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PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION

CALDERWOOD & HARKNESS LLP 1251 Avenue of the Americas, 40th Floor New York, NY 10020

Tel: (212) 558-4000

Fax: (212) 558-3588

www.calderwoodharkness.com

February 16, 2023

VIA EMAIL AND FIRST CLASS MAIL

Thomas R. Hennessy, Esq. General Counsel Meridian Consumer Brands LLC 450 Park Avenue South, 14th Floor New York, NY 10016

Re: Meridian Consumer Brands LLC v. Brindoval Home Goods Inc. S.D.N.Y. Case No. 1:22-cv-09483; TTAB Opposition No. 91/278,415 C&H Matter No. 1011-00003

Dear Tom:

I. Purpose of This Letter

We write to report on the court-ordered mediation session held yesterday, February 15, 2023, in the above-referenced matter. The mediation was conducted before retired Judge Harold K. Novotny of Novotny ADR Services LLC, located at 140 Broadway, Suite 2810, New York, New York 10005. We are pleased to report that, following a full day of intensive negotiations, the parties reached a framework term sheet outlining the principal terms for a comprehensive resolution of the dispute, including both the federal court action and the parallel Trademark Trial and Appeal Board opposition proceeding.

The purpose of this letter is threefold: (1) to provide you with a detailed summary of the mediation proceedings, including the positions advanced by both parties; (2) to describe and analyze each of the principal terms set forth in the framework term sheet; and (3) to convey Calderwood & Harkness's recommendation regarding next steps, including a proposed timeline for negotiation and execution of a definitive Trademark Coexistence Agreement. We request that you review this letter carefully and schedule a call at your earliest convenience so that we may discuss Meridian Consumer Brands LLC's ("MCB") authorization to proceed on the terms described below.

II. Background and Mediation Context

To ensure that this letter provides a self-contained record for your files and for the benefit of MCB's leadership team, we briefly summarize the procedural posture of the litigation and the circumstances leading to yesterday's mediation.

Federal Court Litigation. MCB filed its Complaint on November 7, 2022, in the United States District Court for the Southern District of New York, Case No. 1:22-cv-09483, before the Honorable Patricia M. Albright, United States District Judge. The Complaint asserts claims for trademark infringement and unfair competition under the Lanham Act, 15 U.S.C. §§ 1114(1) and 1125(a), as well as a claim for injury to business reputation and dilution under New York General Business Law § 360-l. These claims arise from Brindoval Home Goods Inc.'s ("Brindoval") adoption and use of the mark MERIDIAN FRESH in connection with household cleaning products, which MCB contends is confusingly similar to MCB's MERIDIAN family of marks and trade dress.

TTAB Opposition. In parallel with the federal court action, MCB filed a Notice of Opposition on October 14, 2022, before the Trademark Trial and Appeal Board, docketed as Opposition No. 91/278,415, against Brindoval's trademark application Serial No. 97/412,558 for the mark MERIDIAN FRESH in International Class 3 (household cleaning preparations). The TTAB proceeding has been suspended pending the outcome of the federal court action.

Preliminary Injunction Order. On January 9, 2023, Judge Albright issued a Preliminary Injunction Order that was granted in part and denied in part. The Court ordered Brindoval to modify its packaging trade dress — specifically, to remove the wave device and change the teal-and-white color scheme — within forty-five (45) days of the Order. However, the Court declined to enjoin Brindoval's use of the word mark MERIDIAN FRESH pending trial, finding that MCB had not demonstrated a sufficient likelihood of success on the word-mark infringement claim standing alone, particularly in light of the differences in trade channels and consumer sophistication arguments advanced by Brindoval. The partial grant of the preliminary injunction was, on balance, a favorable outcome for MCB, as it confirmed the strength of MCB's trade-dress claims and provided immediate relief on the most visible source of consumer confusion.

Initial Disclosures. The parties exchanged initial disclosures on January 23, 2023, pursuant to Rule 26(a)(1) of the Federal Rules of Civil Procedure. Brindoval's disclosures identified several potential fact witnesses, including Nathan Cho, Vice President of Private Label Development, and Karen A. Whitfield, General Counsel. The disclosures also confirmed certain financial data regarding Brindoval's MERIDIAN FRESH product line, which we discuss further below.

Mediation Order and Logistics. The mediation was court-ordered pursuant to Judge Albright's standing case management procedures and a subsequent scheduling order. The total mediation fee charged by Novotny ADR Services LLC was $25,000, split equally between the parties. MCB's share of the mediation fee is $12,500, which has been paid from the matter's litigation expense account.

Attendees. MCB was represented at the mediation by the undersigned, Alan Ngo, and Christy Bauer of Calderwood & Harkness LLP. You, Thomas R. Hennessy, attended on behalf of MCB as General Counsel and authorized representative. Brindoval was represented by Gregory T. Halverson and Megan Janssen of Halverson McKay & Pruitt LLP, located at 225 South Sixth Street, Suite 4200, Minneapolis, Minnesota 55402. Karen A. Whitfield, General Counsel, attended on behalf of Brindoval and was authorized to agree to terms on Brindoval's behalf, subject to final board approval.

III. Summary of Mediation Proceedings

A. Opening Sessions

Judge Novotny convened the mediation at approximately 9:30 a.m. with a joint opening session in the main conference room of Novotny ADR Services. The mediator provided introductory remarks regarding the confidentiality of the proceedings, the non-binding nature of any framework reached during the session, and the ground rules for the day. Following these preliminary remarks, each side was given the opportunity to present an opening statement summarizing its position.

On behalf of MCB, we presented a comprehensive overview of the strength of MCB's case. Our presentation emphasized the following key points:

Federal Registrations. MCB owns three federal trademark registrations that form the foundation of its MERIDIAN brand portfolio:

• U.S. Reg. No. 4,218,506 — MERIDIAN (standard character mark, International Class 3, household cleaning products);

• U.S. Reg. No. 5,034,771 — MERIDIAN CLEAN (standard character mark, International Class 3, household cleaning products); and

• U.S. Reg. No. 5,589,320 — MERIDIAN (stylized logo with wave device, International Class 3, household cleaning products).

These registrations are presumptively valid and incontestable under Section 15 of the Lanham Act, 15 U.S.C. § 1065, and collectively establish MCB's exclusive right to use the MERIDIAN mark and its variations in connection with household cleaning products nationwide.

Continuous Use and Market Presence. MCB has used the MERIDIAN mark in commerce continuously since approximately 2011, building substantial consumer recognition and goodwill over more than a decade of uninterrupted use. In fiscal year 2022, MCB's MERIDIAN cleaning product line generated approximately $94.5 million in annual revenue, reflecting the brand's significant commercial success and market penetration. MCB's cumulative advertising expenditure in support of the MERIDIAN brand from 2011 through 2022 totals approximately $47.2 million, encompassing television, digital, print, and point-of-sale advertising.

Consumer Confusion Survey. MCB commissioned a consumer confusion survey conducted by Dr. Elaine Furman, a recognized expert in trademark survey methodology. Dr. Furman's survey employed a modified Squirt/Eveready protocol and was administered to 612 respondents drawn from the relevant consumer population. The survey yielded a raw confusion rate of 38.6%, with a control-group noise level of 7.2%, resulting in a net confusion rate of 31.4%. This level of confusion is well above the threshold that courts in the Second Circuit have consistently found probative of a likelihood of confusion.

Preliminary Injunction as Confirmation of Case Strength. We emphasized that the Court's January 9, 2023 Preliminary Injunction Order, while granted only in part, nonetheless confirmed MCB's strong likelihood of success on its trade-dress claims. The Court's finding that Brindoval's packaging trade dress — including the wave device and teal-and-white color scheme — was likely to cause consumer confusion represents a significant judicial validation of MCB's position.

Damages Basis. We identified Brindoval's MERIDIAN FRESH gross revenue of approximately $6.8 million during the first five months of sales (July through November 2022), with an annualized projection of approximately $16.3 million, as the basis for a substantial damages computation under 15 U.S.C. § 1117(a). We noted that MCB would seek an accounting of Brindoval's profits, together with any damages sustained by MCB attributable to lost sales and price erosion.

