratory Judgment, Count II), judgment

entered in NPKs favor and against Yeti declaring that NPK can use NPKs Marks to sell plant

washes from any source, sell other products using NPKs Marks, and Yeti cannot use NPKs

Marks to sell Yetis plant washes without NPKs written consent;

E. On NPKs Third Claim For Relief (Declaratory Judgment, Count III), judgment

entered in NPKs favor and against Yeti declaring that NPK and Tang did not knowingly make

false declarations, in registering the trademark for Mighty Wash with the U.S. Patent and

Trademark Office, U.S. Trademark Registration Nos. 4,121,193 and 4,241,438, and did not

induce the trademark examiner to act or refrain from acting in reliance upon any alleged false

declarations;

F. On NPKs Third Claim For Relief (Declaratory Judgment, Count IV), judgment

entered in NPKs favor and against Yeti declaring that Yeti breached or repudiated the

Distribution Agreement and its amendments prior to any alleged breach by NPK; Yetis

repudiation of the Distribution Agreement and its amendments excused NPKs performance;

NPK had reasonable grounds for insecurity with respect to Yetis performance of the

Distribution Agreement and its amendments; NPKs request for assurances suspended NPKs

obligation to perform under the Distribution Agreement and its amendments; the Distribution

Agreement and its amendments either required monthly minimum purchases by NPK and any

alleged breach of one or more installments did not substantially impair the value of the whole



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Page 32 - DEFENDANT NPK LLCS AND ORION TANGS ANSWER

contract, or required yearly minimum purchases by NPK and NPKs time for performance had

not expired; and Yeti wrongfully terminated the entire agreement;

G. NPKs reasonable attorney fees, expenses, and costs incurred in this action;

H. Prejudgment interest as allowed by law;

I. For any other just relief.

DATED this 24th day of July, 2013.

MARKOWITZ, HERBOLD, GLADE& MEHLHAF, P.C.

By: /s/ Rene E. Rothauge

Rene E. Rothauge, OSB #903712Jeffrey M. Edelson, OSB #880407

(503) 295-3085Of Attorneys for Defendant NPK, LLC

KILMER VOORHEES & LAURICK PC

/s/ Robert B. Miller

Robert B. Miller, OSB #960068(503) 224-0055Of Attorneys for Defendant Orion Tang

YETI/344457


Yeti Enterprises NPK Response

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