Neways Wins Court Victory Enjoining Sisel and Five of its Top Distributors
15 Feb 2008 -- A federal court in Utah has issued an injunction against Sisel International, LLC and five of Sisel's top distributors in Japan. Among other things, the injunction requires Sisel and these distributors to return all of Neways' distributor information in their possession and prohibits Sisel and its distributors from using such information. In addition, the Court found that Sisel's top three distributors—Koji Yamamoto, Fumiko Matsumoto and Toru Egashira—likely have breached their contracts with Neways by recruiting Neways distributors to join Sisel, and are now prohibited from continuing to recruit Neways distributors for a period of one year from each distributor's date of suspension from Neways.
In its 23-page ruling issued February 11, 2008, the Court ordered Sisel, Mr. Yamamoto, Ms. Matsumoto, Mr. Egashira, Kaoru Kitagawa, and Chiharu Hayashi to thoroughly search for and return all information relating to Neways' distributors and prohibited them from using such information in the future.
The victory was a significant one for Neways, and came after a two-week evidentiary hearing in federal court. Neways alleged that Sisel and its Japanese distributors were misappropriating Neways' confidential and trade secret information regarding Neways' distributor network, and that the Japanese distributors were breaching their contracts with Neways by soliciting Neways distributors to join Sisel. After hearing all of the evidence, including testimony by the Japanese distributors themselves, the Court found that Neways was likely to prevail on these claims and that the defendants should be enjoined.
This is the third time in less than a year that Neways has prevailed against Sisel or one of Sisel's distributors. In May 2007, the same federal court ordered Sisel, its owner Thomas Mower, Sr., and several of its employees to return all copies of Neways' product formulas, vendor lists, and distributor lists, and prohibited them from continuing to use that information. Two months later, a Utah state court entered an order against Sisel distributors Jef and Patricia Welch restraining them from recruiting any present Neways distributor to participate in another multi-level marketing company. As a result of the federal court's recent ruling, a similar restraint is now in place against Mr. Yamomoto, Ms. Matsumoto, and Mr. Egashira.
"Neways is extremely pleased with the Court's ruling," said Eric Larsen, Neways' C.E.O. "In enjoining Sisel and its top Japanese distributors, the Court has affirmed what Neways has always believed—that companies are free to compete in this market, but they must do so fairly and honestly. We hope that is what we will see in the future."
Chris Crump, Neways' General Counsel, said a significant part of the case against Sisel has been about protecting Neways' distributors and confidential distributor information. "Two courts have now recognized the importance of those protections," said Crump, "and Neways will continue to take all necessary steps to ensure that our distributors' businesses are protected."
The case will now proceed on Neways' other claims against Sisel, Mr. Mower, and the other defendants. These claims include allegations that Mr. Mower breached his fiduciary duties to Neways, that Sisel's products are the result of unlawful theft by Sisel of Neways' trade secrets, and that Mr. Mower and a number of other Sisel employees have intentionally destroyed evidence to prevent it from being discovered in the case.
The case is entitled Neways Inc. v. Thomas E. Mower, Sr., et al., No. 2:07-CV-339.
NEWAYS SUING NATURES SUNSHINE, SYNERGY, AMI ETC
April 2002 -- This is another one like Morina being shafted by their Dallas manufacturer when Morinda started their own bottling. AMI was Maufacturing product for Neways and when Neways quit using them they manufactured a similiar the product to Natures Sunshine and Synergy. Nothing bad but it does show contracting deficiences on part of the company.
Neways International Inc. filed a second suit against its former manufacturer, Advantage Marketing Inc., and Synergy Worldwide, a division of Nature's Sunshine Products Inc., in U.S. District Court in Salt Lake City. The federal lawsuit claims violations of the Lanham Act, trademark infringement, unfair competition, trade dress infringement and misappropriation.
In the complaint, Neways alleges that Nature's Sunshine misappropriated its Maximol formula and packaging for use in Synergy's SyneMax product. Both Maximol and SyneMax are liquid nutritional supplements containing minerals, amino acids, enzymes, vitamins and other nutrients.
