1011-00003 · Waypoint Capital Partners · Correspondence/Opposing Counsel

letter-opposing-counsel-markup-response.docx DOCUMENT Litigation

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CONFIDENTIAL — SETTLEMENT COMMUNICATION — F.R.E. 408

CALDERWOOD & HARKNESS LLP Attorneys at Law

1251 Avenue of the Americas, 40th Floor New York, New York 10020 Telephone: (212) 504-6000 Facsimile: (212) 504-6100 www.calderwoodharkness.com

April 3, 2023

Via Email and First-Class Mail

Gregory T. Halverson, Esq. Halverson McKay & Pruitt LLP 225 South Sixth Street, Suite 4200 Minneapolis, MN 55402

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 Response to Brindoval's March 20, 2023 Mark-Up of Trademark Coexistence Agreement C&H Matter No. 1011-00003

Dear Mr. Halverson:

I. Introduction and Purpose

Thank you for transmitting Brindoval Home Goods Inc.'s ("Brindoval") marked-up draft of the Trademark Coexistence Agreement, dated March 20, 2023 (the "Brindoval Mark-Up"). We appreciate the time and effort your client and your team devoted to their review and appreciate the constructive spirit in which many of the proposed revisions were offered.

On behalf of our client, Meridian Consumer Brands LLC ("MCB"), we have carefully reviewed each of Brindoval's proposed revisions to the initial draft that this firm circulated on March 6, 2023 (the "Initial Draft"). This letter sets forth MCB's responses to the Brindoval Mark-Up — accepting certain revisions in full, rejecting others for the reasons detailed below, and proposing compromise language where appropriate in the interest of advancing negotiations toward a final, executed agreement. Enclosed with this letter is a revised draft reflecting MCB's positions on all outstanding issues (the "Revised Draft," dated April 3, 2023).

We remain hopeful that the parties can finalize the definitive Coexistence Agreement efficiently and in a manner consistent with the framework term sheet reached during the February 15, 2023 mediation session before the Honorable Harold K. Novotny (Ret.) of Novotny ADR Services LLC. As you know, both parties invested considerable time and resources in reaching that framework, and MCB believes the framework's key terms should be honored in the definitive agreement. The positions set forth below reflect MCB's good-faith effort to adhere to the spirit and substance of the parties' prior understandings while accommodating Brindoval's legitimate concerns where possible.

We address each category of revisions in turn below.

II. Revisions MCB Accepts

MCB is prepared to accept certain of Brindoval's proposed revisions, either in their entirety or with minor modifications that we do not believe will be controversial. These accepted revisions are reflected in the Revised Draft.

A. Recitals and Definitions (Sections 1–2)

MCB accepts Brindoval's proposed clarifications to the recitals regarding Brindoval's characterization of its adoption and first use of the MERIDIAN FRESH mark. Specifically, we have no objection to the language characterizing Brindoval's adoption of the mark as having occurred "in connection with the launch of Brindoval's household cleaning product line in or about June 2022," in lieu of the Initial Draft's more general reference to Brindoval's "adoption and use" of the mark. This change is acceptable provided that the recitals continue to acknowledge, as they do in the Revised Draft, MCB's prior rights in its core federal trademark registrations, namely:

(i) U.S. Registration No. 4,218,506 for the mark MERIDIAN, registered on August 14, 2012, covering cleaning preparations for household and commercial use in International Class 3;

(ii) U.S. Registration No. 5,034,771 for the mark MERIDIAN CLEAN, registered on October 18, 2016, covering multi-surface cleaning preparations, glass cleaners, and all-purpose cleaners in International Class 3; and

(iii) U.S. Registration No. 5,589,320 for the MERIDIAN stylized logo with wave device (design plus words), registered on July 10, 2018, covering cleaning preparations for household use, surface cleaning wipes, and related goods in International Class 3.

MCB's prior rights in these registrations form the foundation of the Coexistence Agreement and must be expressly preserved in the recitals. The Revised Draft reflects this understanding.

Additionally, MCB accepts Brindoval's proposed edits to the definition of "Brindoval Channels" set forth in Section 2.4 of the Initial Draft. Brindoval's mark-up helpfully clarifies that the term "Brindoval-branded retail stores" is intended to encompass both the 148 existing brick-and-mortar Brindoval Home Goods retail locations currently in operation as of the date of the agreement and any future retail locations operated under the Brindoval Home Goods brand. MCB agrees that this clarification is appropriate and avoids potential ambiguity regarding whether newly opened stores would fall within the scope of the permitted channels. The Revised Draft incorporates this language.

MCB further accepts the addition of a defined term for "Brindoval E-Commerce Platform," which Brindoval's mark-up defines to mean the website located at www.crestviewhomegoods.com and any successor URL operated directly by Brindoval Home Goods Inc. or its wholly owned subsidiaries. This defined term is a useful addition that provides greater precision to the channel-restriction provisions of Section 5. The Revised Draft incorporates this defined term in Section 2.6.

B. Settlement Payment Mechanics (Section 4)

MCB accepts Brindoval's proposed revisions to the settlement payment mechanics set forth in Section 4 of the Initial Draft. Specifically, MCB agrees to the following clarifications:

(i) The $1,350,000.00 settlement payment shall be deposited by Brindoval via wire transfer into the escrow account established at Dralvecen National Bank, under the supervision of Patricia Dolan, Escrow Officer, located at 60 East 42nd Street, New York, NY 10165.

(ii) Such deposit shall be made within ten (10) business days of the full execution of the Coexistence Agreement by both parties.

(iii) Release of the escrowed funds to MCB shall be triggered by entry of the Court's Order of Dismissal with Prejudice in Case No. 1:22-cv-09483 (S.D.N.Y.).

These terms are consistent with the parties' understanding from the mediation and with the discussions between counsel at the March 2, 2023 status conference before Judge Albright. MCB believes Brindoval's proposed wire-transfer instructions and escrow-release timing are workable, and they are reflected in the Revised Draft without further modification. We note, however, that certain subsidiary issues relating to escrow documentation remain open, as discussed further in Section X of this letter.

C. Amendment of Brindoval's Pending Application (Section 7)

MCB accepts Brindoval's proposed timeline for filing the amendment to pending U.S. Trademark Application Serial No. 97/412,558 with the United States Patent and Trademark Office. As proposed in the Brindoval Mark-Up, Brindoval shall file the amendment within thirty (30) days following execution of the Coexistence Agreement, amending the mark from MERIDIAN FRESH to BRINDOVAL MERIDIAN FRESH and restricting the description of goods in the application to "household cleaning preparations sold exclusively through Brindoval-branded retail locations and Brindoval's own e-commerce platform." MCB considers the thirty-day filing window to be reasonable and appreciates Brindoval's commitment to promptly conforming its pending application to the terms of the Coexistence Agreement. The Revised Draft reflects Brindoval's proposed timeline without modification.

D. Representations and Warranties (Section 10)

MCB accepts Brindoval's minor editorial revisions to the mutual representations and warranties set forth in Section 10 of the Initial Draft regarding each party's authority to enter into and perform its obligations under the Coexistence Agreement. MCB agrees to these edits subject to the following additions, which the Revised Draft includes:

(i) MCB represents that Thomas R. Hennessy, General Counsel of Meridian Consumer Brands LLC, has been duly authorized by MCB's Board of Managers to execute the Coexistence Agreement on behalf of MCB.

(ii) Brindoval shall include a corresponding representation that Karen A. Whitfield, General Counsel of Brindoval Home Goods Inc., has been duly authorized by Brindoval's Board of Directors to execute the Coexistence Agreement on behalf of Brindoval Home Goods Inc.

We trust these additions are noncontroversial and reflect each party's internal governance requirements. If Brindoval's signatory will be someone other than Ms. Whitfield, please advise so we can update the Revised Draft accordingly.