B. Brindoval's Position

Following MCB's opening presentation, Brindoval's counsel, Gregory T. Halverson of Halverson McKay & Pruitt LLP, presented Brindoval's position. The key points of Brindoval's presentation were as follows:

Denial of Word-Mark Infringement. Brindoval maintained its denial of infringement with respect to the word mark MERIDIAN FRESH, arguing that the addition of the word "FRESH" creates a distinct commercial impression, that the goods are sold through different trade channels, and that the relevant consumers exercise a sufficient degree of care to distinguish between MCB's MERIDIAN products and Brindoval's MERIDIAN FRESH private-label products. Halverson pointed to the Court's decision not to enjoin the word mark MERIDIAN FRESH as evidence that MCB's word-mark infringement claim faces material uncertainty at trial.

Acknowledgment of Trade-Dress Modifications. Brindoval acknowledged that trade-dress modifications — specifically, the removal of the wave device and the change from the teal-and-white color scheme — were already underway in compliance with the Court's Preliminary Injunction Order. Brindoval represented that its packaging redesign was proceeding on schedule and would be completed within the Court's forty-five-day deadline.

Willingness to Explore Coexistence. Brindoval expressed a willingness to explore a coexistence framework rather than complete cessation of use of the MERIDIAN FRESH mark. Halverson emphasized the significant investment Brindoval had made in its private-label program, noting that the MERIDIAN FRESH product line was carried in 148 Brindoval-branded retail store locations across 12 Midwestern and Mountain West states, and was also available through Brindoval's own e-commerce platform at www.crestviewhomegoods.com. Brindoval argued that a coexistence arrangement, with appropriate guardrails, would be commercially reasonable for both parties.

Investment and Inventory Commitments. Halverson indicated that Nathan Cho, Brindoval's Vice President of Private Label Development, had been personally involved in developing the MERIDIAN FRESH branding and that Brindoval had made significant inventory and packaging commitments in connection with the product launch. Brindoval argued that these sunk costs and ongoing obligations weighed in favor of a negotiated resolution permitting continued, modified use of the mark.

C. Mediator's Role and Caucus Discussions

Following the joint opening session, Judge Novotny separated the parties into individual caucus rooms and facilitated several rounds of private caucuses over the course of the day. The mediator's approach was methodical and constructive. In his caucus discussions with our team, Judge Novotny tested MCB's litigation risk assessments and cost-benefit analyses with characteristic directness. He acknowledged the strength of MCB's trade-dress claims and survey evidence but noted that the Court's refusal to enjoin the word mark at the preliminary injunction stage introduced a measure of uncertainty regarding the ultimate outcome at trial on the word-mark claims specifically.

The mediator also emphasized that a full trial on the merits would entail substantial additional costs for both sides. He noted that MCB's total matter costs to date were already significant and that the incremental cost of proceeding through expert discovery, dispositive motions, and trial would be considerable. In particular, Judge Novotny observed that Brindoval had retained Dr. Ronald Trask of Pinnacle Research Group Inc. as a rebuttal survey expert, which would necessitate Daubert briefing and potentially a Daubert hearing, adding both time and expense to the pretrial process.

Judge Novotny suggested that a coexistence framework represented a commercially realistic resolution given the differences in the parties' respective market positions: Brindoval operates a regional retail footprint concentrated in 12 Midwestern and Mountain West states, while MCB maintains national distribution through major grocery, club, and e-commerce channels. A properly structured coexistence agreement, in the mediator's view, could provide MCB with meaningful brand protection while permitting Brindoval to continue a modified version of its private-label program within carefully circumscribed boundaries.

After extended negotiation — the session continued until approximately 7:45 p.m. — the parties agreed on the material terms of a framework term sheet. The term sheet was reduced to writing by Judge Novotny and executed by counsel for both parties before the conclusion of the session. A copy of the executed framework term sheet is enclosed with this letter.

IV. Framework Term Sheet — Summary of Principal Terms

We set forth below a detailed summary and analysis of each of the principal terms contained in the framework term sheet. We note at the outset that the framework term sheet is expressly non-binding and is intended to serve as the basis for negotiation of a definitive Trademark Coexistence Agreement. Certain material terms remain subject to further negotiation, as indicated below.

A. Settlement Payment

The framework provides that Brindoval will pay MCB a one-time lump-sum settlement payment in the range of $1,200,000 to $1,500,000. The exact amount is to be finalized during negotiation of the definitive Trademark Coexistence Agreement, based on further discussion between the parties and their respective counsel.

The settlement payment is to be deposited into escrow with a mutually agreed-upon escrow agent and will be released to MCB upon entry of the Court's order of dismissal in the federal court action. This escrow mechanism ensures that MCB receives the settlement payment contemporaneously with the formal resolution of the litigation, and that neither party is exposed to performance risk during the period between execution of the definitive agreement and the court's entry of the dismissal order.

Calderwood & Harkness's Preliminary Recommendation: We recommend that MCB target $1,350,000 as the settlement amount during final negotiations. This midpoint figure is consistent with the strength of MCB's claims, the favorable outcome of the Preliminary Injunction Order, and the significant confusion evidence established by Dr. Furman's survey. The midpoint also reflects a pragmatic assessment of the litigation risk associated with the word-mark claim, given the Court's declination to enjoin the MERIDIAN FRESH word mark at the preliminary injunction stage. A settlement at $1,350,000, combined with the substantial non-monetary protections described below, represents excellent value relative to the cost, risk, and time required to obtain a comparable or potentially greater monetary recovery at trial.

B. Mark Modification

Under the framework, Brindoval is required to modify its mark from "MERIDIAN FRESH" to "BRINDOVAL MERIDIAN FRESH," incorporating Brindoval's house brand as a mandatory prefix. This modification is designed to reduce consumer confusion by clearly associating the product with the Brindoval brand and creating a distinct commercial impression from MCB's standalone MERIDIAN marks.

The framework further provides that the word "BRINDOVAL" must appear in a prominent type size relative to "MERIDIAN FRESH." The parties agreed in principle that the definitive agreement will specify a minimum type-size ratio, with the framework contemplating that "BRINDOVAL" will be displayed at no less than 75% of the type size used for "MERIDIAN FRESH." This type-size requirement is intended to ensure that the Brindoval house brand functions as a meaningful source identifier and is not subordinated or diminished in the overall presentation of the mark.

In addition, Brindoval is required to amend its pending trademark application (Serial No. 97/412,558) before the USPTO to reflect the modified mark and a narrowed description of goods. The implementation deadline for the full rebranding — encompassing product packaging, point-of-sale materials, e-commerce platforms, and all other consumer-facing uses — is to be negotiated in the definitive agreement. The framework contemplates a period of approximately 120 days from execution of the definitive agreement for full implementation.

This mark-modification provision is a significant concession by Brindoval and represents one of the most valuable elements of the framework from MCB's perspective. By requiring the prominent use of the Brindoval house brand as a prefix, the modification substantially reduces the likelihood of consumer confusion and ensures that the mark as used in commerce will convey a distinct source association.

C. Channel Restrictions

The framework imposes strict channel restrictions on Brindoval's use of the modified mark "BRINDOVAL MERIDIAN FRESH." Specifically, Brindoval may use the modified mark only in the following channels:

(a) Brindoval-branded retail stores — currently 148 locations across 12 Midwestern and Mountain West states; and

(b) Brindoval's own e-commerce platform — currently operating at www.crestviewhomegoods.com.

All other channels of trade are expressly prohibited, including without limitation:

• Third-party retail platforms, including but not limited to Penmark Holdings, Walmart.com, and Adriatic Corporation;

• Wholesale distribution to any non-Brindoval-branded retail environment;

• Any brick-and-mortar retail location not operating under the Brindoval brand; and

• Any other distribution channel outside the two permitted channels described above.

