RELEASE MORINDA & NEW VISION
BK Boreyko & ???
Hello Team!
It's been some time since my last update and some of you have been asking about the progress of the mangosteen patent lawsuit with our competitor XanGo™. I'm sending this update out to all qualified New Vision® Platinum Diamonds and above. If you feel the need to forward this on to other leaders in your group or prospects, please feel free to do so or they can find it in the business section of newvision.com.
On October 14, 2004, an independent expert examiner employed by the United States Patent and Trade Office ("US Patent Expert"), issued an order granting a request that the US Patent Office reexamine the question of whether the XanGo patent should have been granted. In doing so, the US Patent Expert stated in his order:
A substantial new question of patentability affecting claims 1-81 of United States Patent Number 6,730,333 is raised by the request for ex parte reexamination.
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The request indicates the Requestor considers that claims 1-81 are unpatentable over the combination of JP 11043442 (JP '442), JP 08208501, (JP '501), Duke et al., Caius, Nakatani et al., Kirtikar et al. and Yaacob et al.
It is agreed that the consideration of the above references raises a substantial new question of patentability as to claims 1-81 of US Patent No. 6,730,333 (Garrity).
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The references were not present in the application at the time the application was examined. Further, there is a substantial likelihood that a reasonable examiner would consider the teachings in the references important in deciding whether or not the claim is patentable. Accordingly, the references raise a substantial new question of patentability as to claims 1-81, which question has not been decided on in a previous examination of Garrity.
We did not initially release this information because it was a preliminary ruling and it often takes a while for the US Patent Expert to reach his conclusion after the reexamination has been granted. However, in a relatively short time period, which we believe reflects the US Patent Expert's opinion that it is clear the original patent should never have been issued, the US Patent Expert issued on December 6, 2004, his official Office Action Reexamination Ruling on behalf of the government, wherein he specifically rejected all eighty-one claims previously submitted by the XanGo patent, specifically finding:
Claims 1-81 are rejected under 35 U.S.C. 103(a) as being unpatentable over the combination of JP 11043442 (JP '442), JP 08208501 (JP '501), Duke et al., Caius, Nakatani et al., Kirtiker et al. and Yaacob et al.
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Since the references make it clear that the pericarp (rind) of mangosteen was known to be used for nutraceutical purposes and since combining the rind with other plants fruits were also known (JP '442) and since the fruit of mangosteen is also known for therapeutic purposes, to combine them into one formulation to treat ailments is obvious.
It is well known that it is prima facie obvious to combine two or more ingredients each of which is taught by the prior art to be useful for the same purpose in order to form a third composition which is useful for the same purpose. The idea for combining them flows logically from their having been used individually in the prior art.
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Thus, since the components were each individually used in the art for the same purpose, therapeutic purposes, then it was obvious to combine them together in the same formulation.
These rulings were made by the independent US Patent Expert that has no bias or relationship with our companies, Morinda or XanGo.
You may review the entirety of the rulings by going to the office government Patent Application Information Retrieval System at http://portal.uspto.gov/external/portal/pair. After the site comes up, enter application No. 90/007,178, and click on the image file wrapper tab, which will reveal an index of the document history.
XanGo will assert this is a preliminary ruling and that they are confident it will be overturned. It is in fact the first time the Patent Office has ruled on the XanGo patent application with anything other than the biased information and arguments submitted by XanGo. The original patent application by XanGo was in fact rejected by the Patent Office. It was subsequently approved after XanGo submitted further arguments, with no one submitting independent materials, to the Patent Office. The reexamination was initiated when counsel for Morinda submitted a request that a reexamination be conducted on the grounds that the patent applicant had not properly and fully disclosed all prior art.
The independent Patent Expert's ruling is not final and it is appealable by XanGo. The US Patent Office has been moving forward with the reexamination and its finding of unpatentability of the XanGo patent with unusual speed. We believe it has done so because it is so obvious that the patent would not have been issued in the first place if proper disclosure had been made.
However, the speed within which a final ruling will be reached is to some extent in XanGo's control, since it now has up to three months to challenge the ruling. We anticipate XanGo will attempt to delay a final ruling as long as it can because it knows the final ruling will in all likelihood uphold the finding of the Independent Patent Expert Examiner of unpatentability.
Based upon the proceedings before the Patent Office, we had requested that the federal judge stay the pending litigation, since a final ruling by the Patent Office that the XanGo patent is invalid would obviously moot all patent claims made by XanGo in the lawsuit. The court denied the request based in part on XanGo's argument that it could take years for a final resolution by the Patent Office. Although we are certain XanGo will attempt to make this prediction come true, we believe the Patent Office will move much quicker than XanGo hopes. In the meantime, we will continue to vigorously defend and prosecute the federal court proceeding.
This news really puts XanGo is a precarious position. They've built their marketing strategy around two key factors. First, they assert they were the first to market mangosteen in America (discovery during this case revealed that a division of Snapple marketed a mangosteen juice and vitamins beginning in late 2000). Second, they assert their patent, on which they reportedly spent between $1 to $3 million, would 'lock up' the mangosteen market for XanGo members. Now, neither of these two key factors has held up to scrutiny.
A recent discovery plan and order issued by the court in the Morinda state court lawsuit, Civil No. 03040824 by the Honorable Judge Gary D. Stott, once again clearly shows the falsity of the rumors. The court order expressly states each party anticipates taking thirty-five depositions, that an estimated trial of three weeks will be required and that at this time it is impossible to even evaluate whether settlement is a possibility. Both Morinda's and XanGo's attorneys concur in the court's order. In the lawsuit filed by Morinda, it alleges XanGo usurped Morinda's property interest and claims that all intellectual property rights in the XanGo juice products, and all intellectual property rights stemming there from, are the exclusive property of Morinda. Morinda therefore seeks a constructive trust be imposed upon all assets, corporate opportunities, benefits and profits unlawfully obtained by XanGo. The result, if Morinda prevails in its lawsuit, is obvious.
As far as taking New Vision down, nothing could be further from the truth. This case will run its course. The recent finding by the independent US Patent Expert that the XanGo patent is invalid obviously makes us more confident than ever that we will prevail. With all the XanGo distributors telling stories about this case, it would appear that the primary reason XanGo initiated this action against New Vision was for marketing purposes. Their contention was that our product violated their patent, which the independent Patent Expert has ruled is invalid, by claiming aloe vera was a vegetable instead of a succulent. Wait, it gets even better: they are now claiming to the court that our new Vemma™ bottle and design is too similar to the XanGo bottle and is causing confusion in the marketplace. I ask you this, do these arguments sound like a desperate attempt to stop New Vision and Vemma's momentum?
Your future with both the New Vision and Vemma opportunities couldn't be stronger. In our 10-year history, we've overcome much more challenging situations than this and every time, we've come out stronger and more determined. I thank you for the confidence you placed in me and our outstanding legal team. With this issue almost behind us, 2005 is going to be one tremendous year!
Successfully,
BK Boreyko
President, CEO
New Vision/Vemma