III. Revisions MCB Rejects

Notwithstanding the areas of agreement identified above, MCB is unable to accept several of Brindoval's proposed revisions. In each case, the revision either departs from the terms of the mediation framework, introduces unacceptable risk to MCB, or is otherwise inconsistent with the core objectives of the Coexistence Agreement. MCB's reasons for rejecting each of these revisions are set forth in detail below.

A. Liquidated Damages — Rejection of Brindoval's Proposed Reduction (Section 9.2)

Brindoval's mark-up proposes reducing the liquidated damages payable for any breach of the channel restrictions (Section 5) or product-category restrictions (Section 5.2) from $500,000 per occurrence to $150,000 per occurrence. MCB firmly rejects this proposed reduction. This is a point on which MCB will not compromise, for the following reasons.

First, the $500,000 per-occurrence liquidated damages figure was a core component of the mediation framework term sheet agreed to by both parties on February 15, 2023. Both Mr. Hennessy and Ms. Whitfield participated in the mediation session at which this figure was negotiated, and both assented to the term sheet before Judge Novotny. MCB views the mediation framework as a binding commitment in principle, and Brindoval's attempt to renegotiate this figure in the Brindoval Mark-Up is troubling. The entire purpose of the mediation and the resulting framework was to establish the essential deal terms; those terms should not be revisited at the drafting stage absent a compelling justification, and Brindoval has offered none.

Second, the purpose of the liquidated damages provision is to provide a meaningful deterrent against unauthorized expansion beyond the channels and product categories permitted under the Coexistence Agreement. The deterrent effect is particularly critical in this case given the magnitude of the revenue at stake. As MCB demonstrated during the preliminary-injunction proceedings before Judge Albright, Brindoval generated approximately $6.8 million in gross revenue from sales of MERIDIAN FRESH products in a period of only five months — from July through November 2022 — with annualized projected revenue of approximately $16.3 million. A liquidated damages figure of $150,000 per occurrence would be immaterial relative to the revenue Brindoval stands to generate from unauthorized channel expansion. Such a figure would not provide a meaningful incentive for compliance, nor would it constitute a reasonable pre-estimate of MCB's damages from a breach.

Third, MCB's own MERIDIAN-branded household cleaning product line generated $94.5 million in revenue in fiscal year 2022, representing approximately 24.4% of MCB's total consolidated revenue of $387 million. The MERIDIAN brand is the cornerstone of MCB's consumer products business, and unauthorized channel expansion by Brindoval — particularly into grocery, club, or e-commerce channels where MCB's products are widely distributed — could cause significant and difficult-to-quantify harm to MCB's brand equity, market position, and consumer goodwill. The $500,000 per-occurrence figure is a commercially reasonable pre-estimate of the harm MCB would suffer from each such breach, and it is fully consistent with applicable New York law governing the enforceability of liquidated damages provisions. See, e.g., Kestrel Corporation, 4 N.Y.3d 373, 380 (2005) (liquidated damages provisions are enforceable where they bear a reasonable relationship to the probable loss and where actual damages would be difficult to determine).

Fourth, MCB will not agree to any cap on the aggregate amount of liquidated damages recoverable under Section 9.2. Each occurrence of a breach — whether it involves a single unauthorized retail placement or a wholesale diversion of BRINDOVAL MERIDIAN FRESH products into prohibited channels — must be treated independently. A cap would undermine the deterrent function of the provision and could, in effect, allow Brindoval to "buy" its way into prohibited channels by treating capped damages as a cost of doing business. This is not acceptable to MCB.

Accordingly, the Revised Draft retains the original $500,000 per-occurrence liquidated damages figure in Section 9.2, together with MCB's right to recover actual damages in excess of liquidated damages where applicable.

B. Channel Restrictions — Rejection of Brindoval's Proposed Carve-Out for Third-Party Online Marketplaces (Section 5)

Brindoval's mark-up proposes the addition of a carve-out to Section 5 that would permit the sale of BRINDOVAL MERIDIAN FRESH products through third-party online marketplaces — including, but not limited to, Penmark Holdings, Walmart.com, and Adriatic Corporation — so long as such products are sold through Brindoval's own official seller accounts on those platforms (as distinguished from sales by unauthorized third-party resellers). MCB rejects this proposed carve-out in its entirety.

The coexistence framework established during the mediation limits Brindoval's use of the modified mark BRINDOVAL MERIDIAN FRESH to two, and only two, distribution channels: (a) Brindoval-branded retail stores and (b) Brindoval's own e-commerce platform (i.e., www.crestviewhomegoods.com and successor URLs). This limitation was a central element of the parties' agreement and was negotiated specifically to prevent the kind of marketplace overlap that gave rise to this litigation in the first place.

Permitting Brindoval to sell BRINDOVAL MERIDIAN FRESH products on third-party online marketplaces would place those products in direct proximity to MCB's own MERIDIAN and MERIDIAN CLEAN products on the very same digital shelves — including Amazon product search results, Walmart.com category pages, and other aggregated retail environments where consumers routinely compare products side-by-side. MCB's MERIDIAN and MERIDIAN CLEAN products are widely distributed through grocery, club, mass-merchant, and e-commerce channels in all fifty states and the District of Columbia, including through MCB's own seller accounts and authorized distribution agreements on Penmark Holdings, Walmart.com, Adriatic Corporation, Cobalt Ridge Corporation, and other major platforms. Allowing Brindoval to access those same platforms would re-create the very conditions of consumer confusion that the Coexistence Agreement is designed to eliminate.

The risk of confusion is not hypothetical. As you are aware, MCB retained Dr. Elaine Furman of Lakeshore Brand Consulting LLC to conduct a consumer confusion survey using the Eveready methodology, which was submitted in connection with MCB's preliminary-injunction motion. Dr. Furman's survey found a net confusion rate of 31.4% — well above the threshold courts in this Circuit have found sufficient to establish a likelihood of confusion — when consumers were exposed to MERIDIAN FRESH products in a retail environment alongside MCB's MERIDIAN products. While the rebranding to BRINDOVAL MERIDIAN FRESH will mitigate confusion to some degree, the effect of that mitigation depends critically on the channel separation that the Coexistence Agreement is designed to ensure. If both parties' products appear on the same third-party marketplace pages, the risk of consumer confusion will remain unacceptably high notwithstanding the modified mark.

The Revised Draft retains the prohibition on sales through third-party retail platforms and wholesale distribution channels without modification.

C. Rejection of Brindoval's Proposed Sunset Clause (Section 12)

Brindoval's mark-up proposes converting the term of the Coexistence Agreement from perpetual to an initial ten-year term, with automatic five-year renewal periods thereafter unless either party provides written notice of non-renewal at least twelve months prior to the expiration of the then-current term. MCB rejects the introduction of any sunset clause or limited-term structure.

The mediation framework expressly contemplated that the Coexistence Agreement would be perpetual in duration, terminable only by mutual written consent of the parties or upon a material breach. MCB insisted on a perpetual term for a fundamental and straightforward reason: MCB's trademark rights are of indefinite duration. MCB's federal registrations for MERIDIAN, MERIDIAN CLEAN, and the MERIDIAN stylized logo with wave device are maintained and renewed in accordance with the requirements of the Lanham Act, and MCB fully intends to continue using, protecting, and enforcing those marks for the indefinite future. The restrictions on Brindoval's use of a MERIDIAN-incorporating mark must be coextensive with those rights. A time-limited agreement would leave MCB exposed after the expiration or non-renewal of the term, effectively requiring MCB to re-litigate issues that have already been resolved — an outcome that would defeat the very purpose of a coexistence arrangement.

Moreover, from a practical standpoint, a sunset clause would create perverse incentives. If Brindoval knew that the channel and product-category restrictions would expire at the end of a finite term, it could use the intervening period to build brand equity in BRINDOVAL MERIDIAN FRESH and then, upon expiration, expand freely into channels and product categories from which it is currently restricted. MCB is unwilling to accept that risk.

The Revised Draft retains the perpetual term of the Coexistence Agreement, terminable only by mutual written consent or material breach, without modification.

