Free Response to Motion - District Court of California - California

Case 3:07-cv-02390-JAH-POR

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1 II WENDY L. SLAVKIN, ESQ. [email protected] 2 1111707Sunset Boulevard, Suite 24 Los Angeles, California 90049 3 II State Bar No. 89100 4
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(310) 476-1939 fax 476-1959 voice

6 II Attorney for Defendants 7 II YAN WHOLESALE and ALLEN YAN CHOW
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IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF CALIFORNIA

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11 IIGEORGIA-PACIFIC, CONSUMER PRODUCTS LP, Plaintiff,

Civil Action No. 07-CV-02390 JAH POR OPPOSITION OF DEFENDANTS YAN WHOLESALE AND ALLEN YAN CHOW TO MOTION FOR PRELIMINARY INJUNCTION; DECLARATIONS OF WENDY L. SLAVKIN AND ALLEN YAN CHOW IN SUPPORT THEREOF HEARING Date: Time: Place: DATE: January 14, 2008 3:00 pm Courtroom 11

vs.
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YAN WHOLESALE; RUSH WHOLESALE; 15 II YES WHOLESALE; YES WHOLESALE OF MEXICO; ALLEN YAN CHOW, an 16 II individual; ROMAN RUSHINSKY, an individual; GLEB TABACHNIK, an 17 II individual; JOHN YEH, an individual
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Defendants

Defendants'
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YAN WHOLESALE and ALLEN YAN CHOW submit the followin

opposition to Plaintiff's request for issuance of a preliminary injunction:
I.

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INTRODUCTION/BACKGROUND
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Allen Chow ("Chow") is an individual

doing business as Yan Wholesale ("Yan") Since 1998-1999

hereinafter sometimes collectively referred to as the" Chow Defendants".
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27 II Chow has been manufacturing

bathroom tissue in China for export to the United States

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1 II primarily for sale and distribution in California. The name Chow has consistently used 0 2 II the tissue paper since 1998-1999 is" Angel", in the type and style as reproduced in Plaintiff' 3 II moving papers (See Plaintiff's Memorandum of Points and Authorities in Support of E

4 II Parte Application for Temporary Retraining Order, "MP A", page 2, lines 14 - 19 and page 7 5 II lines 5 - 10). 6 II Prior to March 23, 2004, Chow, onbehal£ of Yan, filed an application for registratio baby angel with short curly hair

7 II of the trademark" Angel", with the following description:

8 II winking its left one eye, wings stretched, holding pink heart with both hands, with hea 9 II band featuring top part of the body and head and wings. The Secretary of State accepte 10 II Chow's application and on March 23, 2004, issued No. 109928. a Certificate of Registration a

11 II Trademark,

bearing trademark

Attached as Exhibit "A" to the Attache

12 II Declaration of Allen Van Chow ("DAYC") is a true and correct copy of the Certificate a 13 II Registration of Trademark, with accompanying copy of the graphic depiction of the mark 14 II issued by the State of California on March 23,2004 (hereinafter, "Angel mark"). 15 II Prior to service of the herein lawsuit, and based on his registered trademark, Cho

16 II believed he had every right to use the" Angel mark" on the bathroom tissue paper he wa 17 II manufacturing and importing from China. At no time prior to service of the instant actio

18 II did Plaintiff ever contact Chow and advise him that he was in violation of its U.s .. 19 II Trademark, or otherwise. It was only upon service of this action that Chow was first put a 20

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notice of Plaintiff's claims against him and his business. (DAYC p. 8, lines 22 - 28)

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HISTORY OF DEVELOPMENT

OF "ANGEL MARK" BY DEFENDANT

In or about 1997, Chow began both importing from China, and purchasing locally

24 II ceramic figurines in the shape of an Angel. He imported and purchased these figurines fo 25 II re-sale to discount retailers. The angel figurines were so popular with the consumer publi 26 II that when Chow began manufacturing 27
1\

and importing bathroom tissue, he decided on th Contrary to what Plaintiff waul

angel logo as his trademark.