These channel restrictions provide meaningful geographic and trade-channel separation between MCB's national, multi-channel distribution and Brindoval's limited regional retail and e-commerce presence. MCB's MERIDIAN products are distributed through major grocery chains, club stores (including Harborview Enterprises and Westmark Industries), and leading e-commerce platforms nationwide. By confining Brindoval's use of the modified mark to its own branded retail stores and e-commerce platform, the framework virtually eliminates the possibility of side-by-side consumer encounters with both parties' products in the same retail environment.

D. Product-Category Restrictions

Brindoval's use of the modified mark "BRINDOVAL MERIDIAN FRESH" is limited to household cleaning products in International Class 3 only. Brindoval is expressly prohibited from expanding its use of any mark incorporating "MERIDIAN" to the following product categories:

• Personal care products;

• Home fragrance products; and

• Laundry detergent products.

This restriction is critically important for MCB, whose broader brand portfolio encompasses not only household cleaning products but also personal care and home fragrance product lines marketed under the MERIDIAN brand and brand extensions. The product-category restriction ensures that Brindoval cannot leverage any coexistence rights as a platform for expanding into adjacent categories that would bring it into direct competition with MCB's broader MERIDIAN brand family.

E. Trade-Dress Changes

The framework requires Brindoval to permanently discontinue the teal-and-white color scheme and the wave device in connection with any products bearing a mark incorporating "MERIDIAN." This trade-dress obligation is consistent with, and reinforces, the Court's January 9, 2023 Preliminary Injunction Order, which already required Brindoval to modify its packaging trade dress within forty-five (45) days.

Under the framework, Brindoval is further required to submit its replacement trade dress to MCB for review (but not approval) at least thirty (30) days before commercial use. The purpose of this review right is to provide MCB with an opportunity to assess whether the proposed replacement trade dress is sufficiently differentiated from MCB's registered MERIDIAN stylized logo with wave device (U.S. Reg. No. 5,589,320) and overall trade dress. The precise mechanics of the review process — including the procedure for raising objections and the consequences of any disagreement — will be addressed in the definitive agreement.

We note that while the framework provides for a review right rather than an approval right, this distinction is appropriate given the coexistence nature of the arrangement. A full approval right could be viewed as granting MCB an effective veto over Brindoval's packaging decisions, which Brindoval would be unlikely to accept and which could raise antitrust considerations. The review right, combined with the perpetual prohibition on the teal-and-white color scheme and wave device, provides MCB with meaningful oversight while preserving commercial reasonableness.

F. Non-Challenge Covenant

Brindoval will covenant not to challenge the validity of MCB's three trademark registrations, specifically:

• U.S. Reg. No. 4,218,506 — MERIDIAN (standard character mark, International Class 3);

• U.S. Reg. No. 5,034,771 — MERIDIAN CLEAN (standard character mark, International Class 3); and

• U.S. Reg. No. 5,589,320 — MERIDIAN (stylized logo with wave device, International Class 3).

In addition, Brindoval will be required to withdraw any existing or contemplated challenges, oppositions, or cancellation proceedings directed at any of these registrations. This non-challenge covenant secures the legal foundation of MCB's trademark portfolio and eliminates the risk that Brindoval could seek to undermine MCB's registrations in connection with future disputes or competitive activity.

G. Quality Monitoring

The framework contemplates that Brindoval will provide MCB with product samples on an annual basis to enable MCB to monitor the quality of goods sold under the modified mark. In addition, MCB will have the right to conduct quality inspections at Brindoval's manufacturing and distribution facilities. The frequency, scope, and logistical details of such inspections are to be determined in the definitive agreement.

While quality-monitoring provisions are more commonly associated with trademark licensing arrangements, their inclusion in the coexistence framework serves an important function. Under the Lanham Act, a trademark owner that acquiesces in unauthorized third-party use of a confusingly similar mark without exercising quality control may be deemed to have engaged in "naked licensing," potentially jeopardizing the owner's own trademark rights. By including quality-monitoring provisions, the framework enables MCB to exercise a degree of oversight that is consistent with its obligations as a trademark owner while avoiding any inference of acquiescence or abandonment.

H. Enforcement and Liquidated Damages

The framework contemplates the inclusion of a liquidated-damages provision for breach of the channel restrictions or product-category restrictions described above. Preliminary discussions during the mediation suggest a liquidated-damages amount of $500,000 per occurrence, in addition to any actual damages suffered by MCB as a result of the breach. The specific amount and terms of the liquidated-damages provision will be negotiated in the definitive agreement.

The framework also provides that the coexistence arrangement will have a perpetual term, unless terminated by mutual written consent of both parties or as a result of material breach by either party. The perpetual nature of the agreement ensures that the protections afforded to MCB are not time-limited and will continue for as long as Brindoval uses the modified mark.

We view the liquidated-damages provision as an essential component of the framework. Channel and product-category restrictions are only as effective as the enforcement mechanisms that support them. A $500,000 per-occurrence liquidated-damages provision, combined with the right to recover actual damages, provides a meaningful financial deterrent against breach and ensures that MCB will have an efficient remedy in the event of a violation.

I. Governing Law and Dispute Resolution

The framework provides that the definitive Trademark Coexistence Agreement will be governed by the law of the State of New York. This is consistent with MCB's preference and with the location of the pending federal court action.

With respect to dismissal mechanics, the framework contemplates the following:

(a) Upon execution of the definitive agreement and receipt of the settlement payment in escrow, the parties will file a Joint Stipulation of Dismissal with Prejudice in S.D.N.Y. Case No. 1:22-cv-09483, pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(ii); and

(b) MCB will withdraw its Notice of Opposition in TTAB Opposition No. 91/278,415, with Brindoval's consent, to permit Brindoval to amend its pending application to reflect the modified mark "BRINDOVAL MERIDIAN FRESH" with a narrowed description of goods.

The sequencing of these filings will need to be carefully coordinated to ensure that MCB's trademark rights are fully protected throughout the transition period. We will address the specific mechanics and timing of these filings in the definitive agreement.

V. Assessment of the Framework Terms

A. Strengths of the Framework

Calderwood & Harkness believes the framework term sheet represents a strong outcome for MCB. We highlight the following particular strengths:

Monetary Recovery. A settlement payment in the range of $1,200,000 to $1,500,000 provides meaningful monetary compensation for the infringement of MCB's trademark rights. While a damages award at trial could potentially exceed this amount, it could also fall short — particularly given the Court's skepticism regarding the word-mark infringement claim. The certainty of a negotiated payment, combined with the avoidance of substantial additional litigation costs, compares favorably to the uncertain and expensive prospect of proceeding to trial.

Mark Modification. The requirement that Brindoval modify its mark to "BRINDOVAL MERIDIAN FRESH" with a mandatory Brindoval prefix displayed at no less than 75% of the type size of "MERIDIAN FRESH" substantially reduces the risk of consumer confusion. This modification effectively transforms the mark from a standalone "MERIDIAN FRESH" that is directly evocative of MCB's MERIDIAN mark to a clearly Brindoval-branded variant that conveys a distinct source association.

Channel and Product-Category Restrictions. The channel restrictions confine Brindoval's use of the modified mark to its own retail ecosystem — its branded stores and e-commerce platform — and exclude third-party retail platforms, wholesale distribution, and any non-Brindoval-branded retail environments. The product-category restriction limits Brindoval to household cleaning products in International Class 3 and prevents any expansion into personal care, home fragrance, or laundry detergent categories. Together, these restrictions create significant separation between MCB's national, multi-category brand and Brindoval's regional private-label use.

Non-Challenge Covenant. The non-challenge covenant secures MCB's registered trademark portfolio — the three registrations that form the backbone of the MERIDIAN brand — against future challenge by Brindoval. This is a valuable right that eliminates the risk of costly and disruptive validity challenges.

Perpetual Term. The perpetual nature of the coexistence arrangement ensures that the protections afforded to MCB under the agreement are not limited in duration and will continue to benefit MCB's brand for the foreseeable future.

