PRIVILEGED & CONFIDENTIAL ATTORNEY WORK PRODUCT / ATTORNEY-CLIENT COMMUNICATION
This memorandum is a privileged and confidential attorney work product prepared by Calderwood & Harkness LLP in connection with the rendering of legal advice to Meridian Consumer Brands LLC. This memorandum is protected by the attorney-client privilege and the work product doctrine. Any disclosure, copying, distribution, or use of this memorandum or the information contained herein by any person other than the intended recipients is strictly prohibited.
CALDERWOOD & HARKNESS LLP 599 Lexington Avenue, 36th Floor New York, NY 10022 Telephone: (212) 448-6200 Facsimile: (212) 448-6201
Matter No.: 1011-00005
Date: August 18, 2022
To: Diana Ressler, General Counsel, Meridian Consumer Brands LLC Priya Anand, Chief Financial Officer, Meridian Consumer Brands LLC
Cc: Sandra Tung, Responsible Partner, Calderwood & Harkness LLP Andrew Fitzpatrick, Lead Associate, Calderwood & Harkness LLP
From: Naomi Petersen, Associate, Calderwood & Harkness LLP
Re: Due Diligence Memorandum — Intellectual Property Review: Proposed Acquisition of CleanLeaf and PureHaven Product Lines from Briarwood Home Essentials, Inc.
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I. Executive Summary
This memorandum summarizes the findings of our intellectual property due diligence review conducted in connection with the proposed acquisition by Meridian Consumer Brands LLC ("Meridian" or the "Buyer") of the consumer product lines marketed and sold under the CleanLeaf and PureHaven brands (together, the "Product Lines" or the "Acquired Business") from Briarwood Home Essentials, Inc. ("Briarwood" or the "Seller"), pursuant to a contemplated asset purchase agreement (the "APA") with an anticipated aggregate purchase price of approximately $95,000,000 (the "Transaction").
The purpose of this memorandum is to identify and assess the intellectual property assets associated with the Product Lines, evaluate the strength and validity of those assets, identify any encumbrances, restrictions, or deficiencies that may affect the value or transferability of the intellectual property portfolio, and provide recommendations for the structuring of the Transaction documents to protect Meridian's interests.
Scope of Review. Our review encompassed the following categories of intellectual property: (i) trademarks and service marks, including both federal (USPTO) and state registrations; (ii) trade dress rights, both registered and unregistered; (iii) trade secrets, with a particular focus on proprietary product formulations; (iv) domain names associated with the CleanLeaf and PureHaven brands; (v) copyrights in marketing materials, packaging designs, product photography, and related creative works; (vi) patents (if any) owned by or licensed to Briarwood in connection with the Product Lines; and (vii) IP-related agreements, including license agreements, non-disclosure agreements, co-existence agreements, and historical IP assignment instruments.
Materials Reviewed. The materials reviewed in connection with this memorandum were obtained primarily from the Pemberton Systems virtual data room established by Briarwood for the Transaction (Project Code: BHE-CleanLeaf-2022), as well as supplemental document productions and correspondence received from Caldwell, Pruitt & Shaw LLP ("Seller's Counsel"), specifically from Rachel Underwood, partner, and David Soo, senior associate, at that firm. In addition, we conducted independent public records searches, as described in greater detail in Section II below.
Overall Conclusions. Based on our review, the CleanLeaf and PureHaven intellectual property portfolio is reasonably well-maintained and no material encumbrances were identified that would impede the transfer of the IP assets to Meridian in connection with the Transaction. The federal trademark registrations for the CleanLeaf brand are in good standing, and the trademark registrations for the PureHaven brand are generally active, subject to the significant qualification discussed below. The proprietary product formulations underlying the approximately 142 active SKUs across both brands represent a substantial intangible asset. No material third-party intellectual property infringement claims are currently pending or, to our knowledge based on the documents reviewed, threatened against Briarwood with respect to the Product Lines.
Key Risk Item. Notwithstanding the generally favorable condition of the IP portfolio, our review has flagged an issue that requires prompt attention: certain trademark renewal filings for the PureHaven brand — specifically, Section 8 Declarations of Continued Use and Section 9 Applications for Renewal under the Lanham Act — appear to be incomplete with respect to at least one PureHaven registration. If these filings are not completed within the applicable statutory grace period (including payment of the required late filing surcharge), the affected registrations are at risk of cancellation by the USPTO. This issue is discussed in detail in Section IV.D below.
Recommendations. We recommend that Meridian require, as a pre-closing condition or closing deliverable under the APA, the completion of all outstanding trademark renewal filings by Briarwood. The IP Assignment Agreement to be executed at closing should include comprehensive representations and warranties from Briarwood regarding ownership, validity, and good standing of all IP assets, as well as the absence of encumbrances. Additional recommendations regarding the Transaction documents are set forth in Section XIV of this memorandum.
II. Scope of Review and Materials Examined
A. Data Room Materials
Our review was based primarily on the materials posted by Briarwood in the Pemberton Systems virtual data room established for this Transaction under Project Code BHE-CleanLeaf-2022. Within the data room, we reviewed the following index categories and subfolders:
• IP Folder (Index Category 7.0): Master folder containing all intellectual property documentation produced by Briarwood.
• Subfolder 7.1 — Trademark Registrations: Copies of federal (USPTO) and state trademark registration certificates, specimens of use, office action responses, and renewal filings for the CleanLeaf and PureHaven marks.
• Subfolder 7.2 — Trade Dress Documentation: Materials relating to product packaging, label designs, and trade dress elements for both brands.
• Subfolder 7.3 — Domain Name Registrations: Domain registration records, WHOIS printouts, and registrar account information for domains associated with the Product Lines.
• Subfolder 7.4 — Product Formulation Files: Selected documentation regarding proprietary formulations, including summary formulation sheets (redacted for certain ingredient concentrations pending execution of supplemental NDA).