(DAYC, p. 9, lines 1 - 11)

28 II have this court believe, Chow had no idea of the existence of Plaintiff's trademarks and di

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1 II not "intentionally adopt[] marks and images for their product similar to Georgia-Pacific's i 2 II an effort to trade upon the goodwill and success of the Angel Soft® brand" (MPA p. 16 3 II lines 120 - 122). Nothing could be further from the truth. 4 II statement with no basis in fact or knowledge of Chow's intent. 5
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STATUS OF MANUFACTURING

Plaintiff makes this absur

ill
AND SALE OF DEFENDANTS' PRODUCT

7 II

Upon receiving Plaintiff's lawsuit, Chow immediately notified his Chines

8 II manufacturers and agents to cease manufacturing Angel tissue paper until further notice. 9 II true and correct copy of Chow's fax to his Chinese manufacturers is attached as Exhibit "B'" 10 II to the DAye. Furthermore, there remained only two more containers of Angel tissue pape 11 II from China, which have now been re-directed to places outside the United States. 1211Therefore, Chow has ceased manufacturing, importing and/ or selling tissue paper bearin 13 II the" Angel mark", in the United States (DAYC p. 9, lines 12 - '15). Chow, through hi 14 "counsel Wendy L. Slavkin, notified Plaintiff's of this fact (See attached Declaration 0 15 II Wendy L. Slavkin, "DWLS", p.13, lines 9 -15).
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IV. PLAINTIFF HAS FAILED TO ESTABLISH ITS CLAIM FOR TRADEMARK VIOLATION

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Plaintiff has failed to establish the three (3) factors necessary to prove a claim 0

20 II trademark infringement under Section 32 of the Latham Act, 11 U.s.e. §1114,to wit: 21 II 22 II A. Ownership of Trademarks at Issue.

Although Plaintiff does appear to own the trademarks at issue, Chow also owns th

23 II trademark that he registered in California, without objection, and has been usin 24 II continuously for over the past nine years or so ((DAYC,p. 8, lines 13 - 21). Furthermore, a 25 II it is only registered in California, Chow has not sold his product to any other State in th 26 II United States, only in California.
27 II presumed legal right to do this.
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According to his registered trademark, he has th

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B.

Unauthorized Use in Commerce of the Trademark.

In light of the fact that Chow does have a registered trademark in the State 0 California, Chow's use of that trademark in California cannot be presumed to b unauthorized. Quite the opposite; the Secretary of State for California legally granted Cho
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a trademark for the H Angel mark". C. Likelihood of Confusion by Chow's Use of the H Angel mark".

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The seven factors the Court must use in evaluating whether a likelihood of confusio exists, are addressed as follows: 1. The Strength of the Trade Dress. Defendants Ya

Plaintiff would have this court believe that the marks used by Plaintiff is a H stron respectfully disagree. In this day and age it is common to see manufacturers using angels a part of their product packaging design. In fact, Plaintiff does not even ,use an angel in it mark, it uses a baby in a blanket, sucking its thumb (MPA, page 2, lines 14 -19). How thi is similar to the angel with outstretched wings, carrying a heart in its arms, used b Defendants Yan, begs the question. It isn't! The side by side comparison in Plaintiff' moving papers does not help Plaintiff. The mark developed by Chow is distinctivel different than that developed by Plaintiff. The only similarity is the name H Angel" which let us not forget, was legally trademarked by Chow in the State of California. This is not strong mark of the type that warrants greater protection. 2. Proximity or Relatedness of the Goods

11 mark" and therefore entitled to the highest degree of protection.
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Although the goods are both bathroom issues, Chow submits that they are i distinctively different packaging, decreasing the likelihood of confusion in the marketplace.; Moreover, even though the products are both bathroom tissue, the important fact here is th "marketplace" at issue. Chow's consumer is one who purchases products at discount store and close-out stores, similar to those set forth in Plaintiff's Supporting Declaration 0 Darwin D. Wisdom. Mr. Wisdom states hi purchased Defendants products at "Bargai Empire" (Supra, p. 2, line 1 - 2) and "$1 Stor~ +" (p. 2, line 3 - 8)
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3.

Similarity of the ANGEL SOFTTrademarks and the" Angel mark"

As set forth above, Defendants submit that there is no similarity outside of the use 0 the word "Angel" in the products at issue. One is "Angel", the other "Angel Soft". No only are the fonts different, the pictures on the outside of the packaging are completel different, i.e. a baby in a blanket, sucking its thumb vs. an angel with outstretched wings carrying a heart in its arms. As a result, the chances of confusion are unlikely. 4. Actual Confusion. Outside of an anonymous letter received b In fact, due to th

Plaintiff, there is no evidence whatsoever of actual confusion.

9 marketplace factors set forth below, and the difference in the packaging set forth above, th 10 likelihood of actual confusion is non-existent. 11 12 5. Marketplace Factors

This is, perhaps, Plaintiff's weakest argument. The marketing channels utilized t Plaintiff's employ what is commonl

13 market both products are completely different.