Neways is asking for an injunction to stop the defendants from falsely representing themselves as owning patents, licenses or rights to the Maximol product; from using any likeness on their product packaging which would be confusingly similar to Maximol; and from any other unfair competition with Neways. The suit also asks for damages and disgorgement of profits.
The state court complaint filed in the 3rd District Court in Salt Lake by Neways alleges breach of contract and interference with contractual relations. In that complaint, Neways accused Advantage Marketing Inc. (AMI) of giving the Maximol formula to Synergy after Neways terminated their manufacturing agreement with AMI (below) in 2003.
EDITORIAL
FEDERAL 7 COUNT INDICTMENT ON NEWAYS OWNERS
Federal District Court, Salt Lake City Utah
Friday, December 20, 2002
Tom and Dee Mower, owners of Neways were indicted for 3 million dollars worth of tax evasion by a Federal grand jury here and charges brought in Federal court. The charges were conspiracy and tax evasion. Remember they are innocent until proven guilty. The judge set bonds at $250,000@. The trial is set for 24 Feb 2003 for 4 weeks (20 days).
Through my observations over the years when the Feds drop the hammer they usually have their ducks in a row. In the case of Sunrider and the Chens (the owners) the Federal prosecutors were loaded for bear! I asked the assistant prosecutor on the Sunrider case how much the evidence they had on the Chen's and he said, "a truckload", not jesting in the least. I would say from observing that case (the largest private tax evasion case in America - $138 million) the Mowers should only get community service if they are possibly proven guilty. Sunrider and Mr. Chen got a little time in Club Fed and his wife wore an ankle bracelet for a $138 million!
The Mowers were evidently issuing commission checks to themselves on overseas sales and putting the money in a son's account. I really can't understand that, because it is like they were taking money from their company just for a few tax bucks when they end up with the majority of the money way. Since they only did it from 1994-97, it appears that they got wise or some astute tax advisor found out and told them to quit. They should have gone back and paid the money and not tried to hide it. Wonder who ratted them out for the 10% you get for tax evasion reporting? In the Sunrider case it was always rumored to be a blood relative. If the Mowers are convicted that means someone gets $300,000. Not bad for a days worth of spilling your guts to the IRS!
For those that are Neways bashing, note the company is not involved. It will survive well. The Mowers (divorced in 2000) are no longer engaged in the day to day operation of the business according to the Utah Daily Herald on Saturday the 21st. I personally dispute that because I know of a recent event were the CEO made a commitment. Tom Mower threw a tizzy and canceled it. I don't know what "hands off" means in Neways corporate, but it evidently means not physically beating the CEO.
Information extracted from:
Utah Daily Herald Friday 20 Dec, 2002 Mowers, indictments on 7 charges
Utah Daily Herald Saturday 21 Dec, 2002 Mowers - not Guilty Plea
Stay Tuned on Neways - Rod Cook, your editor
RESEARCH ON AMI
Shawn G. Hansen, Esq.
General Counsel
Advantage Marketing, Inc.
P.O. Box 27233
Salt Lake City, Utah 84127-0233
Dear Mr. Hansen:
This is in response to your letter of March 1,200 1 to the Food and Drug Administration (FDA) pursuant to 21 U.S.C. 343(r)(6) (section 403(r)(6) of the Federal Food, Drug, and Cosmetic Act (the Act)). Your submission states that Advantage Marketing, Inc. is making the following claim, among others, for the product NutraceuticaTM Noni GoldTM: “Noni Gold helps support your body’s defenses against disease!”
21 USC. 343(r)(6) makes clear that a statement included in labeling under the authority of that section may not claim to diagnose, mitigate, treat, cure, or prevent a specific disease or class of diseases. The statement that you are making for this product suggests that it is intended to treat, prevent, cure, or mitigate diseases caused by pathogenic
microorganisms. This claim does not meet the requirements of 21 U.S.C. 343(r)(6). This claim suggests that this product is intended for use as a drug within the meaning of 21 U.S.C. 321(g)(l)(B), and that it is subject to regulation under the drug provisions of the Act.
If you intend to make claims of this nature, you should contact FDA’s Center for Drug Evaluation and Research (CDER), Office of Compliance, HFD-3 lo,7520 Standish Place, Rockville, Maryland 20855.
