Theos Medical Systems and Chummie's Deceit Continues !

A lawsuit was filed against Theos Medical Systems, Inc. and it's owner Saket Bhatia on November 12, 2013 in the United States District Court for the Northern District of California for Trademark Infringement of the Malem name. The final Order and Consent Decree was signed by the Honorable Edward M. Chen, United States District Court Judge, United States District Court, Northern District of California on July 14, 2015. This Order has been reproduced in its entirety, as reported in docs.justia.com in our prior two blogs: 

MalemMedical, Ltd. et al v. Theos Medical Systems, Inc. et al PART 1   and

Malem Medical, Ltd. et al v. Theos Medical Systems, Inc. et al PART 2

It is very obvious that the Order issued went well beyond the trademark infringement, and covered what we can only describe as a variety of deceptive practices used by Theos Medical Systems, Inc. and Saket Bhatia  in describing and marketing their Chummie products, primarily on the internet, and extensively on Amazon.com. Effectively, Theos/Chummie have been legally constrained and must make major alterations in their unethical product and market claims and style of conducting business. We congratulate the Plaintiffs in the case for obtaining the necessary legal constraints on Theos/Chummie's behavior and having them alter and/or remove the false or highly exaggerative "facts" with which they have deceived the Public and parties like Amazon for many years.

Reading the constraints placed on Theos/Chummie in the Order, there is little doubt in our mind that their business on Amazon.com will suffer significantly. We do want to point out that Chummie's Amazon business for bedwetting alarms has been dramatically decreasing since the Fall of 2014, when Theos/Chummie received what we consider to be a relatively mild smack on their wrist for using a large number of fake Amazon reviews to both promote their Chummie products and degrade competitive products on the Amazon reviews. We must assume that these further constraints on Theos/Chummie's behavior on Amazon and elsewhere will adversely affect their free-wheeling and deceptive style of doing business. One alteration that we expect will be a significant decrease in the price of their very over-priced Chummie bedwetting alarm products so as to try and entice customers to purchase what we would still consider to be ridiculously priced products for the poor technology and conveniences that are offered. We have already elaborated on this and strongly recommend that the reader looks at our comparative table of detailed facts in our prior blog entry: 

Abusing and Misinterpreting Amazon Reviews: The Case Against Chummie, Dry-Knight and Lil' Jumble.

What many customers also overlook about these Chummie bedwetting alarms is how Chummie continues to "rake in the shekels" with customers buying their absurdly priced and inconvenient sensors and tape for attaching the sensors. Clever marketing  --  Not-so-smart customers!

Since we became aware of this lawsuit being filed in November, 2013, we wondered why it had been taking so long to see any results to this case. It is now apparent, by looking at the court records, that Theos/Chummie (an allegory used in place of the Defendants' long proper name of Theos Medical Systems, Inc. and Saket Bhatia) often sought delays from the Court. The case was resolved in the early part of 2015 with an agreement between the Defendant and Plaintiff, but no signed agreement was forthcoming for many months until the Judge's Order was signed on July 14, 2015

Knowing what we now know, both with respect to Theos/Chummie's business practices which we have very often complained about in this blog, and the substantiation of many of our concerns and complaints by the Honorable Judge in his Order, we can hypothesize what lies behind Theos/Chummie's machinations in delaying this Court Order as long as possible:

1.            The longer Theos/Chummie could continue to operate in its prior free-wheeling manner, the longer it could continue to promote and sell its products to unwitting customers who may withhold their business as they became better aware of true matters. This would have a much more severe effect on Theos/Chummie if it had the standing of a Court Order!

2.            The longer Theos/Chummie could keep its abusive and false behavior out of the public eye, the better its chances of making a "deal" with some other large seller. This would be much like what Theos/Chummie did to become a direct vendor with Amazon, by falsifying facts and making themselves look exemplary. Again, something that should prove very difficult to do with a Court Order detailing much of Theos/Chummie's misbehavior and ordering them to cease and make corrections!

This has become fact with our observing that Costco now carries a Chummie bedwetting alarm on Costco.com . We very much doubt that Costco would have done this if they knew the true facts about Theos/Chummie, which the Court Order certainly points out quite adequately.