14 known as a first tie marketing approach in marketing its bathroom tissue. Plaintiff's sell it 15 products to well known, large retailers; i.e., "Wal*Mart, Target, Winn Dixie an 16 Walgreen's ... " (MPA pA, lines 15 - 18). Defendants Yan, on the other hand, market an 17 sell to second, mostly third tier retailers; i.e., Bargain Empire, $1 Store, etc., all individua

18 retailers selling bargain items, cost over-runs and close-outs. These are a very different typ 19 of store than the one's Plaintiff routinely sells its products to. As a result, there is little 0 20 no likelihood that you will ever find Plaintiff's product!'>and Chow's products on the sam, 21 shelf, or even in the same store. 22 23 24 26 27 28 6. Types of Goods and Purchaser Care

This is a moot issue inasmuch as the purchaser for Plaintiff's product is a differen type of purchaser than the one purchasing Chow's product. One is a purchaser from th

25 big retailer - Wal*Mart, Target, etc. - the other is a purchaser at small, individually owned independent, neighborhood discount stores - Bargain Empire, $1 Store, etc. 7. Likelihood of Expansion

Again, this is a moot issue inasmuch as Chow has no plan to expand its product lin

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and, in fact, has ceased manufacturing and importing any products bearing the "Ange mark". As set forth above, all factors taken together, or separately, simply do not support finding of likelihood of confusion between Plaintiff's products and Chow's product. Ther is no evidence whatsoever to support Plaintiff's blatantly false claim that "Defendant adopted duplicate marks, applied them to identical goods, and intended to trade off 0 Georgia Pacific's goodwill among consumers of bathroom tissue products" (MPA, p. 17 lines 13 - 15). In fact, the evidence establishes just the opposite. (SeeDAYC).
V.

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PLAINTIFF'S LIKELIHOOD OF SUCCESS ON IT'S REMAINING CLAIMS

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Plaintiff's likelihood of succeeding on its other claims is unlikely given the problem it has in establishing its underlying trademark infringement claim and its entitlement to preliminary injunction.
VI.

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BALANCING THE HARDSHIPS

As more completely set forth in the accompanying Declaration of Allen Yan Chow the hardship, if any, is balanced in favor of Chow. Chow is a small importer of bathroo tissue. The profit margins on each shipment from China is minimal when compared to th cost of manufacturing and importing; approximately $10,000.00profit per container, wit an investment of $200,000.00. Measuring this against the "hundreds of millions of dollars" Plaintiff has generated, and continues to generate from the sale of its bathroom tissue" (MPA p. I, lines 9 - 10) it is obvious who will suffer most. Although Chow has ceased any further manufacturing and importing to the Unite State of products bearing the" Angel mark", there still may be product in the stores of som, of the third tier retailers discussed above. There are, at best estimate, maybe ten (10) store that still have product bearing the" Angel mark". The cost for Chow to approach each 0 these retailers, retrieve any remaining bathroom tissue bearing the "Angel mark", an return all funds to these customers, tould result in financial disaster for Chow.
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1 //to Chow, all products

bearing the "Angel mark" should be, more or less, out of th

2 II marketplace by January 31, 2008, (DAYC p. 10, lines 6 - 7). Certainly, distribution of th 3 II tissue paper that remains on the shelves of these discount stores would not harm Plaintiff i 4 II any appreciable way. After all, Chow has been selling the" Angel mark" tissue for ove

5 II eight (8) years and it has had no affect on Plaintiff's profit margin or reputation in the publi 6
II marketplace.

Plaintiff, itself, claims to have generated over $2 billion in sales between 200

7 IIand 2006 and it is ranked second overall in total dollar sales for its tissue paper for ye 8 II ending September 8,2007 (MPA p. 5, line 10 -14). Clearly, Plaintiff has not been affecte

9 II by Chow's sale of the "Angel mark" tissue and will not be affected by the sale of th 10 II remaining" Angel mark" bathroom tissue.

11 II

There is no question; the hardship Chow would incur in having to round-up

th

12 II remaining" Angel mark" tissue paper and reimburse its customers, is devastating compare 13 14 15 16 II to the negligible or non-existent harm Plaintiff would suffer. VII CONCLUSION Plaintiff has failed to sustain its burden in proving irreparable injury as a result 0 if Chow's customer's ar

17 II Chow's conduct, or that it will suffer any kind of hardship

18 II permitted to distribute the remaining tissue paper that is currently in the market place. Fo 19 II the reasons set forth above, Chow and Yan respectfully 20
II restraining

request that the temporar

order be extinguished and a preliminary injunction denied. Respectfully submitted,

21 "Dated: January 11, 2008
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Is/Wendy L. Slavkin WENDY L. SLAVKIN Attorney for Defendants Allen Yan Chow and Yan Wholesalers

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1 II
2 II 3 II 1.