IV. Trade-Dress Review Right — MCB's Position and Clarification (Section 6)

MCB acknowledges Brindoval's concern regarding the scope of the trade-dress review provision set forth in Section 6 of the Initial Draft. The Brindoval Mark-Up proposes two alternative positions, neither of which is acceptable to MCB.

In its primary proposal, Brindoval's mark-up suggests that MCB would have an "approval right" over Brindoval's proposed replacement trade dress — i.e., Brindoval would be prohibited from implementing any new trade dress unless and until MCB provides its affirmative written approval. Brindoval then objects to its own proposed formulation as "overly burdensome" and, in the alternative, proposes eliminating the review right entirely. Under this alternative, Brindoval would simply discontinue its current teal-and-white color scheme and wave device (as required by the preliminary injunction and the Coexistence Agreement) and adopt any replacement trade dress of its choosing without notice to, or review by, MCB.

MCB's position is as follows. MCB does insist upon a review right — but not an approval right. There is a meaningful and well-recognized distinction between the two concepts, and MCB's proposed approach is calibrated to protect MCB's legitimate interests without imposing an unreasonable burden on Brindoval's ability to rebrand. Specifically, MCB proposes the following mechanics for inclusion in Section 6 of the Revised Draft:

(a) Submission Requirement. No later than thirty (30) days before the first commercial use of any proposed replacement trade dress for BRINDOVAL MERIDIAN FRESH products, Brindoval shall submit to MCB, by email to a designated contact (with hard copy to follow), representative samples, mock-ups, or digital renderings of the proposed replacement trade dress, including packaging, labeling, and any associated point-of-sale materials.

(b) MCB Review Period. MCB shall have thirty (30) days from receipt of the submission to review the proposed replacement trade dress. If MCB determines, in its reasonable judgment, that the proposed trade dress is confusingly similar to MCB's registered trade dress — including, without limitation, the MERIDIAN stylized logo with wave device, U.S. Reg. No. 5,589,320, and the overall commercial impression of MCB's product packaging as used in commerce — MCB may raise written objections to Brindoval, specifying the elements of the proposed trade dress that MCB contends are confusingly similar.

(c) Deemed Consent. If MCB raises no written objection within the thirty (30)-day review period, Brindoval may proceed with commercial use of the proposed replacement trade dress without further obligation to MCB under this Section 6.

(d) Good-Faith Negotiation. If MCB raises a timely objection, the parties shall negotiate in good faith for an additional fifteen (15)-day period following MCB's objection to attempt to resolve the dispute. During this negotiation period, Brindoval shall not commence commercial use of the disputed trade dress.

(e) Expedited Arbitration. If the parties are unable to resolve the dispute within the fifteen (15)-day negotiation period, either party may submit the dispute to expedited arbitration before a single arbitrator with expertise in trademark law, to be conducted in New York, New York, under the expedited procedures of the American Arbitration Association, with a final and binding decision to be rendered within forty-five (45) days of submission.

This framework represents a balanced and commercially reasonable approach. MCB does not seek a veto over Brindoval's trade-dress choices. MCB seeks only the ability to raise a timely objection if the proposed replacement trade dress itself creates a new likelihood of confusion with MCB's existing trade dress — an eventuality that, while hopefully unlikely, cannot be ruled out and that would undermine the objectives of the Coexistence Agreement. The proposed review mechanism includes a deemed-consent provision that ensures MCB cannot delay Brindoval's rebranding by simply failing to act, and it provides for expedited arbitration as a final backstop to prevent either party from using the review process as a lever for delay.

We also note that the preliminary injunction entered by Judge Albright on January 9, 2023, already required Brindoval to remove the wave device and discontinue the teal-and-white color scheme within forty-five (45) days of the order. The Coexistence Agreement makes that obligation permanent and adds a prospective review mechanism to address future trade-dress changes. MCB's proposed approach is consistent with the spirit of the Court's order and provides certainty for both parties going forward.

The Revised Draft incorporates this compromise language in Section 6.

V. Quality-Monitoring Provisions — Proposed Compromise (Section 8)

Brindoval's mark-up proposes eliminating the quality-monitoring provisions of Section 8 in their entirety. Brindoval's counsel argues that quality-monitoring provisions are characteristic of trademark license agreements and are unnecessary — and indeed inappropriate — in a coexistence agreement between two independent companies using different (though similar) marks.

MCB respectfully disagrees. While it is true that quality-monitoring obligations most commonly arise in the context of trademark licenses, the Coexistence Agreement presents a circumstance that, in MCB's view, warrants similar protections. Under the terms of the Coexistence Agreement, Brindoval will be permitted to continue using a mark — BRINDOVAL MERIDIAN FRESH — that incorporates the word "MERIDIAN," which is MCB's house mark and the cornerstone of its household cleaning product brand. Consumers who encounter BRINDOVAL MERIDIAN FRESH products may associate those products, at least in part, with MCB or with the quality standards associated with the MERIDIAN brand. If BRINDOVAL MERIDIAN FRESH products were to suffer quality failures — product recalls, safety concerns, or other issues that garner negative publicity — the resulting reputational harm could spill over to MCB's own MERIDIAN-branded products. MCB has a legitimate and substantial interest in ensuring that products sold under any mark incorporating the word "MERIDIAN" do not damage the goodwill associated with MCB's marks.

That said, MCB recognizes Brindoval's concern that the quality-monitoring provisions in the Initial Draft may have been more extensive than necessary for a coexistence arrangement, and MCB is willing to offer the following compromise:

(a) Annual Product Samples. Brindoval shall provide MCB with representative product samples of each BRINDOVAL MERIDIAN FRESH product sold during the preceding calendar year. Such samples shall be delivered to MCB no later than January 31 of each calendar year (e.g., samples of products sold in calendar year 2023 shall be delivered no later than January 31, 2024). The number of samples shall be limited to a reasonable quantity sufficient to permit MCB's quality-assurance team to evaluate product quality and packaging compliance — MCB anticipates requesting no more than three (3) units of each distinct product SKU.

(b) Annual Inspection Right. MCB may conduct one (1) quality inspection per calendar year at Brindoval's facilities where BRINDOVAL MERIDIAN FRESH products are manufactured, packaged, or warehoused. MCB shall provide Brindoval with no fewer than thirty (30) days' prior written notice of any such inspection, and inspections shall be conducted during normal business hours at a date and time mutually agreed upon by the parties (such agreement not to be unreasonably withheld or delayed by Brindoval).

(c) Scope Limitation. Inspections shall be limited in scope to verifying (i) the quality and safety of BRINDOVAL MERIDIAN FRESH products, and (ii) Brindoval's compliance with the trade-dress and mark-modification requirements of the Coexistence Agreement, including the specifications set forth in Sections 3 and 6. Inspections shall not extend to Brindoval's proprietary formulations, manufacturing processes, financial records, or other confidential business information not directly relevant to the foregoing.

(d) Costs. MCB shall bear its own costs and expenses in connection with any inspection, including travel, lodging, and the costs of any third-party consultants retained by MCB to assist with the inspection.

This proposed compromise represents a meaningful reduction from MCB's Initial Draft, which provided for two (2) inspections per calendar year and did not include express limitations on the scope of inspection. MCB believes that one inspection per year, with advance notice, limited scope, and MCB bearing its own costs, is a reasonable and minimally intrusive safeguard. We urge Brindoval to accept this compromise rather than insisting on the elimination of quality monitoring altogether.

The Revised Draft incorporates this compromise language in Section 8.

VI. Mark-Modification Provisions — Confirmation (Section 3)

We note that the parties appear to be in agreement on the core mark-modification terms set forth in Section 3 of the Initial Draft, and that Brindoval's mark-up did not propose substantive changes to these provisions. MCB considers the following terms settled:

(a) Brindoval shall rebrand from MERIDIAN FRESH to BRINDOVAL MERIDIAN FRESH across all products, packaging, marketing materials, signage, and digital assets.