• Subfolder 7.5 — IP-Related Agreements: Copies of executed agreements relating to intellectual property, including employee confidentiality and invention assignment agreements, non-disclosure agreements with suppliers, and any trademark-related agreements.
• Subfolder 7.6 — IP Litigation History: Documentation regarding any intellectual property disputes, including cease-and-desist correspondence, opposition or cancellation proceedings, and litigation matters.
The data room was initially populated on or about June 21, 2022, with periodic supplemental uploads through the date of this memorandum. We note that certain requested documents were not available in the data room as of the date hereof, as discussed in Section II.D below.
B. Public Records Searches
In addition to the data room materials, we conducted the following independent public records searches to verify and supplement the information provided by Briarwood:
• USPTO TESS (Trademark Electronic Search System): We searched the USPTO Trademark Electronic Search System for all marks incorporating the terms "CleanLeaf" and "PureHaven," as well as the associated design marks and logos. The search results confirmed the existence and status of the registrations identified by Briarwood, and no conflicting marks were identified that would present an immediate risk to Meridian's use of these marks post-closing.
• Ohio Secretary of State — Trade Name Filings: We searched the Ohio Secretary of State's online business filing database for trade name registrations associated with "CleanLeaf" and "PureHaven," confirming that Briarwood has filed the appropriate trade name registrations in Ohio.
• WIPO Global Brand Database: We conducted a search of the WIPO Global Brand Database to determine whether Briarwood or any related entity has filed international trademark registrations for the CleanLeaf or PureHaven marks. No international registrations were identified.
• Domain Name WHOIS Searches: We conducted WHOIS lookups for the primary domains associated with the brands (cleanleaf.com, purehaven.com, and identified variations) to confirm registrant information, registration dates, and expiration dates.
C. Supplemental Information
Beyond the data room materials and public records searches, we reviewed the following supplemental information:
• Due Diligence Request List Responses: Responses provided by Briarwood to the Due Diligence Request List dated June 14, 2022, specifically the requests under the "Intellectual Property" category (Items 7.1 through 7.18 of the Request List). Responses were provided in writing by Seller's Counsel on July 8, 2022, with supplemental responses dated July 29, 2022.
• Follow-Up Correspondence: We exchanged several rounds of follow-up correspondence with David Soo at Caldwell, Pruitt & Shaw LLP to clarify certain items in Briarwood's IP disclosures, including the status of trademark renewal filings and the scope of trade secret protection measures in place at Briarwood's facilities.
• Financial Records Cross-Reference: We cross-referenced Briarwood's financial records (provided through the Financial diligence workstream and audited by Hargrove & Linton, P.C., contact Daniel Yee) for IP-related line items, including amortization of intangible assets and any IP-related expenses. No IP-specific materials were obtained directly from the auditor, but the financial records were consulted to confirm the general consistency of IP asset values reflected in the financial statements with our diligence findings.
D. Limitations
This memorandum is subject to the following limitations, which should be considered in evaluating the findings and recommendations set forth herein:
1. Document Production Cutoff. This memorandum is based on documents and information produced or otherwise made available to us as of August 18, 2022. The disclosure schedules to the APA (first draft) had not been received as of the date hereof; we understand from Seller's Counsel that the initial draft of the disclosure schedules is expected to be delivered on or about September 28, 2022. Upon receipt, we will review the IP-related disclosure schedules and supplement this memorandum as appropriate.
2. No Freedom-to-Operate Patent Analysis. We did not conduct an independent freedom-to-operate patent search or patent clearance analysis for the CleanLeaf or PureHaven product lines. Such an analysis was outside the agreed scope of this engagement. If Meridian considers third-party patent risk to be material — particularly given the active patent landscape in the eco-friendly cleaning and personal care product sectors — we recommend commissioning a separate freedom-to-operate analysis through a qualified patent counsel.
3. Trade Secret Review Limitations. Our review of Briarwood's trade secret protection measures was limited to the documentation provided in the data room and through supplemental correspondence. We did not conduct a facility-level review of physical security measures, IT access controls, or cybersecurity protocols at Briarwood's manufacturing facility located at 2800 Industrial Parkway, Marysville, OH 43040, or at any other Briarwood facility. A facility-level review may be advisable to confirm the adequacy of trade secret protections in practice.
4. Reliance on Seller's Representations. Certain findings in this memorandum are based on representations made by Briarwood or its counsel in response to our due diligence requests. We have not independently verified all such representations.
III. Brand Overview
A. CleanLeaf Brand (Home Cleaning)
CleanLeaf is Briarwood's flagship eco-friendly home cleaning product line. The brand encompasses a range of household cleaning products, including surface cleaners, dish soaps, laundry detergents, glass cleaners, all-purpose cleaning sprays, bathroom cleaners, and related household cleaning products. The CleanLeaf brand is positioned in the market as a premium, environmentally conscious alternative to conventional cleaning products, emphasizing plant-derived ingredients and biodegradable formulations.
Based on the data room materials and Briarwood's representations, approximately 85 of the 142 total active stock-keeping units ("SKUs") across both Product Lines are attributable to the CleanLeaf brand. The CleanLeaf brand contributes a significant portion of the Product Lines' total revenue. For fiscal year 2021, total revenue for the combined Product Lines was approximately $68,000,000; however, a precise brand-level revenue breakout between CleanLeaf and PureHaven has been requested but has not yet been provided by Briarwood. We recommend that Meridian continue to pursue this breakout, as it is relevant to the allocation of purchase price among the intangible assets being acquired.
The CleanLeaf brand was founded by Briarwood Home Essentials, Inc. and was first used in commerce in approximately 2005. Briarwood is the original and sole owner of the CleanLeaf brand and all associated intellectual property. There is no indication that the brand was acquired from any third party or that any third party has asserted ownership claims to the CleanLeaf name or brand identity.