B. Considerations and Risks of Proceeding to Trial Instead

We believe it is important to identify candidly the risks and costs that MCB would face if it elected to reject the framework and proceed to trial:

Uncertainty on the Word-Mark Claim. The Court's Preliminary Injunction Order declined to enjoin Brindoval's use of the word mark MERIDIAN FRESH, finding that MCB had not demonstrated a sufficient likelihood of success on the word-mark claim to warrant preliminary injunctive relief. While this ruling is not determinative of the ultimate merits — the standard for a preliminary injunction is higher than the standard for a finding of infringement at trial — it does suggest that the word-mark claim carries a measure of risk. A reasonable possibility exists that the Court could, at trial, find infringement only as to the trade dress and not as to the word mark itself, in which case MCB would obtain an injunction that largely overlaps with what the PI Order already provides.

Substantial Additional Litigation Costs. Proceeding to trial would involve significant additional costs, including: (i) the completion of expert discovery, including the deposition of Brindoval's rebuttal survey expert, Dr. Ronald Trask of Pinnacle Research Group Inc., and any Daubert motion practice relating to both parties' expert testimony; (ii) extensive fact depositions of Brindoval's key witnesses, including Nathan Cho and Karen Whitfield, among others; (iii) preparation and briefing of any summary judgment motions; and (iv) trial preparation and the trial itself. We estimate that MCB's additional litigation costs through trial could range from $300,000 to $500,000 or more, depending on the scope of pretrial discovery and the length of trial.

Uncertainty of Damages at Trial. While MCB has strong confusion evidence, the damages ultimately recoverable at trial are uncertain. The Court might limit monetary relief to an accounting of Brindoval's profits attributable to the trade-dress infringement (as distinct from word-mark infringement), which could significantly reduce the damages base. In addition, Brindoval can be expected to argue for apportionment and to claim that a portion of its revenue is attributable to factors other than the infringing mark and trade dress.

Brindoval's Litigation Resources. Brindoval is a substantial company with reported fiscal year 2022 revenue of approximately $2.1 billion. It has the financial resources to litigate aggressively through trial and appeal, and it has retained experienced trademark litigation counsel at Halverson McKay & Pruitt LLP. A protracted litigation would impose significant demands on MCB's management time and resources, in addition to the direct financial costs.

C. Recommendation

In light of the foregoing analysis, Calderwood & Harkness recommends that MCB proceed with the negotiation of the definitive Trademark Coexistence Agreement on the framework terms. The framework achieves MCB's core litigation objectives: monetary recovery, mark modification, channel containment, and long-term brand protection. It does so with certainty and efficiency, avoiding the substantial costs and risks of continued litigation.

Specifically, we recommend the following negotiation priorities:

1. Target a settlement amount of $1,350,000, the midpoint of the agreed range, during final negotiations of the definitive agreement. This figure reflects a fair assessment of the strength of MCB's claims balanced against the litigation risks identified above.

2. Insist on a robust liquidated-damages provision of $500,000 per occurrence for breach of the channel or product-category restrictions, in addition to actual damages. This provision is essential to deter breach and ensure effective enforcement of the coexistence restrictions.

3. Negotiate precise mark-modification specifications, including the minimum 75% type-size ratio, clear positioning requirements for the BRINDOVAL prefix, and font-style requirements to ensure that the modified mark as used in commerce effectively distinguishes Brindoval's products from MCB's.

4. Ensure that the trade-dress review mechanics in the definitive agreement provide MCB with a meaningful opportunity to object to any replacement trade dress that is insufficiently differentiated, while stopping short of a full approval right that could raise enforceability concerns.

VI. Next Steps and Timeline

We propose the following next steps and timeline for the completion of the definitive Trademark Coexistence Agreement:

1. First Draft of Definitive Agreement. Calderwood & Harkness will prepare the first draft of the definitive Trademark Coexistence Agreement. We anticipate circulating the initial draft to Halverson McKay & Pruitt LLP by early March 2023, subject to MCB's authorization to proceed.

2. Negotiation Period. We expect the negotiation of the definitive agreement to take approximately six to eight weeks from the date of circulation of the first draft, targeting completion of a fully executed agreement by late April 2023. This timeline is subject to the pace of negotiations and the complexity of any open issues.

3. Escrow Agent. In parallel with the negotiation of the definitive agreement, we will identify a mutually acceptable escrow agent and negotiate the terms of an escrow agreement to govern the deposit and release of the settlement payment.

4. MCB Signatory. The framework term sheet anticipates that you, Thomas R. Hennessy, will sign the definitive agreement on behalf of MCB. We request that you confirm that you will serve as the authorized signatory or, alternatively, designate another officer of MCB with appropriate authority.

5. Client Authorization. We respectfully request that MCB confirm its authorization to proceed on the framework terms described in this letter, including any modifications to MCB's negotiation parameters that you or MCB's leadership may wish to communicate. We are prepared to begin drafting immediately upon receipt of your authorization.

6. Brand Management Review. Rachel Dominguez and MCB's brand management team should be prepared to review and comment on the trade-dress specifications, mark-modification requirements, and any brand-guideline provisions that will be incorporated into the definitive agreement. Their input will be particularly important in defining the visual and typographic standards for the modified mark and the replacement trade dress review process.

7. Notification to Waypoint Capital Partners LLC. We recommend that MCB advise Waypoint Capital Partners LLC (Managing Partner James Alderton) of the mediation outcome and the proposed resolution. As MCB's majority equity holder, Waypoint has historically been involved in strategic brand-protection decisions, and we believe it is appropriate to ensure that Waypoint's leadership is informed of and comfortable with the framework terms before MCB formally authorizes the negotiation of the definitive agreement.

VII. Confidentiality Notice

We remind you that the mediation statement submitted by MCB, the mediation statement submitted by Brindoval, and all oral and written communications exchanged during the mediation are subject to the confidentiality protections set forth in the mediation agreement executed by the parties with Novotny ADR Services LLC prior to the commencement of the mediation session. These communications are confidential and may not be disclosed to any third party, introduced in evidence, or used for any purpose in the litigation or any other proceeding, except as may be required by law or court order.

The framework term sheet itself, while executed by counsel for both parties, is expressly non-binding and is subject to the negotiation and execution of a definitive Trademark Coexistence Agreement. Neither party has any binding obligation to complete the transaction contemplated by the framework term sheet, and either party may withdraw from negotiations at any time prior to the execution of the definitive agreement.

Finally, this letter is a privileged and confidential attorney-client communication protected by the attorney-client privilege and the work-product doctrine. It is intended solely for the use of MCB and its authorized officers and advisors and should not be disclosed to any third party without the prior consent of Calderwood & Harkness LLP.

VIII. Closing

We would like to schedule a call with you — and with Sandra Kwan and Rachel Dominguez as appropriate — at your earliest convenience to discuss the framework terms in detail and to obtain MCB's formal authorization to proceed with the negotiation of the definitive agreement. Please let us know your availability for a call early next week. We are also available to meet in person at MCB's offices if you would prefer a face-to-face discussion.

Calderwood & Harkness is prepared to begin drafting the definitive Trademark Coexistence Agreement immediately upon receipt of your authorization. We have the template and precedent materials in hand, and Christy Bauer and I will prioritize this matter to meet the proposed timeline.

We are confident that the framework reached at yesterday's mediation provides a strong foundation for a commercially favorable resolution that protects the MERIDIAN brand — MCB's most valuable intellectual property asset — while avoiding the substantial costs, risks, and management distraction of continued litigation through trial. We look forward to discussing these matters with you and to bringing this dispute to a successful conclusion on terms that serve MCB's long-term strategic interests.