(b) In all uses of the modified mark, the word "BRINDOVAL" must appear in a typeface and size no less than seventy-five percent (75%) of the type size used for the words "MERIDIAN FRESH," as specified in Section 3.1(b) of the Coexistence Agreement. This requirement ensures that "BRINDOVAL" functions as a meaningful house-mark identifier that distinguishes Brindoval's products from MCB's, rather than appearing as a subordinate or inconspicuous element.

(c) Brindoval shall complete the rebranding across all channels — including in-store signage, product packaging, e-commerce listings, and marketing collateral — within one hundred twenty (120) days of execution of the Coexistence Agreement (i.e., by approximately September 12, 2023, assuming execution on or about May 15, 2023).

The Revised Draft retains these provisions without modification.

VII. Non-Challenge Covenant — Confirmation (Section 11)

MCB confirms that Brindoval's mark-up did not propose substantive changes to the non-challenge covenant set forth in Section 11 of the Initial Draft. Under this provision, Brindoval covenants that it will not, directly or indirectly, challenge the validity, enforceability, or distinctiveness of MCB's following federal trademark registrations:

(i) U.S. Registration No. 4,218,506 (MERIDIAN);

(ii) U.S. Registration No. 5,034,771 (MERIDIAN CLEAN); and

(iii) U.S. Registration No. 5,589,320 (MERIDIAN stylized logo with wave device).

This covenant extends to challenges before the USPTO (including petitions for cancellation), challenges in any federal or state court, and challenges before any administrative body. The Revised Draft retains this provision without modification, and MCB considers it settled.

VIII. Product-Category Restrictions — Confirmation (Section 5.2)

MCB confirms that the product-category restrictions set forth in Section 5.2 of the Initial Draft remain as drafted and that Brindoval's mark-up did not propose changes to these provisions. Under Section 5.2, Brindoval may use the modified mark BRINDOVAL MERIDIAN FRESH only in connection with household cleaning products in International Class 3. Brindoval is expressly prohibited from expanding into personal care products, home fragrance products, laundry detergent products, or any other product category under any mark incorporating the word "MERIDIAN," whether BRINDOVAL MERIDIAN FRESH or any variation thereof.

MCB considers this provision settled. We note that this product-category restriction works in tandem with the liquidated damages provision discussed in Section III.A above. The $500,000 per-occurrence liquidated damages figure applies not only to breaches of the channel restrictions but also to breaches of the product-category restrictions, thereby providing meaningful protection against unauthorized product-line expansion. The integrity of both provisions — the product-category restrictions and the liquidated damages mechanism — must be preserved.

IX. Governing Law and Dispute Resolution (Section 13)

Brindoval's mark-up proposes two changes to Section 13 of the Initial Draft: (1) the addition of a mandatory mediation step as a condition precedent to litigation for disputes arising under the Coexistence Agreement, and (2) a change in the governing law from New York to Minnesota.

MCB accepts the first proposal and rejects the second.

Mandatory Mediation Step. MCB agrees to the addition of a mandatory mediation step prior to the commencement of any litigation arising out of or relating to the Coexistence Agreement, provided that the mediation venue is New York County, New York, and that the mediation is conducted under the mediation rules of Novotny ADR Services LLC or, if that firm is unavailable, JAMS or the American Arbitration Association. The Revised Draft incorporates this provision.

Governing Law. MCB rejects Brindoval's proposal to change the governing law from New York to Minnesota. The mediation framework specified that the Coexistence Agreement would be governed by New York law. The underlying court action, Case No. 1:22-cv-09483, is pending in the Southern District of New York. MCB is headquartered in New York. The escrow account is held at a New York financial institution. New York has the most significant connection to this transaction, and New York law should govern. The Revised Draft retains New York as the governing law without modification.

X. Enclosure and Next Steps

Enclosed with this letter, please find the Revised Draft of the Trademark Coexistence Agreement, dated April 3, 2023, reflecting MCB's positions as set forth in this letter. The Revised Draft is provided in both clean and redline formats for your convenience.

MCB respectfully requests that Brindoval review the Revised Draft and provide its response on or before April 17, 2023. We believe that maintaining a prompt cadence of exchange is essential to achieving a final, executed agreement in a timeframe that serves both parties' interests. Unnecessary delay will only increase the costs of the pending litigation and prolong the uncertainty facing both companies.

In that regard, we note that the parties' discovery obligations in Case No. 1:22-cv-09483 continue unabated. MCB's document production requests remain outstanding, the depositions of Brindoval's Vice President of Product Development (Jeffrey M. Koller) and Vice President of Marketing (Danielle R. Ostrowski) are currently scheduled for April 25 and April 27, 2023, respectively, and MCB's expert reports are due on May 5, 2023. MCB reserves all rights in the litigation pending execution of the definitive Coexistence Agreement and will continue to prosecute its claims vigorously in the interim.

MCB is willing to schedule a call between counsel at a mutually convenient time to discuss any remaining open points and to attempt to resolve as many issues as possible before the next exchange of drafts. If a call would be productive, please propose several dates and times, and we will accommodate your schedule.

Finally, we note that three issues remain open for further discussion and will require attention in the next round of negotiations:

(1) Escrow Release Mechanics. The specific escrow release mechanics and documentation requirements — including the form of the joint escrow release instruction to be delivered to Dralvecen National Bank and the treatment of interest accrued on the escrowed funds — have not yet been fully documented. MCB proposes that the parties work with Ms. Dolan to prepare a mutually acceptable escrow instruction letter as an exhibit to the Coexistence Agreement.

(2) Amendment to Serial No. 97/412,558 — Description of Goods. While the parties are in general agreement on the scope of the amendment to Brindoval's pending application, the precise language of the amended description of goods has not been finalized. MCB will circulate proposed description-of-goods language under separate cover for Brindoval's review.

(3) 120-Day Rebranding Deadline — Trigger Date. MCB's position is that the 120-day rebranding deadline runs from the date of execution of the Coexistence Agreement, as the rebranding obligation is a contractual commitment independent of the litigation and should not be contingent on the timing of any court order. Brindoval's mark-up appears to suggest that the deadline should run from the date the Court enters the Order of Dismissal with Prejudice, which could introduce delay beyond the parties' control. MCB urges Brindoval to accept the execution date as the trigger.

XI. Reservation of Rights

Nothing in this letter, in the Revised Draft, or in any prior or future settlement communications between the parties or their counsel shall be deemed an admission or waiver of any of MCB's claims, rights, defenses, or remedies in Case No. 1:22-cv-09483 (S.D.N.Y.) or in TTAB Opposition No. 91/278,415. MCB's willingness to negotiate the terms of the Coexistence Agreement is undertaken in a good-faith effort to resolve this dispute, and is without prejudice to MCB's ability to proceed to trial, to seek additional injunctive relief, or to pursue any other available remedy if a satisfactory agreement is not reached. This letter is a settlement communication within the meaning of Federal Rule of Evidence 408 and is not admissible for any purpose in any proceeding.