B. PureHaven Brand (Personal Care)
PureHaven is Briarwood's eco-friendly personal care product line, offering hand soaps, body washes, moisturizing lotions, and related personal care items. Like CleanLeaf, the PureHaven brand emphasizes natural, plant-based ingredients and sustainability in its product formulations and packaging.
Approximately 57 of the 142 total active SKUs are attributable to the PureHaven brand. The PureHaven brand was launched by Briarwood in approximately 2010, making it the newer of the two brands in the portfolio. According to Briarwood's representations during the diligence process, PureHaven is a smaller revenue contributor relative to CleanLeaf but represents a growing segment of the business, with year-over-year revenue growth in recent fiscal years. The precise revenue contribution and growth trajectory of the PureHaven brand remain subject to confirmation pending receipt of the brand-level financial breakout discussed above.
C. Product Line Scope
Across both brands, the Product Lines encompass a total of approximately 142 active SKUs. Products are manufactured at Briarwood's leased manufacturing facility located at 2800 Industrial Parkway, Marysville, OH 43040 (the "Marysville Facility"), and distributed from Briarwood's owned distribution center located at 500 Commerce Boulevard, West Jefferson, OH 43162 (the "West Jefferson Facility"). Each SKU is associated with a distinct product formulation or variant, as discussed in greater detail in Section VII below.
The Product Lines are sold through a network of approximately 23 customer contracts with major national and regional retailers. Our review of these contracts (which is the subject of a separate due diligence memorandum addressing commercial agreements) identified that seven of the 23 customer contracts contain assignment consent provisions or change-of-control clauses that may require notification to or consent from the applicable retailer in connection with the Transaction. The interplay between these consent requirements and the IP assignment is addressed in Section XIV below.
IV. Trademark and Service Mark Registrations
A. Federal Trademark Registrations (USPTO)
Based on our review of the data room materials, the USPTO TESS search results, and Briarwood's responses to our due diligence requests, the following federal trademark registrations have been identified as associated with the CleanLeaf and PureHaven brands. A complete schedule of trademark registrations is set forth in Appendix A to this memorandum.
1. CleanLeaf Word Mark
Briarwood owns a federal trademark registration for the CLEANLEAF word mark (standard character mark) on the Principal Register of the United States Patent and Trademark Office. The mark is registered in International Class 3 (cleaning preparations, namely, surface cleaners, dish soaps, laundry detergents, glass cleaners, all-purpose household cleaning preparations, and bathroom cleaning preparations). The registration was obtained following examination on the merits and is recorded on the Principal Register, which affords the mark a presumption of validity, nationwide constructive notice of the registrant's claim of ownership, and the potential to achieve incontestable status under 15 U.S.C. § 1065 upon the filing of a Section 15 declaration.
The registration is currently active and in good standing. Based on our review, all required maintenance filings — including the Section 8 Declaration of Continued Use and Section 9 Application for Renewal — have been timely filed for this registration, and the current registration period extends through the applicable renewal deadline. The owner of record is Briarwood Home Essentials, Inc. Our search of the USPTO Assignment Recordation database revealed no recorded liens, security interests, pledges, or other encumbrances against this registration.
2. CleanLeaf Design Mark / Logo
In addition to the standard character word mark, Briarwood owns a federal trademark registration for the CLEANLEAF design mark, which incorporates a stylized leaf motif integrated with the word "CleanLeaf." This design mark is registered on the Principal Register in International Class 3, covering the same categories of cleaning preparations as the word mark. The design mark corresponds to the logo as used on product labels, packaging, and marketing materials.
The registration is currently active and in good standing. All required maintenance filings appear to have been timely submitted. The owner of record is Briarwood Home Essentials, Inc. No liens, security interests, or encumbrances were identified in the USPTO Assignment Recordation database.
3. PureHaven Word Mark
Briarwood owns a federal trademark registration for the PUREHAVEN word mark (standard character mark) on the Principal Register. The mark is registered in International Class 3 (personal care products, namely, hand soaps, body washes, skin lotions, moisturizing preparations, and related personal care preparations). The registration was obtained following examination on the merits and is recorded on the Principal Register.
However, our review has identified a significant issue with respect to the renewal status of this registration. Specifically, the Section 8 Declaration of Continued Use and Section 9 Application for Renewal due in connection with this registration appear to be incomplete. Based on the documents available in the data room and the information provided by Seller's Counsel, the filing of the combined Section 8/9 declaration and renewal application was initiated but the required supporting documentation — including the specimen of current use — was not timely submitted by the filing deadline. The registration is currently within the six-month statutory grace period provided under the Lanham Act for late filing (subject to payment of the applicable late filing surcharge), but if the deficiency is not cured within the grace period, the registration will be subject to cancellation by the USPTO.
The owner of record is Briarwood Home Essentials, Inc. No liens, security interests, or encumbrances were identified against this registration in the USPTO Assignment Recordation database. However, the cancellation risk arising from the incomplete renewal filing is a material concern, as discussed in detail in Section IV.D below.
4. PureHaven Design Mark / Logo
Briarwood also owns a federal trademark registration for the PUREHAVEN design mark, which incorporates a stylized water droplet and botanical element integrated with the word "PureHaven." This design mark is registered on the Principal Register in International Class 3, covering the same categories of personal care products as the PureHaven word mark. The design mark corresponds to the logo as used on product labels, packaging, and marketing materials for the PureHaven brand.
The registration is currently active; however, the same renewal concern identified with respect to the PureHaven word mark applies to this design mark registration as well. The Section 8/9 renewal filing for the design mark appears to be similarly incomplete, and the same grace period timeline applies. The owner of record is Briarwood Home Essentials, Inc.
5. Additional Marks
We reviewed the data room materials and conducted supplemental USPTO searches to determine whether Briarwood has registered any additional marks associated with the Product Lines, including sub-brand marks, product-specific marks, taglines, or slogans. Our review identified the following:
• Sub-Brand and Product-Specific Marks. No sub-brand marks or product-specific marks were identified as separately registered at the USPTO. The individual product names within the CleanLeaf and PureHaven lines (e.g., descriptive product names for specific cleaning formulations) do not appear to be the subject of separate trademark registrations. To the extent any common law trademark rights exist in such product names, those rights should be included in the assignment of IP assets.