Thank you for your continued confidence in Calderwood & Harkness.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Alan Ngo Partner, intellectual Property Calderwood & Harkness LLP 1251 Avenue of the Americas, 40th Floor New York, NY 10020 Direct: (212) 558-4127

Email: ango@calderwoodharkness.com

cc: Sandra Kwan, Chief Executive Officer, Meridian Consumer Brands LLC Rachel Dominguez, Vice President, Brand Management, Meridian Consumer Brands LLC Marcus Delgado, Billing Partner, Calderwood & Harkness LLP Christy Bauer, Lead Associate, Calderwood & Harkness LLP

Enclosure: Framework Term Sheet (Non-Binding) dated February 15, 2023 (prepared by Mediator Novotny, executed by both parties' counsel)

PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION
CALDERWOOD & HARKNESS LLP 1251 Avenue of the Americas, 40th Floor New York, NY 10020
Tel: (212) 558-4000
Fax: (212) 558-3588
www.calderwoodharkness.com
February 16, 2023
VIA EMAIL AND FIRST CLASS MAIL
Thomas R. Hennessy, Esq. General Counsel Meridian Consumer Brands LLC 450 Park Avenue South, 14th Floor New York, NY 10016
Re: Meridian Consumer Brands LLC v. Brindoval Home Goods Inc. S.D.N.Y. Case No. 1:22-cv-09483; TTAB Opposition No. 91/278,415 C&H Matter No. 1011-00003
Dear Tom:
I. Purpose of This Letter
We write to report on the court-ordered mediation session held yesterday, February 15, 2023, in the above-referenced matter. The mediation was conducted before retired Judge Harold K. Novotny of Novotny ADR Services LLC, located at 140 Broadway, Suite 2810, New York, New York 10005. We are pleased to report that, following a full day of intensive negotiations, the parties reached a framework term sheet outlining the principal terms for a comprehensive resolution of the dispute, including both the federal court action and the parallel Trademark Trial and Appeal Board opposition proceeding.
The purpose of this letter is threefold: (1) to provide you with a detailed summary of the mediation proceedings, including the positions advanced by both parties; (2) to describe and analyze each of the principal terms set forth in the framework term sheet; and (3) to convey Calderwood & Harkness's recommendation regarding next steps, including a proposed timeline for negotiation and execution of a definitive Trademark Coexistence Agreement. We request that you review this letter carefully and schedule a call at your earliest convenience so that we may discuss Meridian Consumer Brands LLC's ("MCB") authorization to proceed on the terms described below.
II. Background and Mediation Context
To ensure that this letter provides a self-contained record for your files and for the benefit of MCB's leadership team, we briefly summarize the procedural posture of the litigation and the circumstances leading to yesterday's mediation.
Federal Court Litigation. MCB filed its Complaint on November 7, 2022, in the United States District Court for the Southern District of New York, Case No. 1:22-cv-09483, before the Honorable Patricia M. Albright, United States District Judge. The Complaint asserts claims for trademark infringement and unfair competition under the Lanham Act, 15 U.S.C. §§ 1114(1) and 1125(a), as well as a claim for injury to business reputation and dilution under New York General Business Law § 360-l. These claims arise from Brindoval Home Goods Inc.'s ("Brindoval") adoption and use of the mark MERIDIAN FRESH in connection with household cleaning products, which MCB contends is confusingly similar to MCB's MERIDIAN family of marks and trade dress.
TTAB Opposition. In parallel with the federal court action, MCB filed a Notice of Opposition on October 14, 2022, before the Trademark Trial and Appeal Board, docketed as Opposition No. 91/278,415, against Brindoval's trademark application Serial No. 97/412,558 for the mark MERIDIAN FRESH in International Class 3 (household cleaning preparations). The TTAB proceeding has been suspended pending the outcome of the federal court action.
Preliminary Injunction Order. On January 9, 2023, Judge Albright issued a Preliminary Injunction Order that was granted in part and denied in part. The Court ordered Brindoval to modify its packaging trade dress — specifically, to remove the wave device and change the teal-and-white color scheme — within forty-five (45) days of the Order. However, the Court declined to enjoin Brindoval's use of the word mark MERIDIAN FRESH pending trial, finding that MCB had not demonstrated a sufficient likelihood of success on the word-mark infringement claim standing alone, particularly in light of the differences in trade channels and consumer sophistication arguments advanced by Brindoval. The partial grant of the preliminary injunction was, on balance, a favorable outcome for MCB, as it confirmed the strength of MCB's trade-dress claims and provided immediate relief on the most visible source of consumer confusion.
Initial Disclosures. The parties exchanged initial disclosures on January 23, 2023, pursuant to Rule 26(a)(1) of the Federal Rules of Civil Procedure. Brindoval's disclosures identified several potential fact witnesses, including Nathan Cho, Vice President of Private Label Development, and Karen A. Whitfield, General Counsel. The disclosures also confirmed certain financial data regarding Brindoval's MERIDIAN FRESH product line, which we discuss further below.
Mediation Order and Logistics. The mediation was court-ordered pursuant to Judge Albright's standing case management procedures and a subsequent scheduling order. The total mediation fee charged by Novotny ADR Services LLC was $25,000, split equally between the parties. MCB's share of the mediation fee is $12,500, which has been paid from the matter's litigation expense account.
Attendees. MCB was represented at the mediation by the undersigned, Alan Ngo, and Christy Bauer of Calderwood & Harkness LLP. You, Thomas R. Hennessy, attended on behalf of MCB as General Counsel and authorized representative. Brindoval was represented by Gregory T. Halverson and Megan Janssen of Halverson McKay & Pruitt LLP, located at 225 South Sixth Street, Suite 4200, Minneapolis, Minnesota 55402. Karen A. Whitfield, General Counsel, attended on behalf of Brindoval and was authorized to agree to terms on Brindoval's behalf, subject to final board approval.
III. Summary of Mediation Proceedings
A. Opening Sessions
Judge Novotny convened the mediation at approximately 9:30 a.m. with a joint opening session in the main conference room of Novotny ADR Services. The mediator provided introductory remarks regarding the confidentiality of the proceedings, the non-binding nature of any framework reached during the session, and the ground rules for the day. Following these preliminary remarks, each side was given the opportunity to present an opening statement summarizing its position.
On behalf of MCB, we presented a comprehensive overview of the strength of MCB's case. Our presentation emphasized the following key points:
Federal Registrations. MCB owns three federal trademark registrations that form the foundation of its MERIDIAN brand portfolio:
• U.S. Reg. No. 4,218,506 — MERIDIAN (standard character mark, International Class 3, household cleaning products);
• U.S. Reg. No. 5,034,771 — MERIDIAN CLEAN (standard character mark, International Class 3, household cleaning products); and
• U.S. Reg. No. 5,589,320 — MERIDIAN (stylized logo with wave device, International Class 3, household cleaning products).
These registrations are presumptively valid and incontestable under Section 15 of the Lanham Act, 15 U.S.C. § 1065, and collectively establish MCB's exclusive right to use the MERIDIAN mark and its variations in connection with household cleaning products nationwide.
Continuous Use and Market Presence. MCB has used the MERIDIAN mark in commerce continuously since approximately 2011, building substantial consumer recognition and goodwill over more than a decade of uninterrupted use. In fiscal year 2022, MCB's MERIDIAN cleaning product line generated approximately $94.5 million in annual revenue, reflecting the brand's significant commercial success and market penetration. MCB's cumulative advertising expenditure in support of the MERIDIAN brand from 2011 through 2022 totals approximately $47.2 million, encompassing television, digital, print, and point-of-sale advertising.
Consumer Confusion Survey. MCB commissioned a consumer confusion survey conducted by Dr. Elaine Furman, a recognized expert in trademark survey methodology. Dr. Furman's survey employed a modified Squirt/Eveready protocol and was administered to 612 respondents drawn from the relevant consumer population. The survey yielded a raw confusion rate of 38.6%, with a control-group noise level of 7.2%, resulting in a net confusion rate of 31.4%. This level of confusion is well above the threshold that courts in the Second Circuit have consistently found probative of a likelihood of confusion.
Preliminary Injunction as Confirmation of Case Strength. We emphasized that the Court's January 9, 2023 Preliminary Injunction Order, while granted only in part, nonetheless confirmed MCB's strong likelihood of success on its trade-dress claims. The Court's finding that Brindoval's packaging trade dress — including the wave device and teal-and-white color scheme — was likely to cause consumer confusion represents a significant judicial validation of MCB's position.
Damages Basis. We identified Brindoval's MERIDIAN FRESH gross revenue of approximately $6.8 million during the first five months of sales (July through November 2022), with an annualized projection of approximately $16.3 million, as the basis for a substantial damages computation under 15 U.S.C. § 1117(a). We noted that MCB would seek an accounting of Brindoval's profits, together with any damages sustained by MCB attributable to lost sales and price erosion.
B. Brindoval's Position