We look forward to receiving Brindoval's response on or before April 17, 2023, and to continuing our work toward a final agreement that serves both parties' interests. Please do not hesitate to contact the undersigned or any member of our team with questions.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Christy Bauer Senior Associate, intellectual Property Calderwood & Harkness LLP 1251 Avenue of the Americas, 40th Floor New York, NY 10020 Direct: (212) 504-6247

Email: cbauer@calderwoodharkness.com

cc (via email):

Alan Ngo, Esq. (Calderwood & Harkness LLP) Marcus Delgado, Esq. (Calderwood & Harkness LLP) Thomas R. Hennessy, Esq. (General Counsel, Meridian Consumer Brands LLC) Megan Janssen, Esq. (Halverson McKay & Pruitt LLP) David Kowalski, Esq. (Halverson McKay & Pruitt LLP)

Encl:

Revised Draft — Trademark Coexistence Agreement (dated April 3, 2023) (clean and redline versions)

CONFIDENTIAL — SETTLEMENT COMMUNICATION — F.R.E. 408
CALDERWOOD & HARKNESS LLP Attorneys at Law
1251 Avenue of the Americas, 40th Floor New York, New York 10020 Telephone: (212) 504-6000 Facsimile: (212) 504-6100 www.calderwoodharkness.com
April 3, 2023
Via Email and First-Class Mail
Gregory T. Halverson, Esq. Halverson McKay & Pruitt LLP 225 South Sixth Street, Suite 4200 Minneapolis, MN 55402
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 Response to Brindoval's March 20, 2023 Mark-Up of Trademark Coexistence Agreement C&H Matter No. 1011-00003
Dear Mr. Halverson:
I. Introduction and Purpose
Thank you for transmitting Brindoval Home Goods Inc.'s ("Brindoval") marked-up draft of the Trademark Coexistence Agreement, dated March 20, 2023 (the "Brindoval Mark-Up"). We appreciate the time and effort your client and your team devoted to their review and appreciate the constructive spirit in which many of the proposed revisions were offered.
On behalf of our client, Meridian Consumer Brands LLC ("MCB"), we have carefully reviewed each of Brindoval's proposed revisions to the initial draft that this firm circulated on March 6, 2023 (the "Initial Draft"). This letter sets forth MCB's responses to the Brindoval Mark-Up — accepting certain revisions in full, rejecting others for the reasons detailed below, and proposing compromise language where appropriate in the interest of advancing negotiations toward a final, executed agreement. Enclosed with this letter is a revised draft reflecting MCB's positions on all outstanding issues (the "Revised Draft," dated April 3, 2023).
We remain hopeful that the parties can finalize the definitive Coexistence Agreement efficiently and in a manner consistent with the framework term sheet reached during the February 15, 2023 mediation session before the Honorable Harold K. Novotny (Ret.) of Novotny ADR Services LLC. As you know, both parties invested considerable time and resources in reaching that framework, and MCB believes the framework's key terms should be honored in the definitive agreement. The positions set forth below reflect MCB's good-faith effort to adhere to the spirit and substance of the parties' prior understandings while accommodating Brindoval's legitimate concerns where possible.
We address each category of revisions in turn below.
II. Revisions MCB Accepts
MCB is prepared to accept certain of Brindoval's proposed revisions, either in their entirety or with minor modifications that we do not believe will be controversial. These accepted revisions are reflected in the Revised Draft.
A. Recitals and Definitions (Sections 1–2)
MCB accepts Brindoval's proposed clarifications to the recitals regarding Brindoval's characterization of its adoption and first use of the MERIDIAN FRESH mark. Specifically, we have no objection to the language characterizing Brindoval's adoption of the mark as having occurred "in connection with the launch of Brindoval's household cleaning product line in or about June 2022," in lieu of the Initial Draft's more general reference to Brindoval's "adoption and use" of the mark. This change is acceptable provided that the recitals continue to acknowledge, as they do in the Revised Draft, MCB's prior rights in its core federal trademark registrations, namely:
(i) U.S. Registration No. 4,218,506 for the mark MERIDIAN, registered on August 14, 2012, covering cleaning preparations for household and commercial use in International Class 3;
(ii) U.S. Registration No. 5,034,771 for the mark MERIDIAN CLEAN, registered on October 18, 2016, covering multi-surface cleaning preparations, glass cleaners, and all-purpose cleaners in International Class 3; and
(iii) U.S. Registration No. 5,589,320 for the MERIDIAN stylized logo with wave device (design plus words), registered on July 10, 2018, covering cleaning preparations for household use, surface cleaning wipes, and related goods in International Class 3.
MCB's prior rights in these registrations form the foundation of the Coexistence Agreement and must be expressly preserved in the recitals. The Revised Draft reflects this understanding.
Additionally, MCB accepts Brindoval's proposed edits to the definition of "Brindoval Channels" set forth in Section 2.4 of the Initial Draft. Brindoval's mark-up helpfully clarifies that the term "Brindoval-branded retail stores" is intended to encompass both the 148 existing brick-and-mortar Brindoval Home Goods retail locations currently in operation as of the date of the agreement and any future retail locations operated under the Brindoval Home Goods brand. MCB agrees that this clarification is appropriate and avoids potential ambiguity regarding whether newly opened stores would fall within the scope of the permitted channels. The Revised Draft incorporates this language.
MCB further accepts the addition of a defined term for "Brindoval E-Commerce Platform," which Brindoval's mark-up defines to mean the website located at www.crestviewhomegoods.com and any successor URL operated directly by Brindoval Home Goods Inc. or its wholly owned subsidiaries. This defined term is a useful addition that provides greater precision to the channel-restriction provisions of Section 5. The Revised Draft incorporates this defined term in Section 2.6.
B. Settlement Payment Mechanics (Section 4)
MCB accepts Brindoval's proposed revisions to the settlement payment mechanics set forth in Section 4 of the Initial Draft. Specifically, MCB agrees to the following clarifications:
(i) The $1,350,000.00 settlement payment shall be deposited by Brindoval via wire transfer into the escrow account established at Dralvecen National Bank, under the supervision of Patricia Dolan, Escrow Officer, located at 60 East 42nd Street, New York, NY 10165.
(ii) Such deposit shall be made within ten (10) business days of the full execution of the Coexistence Agreement by both parties.
(iii) Release of the escrowed funds to MCB shall be triggered by entry of the Court's Order of Dismissal with Prejudice in Case No. 1:22-cv-09483 (S.D.N.Y.).
These terms are consistent with the parties' understanding from the mediation and with the discussions between counsel at the March 2, 2023 status conference before Judge Albright. MCB believes Brindoval's proposed wire-transfer instructions and escrow-release timing are workable, and they are reflected in the Revised Draft without further modification. We note, however, that certain subsidiary issues relating to escrow documentation remain open, as discussed further in Section X of this letter.
C. Amendment of Brindoval's Pending Application (Section 7)
MCB accepts Brindoval's proposed timeline for filing the amendment to pending U.S. Trademark Application Serial No. 97/412,558 with the United States Patent and Trademark Office. As proposed in the Brindoval Mark-Up, Brindoval shall file the amendment within thirty (30) days following execution of the Coexistence Agreement, amending the mark from MERIDIAN FRESH to BRINDOVAL MERIDIAN FRESH and restricting the description of goods in the application to "household cleaning preparations sold exclusively through Brindoval-branded retail locations and Brindoval's own e-commerce platform." MCB considers the thirty-day filing window to be reasonable and appreciates Brindoval's commitment to promptly conforming its pending application to the terms of the Coexistence Agreement. The Revised Draft reflects Brindoval's proposed timeline without modification.
D. Representations and Warranties (Section 10)
MCB accepts Brindoval's minor editorial revisions to the mutual representations and warranties set forth in Section 10 of the Initial Draft regarding each party's authority to enter into and perform its obligations under the Coexistence Agreement. MCB agrees to these edits subject to the following additions, which the Revised Draft includes:
(i) MCB represents that Thomas R. Hennessy, General Counsel of Meridian Consumer Brands LLC, has been duly authorized by MCB's Board of Managers to execute the Coexistence Agreement on behalf of MCB.
(ii) Brindoval shall include a corresponding representation that Karen A. Whitfield, General Counsel of Brindoval Home Goods Inc., has been duly authorized by Brindoval's Board of Directors to execute the Coexistence Agreement on behalf of Brindoval Home Goods Inc.
We trust these additions are noncontroversial and reflect each party's internal governance requirements. If Brindoval's signatory will be someone other than Ms. Whitfield, please advise so we can update the Revised Draft accordingly.