• Taglines and Slogans. No registered trademark for any tagline or slogan associated with the CleanLeaf or PureHaven brands was identified. Briarwood has used certain taglines in its marketing materials (e.g., "Clean Your Home, Not the Planet" for CleanLeaf and "Purely Natural, Purely You" for PureHaven), but these do not appear to be the subject of federal registrations. Any common law rights in these taglines should be captured in the IP Assignment Agreement.
• Intent-to-Use Applications. No pending intent-to-use applications at the USPTO were identified for any marks related to the Product Lines. There are no applications in the examination pipeline that would require monitoring or prosecution post-closing.
B. State Trademark Registrations
Our review identified state-level trademark registrations for both the CleanLeaf and PureHaven marks in Ohio, where Briarwood is incorporated and maintains its principal place of business. Specifically, Briarwood has registered both the CLEANLEAF and PUREHAVEN marks with the Ohio Secretary of State, as well as the corresponding trade names. These state registrations are generally current and in good standing. No material issues were identified with respect to the state-level registrations beyond the federal renewal gap discussed above.
We also conducted targeted searches in other key markets to determine whether Briarwood has obtained state trademark registrations outside Ohio. Based on our review, no additional state-level trademark registrations were identified. While state trademark registrations provide limited additional protection beyond the federal registrations, they may be relevant in certain jurisdictions; however, the federal registrations on the Principal Register provide the primary source of trademark protection for the brands.
C. International Trademark Registrations
Our search of the WIPO Global Brand Database did not identify any international trademark registrations for the CleanLeaf or PureHaven marks. Based on the information provided by Briarwood, the Product Lines are distributed and sold exclusively within the United States, and Briarwood has not pursued any foreign trademark filings.
We note for Meridian's consideration that, if international expansion of the CleanLeaf or PureHaven brands is contemplated as part of Meridian's post-acquisition strategy, new trademark filings will be required in the relevant foreign jurisdictions. The Madrid Protocol system administered by WIPO provides a streamlined mechanism for filing international trademark applications based on an existing U.S. registration, but such filings would need to be initiated promptly, particularly in first-to-file jurisdictions where third parties may be able to register similar marks before Meridian enters the market. We recommend that Meridian's business team assess its international expansion plans so that a prioritized filing strategy can be developed post-closing, if appropriate.
D. Trademark Renewal Filing Gap — Detailed Analysis
As noted in the Executive Summary and in Sections IV.A.3 and IV.A.4 above, our review has identified an issue with respect to the renewal of certain PureHaven trademark registrations that warrants detailed discussion and prompt attention.
Issue Identified. The Section 8 Declaration of Continued Use and Section 9 Application for Renewal under the Lanham Act (15 U.S.C. §§ 1058, 1059), which are required to be filed at periodic intervals to maintain a federal trademark registration in force, appear to be incomplete for at least the PureHaven word mark registration and, we believe, for the PureHaven design mark registration as well. Under the Lanham Act, a combined Section 8/9 declaration and renewal application must be filed within the one-year period preceding the expiration of the applicable registration term, or within the six-month grace period following expiration upon payment of the additional late filing surcharge. Our review of the data room materials indicates that the filing was initiated — a partially completed application and draft specimen of use were identified in the data room — but the filing was not completed and submitted to the USPTO before the initial filing deadline.
Registrations Affected. Based on the information available, the following registrations are affected:
• PUREHAVEN (word mark) — Principal Register, International Class 3
• PUREHAVEN (design mark) — Principal Register, International Class 3
Filing Deadlines and Grace Period. The applicable filing deadline for the combined Section 8/9 filing for these registrations has passed. However, based on our calculation of the relevant dates, the registrations are currently within the six-month statutory grace period, which will expire on a date that we estimate to be in the fourth quarter of 2022. Completion of the filing within this grace period — including submission of the declaration of continued use, a current specimen of use, and payment of the applicable late fee surcharge — will preserve the registrations. If the grace period expires without completion of the filing, the registrations will be cancelled by the USPTO, and Briarwood would need to file new applications to re-register the marks, which would involve examination delays, potential loss of priority date, and the risk of third-party filings in the interim.
Risk Assessment. We assess the risk level associated with this issue as Medium-High. While the grace period remains available and the deficiency appears curable, the failure to complete these filings represents a lapse in trademark portfolio management that, if not promptly remedied, could result in the loss of significant brand protection for the PureHaven product line. In the context of a $95,000,000 asset purchase in which the intellectual property constitutes a material component of the value of the Acquired Assets, the loss of these registrations would be adverse to Meridian's interests.
Notification to Seller. We have communicated this issue to Seller's Counsel. Specifically, in a letter dated August 4, 2022, addressed to David Soo at Caldwell, Pruitt & Shaw LLP, we identified the apparent gap in the renewal filings and requested confirmation of Briarwood's plan and timeline to complete the outstanding filings. As of the date of this memorandum, we have received an acknowledgment from Mr. Soo that the issue has been escalated internally at Briarwood and to Briarwood's trademark prosecution counsel, but we have not yet received confirmation that the filings have been completed.
Recommendations. In light of this issue, we recommend the following actions:
(i) Pre-Closing Condition. Meridian should require, as a condition to closing under the APA, that Briarwood complete all outstanding trademark renewal filings for the PureHaven registrations (and any other registrations for which maintenance filings are not current) prior to the closing date, and deliver evidence of such completion to Meridian's counsel.
(ii) Representations and Warranties. The APA should include a specific representation and warranty by Briarwood that all trademark registrations included in the Acquired Assets are in good standing, that all required maintenance and renewal filings have been timely made, and that no registration is subject to cancellation for failure to file. The APA should provide that any breach of this representation constitutes a basis for indemnification.