Following MCB's opening presentation, Brindoval's counsel, Gregory T. Halverson of Halverson McKay & Pruitt LLP, presented Brindoval's position. The key points of Brindoval's presentation were as follows:
Denial of Word-Mark Infringement. Brindoval maintained its denial of infringement with respect to the word mark MERIDIAN FRESH, arguing that the addition of the word "FRESH" creates a distinct commercial impression, that the goods are sold through different trade channels, and that the relevant consumers exercise a sufficient degree of care to distinguish between MCB's MERIDIAN products and Brindoval's MERIDIAN FRESH private-label products. Halverson pointed to the Court's decision not to enjoin the word mark MERIDIAN FRESH as evidence that MCB's word-mark infringement claim faces material uncertainty at trial.
Acknowledgment of Trade-Dress Modifications. Brindoval acknowledged that trade-dress modifications — specifically, the removal of the wave device and the change from the teal-and-white color scheme — were already underway in compliance with the Court's Preliminary Injunction Order. Brindoval represented that its packaging redesign was proceeding on schedule and would be completed within the Court's forty-five-day deadline.
Willingness to Explore Coexistence. Brindoval expressed a willingness to explore a coexistence framework rather than complete cessation of use of the MERIDIAN FRESH mark. Halverson emphasized the significant investment Brindoval had made in its private-label program, noting that the MERIDIAN FRESH product line was carried in 148 Brindoval-branded retail store locations across 12 Midwestern and Mountain West states, and was also available through Brindoval's own e-commerce platform at www.crestviewhomegoods.com. Brindoval argued that a coexistence arrangement, with appropriate guardrails, would be commercially reasonable for both parties.
Investment and Inventory Commitments. Halverson indicated that Nathan Cho, Brindoval's Vice President of Private Label Development, had been personally involved in developing the MERIDIAN FRESH branding and that Brindoval had made significant inventory and packaging commitments in connection with the product launch. Brindoval argued that these sunk costs and ongoing obligations weighed in favor of a negotiated resolution permitting continued, modified use of the mark.
C. Mediator's Role and Caucus Discussions
Following the joint opening session, Judge Novotny separated the parties into individual caucus rooms and facilitated several rounds of private caucuses over the course of the day. The mediator's approach was methodical and constructive. In his caucus discussions with our team, Judge Novotny tested MCB's litigation risk assessments and cost-benefit analyses with characteristic directness. He acknowledged the strength of MCB's trade-dress claims and survey evidence but noted that the Court's refusal to enjoin the word mark at the preliminary injunction stage introduced a measure of uncertainty regarding the ultimate outcome at trial on the word-mark claims specifically.
The mediator also emphasized that a full trial on the merits would entail substantial additional costs for both sides. He noted that MCB's total matter costs to date were already significant and that the incremental cost of proceeding through expert discovery, dispositive motions, and trial would be considerable. In particular, Judge Novotny observed that Brindoval had retained Dr. Ronald Trask of Pinnacle Research Group Inc. as a rebuttal survey expert, which would necessitate Daubert briefing and potentially a Daubert hearing, adding both time and expense to the pretrial process.
Judge Novotny suggested that a coexistence framework represented a commercially realistic resolution given the differences in the parties' respective market positions: Brindoval operates a regional retail footprint concentrated in 12 Midwestern and Mountain West states, while MCB maintains national distribution through major grocery, club, and e-commerce channels. A properly structured coexistence agreement, in the mediator's view, could provide MCB with meaningful brand protection while permitting Brindoval to continue a modified version of its private-label program within carefully circumscribed boundaries.
After extended negotiation — the session continued until approximately 7:45 p.m. — the parties agreed on the material terms of a framework term sheet. The term sheet was reduced to writing by Judge Novotny and executed by counsel for both parties before the conclusion of the session. A copy of the executed framework term sheet is enclosed with this letter.
IV. Framework Term Sheet — Summary of Principal Terms
We set forth below a detailed summary and analysis of each of the principal terms contained in the framework term sheet. We note at the outset that the framework term sheet is expressly non-binding and is intended to serve as the basis for negotiation of a definitive Trademark Coexistence Agreement. Certain material terms remain subject to further negotiation, as indicated below.
A. Settlement Payment
The framework provides that Brindoval will pay MCB a one-time lump-sum settlement payment in the range of $1,200,000 to $1,500,000. The exact amount is to be finalized during negotiation of the definitive Trademark Coexistence Agreement, based on further discussion between the parties and their respective counsel.
The settlement payment is to be deposited into escrow with a mutually agreed-upon escrow agent and will be released to MCB upon entry of the Court's order of dismissal in the federal court action. This escrow mechanism ensures that MCB receives the settlement payment contemporaneously with the formal resolution of the litigation, and that neither party is exposed to performance risk during the period between execution of the definitive agreement and the court's entry of the dismissal order.
Calderwood & Harkness's Preliminary Recommendation: We recommend that MCB target $1,350,000 as the settlement amount during final negotiations. This midpoint figure is consistent with the strength of MCB's claims, the favorable outcome of the Preliminary Injunction Order, and the significant confusion evidence established by Dr. Furman's survey. The midpoint also reflects a pragmatic assessment of the litigation risk associated with the word-mark claim, given the Court's declination to enjoin the MERIDIAN FRESH word mark at the preliminary injunction stage. A settlement at $1,350,000, combined with the substantial non-monetary protections described below, represents excellent value relative to the cost, risk, and time required to obtain a comparable or potentially greater monetary recovery at trial.
B. Mark Modification
Under the framework, Brindoval is required to modify its mark from "MERIDIAN FRESH" to "BRINDOVAL MERIDIAN FRESH," incorporating Brindoval's house brand as a mandatory prefix. This modification is designed to reduce consumer confusion by clearly associating the product with the Brindoval brand and creating a distinct commercial impression from MCB's standalone MERIDIAN marks.
The framework further provides that the word "BRINDOVAL" must appear in a prominent type size relative to "MERIDIAN FRESH." The parties agreed in principle that the definitive agreement will specify a minimum type-size ratio, with the framework contemplating that "BRINDOVAL" will be displayed at no less than 75% of the type size used for "MERIDIAN FRESH." This type-size requirement is intended to ensure that the Brindoval house brand functions as a meaningful source identifier and is not subordinated or diminished in the overall presentation of the mark.
In addition, Brindoval is required to amend its pending trademark application (Serial No. 97/412,558) before the USPTO to reflect the modified mark and a narrowed description of goods. The implementation deadline for the full rebranding — encompassing product packaging, point-of-sale materials, e-commerce platforms, and all other consumer-facing uses — is to be negotiated in the definitive agreement. The framework contemplates a period of approximately 120 days from execution of the definitive agreement for full implementation.
This mark-modification provision is a significant concession by Brindoval and represents one of the most valuable elements of the framework from MCB's perspective. By requiring the prominent use of the Brindoval house brand as a prefix, the modification substantially reduces the likelihood of consumer confusion and ensures that the mark as used in commerce will convey a distinct source association.
C. Channel Restrictions
The framework imposes strict channel restrictions on Brindoval's use of the modified mark "BRINDOVAL MERIDIAN FRESH." Specifically, Brindoval may use the modified mark only in the following channels:
(a) Brindoval-branded retail stores — currently 148 locations across 12 Midwestern and Mountain West states; and
(b) Brindoval's own e-commerce platform — currently operating at www.crestviewhomegoods.com.
All other channels of trade are expressly prohibited, including without limitation:
• Third-party retail platforms, including but not limited to Penmark Holdings, Walmart.com, and Adriatic Corporation;
• Wholesale distribution to any non-Brindoval-branded retail environment;
• Any brick-and-mortar retail location not operating under the Brindoval brand; and
• Any other distribution channel outside the two permitted channels described above.
These channel restrictions provide meaningful geographic and trade-channel separation between MCB's national, multi-channel distribution and Brindoval's limited regional retail and e-commerce presence. MCB's MERIDIAN products are distributed through major grocery chains, club stores (including Harborview Enterprises and Westmark Industries), and leading e-commerce platforms nationwide. By confining Brindoval's use of the modified mark to its own branded retail stores and e-commerce platform, the framework virtually eliminates the possibility of side-by-side consumer encounters with both parties' products in the same retail environment.