III. Revisions MCB Rejects
Notwithstanding the areas of agreement identified above, MCB is unable to accept several of Brindoval's proposed revisions. In each case, the revision either departs from the terms of the mediation framework, introduces unacceptable risk to MCB, or is otherwise inconsistent with the core objectives of the Coexistence Agreement. MCB's reasons for rejecting each of these revisions are set forth in detail below.
A. Liquidated Damages — Rejection of Brindoval's Proposed Reduction (Section 9.2)
Brindoval's mark-up proposes reducing the liquidated damages payable for any breach of the channel restrictions (Section 5) or product-category restrictions (Section 5.2) from $500,000 per occurrence to $150,000 per occurrence. MCB firmly rejects this proposed reduction. This is a point on which MCB will not compromise, for the following reasons.
First, the $500,000 per-occurrence liquidated damages figure was a core component of the mediation framework term sheet agreed to by both parties on February 15, 2023. Both Mr. Hennessy and Ms. Whitfield participated in the mediation session at which this figure was negotiated, and both assented to the term sheet before Judge Novotny. MCB views the mediation framework as a binding commitment in principle, and Brindoval's attempt to renegotiate this figure in the Brindoval Mark-Up is troubling. The entire purpose of the mediation and the resulting framework was to establish the essential deal terms; those terms should not be revisited at the drafting stage absent a compelling justification, and Brindoval has offered none.
Second, the purpose of the liquidated damages provision is to provide a meaningful deterrent against unauthorized expansion beyond the channels and product categories permitted under the Coexistence Agreement. The deterrent effect is particularly critical in this case given the magnitude of the revenue at stake. As MCB demonstrated during the preliminary-injunction proceedings before Judge Albright, Brindoval generated approximately $6.8 million in gross revenue from sales of MERIDIAN FRESH products in a period of only five months — from July through November 2022 — with annualized projected revenue of approximately $16.3 million. A liquidated damages figure of $150,000 per occurrence would be immaterial relative to the revenue Brindoval stands to generate from unauthorized channel expansion. Such a figure would not provide a meaningful incentive for compliance, nor would it constitute a reasonable pre-estimate of MCB's damages from a breach.
Third, MCB's own MERIDIAN-branded household cleaning product line generated $94.5 million in revenue in fiscal year 2022, representing approximately 24.4% of MCB's total consolidated revenue of $387 million. The MERIDIAN brand is the cornerstone of MCB's consumer products business, and unauthorized channel expansion by Brindoval — particularly into grocery, club, or e-commerce channels where MCB's products are widely distributed — could cause significant and difficult-to-quantify harm to MCB's brand equity, market position, and consumer goodwill. The $500,000 per-occurrence figure is a commercially reasonable pre-estimate of the harm MCB would suffer from each such breach, and it is fully consistent with applicable New York law governing the enforceability of liquidated damages provisions. See, e.g., Kestrel Corporation, 4 N.Y.3d 373, 380 (2005) (liquidated damages provisions are enforceable where they bear a reasonable relationship to the probable loss and where actual damages would be difficult to determine).
Fourth, MCB will not agree to any cap on the aggregate amount of liquidated damages recoverable under Section 9.2. Each occurrence of a breach — whether it involves a single unauthorized retail placement or a wholesale diversion of BRINDOVAL MERIDIAN FRESH products into prohibited channels — must be treated independently. A cap would undermine the deterrent function of the provision and could, in effect, allow Brindoval to "buy" its way into prohibited channels by treating capped damages as a cost of doing business. This is not acceptable to MCB.
Accordingly, the Revised Draft retains the original $500,000 per-occurrence liquidated damages figure in Section 9.2, together with MCB's right to recover actual damages in excess of liquidated damages where applicable.
B. Channel Restrictions — Rejection of Brindoval's Proposed Carve-Out for Third-Party Online Marketplaces (Section 5)
Brindoval's mark-up proposes the addition of a carve-out to Section 5 that would permit the sale of BRINDOVAL MERIDIAN FRESH products through third-party online marketplaces — including, but not limited to, Penmark Holdings, Walmart.com, and Adriatic Corporation — so long as such products are sold through Brindoval's own official seller accounts on those platforms (as distinguished from sales by unauthorized third-party resellers). MCB rejects this proposed carve-out in its entirety.
The coexistence framework established during the mediation limits Brindoval's use of the modified mark BRINDOVAL MERIDIAN FRESH to two, and only two, distribution channels: (a) Brindoval-branded retail stores and (b) Brindoval's own e-commerce platform (i.e., www.crestviewhomegoods.com and successor URLs). This limitation was a central element of the parties' agreement and was negotiated specifically to prevent the kind of marketplace overlap that gave rise to this litigation in the first place.
Permitting Brindoval to sell BRINDOVAL MERIDIAN FRESH products on third-party online marketplaces would place those products in direct proximity to MCB's own MERIDIAN and MERIDIAN CLEAN products on the very same digital shelves — including Amazon product search results, Walmart.com category pages, and other aggregated retail environments where consumers routinely compare products side-by-side. MCB's MERIDIAN and MERIDIAN CLEAN products are widely distributed through grocery, club, mass-merchant, and e-commerce channels in all fifty states and the District of Columbia, including through MCB's own seller accounts and authorized distribution agreements on Penmark Holdings, Walmart.com, Adriatic Corporation, Cobalt Ridge Corporation, and other major platforms. Allowing Brindoval to access those same platforms would re-create the very conditions of consumer confusion that the Coexistence Agreement is designed to eliminate.
The risk of confusion is not hypothetical. As you are aware, MCB retained Dr. Elaine Furman of Lakeshore Brand Consulting LLC to conduct a consumer confusion survey using the Eveready methodology, which was submitted in connection with MCB's preliminary-injunction motion. Dr. Furman's survey found a net confusion rate of 31.4% — well above the threshold courts in this Circuit have found sufficient to establish a likelihood of confusion — when consumers were exposed to MERIDIAN FRESH products in a retail environment alongside MCB's MERIDIAN products. While the rebranding to BRINDOVAL MERIDIAN FRESH will mitigate confusion to some degree, the effect of that mitigation depends critically on the channel separation that the Coexistence Agreement is designed to ensure. If both parties' products appear on the same third-party marketplace pages, the risk of consumer confusion will remain unacceptably high notwithstanding the modified mark.
The Revised Draft retains the prohibition on sales through third-party retail platforms and wholesale distribution channels without modification.
C. Rejection of Brindoval's Proposed Sunset Clause (Section 12)
Brindoval's mark-up proposes converting the term of the Coexistence Agreement from perpetual to an initial ten-year term, with automatic five-year renewal periods thereafter unless either party provides written notice of non-renewal at least twelve months prior to the expiration of the then-current term. MCB rejects the introduction of any sunset clause or limited-term structure.
The mediation framework expressly contemplated that the Coexistence Agreement would be perpetual in duration, terminable only by mutual written consent of the parties or upon a material breach. MCB insisted on a perpetual term for a fundamental and straightforward reason: MCB's trademark rights are of indefinite duration. MCB's federal registrations for MERIDIAN, MERIDIAN CLEAN, and the MERIDIAN stylized logo with wave device are maintained and renewed in accordance with the requirements of the Lanham Act, and MCB fully intends to continue using, protecting, and enforcing those marks for the indefinite future. The restrictions on Brindoval's use of a MERIDIAN-incorporating mark must be coextensive with those rights. A time-limited agreement would leave MCB exposed after the expiration or non-renewal of the term, effectively requiring MCB to re-litigate issues that have already been resolved — an outcome that would defeat the very purpose of a coexistence arrangement.
Moreover, from a practical standpoint, a sunset clause would create perverse incentives. If Brindoval knew that the channel and product-category restrictions would expire at the end of a finite term, it could use the intervening period to build brand equity in BRINDOVAL MERIDIAN FRESH and then, upon expiration, expand freely into channels and product categories from which it is currently restricted. MCB is unwilling to accept that risk.