DECLARATION

OF ALLEN YAN CHOW

I, ALLENYAN CHOW, declare as follows: I am a Defendant in the above-captioned matter, and the owner of Y

4 II Wholesale. The matters stated herein are true of my own knowledge, I am competent to testif 5 II thereto, and would so testify if called upon to do so. I submit this Declaration in opposition tl 6 II Plaintiff's motion for a preliminary injunction.
7 II 2.

Since 1998-1999, I have been manufacturing bathroom tissue in China fo

8 II export to the United States, primarily for sale and distribution in California. The name
9 IIhave consistently used on the tissue paper since 1998-1999 is" Angel", in the type and styl

10 II as reproduced in Plaintiff's moving papers (See Plaintiff's Memorandum of Points an 11 II Authorities in Support of Ex Parte Application for Temporary Retraining Order, "MPA"
12 II page 2, lines 14 -19 and page 7, lines 5 -10). 13 II 3.

Prior to March 23, 2004, I, on behalf of Yan Wholesale, filed an application fo

14 II registration of the trademark" Angel", with the following description: baby angel wit 15 II short curly hair, winking its left one eye, wings stretched, holding pink heart with bot 16 II hands, with head band featuring top part of the body and head and wings. The Secretary 0
17 IIState accepted my application and on March 23,2004, issued a Certificate of Registration 0 18 IITrademark, bearing trademark No. 109928.

Attached hereto as Exhibit "A", an

19 II incorporated herein by this reference, is a true and correct copy of the Certificate 0 20 II Registration of Trademark, with accompanying copy of the graphic depiction of the mark
21 IIissued by the State of California on March 23, 2004 (hereinafter, "Angel mark").

22 II

4.

Prior to service of the herein lawsuit, and based on my registered trademark,

23 II believed I had every right to use the "Angel mark" on the bathroom tissue paper I wa 24 II manufacturing and importing from China and had been doing so for approximately eigh 25 II (8) years. At no time prior to service of the instant action did Plaintiff ever contact me an 26 II advise me that I was in violation of its u.s. Trademark, or otherwise. It was only upo 27 II service of this action that I was first put on notice of Plaintiff's claims against me and m 28 II business.

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1 II

5.

Plaintiff and its products had nothing whatsoever to do with my use an

2 IIeventual registration of the "angel mark".

I choose that name because, in or about 1997, I bega

3 IIbegan both importing from China, and purchasing locally, ceramic figurines in the shape 0 4 IIan Angel.

I imported and purchased I

these figurines for re-sale to discount retailers. Th

5 IIsale of these angel figurines was so popular with the consumer public that when

6 IImanufacturing and importing bathroom tissue, decided on the angel logo as th 7 trademark. had no idea of the existence of Plaintiff's trademarks and did not intentionall 8 adopt a mark similar to Georgia-Pacific's in an effort to trade upon the goodwill and sUCces

I

9 IIof the Angel Soft® brand.

I simply had experience that the consumer public liked angel I
immediately notified my Chines

10 and that, therefore, they would be drawn to the angel on the outside packaging of my tissu 11 paper. 12 II 6. Upon receiving Plaintiff's lawsuit,

13 IImanufacturers and agents to cease manufacturing Angel tissue paper. A true and correc 14 IIcopy of my fax to my Chinese manufacturers and agent is attached hereto as Exhibit "B": 15 IIand incorporated herein by this reference. 16 II 7. As of this date, there is no more manufacturing or importing of bathroo

17 IItissue from China, or anywhere else, bearing the" Angel mark". However, there were tw 18 IIcontainers that were already shipped from China. 19 IIUnited States. 20 II 8. Although

I have diverted them from arriving in th
and importing to th

I have has ceased any further manufacturing

21 IIUnited State of products bearing the" Angel mark", there still may be product in the store 22 IIof some of my customers and my customer's customers. The types of stores sell to are, fo 23 IIthe most part, third tier stores. They are completely different from the types of store 24 IIPlaintiff sells to and, therefore, attract a different type of consumer. These retailers ar, 25 II independently owned, small discount stores that sell discounted goods, over-runs an 26 IIclose-outs.