Now let's look at this Costco matter a little more:
We see that the Chummie alarm sells on Costco.com for about $20 less than on Amazon.com . Any comments, Amazon? Will the price on Amazon be reduced to match Costco? Costco will take the item back with "no questions asked" if ever the customer becomes unhappy with the product and wishes to return it to Costco, and refund the entire purchse price. Costco will even take the used product back after TEN MONTHS (an arbitrary but realistic number). Will Amazon be willing to take back the crummy Chummie after TEN MONTHS and provide a full refund? If not, why would an Amazon customer pay about $20 more, and be unable to return the product as easily and with a full refund as he/she would get at Costco? In other words, any rational customer should buy this Chummie alarm at Costco, if they still unwittingly believe that this is what they want to spend their money on! 

We think Amazon and Amazon's customers have been abused enough by Theos/Chummie. Now it is Costco's turn. Let us see how long and in what manner this may continue.

More later ...

Malem Medical, Ltd. et al v. Theos Medical Systems, Inc. et al PART 2

PART 2  Continued from Part 1


Forward:

For the past two years we have been pointing out the deceit indulged in by Theos Medical Systems, Inc. with respect to their Chummie products and also disparaging the reputation and facts about Theos's competitors and their products. Now we have a judgement/decree from a U.S. Federal Judge which validates and confirms much of what we have written about with respect to Theos/Chummie and imposes strict controls on them. This further confirms our claims of excessive hype and false claims by Theos about their Chummie products, and their abuse of Amazon Reviews to hype their products and degrade their competition, and the general lack of good ethics on the part of Theos Medical Systems. We continue to wonder why any moral and ethical buyer might want to conduct any business with Theos or purchase their Chummie products.

We shall reproduce this published Order and Consent Decree in parts as it is quite long. For the interested reader, the entire Order can be found at

docs.justia.com .

This Order and Consent Decree was filed on July 14, 2015.

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
MALEM MEDICAL, LTD. and ENURESIS ASSOCIATES, LLC,
Plaintiffs,
v.
THEOS MEDICAL SYSTEMS, INC. and SAKET BHATIA,
Defendants.
AND RELATED COUNTERCLAIMS
CASE NO.: 3:13-cv-05236-EMC
CONSENT DECREE AND ORDER

Continued from PART 1.

7. DEFENDANTS will refrain from making cash payments to individuals in exchange for reviews of their products. This agreement does not apply to the exchange of goods for reviews.

8. DEFENDANTS will submit, through Amazon Vendor Central, a letter from their attorneys to Amazon’s Buyers Review Team and Item Update Creation Team. The letter will ask for the removal of all nonverified reviews of Chummie products on all Amazon websites posted between June 1, 2014 and March 31, 2015 on the grounds that the validity of the reviews has come into question. This letter will be sent within 10 days of entry of this Consent Decree. If the subject reviews are not removed within 45 days of the date the letter is sent, DEFENDANTS will send, through Amazon Vendor Central, a second letter from their attorneys to Amazon’s Buyers Review Team and Item Update Creation Team. The second letter will reference this Agreement and the Court’s Consent Decree, and will identify the specific nonverified reviews to be removed.

9. DEFENDANTS will not disparage PLAINTIFFS or any of their products, services, officers, directors, or employees. For purposes of this agreement, disparage means to take any action which could reasonably be expected to adversely affect the reputation of PLAINTIFFS or any of their
products, services, officers, directors, or employees. This paragraph does not apply to legitimate
business concerns raised by DEFENDANTS or to allegations that PLAINTIFFS have violated this
Agreement or this Consent Decree.

10. DEFENDANTS will not communicate with any person or entity through the use of a false or assumed identity such that the communication could reasonably be mistaken as coming from PLAINTIFFS or any of their officers, directors, or employees.


PLAINTIFFS’ OBLIGATIONS

11. PLAINTIFFS will remove or modify specified factual statements from their website and other published materials (see items a-c below).

a. PLAINTIFFS will change the statement “largest marketplace/ distributor of bedwetting products” to “one of the largest.”

b. PLAINTIFFS will remove the statement “90% success rate within a few weeks.”

c. PLAINTIFFS will change the statement “each alarm cures, on average, 3 children per year” to “each alarm treats, on average, 3 children per year.”

12. PLAINTIFFS will not use the terms: “Chummie,” “One Drop Detection,” “Flexitape,”
“Comfy-Armband,” “Theos Medical Systems,” “Better technology for faster treatment,” “Active guard monitoring,” or “Enhanced protection plus care,” or the Chummie logo, Theos Medical Systems logo, or Chummie smiley face, as well as other trademarks and registered trademarks of DEFENDANTS now and in the future, except in bona fide comparative advertising.