The Revised Draft retains the perpetual term of the Coexistence Agreement, terminable only by mutual written consent or material breach, without modification.
IV. Trade-Dress Review Right — MCB's Position and Clarification (Section 6)
MCB acknowledges Brindoval's concern regarding the scope of the trade-dress review provision set forth in Section 6 of the Initial Draft. The Brindoval Mark-Up proposes two alternative positions, neither of which is acceptable to MCB.
In its primary proposal, Brindoval's mark-up suggests that MCB would have an "approval right" over Brindoval's proposed replacement trade dress — i.e., Brindoval would be prohibited from implementing any new trade dress unless and until MCB provides its affirmative written approval. Brindoval then objects to its own proposed formulation as "overly burdensome" and, in the alternative, proposes eliminating the review right entirely. Under this alternative, Brindoval would simply discontinue its current teal-and-white color scheme and wave device (as required by the preliminary injunction and the Coexistence Agreement) and adopt any replacement trade dress of its choosing without notice to, or review by, MCB.
MCB's position is as follows. MCB does insist upon a review right — but not an approval right. There is a meaningful and well-recognized distinction between the two concepts, and MCB's proposed approach is calibrated to protect MCB's legitimate interests without imposing an unreasonable burden on Brindoval's ability to rebrand. Specifically, MCB proposes the following mechanics for inclusion in Section 6 of the Revised Draft:
(a) Submission Requirement. No later than thirty (30) days before the first commercial use of any proposed replacement trade dress for BRINDOVAL MERIDIAN FRESH products, Brindoval shall submit to MCB, by email to a designated contact (with hard copy to follow), representative samples, mock-ups, or digital renderings of the proposed replacement trade dress, including packaging, labeling, and any associated point-of-sale materials.
(b) MCB Review Period. MCB shall have thirty (30) days from receipt of the submission to review the proposed replacement trade dress. If MCB determines, in its reasonable judgment, that the proposed trade dress is confusingly similar to MCB's registered trade dress — including, without limitation, the MERIDIAN stylized logo with wave device, U.S. Reg. No. 5,589,320, and the overall commercial impression of MCB's product packaging as used in commerce — MCB may raise written objections to Brindoval, specifying the elements of the proposed trade dress that MCB contends are confusingly similar.
(c) Deemed Consent. If MCB raises no written objection within the thirty (30)-day review period, Brindoval may proceed with commercial use of the proposed replacement trade dress without further obligation to MCB under this Section 6.
(d) Good-Faith Negotiation. If MCB raises a timely objection, the parties shall negotiate in good faith for an additional fifteen (15)-day period following MCB's objection to attempt to resolve the dispute. During this negotiation period, Brindoval shall not commence commercial use of the disputed trade dress.
(e) Expedited Arbitration. If the parties are unable to resolve the dispute within the fifteen (15)-day negotiation period, either party may submit the dispute to expedited arbitration before a single arbitrator with expertise in trademark law, to be conducted in New York, New York, under the expedited procedures of the American Arbitration Association, with a final and binding decision to be rendered within forty-five (45) days of submission.
This framework represents a balanced and commercially reasonable approach. MCB does not seek a veto over Brindoval's trade-dress choices. MCB seeks only the ability to raise a timely objection if the proposed replacement trade dress itself creates a new likelihood of confusion with MCB's existing trade dress — an eventuality that, while hopefully unlikely, cannot be ruled out and that would undermine the objectives of the Coexistence Agreement. The proposed review mechanism includes a deemed-consent provision that ensures MCB cannot delay Brindoval's rebranding by simply failing to act, and it provides for expedited arbitration as a final backstop to prevent either party from using the review process as a lever for delay.
We also note that the preliminary injunction entered by Judge Albright on January 9, 2023, already required Brindoval to remove the wave device and discontinue the teal-and-white color scheme within forty-five (45) days of the order. The Coexistence Agreement makes that obligation permanent and adds a prospective review mechanism to address future trade-dress changes. MCB's proposed approach is consistent with the spirit of the Court's order and provides certainty for both parties going forward.
The Revised Draft incorporates this compromise language in Section 6.
V. Quality-Monitoring Provisions — Proposed Compromise (Section 8)
Brindoval's mark-up proposes eliminating the quality-monitoring provisions of Section 8 in their entirety. Brindoval's counsel argues that quality-monitoring provisions are characteristic of trademark license agreements and are unnecessary — and indeed inappropriate — in a coexistence agreement between two independent companies using different (though similar) marks.
MCB respectfully disagrees. While it is true that quality-monitoring obligations most commonly arise in the context of trademark licenses, the Coexistence Agreement presents a circumstance that, in MCB's view, warrants similar protections. Under the terms of the Coexistence Agreement, Brindoval will be permitted to continue using a mark — BRINDOVAL MERIDIAN FRESH — that incorporates the word "MERIDIAN," which is MCB's house mark and the cornerstone of its household cleaning product brand. Consumers who encounter BRINDOVAL MERIDIAN FRESH products may associate those products, at least in part, with MCB or with the quality standards associated with the MERIDIAN brand. If BRINDOVAL MERIDIAN FRESH products were to suffer quality failures — product recalls, safety concerns, or other issues that garner negative publicity — the resulting reputational harm could spill over to MCB's own MERIDIAN-branded products. MCB has a legitimate and substantial interest in ensuring that products sold under any mark incorporating the word "MERIDIAN" do not damage the goodwill associated with MCB's marks.
That said, MCB recognizes Brindoval's concern that the quality-monitoring provisions in the Initial Draft may have been more extensive than necessary for a coexistence arrangement, and MCB is willing to offer the following compromise:
(a) Annual Product Samples. Brindoval shall provide MCB with representative product samples of each BRINDOVAL MERIDIAN FRESH product sold during the preceding calendar year. Such samples shall be delivered to MCB no later than January 31 of each calendar year (e.g., samples of products sold in calendar year 2023 shall be delivered no later than January 31, 2024). The number of samples shall be limited to a reasonable quantity sufficient to permit MCB's quality-assurance team to evaluate product quality and packaging compliance — MCB anticipates requesting no more than three (3) units of each distinct product SKU.
(b) Annual Inspection Right. MCB may conduct one (1) quality inspection per calendar year at Brindoval's facilities where BRINDOVAL MERIDIAN FRESH products are manufactured, packaged, or warehoused. MCB shall provide Brindoval with no fewer than thirty (30) days' prior written notice of any such inspection, and inspections shall be conducted during normal business hours at a date and time mutually agreed upon by the parties (such agreement not to be unreasonably withheld or delayed by Brindoval).
(c) Scope Limitation. Inspections shall be limited in scope to verifying (i) the quality and safety of BRINDOVAL MERIDIAN FRESH products, and (ii) Brindoval's compliance with the trade-dress and mark-modification requirements of the Coexistence Agreement, including the specifications set forth in Sections 3 and 6. Inspections shall not extend to Brindoval's proprietary formulations, manufacturing processes, financial records, or other confidential business information not directly relevant to the foregoing.
(d) Costs. MCB shall bear its own costs and expenses in connection with any inspection, including travel, lodging, and the costs of any third-party consultants retained by MCB to assist with the inspection.
This proposed compromise represents a meaningful reduction from MCB's Initial Draft, which provided for two (2) inspections per calendar year and did not include express limitations on the scope of inspection. MCB believes that one inspection per year, with advance notice, limited scope, and MCB bearing its own costs, is a reasonable and minimally intrusive safeguard. We urge Brindoval to accept this compromise rather than insisting on the elimination of quality monitoring altogether.
The Revised Draft incorporates this compromise language in Section 8.
VI. Mark-Modification Provisions — Confirmation (Section 3)
We note that the parties appear to be in agreement on the core mark-modification terms set forth in Section 3 of the Initial Draft, and that Brindoval's mark-up did not propose substantive changes to these provisions. MCB considers the following terms settled:
(a) Brindoval shall rebrand from MERIDIAN FRESH to BRINDOVAL MERIDIAN FRESH across all products, packaging, marketing materials, signage, and digital assets.
(b) In all uses of the modified mark, the word "BRINDOVAL" must appear in a typeface and size no less than seventy-five percent (75%) of the type size used for the words "MERIDIAN FRESH," as specified in Section 3.1(b) of the Coexistence Agreement. This requirement ensures that "BRINDOVAL" functions as a meaningful house-mark identifier that distinguishes Brindoval's products from MCB's, rather than appearing as a subordinate or inconspicuous element.
(c) Brindoval shall complete the rebranding across all channels — including in-store signage, product packaging, e-commerce listings, and marketing collateral — within one hundred twenty (120) days of execution of the Coexistence Agreement (i.e., by approximately September 12, 2023, assuming execution on or about May 15, 2023).
The Revised Draft retains these provisions without modification.
VII. Non-Challenge Covenant — Confirmation (Section 11)
MCB confirms that Brindoval's mark-up did not propose substantive changes to the non-challenge covenant set forth in Section 11 of the Initial Draft. Under this provision, Brindoval covenants that it will not, directly or indirectly, challenge the validity, enforceability, or distinctiveness of MCB's following federal trademark registrations:
(i) U.S. Registration No. 4,218,506 (MERIDIAN);
(ii) U.S. Registration No. 5,034,771 (MERIDIAN CLEAN); and
(iii) U.S. Registration No. 5,589,320 (MERIDIAN stylized logo with wave device).
This covenant extends to challenges before the USPTO (including petitions for cancellation), challenges in any federal or state court, and challenges before any administrative body. The Revised Draft retains this provision without modification, and MCB considers it settled.
VIII. Product-Category Restrictions — Confirmation (Section 5.2)
MCB confirms that the product-category restrictions set forth in Section 5.2 of the Initial Draft remain as drafted and that Brindoval's mark-up did not propose changes to these provisions. Under Section 5.2, Brindoval may use the modified mark BRINDOVAL MERIDIAN FRESH only in connection with household cleaning products in International Class 3. Brindoval is expressly prohibited from expanding into personal care products, home fragrance products, laundry detergent products, or any other product category under any mark incorporating the word "MERIDIAN," whether BRINDOVAL MERIDIAN FRESH or any variation thereof.
MCB considers this provision settled. We note that this product-category restriction works in tandem with the liquidated damages provision discussed in Section III.A above. The $500,000 per-occurrence liquidated damages figure applies not only to breaches of the channel restrictions but also to breaches of the product-category restrictions, thereby providing meaningful protection against unauthorized product-line expansion. The integrity of both provisions — the product-category restrictions and the liquidated damages mechanism — must be preserved.
IX. Governing Law and Dispute Resolution (Section 13)
Brindoval's mark-up proposes two changes to Section 13 of the Initial Draft: (1) the addition of a mandatory mediation step as a condition precedent to litigation for disputes arising under the Coexistence Agreement, and (2) a change in the governing law from New York to Minnesota.
MCB accepts the first proposal and rejects the second.
Mandatory Mediation Step. MCB agrees to the addition of a mandatory mediation step prior to the commencement of any litigation arising out of or relating to the Coexistence Agreement, provided that the mediation venue is New York County, New York, and that the mediation is conducted under the mediation rules of Novotny ADR Services LLC or, if that firm is unavailable, JAMS or the American Arbitration Association. The Revised Draft incorporates this provision.
Governing Law. MCB rejects Brindoval's proposal to change the governing law from New York to Minnesota. The mediation framework specified that the Coexistence Agreement would be governed by New York law. The underlying court action, Case No. 1:22-cv-09483, is pending in the Southern District of New York. MCB is headquartered in New York. The escrow account is held at a New York financial institution. New York has the most significant connection to this transaction, and New York law should govern. The Revised Draft retains New York as the governing law without modification.
X. Enclosure and Next Steps
Enclosed with this letter, please find the Revised Draft of the Trademark Coexistence Agreement, dated April 3, 2023, reflecting MCB's positions as set forth in this letter. The Revised Draft is provided in both clean and redline formats for your convenience.
MCB respectfully requests that Brindoval review the Revised Draft and provide its response on or before April 17, 2023. We believe that maintaining a prompt cadence of exchange is essential to achieving a final, executed agreement in a timeframe that serves both parties' interests. Unnecessary delay will only increase the costs of the pending litigation and prolong the uncertainty facing both companies.
In that regard, we note that the parties' discovery obligations in Case No. 1:22-cv-09483 continue unabated. MCB's document production requests remain outstanding, the depositions of Brindoval's Vice President of Product Development (Jeffrey M. Koller) and Vice President of Marketing (Danielle R. Ostrowski) are currently scheduled for April 25 and April 27, 2023, respectively, and MCB's expert reports are due on May 5, 2023. MCB reserves all rights in the litigation pending execution of the definitive Coexistence Agreement and will continue to prosecute its claims vigorously in the interim.
MCB is willing to schedule a call between counsel at a mutually convenient time to discuss any remaining open points and to attempt to resolve as many issues as possible before the next exchange of drafts. If a call would be productive, please propose several dates and times, and we will accommodate your schedule.
Finally, we note that three issues remain open for further discussion and will require attention in the next round of negotiations:
(1) Escrow Release Mechanics. The specific escrow release mechanics and documentation requirements — including the form of the joint escrow release instruction to be delivered to Dralvecen National Bank and the treatment of interest accrued on the escrowed funds — have not yet been fully documented. MCB proposes that the parties work with Ms. Dolan to prepare a mutually acceptable escrow instruction letter as an exhibit to the Coexistence Agreement.
(2) Amendment to Serial No. 97/412,558 — Description of Goods. While the parties are in general agreement on the scope of the amendment to Brindoval's pending application, the precise language of the amended description of goods has not been finalized. MCB will circulate proposed description-of-goods language under separate cover for Brindoval's review.
(3) 120-Day Rebranding Deadline — Trigger Date. MCB's position is that the 120-day rebranding deadline runs from the date of execution of the Coexistence Agreement, as the rebranding obligation is a contractual commitment independent of the litigation and should not be contingent on the timing of any court order. Brindoval's mark-up appears to suggest that the deadline should run from the date the Court enters the Order of Dismissal with Prejudice, which could introduce delay beyond the parties' control. MCB urges Brindoval to accept the execution date as the trigger.
XI. Reservation of Rights
Nothing in this letter, in the Revised Draft, or in any prior or future settlement communications between the parties or their counsel shall be deemed an admission or waiver of any of MCB's claims, rights, defenses, or remedies in Case No. 1:22-cv-09483 (S.D.N.Y.) or in TTAB Opposition No. 91/278,415. MCB's willingness to negotiate the terms of the Coexistence Agreement is undertaken in a good-faith effort to resolve this dispute, and is without prejudice to MCB's ability to proceed to trial, to seek additional injunctive relief, or to pursue any other available remedy if a satisfactory agreement is not reached. This letter is a settlement communication within the meaning of Federal Rule of Evidence 408 and is not admissible for any purpose in any proceeding.
We look forward to receiving Brindoval's response on or before April 17, 2023, and to continuing our work toward a final agreement that serves both parties' interests. Please do not hesitate to contact the undersigned or any member of our team with questions.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Christy Bauer Senior Associate, intellectual Property Calderwood & Harkness LLP 1251 Avenue of the Americas, 40th Floor New York, NY 10020 Direct: (212) 504-6247
Email: cbauer@calderwoodharkness.com
cc (via email):
Alan Ngo, Esq. (Calderwood & Harkness LLP) Marcus Delgado, Esq. (Calderwood & Harkness LLP) Thomas R. Hennessy, Esq. (General Counsel, Meridian Consumer Brands LLC) Megan Janssen, Esq. (Halverson McKay & Pruitt LLP) David Kowalski, Esq. (Halverson McKay & Pruitt LLP)
Encl:
Revised Draft — Trademark Coexistence Agreement (dated April 3, 2023) (clean and redline versions)

CONFIDENTIAL — SETTLEMENT COMMUNICATION — F.R.E. 408

CALDERWOOD & HARKNESS LLP

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