(iii) IP Assignment Agreement Covenant. The IP Assignment Agreement should include a covenant by Briarwood, as assignor, to cure any renewal deficiencies prior to the effective date of the assignment and to cooperate with Meridian, as assignee, in completing any further filings necessary to ensure the good standing of the assigned registrations.
V. Trade Dress
A. CleanLeaf Trade Dress
The CleanLeaf brand is associated with a distinctive packaging design that serves as a source identifier for the product line. The key elements of the CleanLeaf trade dress include a consistent green and white color scheme applied across all product packaging, distinctive bottle shapes (particularly for the surface cleaner and dish soap products), a characteristic label layout featuring the CleanLeaf leaf motif logo prominently positioned above a clean, minimalist product description, and a unifying visual identity that extends across the approximately 85 SKUs in the CleanLeaf line.
Briarwood has used this trade dress consistently since approximately 2005, when the CleanLeaf brand was first launched. The evidence available in the data room — including historical product images, marketing materials, and advertising expenditure summaries — suggests that the trade dress has acquired distinctiveness through long and continuous use over a period of approximately 17 years, significant marketing investment, and widespread consumer exposure through distribution at major national retailers. These factors support a finding that the CleanLeaf trade dress is protectable under federal unfair competition law (15 U.S.C. § 1125(a)) and analogous state law doctrines.
However, we note that no federal trade dress registration has been obtained for the CleanLeaf packaging design. The trade dress rights currently exist solely as common law rights, which, while enforceable, do not carry the same procedural advantages as a federal registration (such as the presumption of validity, nationwide constructive notice, and the ability to obtain incontestable status). Our assessment is that the CleanLeaf trade dress rights are likely protectable but are not as robust as they would be with the benefit of federal registration.
B. PureHaven Trade Dress
The PureHaven brand similarly features a distinctive packaging design, including a blue and lavender color palette, a characteristic label configuration with the PureHaven water droplet and botanical logo, and consistent bottle and tube shapes across the personal care product line. These elements have been in continuous use since the PureHaven brand launch in approximately 2010, representing approximately 12 years of commercial use.
As with CleanLeaf, no federal trade dress registration has been obtained for the PureHaven packaging. The PureHaven trade dress is therefore also protected solely under common law, with the same limitations as discussed above with respect to CleanLeaf.
C. Recommendations on Trade Dress
We recommend the following with respect to trade dress:
(i) Post-Closing Registration. Following the closing of the Transaction, Meridian should consider filing federal trade dress registration applications for the key packaging designs of both the CleanLeaf and PureHaven brands. While common law rights are enforceable, federal registration would significantly strengthen the protectability and enforceability of the trade dress.
(ii) Assignment of Trade Dress Rights. The APA and the IP Assignment Agreement should include explicit assignment language covering all trade dress rights associated with the CleanLeaf and PureHaven brands, both registered and unregistered, together with all goodwill associated therewith. The definition of "Intellectual Property" in the APA should specifically reference trade dress as a category of IP included in the Acquired Assets.
VI. Domain Names
A. Inventory of Domain Names
Our review identified the following domain names associated with the CleanLeaf and PureHaven brands:
All domains are registered in the name of Briarwood Home Essentials, Inc. The administrative contact listed for each domain is Malcolm Greer, who we understand to be the founder and principal of Briarwood. Our WHOIS searches confirmed the registrant information, registration dates, and expiration dates for each domain.
We conducted additional searches for common variations and potential defensive registrations (e.g., cleanleaf.net, cleanleaf.org, purehaven.net, purehaven.org) and did not identify any additional domains registered by Briarwood. The availability or third-party ownership of these variations may warrant further review; Meridian may wish to consider acquiring additional defensive registrations post-closing to protect against cybersquatting or brand confusion.
B. Domain Name Transfer Considerations
The domain names listed above must be transferred from Briarwood to Meridian at or promptly following the closing of the Transaction. Several considerations bear on the transfer process:
• Registrar Transfer Procedures. The domains are currently registered through Adriatic & Co.. Transfer to Meridian will require coordination with Severin Health IT's registrar transfer process, which typically involves obtaining authorization codes from the current registrant, initiating transfer requests, and confirming the transfer through email verification. The process generally takes five to seven business days, though delays can occur. If Meridian uses a different registrar, an inter-registrar transfer will be required, which may involve additional steps and timeframes.
• IP Assignment Agreement. The IP Assignment Agreement should include specific provisions for the assignment and transfer of all domain names listed in the domain name inventory. The domains should be itemized in a schedule to the IP Assignment Agreement, and Briarwood should be required to execute all transfer authorizations and take all actions necessary to effectuate the transfer at or promptly following closing.
• Closing Deliverable. The transfer of domain names should be designated as a closing deliverable in the APA. To the extent that the registrar transfer process cannot be completed simultaneously with the closing, the APA should include a post-closing cooperation covenant requiring Briarwood to complete the transfer within a specified period (e.g., five business days) following closing, with appropriate interim provisions to ensure Meridian has administrative access to the domains during the transition period.
• Social Media Accounts. In addition to domain names, the social media handles and accounts associated with the CleanLeaf and PureHaven brands should also be assigned to Meridian at closing. Our review identified active accounts for both brands on Ashford Systems, Northpoint Services Inc., and Kestrel Services Inc.. These accounts should be itemized in the IP Assignment Agreement, and Briarwood should be required to transfer administrative control of all such accounts to Meridian at or promptly following closing.
A complete inventory of domain names is set forth in Appendix B to this memorandum.