13. PLAINTIFFS will remove all meta information containing the terms referenced in the above paragraph, as well as other brands sold by DEFENDANTS and not sold by PLAINTIFFS. This shall be accomplished within 30 days of entry of this Consent Decree.

14. PLAINTIFFS will refrain from making cash payments to individuals in exchange for reviews of their products. This agreement does not apply to the exchange of goods for reviews.

15. PLAINTIFFS will not disparage DEFENDANTS or any of their products, services, officers, directors, or employees. For purposes of this agreement, disparage means to take any action
which could reasonably be expected to adversely affect the reputation of DEFENDANTS or any of
their products, services, officers, directors, or employees. This paragraph does not apply to legitimate
business concerns raised by PLAINTIFFS or to allegations that DEFENDANTS have violated this
Agreement or this Consent Decree.

16. PLAINTIFFS will not communicate with any person or entity through the use of a false or assumed identity such that the communication could reasonably be mistaken as coming from
DEFENDANTS or any of their officers, directors, or employees.


FURTHER ORDERS

17. This Consent Decree is binding on PLAINTIFFS, DEFENDANTS, their officers, agents, servants, employees, affiliates, attorneys, successors, and assigns, as well as those persons in
active concert or participation with them and who receive actual notice of this Consent Decree.

18. This Consent Decree shall inure to the benefit of, and shall be enforceable by, PLAINTIFFS, DEFENDANTS, their affiliates, successors, and assigns as their respective interests may appear.

16. PLAINTIFFS will not communicate with any person or entity through the use of a false
or assumed identity such that the communication could reasonably be mistaken as coming from
DEFENDANTS or any of their officers, directors, or employees.
FURTHER ORDERS

17. This Consent Decree is binding on PLAINTIFFS, DEFENDANTS, their officers,
agents, servants, employees, affiliates, attorneys, successors, and assigns, as well as those persons in active concert or participation with them and who receive actual notice of this Consent Decree.

18. This Consent Decree shall inure to the benefit of, and shall be enforceable by, PLAINTIFFS, DEFENDANTS, their affiliates, successors, and assigns as their respective interests may appear.

APPROVED BY:
CLAPP, MORONEY, VUCINICH, BEEMAN and SCHELEY
DATED: July 9, 2015 /s/ P. Christian Scheley
By: P. CHRISTIAN SCHELEY, ESQ.
Attorneys for Defendants and Counter-Claimants, THEOS MEDICAL SYSTEMS, INC. and SAKET BHATIA

CRAIGIE, McCARTHY & CLOW
DATED: July 9, 2015 /s/ Peter W. Craigie
By: PETER W. CRAIGIE, ESQ.
Attorneys for Plaintiffs and Counter-Defendants, MALEM MEDICAL, LTD. and ENURESIS ASSOCIATES, LLC

ORDER
IT IS SO ORDERED: All hearing and trial dates are vacated. The Clerk of the Court is directed to close this case.

DATED: July 14, 2015

Honorable Edward M. Chen
United States District Court Judge
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA

CONSENT DECREE AND ORDER
CASE NO. 3:13-cv-05236-EMC

Malem Medical, Ltd. et al v. Theos Medical Systems, Inc. et al PART 1

PART 1

Forward:

For the past two years we have been pointing out the deceit indulged in by Theos Medical Systems, Inc. with respect to their Chummie products and also disparaging the reputation and facts about Theos's competitors and their products. Now we have a judgement/decree from a U.S. Federal Judge which validates and confirms much of what we have written about with respect to Theos/Chummie and imposes strict controls on them. This further confirms our claims of excessive hype and false claims by Theos about their Chummie products, and their abuse of Amazon Reviews to hype their products and degrade their competition, and the general lack of good ethics on the part of Theos Medical Systems. We continue to wonder why any moral and ethical buyer might want to conduct any business with Theos or purchase their Chummie products.

We shall reproduce this published Order and Consent Decree in parts as it is quite long. For the interested reader, the entire Order can be found at

docs.justia.com .

This Order and Consent Decree was filed on July 14, 2015.