D. Product-Category Restrictions
Brindoval's use of the modified mark "BRINDOVAL MERIDIAN FRESH" is limited to household cleaning products in International Class 3 only. Brindoval is expressly prohibited from expanding its use of any mark incorporating "MERIDIAN" to the following product categories:
• Personal care products;
• Home fragrance products; and
• Laundry detergent products.
This restriction is critically important for MCB, whose broader brand portfolio encompasses not only household cleaning products but also personal care and home fragrance product lines marketed under the MERIDIAN brand and brand extensions. The product-category restriction ensures that Brindoval cannot leverage any coexistence rights as a platform for expanding into adjacent categories that would bring it into direct competition with MCB's broader MERIDIAN brand family.
E. Trade-Dress Changes
The framework requires Brindoval to permanently discontinue the teal-and-white color scheme and the wave device in connection with any products bearing a mark incorporating "MERIDIAN." This trade-dress obligation is consistent with, and reinforces, the Court's January 9, 2023 Preliminary Injunction Order, which already required Brindoval to modify its packaging trade dress within forty-five (45) days.
Under the framework, Brindoval is further required to submit its replacement trade dress to MCB for review (but not approval) at least thirty (30) days before commercial use. The purpose of this review right is to provide MCB with an opportunity to assess whether the proposed replacement trade dress is sufficiently differentiated from MCB's registered MERIDIAN stylized logo with wave device (U.S. Reg. No. 5,589,320) and overall trade dress. The precise mechanics of the review process — including the procedure for raising objections and the consequences of any disagreement — will be addressed in the definitive agreement.
We note that while the framework provides for a review right rather than an approval right, this distinction is appropriate given the coexistence nature of the arrangement. A full approval right could be viewed as granting MCB an effective veto over Brindoval's packaging decisions, which Brindoval would be unlikely to accept and which could raise antitrust considerations. The review right, combined with the perpetual prohibition on the teal-and-white color scheme and wave device, provides MCB with meaningful oversight while preserving commercial reasonableness.
F. Non-Challenge Covenant
Brindoval will covenant not to challenge the validity of MCB's three trademark registrations, specifically:
• U.S. Reg. No. 4,218,506 — MERIDIAN (standard character mark, International Class 3);
• U.S. Reg. No. 5,034,771 — MERIDIAN CLEAN (standard character mark, International Class 3); and
• U.S. Reg. No. 5,589,320 — MERIDIAN (stylized logo with wave device, International Class 3).
In addition, Brindoval will be required to withdraw any existing or contemplated challenges, oppositions, or cancellation proceedings directed at any of these registrations. This non-challenge covenant secures the legal foundation of MCB's trademark portfolio and eliminates the risk that Brindoval could seek to undermine MCB's registrations in connection with future disputes or competitive activity.
G. Quality Monitoring
The framework contemplates that Brindoval will provide MCB with product samples on an annual basis to enable MCB to monitor the quality of goods sold under the modified mark. In addition, MCB will have the right to conduct quality inspections at Brindoval's manufacturing and distribution facilities. The frequency, scope, and logistical details of such inspections are to be determined in the definitive agreement.
While quality-monitoring provisions are more commonly associated with trademark licensing arrangements, their inclusion in the coexistence framework serves an important function. Under the Lanham Act, a trademark owner that acquiesces in unauthorized third-party use of a confusingly similar mark without exercising quality control may be deemed to have engaged in "naked licensing," potentially jeopardizing the owner's own trademark rights. By including quality-monitoring provisions, the framework enables MCB to exercise a degree of oversight that is consistent with its obligations as a trademark owner while avoiding any inference of acquiescence or abandonment.
H. Enforcement and Liquidated Damages
The framework contemplates the inclusion of a liquidated-damages provision for breach of the channel restrictions or product-category restrictions described above. Preliminary discussions during the mediation suggest a liquidated-damages amount of $500,000 per occurrence, in addition to any actual damages suffered by MCB as a result of the breach. The specific amount and terms of the liquidated-damages provision will be negotiated in the definitive agreement.
The framework also provides that the coexistence arrangement will have a perpetual term, unless terminated by mutual written consent of both parties or as a result of material breach by either party. The perpetual nature of the agreement ensures that the protections afforded to MCB are not time-limited and will continue for as long as Brindoval uses the modified mark.
We view the liquidated-damages provision as an essential component of the framework. Channel and product-category restrictions are only as effective as the enforcement mechanisms that support them. A $500,000 per-occurrence liquidated-damages provision, combined with the right to recover actual damages, provides a meaningful financial deterrent against breach and ensures that MCB will have an efficient remedy in the event of a violation.
I. Governing Law and Dispute Resolution
The framework provides that the definitive Trademark Coexistence Agreement will be governed by the law of the State of New York. This is consistent with MCB's preference and with the location of the pending federal court action.
With respect to dismissal mechanics, the framework contemplates the following:
(a) Upon execution of the definitive agreement and receipt of the settlement payment in escrow, the parties will file a Joint Stipulation of Dismissal with Prejudice in S.D.N.Y. Case No. 1:22-cv-09483, pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(ii); and
(b) MCB will withdraw its Notice of Opposition in TTAB Opposition No. 91/278,415, with Brindoval's consent, to permit Brindoval to amend its pending application to reflect the modified mark "BRINDOVAL MERIDIAN FRESH" with a narrowed description of goods.
The sequencing of these filings will need to be carefully coordinated to ensure that MCB's trademark rights are fully protected throughout the transition period. We will address the specific mechanics and timing of these filings in the definitive agreement.
V. Assessment of the Framework Terms
A. Strengths of the Framework
Calderwood & Harkness believes the framework term sheet represents a strong outcome for MCB. We highlight the following particular strengths:
Monetary Recovery. A settlement payment in the range of $1,200,000 to $1,500,000 provides meaningful monetary compensation for the infringement of MCB's trademark rights. While a damages award at trial could potentially exceed this amount, it could also fall short — particularly given the Court's skepticism regarding the word-mark infringement claim. The certainty of a negotiated payment, combined with the avoidance of substantial additional litigation costs, compares favorably to the uncertain and expensive prospect of proceeding to trial.
Mark Modification. The requirement that Brindoval modify its mark to "BRINDOVAL MERIDIAN FRESH" with a mandatory Brindoval prefix displayed at no less than 75% of the type size of "MERIDIAN FRESH" substantially reduces the risk of consumer confusion. This modification effectively transforms the mark from a standalone "MERIDIAN FRESH" that is directly evocative of MCB's MERIDIAN mark to a clearly Brindoval-branded variant that conveys a distinct source association.
Channel and Product-Category Restrictions. The channel restrictions confine Brindoval's use of the modified mark to its own retail ecosystem — its branded stores and e-commerce platform — and exclude third-party retail platforms, wholesale distribution, and any non-Brindoval-branded retail environments. The product-category restriction limits Brindoval to household cleaning products in International Class 3 and prevents any expansion into personal care, home fragrance, or laundry detergent categories. Together, these restrictions create significant separation between MCB's national, multi-category brand and Brindoval's regional private-label use.
Non-Challenge Covenant. The non-challenge covenant secures MCB's registered trademark portfolio — the three registrations that form the backbone of the MERIDIAN brand — against future challenge by Brindoval. This is a valuable right that eliminates the risk of costly and disruptive validity challenges.
Perpetual Term. The perpetual nature of the coexistence arrangement ensures that the protections afforded to MCB under the agreement are not limited in duration and will continue to benefit MCB's brand for the foreseeable future.
B. Considerations and Risks of Proceeding to Trial Instead
We believe it is important to identify candidly the risks and costs that MCB would face if it elected to reject the framework and proceed to trial:
Uncertainty on the Word-Mark Claim. The Court's Preliminary Injunction Order declined to enjoin Brindoval's use of the word mark MERIDIAN FRESH, finding that MCB had not demonstrated a sufficient likelihood of success on the word-mark claim to warrant preliminary injunctive relief. While this ruling is not determinative of the ultimate merits — the standard for a preliminary injunction is higher than the standard for a finding of infringement at trial — it does suggest that the word-mark claim carries a measure of risk. A reasonable possibility exists that the Court could, at trial, find infringement only as to the trade dress and not as to the word mark itself, in which case MCB would obtain an injunction that largely overlaps with what the PI Order already provides.
Substantial Additional Litigation Costs. Proceeding to trial would involve significant additional costs, including: (i) the completion of expert discovery, including the deposition of Brindoval's rebuttal survey expert, Dr. Ronald Trask of Pinnacle Research Group Inc., and any Daubert motion practice relating to both parties' expert testimony; (ii) extensive fact depositions of Brindoval's key witnesses, including Nathan Cho and Karen Whitfield, among others; (iii) preparation and briefing of any summary judgment motions; and (iv) trial preparation and the trial itself. We estimate that MCB's additional litigation costs through trial could range from $300,000 to $500,000 or more, depending on the scope of pretrial discovery and the length of trial.
Uncertainty of Damages at Trial. While MCB has strong confusion evidence, the damages ultimately recoverable at trial are uncertain. The Court might limit monetary relief to an accounting of Brindoval's profits attributable to the trade-dress infringement (as distinct from word-mark infringement), which could significantly reduce the damages base. In addition, Brindoval can be expected to argue for apportionment and to claim that a portion of its revenue is attributable to factors other than the infringing mark and trade dress.
Brindoval's Litigation Resources. Brindoval is a substantial company with reported fiscal year 2022 revenue of approximately $2.1 billion. It has the financial resources to litigate aggressively through trial and appeal, and it has retained experienced trademark litigation counsel at Halverson McKay & Pruitt LLP. A protracted litigation would impose significant demands on MCB's management time and resources, in addition to the direct financial costs.
C. Recommendation
In light of the foregoing analysis, Calderwood & Harkness recommends that MCB proceed with the negotiation of the definitive Trademark Coexistence Agreement on the framework terms. The framework achieves MCB's core litigation objectives: monetary recovery, mark modification, channel containment, and long-term brand protection. It does so with certainty and efficiency, avoiding the substantial costs and risks of continued litigation.
Specifically, we recommend the following negotiation priorities:
1. Target a settlement amount of $1,350,000, the midpoint of the agreed range, during final negotiations of the definitive agreement. This figure reflects a fair assessment of the strength of MCB's claims balanced against the litigation risks identified above.
2. Insist on a robust liquidated-damages provision of $500,000 per occurrence for breach of the channel or product-category restrictions, in addition to actual damages. This provision is essential to deter breach and ensure effective enforcement of the coexistence restrictions.
3. Negotiate precise mark-modification specifications, including the minimum 75% type-size ratio, clear positioning requirements for the BRINDOVAL prefix, and font-style requirements to ensure that the modified mark as used in commerce effectively distinguishes Brindoval's products from MCB's.
4. Ensure that the trade-dress review mechanics in the definitive agreement provide MCB with a meaningful opportunity to object to any replacement trade dress that is insufficiently differentiated, while stopping short of a full approval right that could raise enforceability concerns.
VI. Next Steps and Timeline
We propose the following next steps and timeline for the completion of the definitive Trademark Coexistence Agreement:
1. First Draft of Definitive Agreement. Calderwood & Harkness will prepare the first draft of the definitive Trademark Coexistence Agreement. We anticipate circulating the initial draft to Halverson McKay & Pruitt LLP by early March 2023, subject to MCB's authorization to proceed.
2. Negotiation Period. We expect the negotiation of the definitive agreement to take approximately six to eight weeks from the date of circulation of the first draft, targeting completion of a fully executed agreement by late April 2023. This timeline is subject to the pace of negotiations and the complexity of any open issues.
3. Escrow Agent. In parallel with the negotiation of the definitive agreement, we will identify a mutually acceptable escrow agent and negotiate the terms of an escrow agreement to govern the deposit and release of the settlement payment.
4. MCB Signatory. The framework term sheet anticipates that you, Thomas R. Hennessy, will sign the definitive agreement on behalf of MCB. We request that you confirm that you will serve as the authorized signatory or, alternatively, designate another officer of MCB with appropriate authority.
5. Client Authorization. We respectfully request that MCB confirm its authorization to proceed on the framework terms described in this letter, including any modifications to MCB's negotiation parameters that you or MCB's leadership may wish to communicate. We are prepared to begin drafting immediately upon receipt of your authorization.
6. Brand Management Review. Rachel Dominguez and MCB's brand management team should be prepared to review and comment on the trade-dress specifications, mark-modification requirements, and any brand-guideline provisions that will be incorporated into the definitive agreement. Their input will be particularly important in defining the visual and typographic standards for the modified mark and the replacement trade dress review process.
7. Notification to Waypoint Capital Partners LLC. We recommend that MCB advise Waypoint Capital Partners LLC (Managing Partner James Alderton) of the mediation outcome and the proposed resolution. As MCB's majority equity holder, Waypoint has historically been involved in strategic brand-protection decisions, and we believe it is appropriate to ensure that Waypoint's leadership is informed of and comfortable with the framework terms before MCB formally authorizes the negotiation of the definitive agreement.
VII. Confidentiality Notice
We remind you that the mediation statement submitted by MCB, the mediation statement submitted by Brindoval, and all oral and written communications exchanged during the mediation are subject to the confidentiality protections set forth in the mediation agreement executed by the parties with Novotny ADR Services LLC prior to the commencement of the mediation session. These communications are confidential and may not be disclosed to any third party, introduced in evidence, or used for any purpose in the litigation or any other proceeding, except as may be required by law or court order.
The framework term sheet itself, while executed by counsel for both parties, is expressly non-binding and is subject to the negotiation and execution of a definitive Trademark Coexistence Agreement. Neither party has any binding obligation to complete the transaction contemplated by the framework term sheet, and either party may withdraw from negotiations at any time prior to the execution of the definitive agreement.
Finally, this letter is a privileged and confidential attorney-client communication protected by the attorney-client privilege and the work-product doctrine. It is intended solely for the use of MCB and its authorized officers and advisors and should not be disclosed to any third party without the prior consent of Calderwood & Harkness LLP.
VIII. Closing
We would like to schedule a call with you — and with Sandra Kwan and Rachel Dominguez as appropriate — at your earliest convenience to discuss the framework terms in detail and to obtain MCB's formal authorization to proceed with the negotiation of the definitive agreement. Please let us know your availability for a call early next week. We are also available to meet in person at MCB's offices if you would prefer a face-to-face discussion.
Calderwood & Harkness is prepared to begin drafting the definitive Trademark Coexistence Agreement immediately upon receipt of your authorization. We have the template and precedent materials in hand, and Christy Bauer and I will prioritize this matter to meet the proposed timeline.
We are confident that the framework reached at yesterday's mediation provides a strong foundation for a commercially favorable resolution that protects the MERIDIAN brand — MCB's most valuable intellectual property asset — while avoiding the substantial costs, risks, and management distraction of continued litigation through trial. We look forward to discussing these matters with you and to bringing this dispute to a successful conclusion on terms that serve MCB's long-term strategic interests.
Thank you for your continued confidence in Calderwood & Harkness.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Alan Ngo Partner, intellectual Property Calderwood & Harkness LLP 1251 Avenue of the Americas, 40th Floor New York, NY 10020 Direct: (212) 558-4127
Email: ango@calderwoodharkness.com
cc: Sandra Kwan, Chief Executive Officer, Meridian Consumer Brands LLC Rachel Dominguez, Vice President, Brand Management, Meridian Consumer Brands LLC Marcus Delgado, Billing Partner, Calderwood & Harkness LLP Christy Bauer, Lead Associate, Calderwood & Harkness LLP
Enclosure: Framework Term Sheet (Non-Binding) dated February 15, 2023 (prepared by Mediator Novotny, executed by both parties' counsel)

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