I

I have no customers that are equal, or even similar to, Target, Wal*Greens 0

27 II Winn-Dixie. My best estimate is that maybe ten (10) stores still have product bearing th 28 II"Angel mark".

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The cost for me to approach each of my customers, retrieve any remainin

2 II bathroom tissue bearing the "Ang~l mark", and return all funds to these customers, woul 3 II be financially devastating to me. My profit margin is very small on each shipment 0 4 II product. At a manufacturing and importing cost of $200,000.00out-of-pocket per container 5 II I generate an approximate $10,000.00profit. 6
II

10.

It is my sincere belief that all products bearing the" Angel mark" should be

7 II more or less, out of the marketplace by January 31, 2008. 8 II I declare under penalty or perjury under the laws of the United States that th

9 II foregoing is true and correct. 10 II
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Executed this 13th day of January, 2008
I sl Allen Yan Chow ALLENYANCHOW

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SECRFl~i\RY (JF STATE
Trademark Reg. No. 109928
I

Class No. In1. 16

CERTIFICATE OF REGISTRATION OF TRADEMARK
I, KEVIN SHELLEY, Secretary of State of the State of California, hereby certify:

That In accordance with the application filed in this office the TRADEMARK described below has been duly registered in this office on behalf of: Name of Applicant: Yan Wholesale

Business Address: 17534 Vacas Circle, Fountain Valleo/, CA 92708 August 21, 2002 (\ Date fIrst used in Carlfornla:

Date first used anywhere: Description of Trademark:
left one eye, wings stretched,

Not provided

ANGEL ai)d baby angel with short curly hair, winking its
holding pink h~art with both hands, with head band featuring

top part of the body and head and wings
kitchen towels, hand towels

.

Description of Goods on which the Trademark. Is used: '

Bathroomtissue, napkins,

A copy, specimen, facslmlfe, counterpart or a reproduction of the mark is attached Date of Registration: March 23, 2004 Term of Registration Extends to and IncJudes: March 23, 2014

IN WITNESS WHEREOF, I execute this certificate and affix the Great

Seal of the State of California this
25th day of March, 2004.

1·dl£l.l..86£2£S09£0022816:01

L982296t>lL

31~S310HM S,N~A:WO~~ ~0£:21

.l..002-82-J3G

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Tips

P.12
EXHIBIT A

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01.

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YAN WHOLESALE 17534 VACAS CIRCLE F. V. CA 92708 12/22/2007 TO : ALL SUPPLiERS FOOK WOO ASSORTED PAPERLO. LTD SANJlAO PAPER MANUFACTURING CO. LTD NANNINGSHAN ZHONGSHUN IMPORT EXP. CORP. <;~o~\ NEW & HIGH ZONE IMP. & & EXPORT \, ,) ZHONG Van Wholesale USA Effective 12/24/2007 Here is to notify all of our manufacturers and suppliers of all our products Bearing the name ANGEL will be discontinued immediately. We will advise any change in our policy in the future.

Since~ Allen Yan Chow ( Owner)

P.13 EXHIBITB
l'dl£l£b69l6262600228l6:01
L982296bl.L

3~~S3IOHM S.N~A:WO~~ ~20:0l L002-82-J30

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DECLARATION

OF WENDY L. SLA VKIN

I, WENDYL. SLAVKIN, declare as follow:

I am an attorney at law duly licensed to practice before this court and al

courts of the State of California. I am the attorney of record for Defendants ALLEN YA CHOW and YAN WHOLESALE. Th~ matters stated herein are true of my own knowledge I am competent to testify thereto, and would so testify if called upon to do so. 2. injunction. 3. On or about January 4, 2008, I emailed, faxed and mailed a letter t, I submit this Declaration in opposition to Plaintiff's motion for a preliminar

10 Plaintiff's counsel, Stephen P. Swinton, advising him of the status of my client's continue 11 manufacturing and importing of the" Angel mark" products. Specifically, I advised him 0 12 the following: 13 a. That on December 22, 2007, the day after my client was served with th

14 II lawsuit, he sent a fax to his manufacturers and agent in China advising them that ther 15 would be no further manufacturing of any products bearing the name" Angel"; 16 b. That there are two container shipments that were in transit from Chin

17 that contain "Angel" bathroom tissue, scheduled to arrive on January 9 and 18, 2008, an 18 20 21 22 23 that they were sent prior to issuance of the TRO (although I am now advised by my clien c. That the out-of-pocket cost involved in each shipment was $200,000.0 19 that these two shipments have been diverted from entering the United States); and the estimated profit for both shipments was a total of $20,000.00. I also included in my letter to Mr. Swinton a 3 page list of my client's customers that were t, receive product from My. Chow and the payment arrangements relative to same. A tru

24 and correct copy of that letter is attached hereto as Exhibit" C"and incorporated herein b 25 II this reference.
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I declare

under penalty or perjury under the laws of the United States that th

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foregoing is true and correct. Executed this 11th day of January, 2008 IS/Wendy L. Slavkin
WENDY L. SLA VKIN

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..