VII. Trade Secrets and Proprietary Formulations
A. Product Formulations
The CleanLeaf and PureHaven product lines each rely on proprietary formulations that constitute a significant component of the value of the Acquired Assets. The CleanLeaf brand utilizes proprietary formulations for its cleaning agents, including surfactant blends, enzymatic cleaning compounds, and fragrance compositions designed to achieve effective cleaning performance using plant-derived and biodegradable ingredients. The PureHaven brand relies on proprietary formulations for its personal care products, including skin-conditioning agents, cleansing complexes, moisturizing compositions, and fragrance blends formulated with natural and plant-based ingredients.
Across both brands, the approximately 142 active SKUs each have a distinct formulation or variant. The formulations are documented in Briarwood's internal formulation database, which is maintained at the Marysville manufacturing facility. According to Briarwood's representations, access to the formulation database is restricted to members of Briarwood's Research & Development team and certain production staff who require access for manufacturing purposes. The formulation files provided in the data room (Subfolder 7.4) included summary formulation sheets with certain ingredient concentration details redacted, pending the execution of a supplemental non-disclosure agreement between the parties. We understand that full, unredacted formulation documentation will be made available to Meridian following execution of the supplemental NDA and, in any event, at or prior to closing.
The proprietary nature of these formulations is central to the competitive positioning and market differentiation of the CleanLeaf and PureHaven brands. Unlike certain competitors in the eco-friendly cleaning and personal care space, Briarwood has elected to protect its formulations through trade secret protection rather than through patent filings, preserving the indefinite duration of protection that trade secret status affords (in contrast to the finite term of patent protection).
B. Trade Secret Protection Measures
Briarwood represents that it maintains its product formulations as trade secrets and has implemented measures to protect the confidentiality of the formulation information. Based on our review of the available documentation and Briarwood's responses to our due diligence requests, the following trade secret protection measures are in place:
• Physical Access Controls. The Marysville manufacturing facility (2800 Industrial Parkway, Marysville, OH 43040) is equipped with controlled access points. The R&D laboratory and formulation records storage areas are subject to additional access restrictions, including keycard access limited to authorized personnel. Briarwood represents that visitors to the facility are required to sign in and are escorted in production and R&D areas.
• Electronic Access Controls. The formulation database is maintained on a secured internal server with access limited to authorized users through individual login credentials. Briarwood represents that the database is not accessible remotely and that electronic copies of formulation documents are stored only on the secured server and are not permitted to be transferred to portable media or personal devices.
• Employee Confidentiality Agreements. Briarwood utilizes a standard form Employee Confidentiality and Invention Assignment Agreement, which is executed by all employees upon hiring. We reviewed the form agreement and found that it contains provisions requiring employees to maintain the confidentiality of all proprietary information, including product formulations, during and after employment. The agreement also includes an assignment of inventions clause, pursuant to which employees assign to Briarwood all rights in inventions, improvements, and developments made during the course of employment. The form agreement is generally adequate, though we note certain areas where it could be strengthened, as discussed below.
• Non-Disclosure Agreements with Third Parties. Briarwood has entered into non-disclosure agreements with its key raw material suppliers and fragrance suppliers who have access to information regarding formulation ingredients and compositions. The NDAs reviewed in the data room contain standard confidentiality obligations with terms ranging from three to five years, with certain agreements providing for perpetual confidentiality obligations with respect to trade secrets. These NDAs appear to be in place for the major suppliers identified in the supply chain documentation.
Observation Regarding Informality of Trade Secret Program. While the measures described above provide a baseline level of trade secret protection, we note that the documentation of these measures is somewhat informal. Briarwood does not appear to have a written trade secret protection policy or a formal trade secret inventory — that is, a document that specifically identifies the categories of information that Briarwood considers to be trade secrets, the measures in place to protect each category, and the individuals who have authorized access. The absence of a formal, documented trade secret protection program could be relevant in the event that Briarwood or Meridian (post-closing) is required to prove the existence of trade secret protections in the context of a misappropriation claim or enforcement action.
We recommend that (i) the APA include robust representations by Briarwood regarding the maintenance and protection of trade secrets, including a representation that Briarwood has taken reasonable steps to maintain the secrecy of all information constituting trade secrets included in the Acquired Assets; and (ii) Meridian implement a formal trade secret management program promptly following the closing, including the development of a written trade secret protection policy, a formal trade secret inventory, and enhanced access controls and monitoring procedures.
C. Third-Party Access to Formulations
We reviewed the available supply agreements, toll manufacturing arrangements, and co-packing agreements to determine whether any third party has been granted access to, or rights in, Briarwood's proprietary formulations in a manner that could compromise trade secret status or create shared ownership of the intellectual property.
Based on our review, no evidence was identified that formulations have been disclosed to any third party without the protection of a confidentiality agreement. The raw material and fragrance suppliers with whom Briarwood contracts receive only the information necessary to fulfill their supply obligations (e.g., ingredient specifications and quantities for purchase order fulfillment) and are bound by NDAs. We did not identify any toll manufacturing or co-packing arrangements pursuant to which a third party manufactures CleanLeaf or PureHaven products using Briarwood's formulations; all manufacturing appears to take place at the Marysville Facility using Briarwood's own production staff.
Furthermore, no co-development agreements, joint venture arrangements, or collaborative research arrangements were identified that would create shared or joint ownership of any formulation intellectual property. This is a positive finding, as the absence of third-party co-ownership claims simplifies the assignment of trade secret rights in connection with the Transaction.
VIII. Patents
A. Patent Search Results
We conducted a search of the USPTO patent database for issued U.S. patents and pending patent applications owned by or assigned to Briarwood Home Essentials, Inc. No issued U.S. patents were identified as owned by Briarwood. No pending patent applications were identified.
This finding is consistent with Briarwood's representation that its product formulations are protected through trade secret measures rather than through patent filings. The election to rely on trade secret protection rather than patent protection is a common approach in the consumer products industry, particularly for product formulations, where trade secret protection offers indefinite duration (as opposed to the 20-year term of a utility patent from the filing date) and does not require public disclosure of the protected information (as would be required in a published patent application or issued patent).