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
MALEM MEDICAL, LTD. and ENURESIS ASSOCIATES, LLC,
Plaintiffs,
v.
THEOS MEDICAL SYSTEMS, INC. and SAKET BHATIA,
Defendants.
AND RELATED COUNTERCLAIMS
CASE NO.: 3:13-cv-05236-EMC
CONSENT DECREE AND ORDER

IT IS HEREBY STIPULATED AND AGREED by and between Plaintiffs and Counter-Defendants MALEM MEDICAL, LTD. and ENURESIS ASSOCIATES, LLC (“PLAINTIFFS”) and
Defendants and Counter-Claimants THEOS MEDICAL SYSTEMS, INC. and SAKET BHATIA
(“DEFENDANTS”) (collectively, “the Parties”), that the Court shall enter an Order as follows:

DEFENDANTS’ OBLIGATIONS

1. DEFENDANTS will withdraw the opposition to PLAINTIFFS’ Bedwetting Store trademark application within 10 days of entry of this Consent Decree.

2. DEFENDANTS will not use the terms “Malem,” “Bedwetting Store,” “Easy-Clip”, “Secure Grip,” “Quick Detect,” as well as other trademarks and registered trademarks of PLAINTIFFS now and in the future, except in bona fide comparative advertising.

3. DEFENDANTS will remove allegedly copyrighted material from their website within 10 days of entry of this Consent Decree, and will not use any of PLAINTIFFS copyrighted material in the future.

4. DEFENDANTS will remove all meta information containing the terms “Malem” or “Bedwetting Store,” as well as other brands sold by Enuresis Associates, which products are not currently sold by DEFENDANTS. The above conditions shall be accomplished within 30 days of entry of this Consent Decree.

5. DEFENDANTS will remove or modify specified statements (see items a-o below) from their website within 10 days of entry of this Consent Decree. DEFENDANTS will also remove these
statements from Amazon and eBay websites in all countries within 30 days of entry of this Consent
Decree. DEFENDANTS will not be required to guarantee or effect removal of statements made by
others, such as third party resellers. This agreement is expressly subject to change in the event that
further research, testing, or new information demonstrates that the below statements are verifiable and factually accurate.

a. DEFENDANTS will change the statement “#1 doctor recommended bedwetting alarm” to “doctor recommended bedwetting alarm.”

b. DEFENDANTS will change the statement “world’s #1 pediatrician recommended alarm” to “widely recommended by pediatricians.”

c. DEFENDANTS will remove the statement “urine detection is 50x faster than other bedwetting alarms.” This statement will be reinstated in the event that further research, testing, or new information demonstrates that the statement is verifiable and factually accurate.

d. DEFENDANTS will remove the statement “more pediatric urologists recommend Chummie over other alarms.”

e. DEFENDANTS will change the statement “Chummie is the only alarm that stops bedwetting” to “Chummie alarms stop bedwetting.”

f. DEFENDANTS will change the statement “Chummie’s urine detection area is 100x larger than other alarms” to “Chummie’s urine detection area is significantly larger than other clip sensors.”

g. DEFENDANTS will remove all references to the safety of PLAINTIFFS’ products, including references to “dangerous safety pins,” “sharp sensors - can cut skin,” and “contain lead and mercury.”

h. DEFENDANTS will change references to “over 100,000” to “over 20,000.” This statement will be further revised when new quantitative milestones are reached.

i. DEFENDANTS will change the statement “only alarm carried by major retailers in USA, Europe, and Asia” to “carried by major retailers in USA, Europe, and Asia.”

j. DEFENDANTS will change the statement “does not cause skin rash caused by all other alarms” to “does not cause skin rash.”

k. DEFENDANTS will remove the statement “only bedwetting alarm that has passed the test required to be registered with the United States FDA.”

l. DEFENDANTS will change the statement “96% success rate” to “in a study . . . 96% success rate.”

m. DEFENDANTS will change the statement “smallest and lightest bedwetting alarm available” to “small and lightweight.”

n. DEFENDANTS will change the statement “loudest alarm available” to “loud.”

o. DEFENDANTS will remove the statements “faster urine detection equals rapid treatment,” or “faster detection equals quicker treatment.”

6. DEFENDANTS will remove from their website all references to patented claims for which no patent has been approved within 10 days of entry of this Consent Decree. DEFENDANTS will also remove these references from Amazon and eBay websites within 45 days of entry of this Consent Decree.

Continued on PART 2.