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North American Dental Wholesalers, Inc. v. Danaher Corporation

August 15, 2011

NORTH AMERICAN DENTAL WHOLESALERS, INC. PLAINTIFF,
v.
DANAHER CORPORATION, ET AL. DEFENDANTS.



The opinion of the court was delivered by: Tucker, J.

MEMORANDUM AND ORDER

August___, 2011

Presently before the Court is Defendants' Motion to Transfer or, in the Alternative, to Dismiss (Doc. 12) and Plaintiff's Response in Opposition thereto (Doc. 14). For the reasons set forth below, the Court grants Defendants' Motion to Transfer this matter to the Central District of California.

I. BACKGROUND

A. The Parties

Plaintiff, North American Dental Wholesalers Inc. ("NAD"), is a Toronto, Canada-based importer and distributor of dental supply products, which it sells in United States. Among the dental products that NAD distributes are Kerr branded consumable dental products, including Revolution Formula 2 and Premise Flowable, NX3/Nexus and Maxcem Elite. Defendant Danaher Corporation ("Danaher"), a Delaware corporation having its principal place of business at its headquarters in Washington, D.C., is among the leading dental company in the world. Defendant Sybron Dental Specialties, Inc. ("Sybron"), a wholly-owned subsidiary of Danaher, manufactures dental consumables and small equipment serving the professional dental market globally. Kerr Corporation ("Kerr"), a wholly-owned subsidiary of Sybron, manufactures and sells Kerr dental products. The operational offices of Sybron and Kerr are located at 1717 West Collins, Orange, California; but, the manufacture of Kerr® dental product is done principally at Sybron's facility in Mexicali, Mexico.

B. The Allegations

Plaintiff claims Sybron wildly discriminates in the prices at which it sells Kerr dental products. As a result, Plaintiff has been able to acquire genuine Kerr products from domestic and foreign retailers at a low cost, and then re-sell those products in the United States at prices that are substantially lower than Sybron's prices. Because Plaintiff offers Kerr products at lower prices, many United States dental retailers switched from exclusively acquiring Kerr products from Sybron to acquiring a significant quantity of Kerr products from Plaintiff. According to Plaintiff, these retailers account for as much as eighty percent of the United States dental retail sales market.

Plaintiff alleges that in response to losing its market share, Sybron has set out to eliminate Plaintiff as a competitor by falsely representing to retailers that Plaintiff supplies counterfeit Kerr products. In furtherance of this scheme, on December 30, 2010, Sybron distributed a letter signed by Sybron's Chief Intellectual Property Counsel Rajiv Yadav to at least thirty dental supply retailers throughout the United States and Canada. The letter states, in part:

I am writing to inform you about the existence of certain counterfeit Kerr products in the marketplace. . . . Our investigation has identified at least two Kerr products that are being counterfeited: Revolution Formula 2 and Premise Flowable. . . . . Kerr did not manufacture or supply the counterfeit product and, therefore, the counterfeits were put into commerce by distributors who supplied the product to customers. Based on invoices received from customers, Kerr was able to determine the identity of at least some distributors who had sold counterfeit Revolution Formula 2 to customers. . . . The distributors have informed Kerr that they bought Revolution Formula 2 Product from a company called North American Dental Inc. (Am. Compl., Ex. 2.) Plaintiff alleges that, though the letter, drafted on Sybron Dental Specialties letterhead, was crafted by Sybron's Chief Intellectual Property Counsel and distributed by Sybron from its Orange, California office, the false statements contained therein were "presumably authorized by Edward J. Buthusiem, who controls, supervises and oversees this aspect of Danaher's Dental Businesses in America, from facilities in Hatfield, PA, at 2800 Crystal Drive." (Am. Compl. ¶ 79.) Sybron also allegedly distributed the December 30, 2010 letter and a redacted communication to as many as 38 of its Valued International Distributors located in Asia, Mexico, Central and South America and the Carribean. This redacted communication states:

Dear Valued International Distributor,

I would like to make you aware of a letter that went out to all of our distribution partners in the US and Canada regarding several incidences of counterfeit Kerr products that have been found being sold in the marketplace. This problem came to light as we received a high volume of customer complaints on some of our most popular products. As you will read, we have identified a specific company, North American Dental Inc (NAD) as the supplier of these counterfeit products. NAD has operations in both Toronto, Ontario and Baltimore, Maryland and is very active in sourcing Kerr products from various global markets to be re-sold here in the United States and Canada.

Sybron legal is currently undertaking a full investigation of NAD to determine the origination of the counterfeit products, as well as the source of legitimate Kerr products they are obtaining from other countries. would like to stress the importance of controlling our products within your country to include sub-dealers and retail establishments so they are not re- exported into the United States or Canada.

We believe this counterfeit problem is contained to the United States and Canada, but did want to make you aware of it should anyone be selling very low-cost Kerr ...


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