We note that no independent freedom-to-operate analysis was conducted as part of this review. A freedom-to-operate analysis — which would assess whether the manufacture, use, or sale of the CleanLeaf and PureHaven products infringes any third-party patents — was outside the agreed scope of this engagement. If Meridian considers third-party patent risk to be material, we recommend that a separate engagement be undertaken with qualified patent counsel to conduct such an analysis.
B. Third-Party Patent Risk
Our review of the litigation and regulatory diligence materials (cross-referenced with the Due Diligence Memorandum — Litigation & Regulatory, dated September 12, 2022, prepared by Andrew Fitzpatrick) did not identify any pending or threatened patent infringement claims or demands directed at Briarwood in connection with the CleanLeaf or PureHaven product lines. No cease-and-desist letters, licensing demands, or other communications from third-party patent holders were identified in the data room materials or in Briarwood's responses to our due diligence requests.
As a general observation, the eco-friendly cleaning and personal care product space involves various third-party patents covering formulation techniques, ingredient combinations, delivery systems, and manufacturing processes. While no specific infringement risk has been identified, Meridian should consider including standard patent indemnification provisions in its customer contracts and should monitor the patent landscape in this sector on an ongoing basis post-closing. The inclusion of customary intellectual property indemnification provisions in the APA — both a seller's indemnification for pre-closing infringement of third-party patents and a general IP indemnification in customer-facing agreements — is recommended.
IX. Copyrights
A. Copyright Registrations
Our review did not identify any formal copyright registrations with the U.S. Copyright Office for any of the creative works associated with the CleanLeaf or PureHaven brands, including marketing materials, packaging designs, product labels, product photography, website content, or advertising copy. While copyright protection attaches automatically upon the creation and fixation of original works of authorship under U.S. copyright law (17 U.S.C. § 102), the absence of formal registration means that Briarwood would not be able to pursue certain remedies in a copyright infringement action (notably, statutory damages and attorney's fees under 17 U.S.C. §§ 504(c) and 505) without first obtaining a registration.
Notwithstanding the absence of formal registrations, Briarwood owns copyrights in a significant body of creative works associated with the Product Lines, including:
• Product label designs and packaging artwork for all CleanLeaf and PureHaven SKUs
• Marketing and advertising materials, including print advertisements, digital advertising content, and promotional materials
• Product photography used on the brand websites and in retailer listings
• Website content for cleanleaf.com and purehaven.com, including text, graphics, and layout
• Social media content posted on the CleanLeaf and PureHaven brand accounts
We reviewed the available contractor and design agency agreements identified in the data room to assess whether the creative works were produced as "works made for hire" under the Copyright Act (17 U.S.C. § 101) or whether ownership was transferred to Briarwood by written assignment. The standard form agreements reviewed generally include work-for-hire clauses and, in the alternative, IP assignment provisions that vest ownership of all deliverables in Briarwood. Based on the agreements reviewed, we did not identify any material gaps in copyright ownership for the key creative works associated with the brands; however, we note that the data room did not contain agreements for all contractors and vendors who may have contributed to the creative output over the lifetime of the brands, and we cannot confirm complete chain of title for all works without a more exhaustive review.
B. Recommendations
(i) Inclusion in Acquired Assets. All copyrights, both registered and unregistered, associated with the CleanLeaf and PureHaven brands should be included within the definition of "Intellectual Property" in the APA and specifically assigned in the IP Assignment Agreement. The assignment should cover all copyrights in works created by or for Briarwood in connection with the Product Lines, whether or not registered.
(ii) Third-Party Licensed Content. Meridian should confirm that all third-party content incorporated into the branding and marketing materials — such as stock photography, licensed fonts, and third-party illustrations — is properly licensed and that the applicable licenses are transferable to Meridian in connection with the Transaction. If any licenses are non-transferable, Meridian will need to obtain its own licenses for such content post-closing.
(iii) Selective Registration. Post-closing, Meridian may wish to consider filing copyright registrations for certain key marketing materials and packaging designs, particularly for works that are central to the brand identity and that Meridian may wish to enforce against infringers.
X. IP-Related Agreements
A. License Agreements
Our review of the IP-related agreements in the data room did not identify any outbound license agreements pursuant to which Briarwood has granted any third party a license to use the CleanLeaf or PureHaven trademarks, trade dress, trade secrets, or other intellectual property. This is a positive finding, as the absence of outstanding outbound licenses means that Meridian will acquire the IP assets free of third-party use rights.
Similarly, our review did not identify any inbound license agreements from third parties that are material to the Product Lines. The CleanLeaf and PureHaven formulations are proprietary to Briarwood and do not incorporate any licensed technology from third parties. The fragrance supply agreements with Briarwood's fragrance suppliers were reviewed and were found to contain standard commercial supply terms without any IP license components — the suppliers provide finished fragrance blends to Briarwood's specifications under a purchase order framework, and the specifications and resulting formulations remain the property of Briarwood.
B. Confidentiality / Non-Disclosure Agreements
We reviewed the standard form employee non-disclosure and confidentiality agreement used by Briarwood, as well as the NDAs in place with key suppliers. The findings are as follows:
• Employee NDAs. Briarwood's standard form Employee Confidentiality and Invention Assignment Agreement requires all employees to maintain the confidentiality of proprietary information during and after employment, assigns all work-related inventions to Briarwood, and includes post-employment non-disclosure obligations. The form agreement is generally adequate for its purpose, though we recommend that Meridian consider updating the form post-closing to reflect best practices, including more specific definitions of "Confidential Information," enhanced provisions regarding electronic data handling, and express coverage of trade secret obligations under applicable state law (including Ohio's adoption of the Uniform Trade Secrets Act, Ohio Rev. Code §§ 1333.61–1333.69).
• Supplier NDAs. Non-disclosure agreements are in place with Briarwood's major raw material and fragrance suppliers. These agreements contain standard confidentiality provisions with terms that are generally adequate. We did not identify any NDAs that contain provisions that would restrict Meridian's ability to use or benefit from the formulation information post-closing, subject to the assignment of Briarwood's rights under the NDAs in connection with the Transaction.