. I·.",·:~~~'.L>"'."
'."1'

.E,~iro;:r.q;"C ..
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Wf;NDY L. SLAVklN
ATIORNf;Y AT LAW 1/707 SUNSf;T BOULf;VARD. SUITJ; '24.LOS ANGf;LJ;S, CALli=ORNIA 90049 TJ;LJ;PJ-jONf; 310.476.1959 +=ACSIMILf; 3104761939 J;-MAIL,WLSLAVKIN@AOLCOM

January 4 2008

,

SENT VIA FACSMILIE 858.523.5450

TRANSMISSION

ANDlu.s.
I I

MAIL

Stephen P. Swinton, Esq. LATHAM & WATKINS, LLP 12636 High Bluff Drive, Suite 400 San Diego, CA 92130-2071

I I

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RE:

Yan Wholesale adv. Geowa-PacificlConsumer Products LP
USDC Case No. 07-CV-02390

Dear Mr. Swinton: As I previously advised you, the undersigned represetits Yan Wholesale and Allen Chow relative to the above-referenced matter. ' To reiterate what I already told you, my client does nbt want to litigate this matter. Mr. Chow had no idea he was infringing upon the trademarks of yak client until he was served with the subject lawsuit. On December 22, 2007, the day after he wak served with the lawsuit, he sent a fax to his manufacturers and agent in China advising them that there would be no further manufacturing of any products bearing the name "Angel". Unfortunat9ly, there are two container shipments that are in transit from China that contain "Angel" batbrooF tissue. They are scheduled· to arrive on January 9 and 18, 2008. These were sent prior to i~suance of the TRO. The out-of-pocket cost involved in each shipment is $200,000.00. The es,.ated profit for both shipments is a total of $20,000.00. My client is awaiting receipt of invoi~es from China that will reflect his cost of manufacturing and shipment. I will send these invoi~es to you as soon as I receive same. Clearly, the profit margin on this endeavor is very small comp~ed to the out-of-pocket expense. I have included with this letter a three (3) page list o~ my client's customers that was prepared by Mr. Chow. Some or all of these customers have 4eady given Yan Wholesale deposits for the delivery. Included on in the total (3) page list issum of $20,000.00. TheYesl Wholesale.be According tissue paper in transit this three approximate one ofthe Defendants, b1ance is to paid upon. to Mr. Chow, Defendant Rush Wholesale is a customer of Defendant.QefeItdant John Yeh, and has Mr. Chow has never sold to Defendant Yes Wholesale of Mexico, or Ye3 Wholesale. However, no idea who this entity or individual is.

P. 16

EXHIBITC

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Stephen P. Swinton, Esq. LATHAM & WATKINS, LLP January 4, 2008 Page 2

To try and stop the distribution of the product in transit is a monumental, ifnot impossible, as well as extremely costly, task. As stated, after the January 18, 2008, delivery, there will be no further "Angel" products entering this country, or anywhere else for that matter. AU production and manufacturing of "Angel" tissue has ceased. Furthermore, the California trademark at issue will be cancelled forthwith. Additionally, what my client proposes is as follows: 1. Allow the remaining "Angel" product to enter the UILited States and be distributed and sold as previously arranged; 2. Provide your client with a full accounting of all funds paid and received from the remaining two (2) shipments; and 3. Turn-over all profits from the remaining two (2) shipments to your client, in the sum of approximately, and at least, $20,000.00. Mr. Chow advises me that, with respect to the two (2) remaining shipments, all product should be sold, and off the shelves, no later than January 31,2008. Please advise me if we can resolve this matter as outlined above. If you need any further information or documentation, please advise me accordingly and I will endeavor to provide it to you forthwith. If we cannot resolve this matter, I will seek a brief continuance of the hearing set for Monday in light of my recent retention. Thank you for your anticipated courtesy and cooperation.

WLS/mf enclosures cc: client (via email) David K. Demergian, Esq. (via email)

P.17 EXHIBITC