C. Co-Existence or Consent-to-Use Agreements
Our review did not identify any trademark co-existence agreements or consent-to-use agreements between Briarwood and any third party with respect to the CleanLeaf or PureHaven marks. No prior trademark disputes were identified that resulted in settlement agreements containing restrictions on Briarwood's use of the marks. This is a favorable finding, as it confirms that Meridian's use of the marks post-closing will not be subject to any negotiated restrictions or covenants arising from prior disputes.
D. IP Assignment Agreements (Historical)
We reviewed the USPTO Assignment Recordation database and the data room materials for evidence of any prior assignments of the CleanLeaf or PureHaven marks. No prior assignments were identified. Briarwood Home Essentials, Inc. is the original registrant and has been the sole owner of record since the initial registration of each mark. There is no indication that the marks were ever assigned from Malcolm Greer personally to Briarwood or from any other entity to Briarwood; the marks appear to have been filed and registered by Briarwood as the applicant from the outset.
A list of all IP-related agreements reviewed in connection with this memorandum is set forth in Appendix D.
XI. IP Encumbrances and Security Interests
A. UCC Search Results
We conducted Uniform Commercial Code (UCC) lien searches against Briarwood Home Essentials, Inc. in the following jurisdictions:
• Ohio Secretary of State. UCC search conducted on July 18, 2022. The search results did not identify any UCC-1 financing statements that specifically encumber the CleanLeaf or PureHaven intellectual property or that specifically list trademarks, trade secrets, or other IP as collateral.
• Delaware Secretary of State. UCC search conducted on July 18, 2022. The search results did not identify any UCC-1 financing statements filed against Briarwood in Delaware.
We note that Briarwood's existing lender relationships may include blanket security interests covering "all assets" or "all personal property" of Briarwood, which could arguably encompass the intellectual property included in the Acquired Assets. The existence and scope of any such blanket liens are being reviewed in connection with the broader financial and debt diligence workstream. To the extent any blanket UCC filings exist that could be interpreted to cover the IP assets, Meridian should require the delivery of lien releases, UCC-3 termination statements, or payoff letters at closing to ensure that the IP assets are transferred free and clear of all security interests.
B. USPTO Assignment Records
We searched the USPTO Assignment Recordation database for any recorded security interests, liens, mortgages, or other encumbrances against the CleanLeaf and PureHaven trademark registrations. No security interests or encumbrances of any kind were identified in the USPTO records. The only recorded assignment for each registration is the original filing by Briarwood as the registrant.
C. Conclusion on Encumbrances
Based on our review, no material IP-specific encumbrances were identified that would impede the transfer of the CleanLeaf and PureHaven intellectual property to Meridian in connection with the Transaction. The IP assets appear to be owned by Briarwood free and clear of liens, security interests, pledges, and other encumbrances, subject to the caveat regarding potential blanket UCC filings discussed in Section XI.A above.
The APA should include (i) a representation and warranty by Briarwood that the IP assets are free and clear of all liens, security interests, and encumbrances (other than any permitted encumbrances expressly identified in the disclosure schedules); and (ii) a requirement that Briarwood deliver at closing all lien releases, UCC-3 termination statements, and other instruments necessary to evidence the release of any encumbrances on the Acquired Assets, including the IP assets.
XII. IP Litigation History
A. Trademark Opposition / Cancellation Proceedings
We searched the Trademark Trial and Appeal Board (TTAB) records at the USPTO for any pending or historical opposition or cancellation proceedings involving the CleanLeaf or PureHaven marks. No such proceedings were identified. The CleanLeaf and PureHaven marks have not been the subject of any opposition during the registration process or any cancellation proceeding following registration.
B. IP Infringement Claims (By or Against Briarwood)
Our review of the data room materials (Subfolder 7.6 — IP Litigation History) and Briarwood's responses to the due diligence request items relating to intellectual property disputes did not identify any pending or threatened IP infringement claims, whether brought by or against Briarwood in connection with the CleanLeaf or PureHaven brands. Specifically:
• No pending lawsuits alleging trademark infringement, trade dress infringement, trade secret misappropriation, patent infringement, copyright infringement, or unfair competition were identified.
• No demand letters or cease-and-desist letters were identified as having been sent by Briarwood to any third party with respect to the CleanLeaf or PureHaven brands.
• No demand letters or cease-and-desist letters were identified as having been received by Briarwood from any third party alleging infringement of third-party IP rights.
• No settlements, consent orders, or other resolutions of prior IP disputes were identified.
For a comprehensive review of all litigation and regulatory matters involving Briarwood, including any matters outside the IP context, we cross-reference the Due Diligence Memorandum — Litigation & Regulatory, dated September 12, 2022, prepared by Andrew Fitzpatrick.
The absence of any IP litigation history is a positive finding that supports the conclusion that the CleanLeaf and PureHaven brands enjoy a clean IP profile and that Meridian's acquisition of the IP assets is not subject to any outstanding disputes or contingent liabilities arising from prior IP claims.
XIII. Summary of Key Findings and Risk Items
A. Positive Findings
Based on our comprehensive review, we highlight the following positive findings regarding the intellectual property portfolio associated with the CleanLeaf and PureHaven brands:
1. Ownership. The CleanLeaf and PureHaven brands are owned free and clear by Briarwood Home Essentials, Inc. Briarwood is the original registrant and sole owner of all federal and state trademark registrations. No prior assignments, shared ownership arrangements, or co-development agreements were identified.
2. Federal Registration Protection. The federal trademark registrations for the CleanLeaf and PureHaven marks on the Principal Register of the USPTO provide strong brand protection domestically, affording Briarwood (and, following assignment, Meridian) a presumption of validity, nationwide constructive notice, and the ability to seek the full range of remedies available under the Lanham Act.