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Case 1:18-cv-00925-PAB-SKC Document 52 Filed 08/31/18 USDC Colorado Page 1 of 39

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO

Civil Action No. 1:18-cv-00925-PAB-SKC

CANNOID, LLC and
WILLIAM ARNOLD

Plaintiffs,

v.

GCX, LLC,
FULL SPECTRUM NUTRITION, LLC and
RYAN LEWIS

Defendants.

DEFENDANT FULL SPECTRUM NUTRITION, LLC’S ANSWER AND
COUNTERCLAIMS TO PLAINTIFFS’ FIRST AMENDED COMPLAINT

Defendant Full Spectrum Nutrition, LLC1 (“Full Spectrum”) hereby responds to

Plaintiffs’ First Amended Complaint (“FAC”) and states and alleges as follows. For the Court’s

convenience, Full Spectrum restates the allegations from the FAC before each answer.

Introduction

1. This is an action for trademark infringement, breach of contract, breach of the
implied covenant of good faith and fair dealing, tortious interference with a contractual
relationship, civil conspiracy, and false advertising. This case is about an unlawful
transfer of infringing trademarks and domain names to a third party to a settlement
agreement prohibiting the use of those infringing marks.

ANSWER: Full Spectrum is not required to respond regarding Plaintiffs’ characterization of

their own Complaint. Full Spectrum states that the Complaint speaks for itself regarding the

1
Full Spectrum disagrees with Plaintiff’s characterization of Global Cannabinoids as a d/b/a of
Full Spectrum Nutrition, LLC.
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claims it asserts. To the extent further response is deemed necessary, Full Spectrum denies that

it has engaged in any unlawful practices and denies any allegations in Paragraph 1 of the FAC

not specifically admitted.

2. Plaintiffs William Arnold and Cannoid, LLC are direct competitors of Defendants
GCX, LLC and Full Spectrum Nutrition, LLC d/b/a Global Cannabinoids (referred to as
“Global Cannabinoids”) in the industrial hemp related products industry. In the fall of
2016, Arnold and Cannoid sued GCX’s predecessor, Entourage Nutritional Distributors,
LLC, and others for infringing Arnold’s registered trademarks ENTOURAGE HEMP and
ENTOURAGE HEMP E (the “Entourage Marks”).

ANSWER: Full Spectrum denies that it is a competitor of Plaintiffs. Full Spectrum lacks

knowledge about the specific details of Plaintiffs’ prior litigation history, but admits public court

records show that Plaintiffs filed a complaint against Entourage Nutritional Distributors, LLC on

November 21, 2016. Full Spectrum denies any allegations in Paragraph 2 of the FAC not

specifically admitted.

3. After almost a year of litigation, Plaintiffs settled with Entourage Nutritional as
set forth in a settlement agreement dated October 6, 2017 (the “Settlement Agreement”)
(attached hereto as Exhibit D).

ANSWER: Full Spectrum states that the Settlement Agreement speaks for itself. To the extent

further response is deemed necessary, Full Spectrum states it is without actual knowledge

sufficient to form a belief as to the remaining allegations in Paragraph 3 of the FAC and

therefore denies the same. Full Spectrum denies any allegations in Paragraph 3 of the FAC not

specifically admitted.

4. Entourage Nutritional, now known as GCX and referred to as such hereafter,
categorically agreed to cease using the infringing Entourage Marks (which included
ENTOURAGE NUTRITIONAL, ENTOURAGE NUTRITIONAL DISTRIBUTORS and
all marks incorporating the term ENTOURAGE) and to completely shut down the
domain name www.entouragenutritional.com. Despite this, GCX and one of its owners
and officers, Ryan Lewis, transferred all of Entourage Nutritional’s marks, domain names
and social media accounts which ended up in the hands of Cannoid’s competitor, Global

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Cannabinoids, just days before the deadline to cease use set forth in the Settlement
Agreement, evasively claiming that Global Cannabinoids is an unrelated third party and
that some other unrelated company merely agreed to help GCX comply with the
Settlement Agreement in exchange for the transfer of those marks, domain names and
social media accounts. Defendants refused to provide any information concerning the
identity of Global Cannabinoids, leading Plaintiffs to logically assume that GCX was an
acronym for Global Cannabinoids International.

ANSWER: Full Spectrum states that the Settlement Agreement speaks for itself. To the extent

further response is deemed necessary, Full Spectrum states it is without actual knowledge

sufficient to form a belief as to the actions or non-actions of GCX or its officers and therefore

denies the same. Full Spectrum denies any allegations in Paragraph 4 of the FAC not

specifically admitted.

5. Plaintiffs discovered that Global Cannabinoids’ domain name is owned by John
Merritt, the founder and president of Full Spectrum, and a former colleague of Defendant
Lewis at Entourage Nutritional. According to documents provided under subpoena by the
domain name registrant, Domains By Proxy, LLC, Global Cannabinoids it turns out is
just a fictitious business name for Defendant Full Spectrum.

ANSWER: Full Spectrum states that Exhibit I to the FAC speaks for itself. Full Spectrum lacks

knowledge about what Plaintiffs supposedly have discovered, and therefore denies the same.

Full Spectrum denies any allegations in Paragraph 5 of the FAC not specifically admitted.

6. Despite the fact that there are numerous connections between GCX and Global
Cannabinoids2, and despite the fact that it was well known what Global Cannabinoids’
business is, GCX and Lewis boldly claim that they cannot be held accountable for this
infringement, or redirecting internet traffic from the infringing domain name
www.entouragenutritional.com to Global Cannabinoids’ new website, or any of Global
Cannabinoids other infringement of Plaintiffs’ registered trademarks. Lewis himself
agreed he personally would not be involved in doing such a thing as part of the
settlement.

ANSWER: Full Spectrum states that the Settlement Agreement speaks for itself. To the extent

further response is deemed necessary, Full Spectrum states that it is without actual knowledge

2
Global Cannabinoids denies the allegations in Plaintiffs’ footnote number 1.
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sufficient to form a belief as to the actions or non-actions of GCX or its officers and therefore

denies the same. Full Spectrum denies the remaining allegations in Paragraph 6 of the FAC.

7. Plaintiffs seek an injunction, monetary damages, and attorneys’ fees as a result of
Defendants’ infringement of the Entourage Marks, breach of the Settlement Agreement,
tortious interference with a contractual relationship, and civil conspiracy to breach the
Settlement Agreement.

ANSWER: Full Spectrum is not required to respond regarding Plaintiffs’ characterization of

their own Complaint. Full Spectrum states that the FAC speaks for itself. To the extent further

response is deemed necessary, Full Spectrum denies that Plaintiffs are entitled to the relief

sought, as set forth in Paragraph 7 of the FAC, and denies any allegations in Paragraph 7 not

specifically admitted.

The Parties

8. Plaintiff Cannoid is a Colorado limited liability company. Cannoid is the
exclusive licensee of Arnold’s registered Trademarks ENTOURAGE HEMP and
ENTOURAGE HEMP E. Cannoid’s principal place of business in Colorado. Cannoid’s
sole member is located in, and is a citizen of, the State of Colorado.

ANSWER: Full Spectrum admits that Plaintiff Cannoid is a Colorado limited liability company

and that the ENTOURAGE HEMP and ENTOURAGE HEMP E trademarks are registered in

Plaintiff Arnold’s name. Full Spectrum lacks knowledge regarding the truth or falsity of the

remaining allegations in Paragraph 8 of the FAC and, therefore, denies the same.

9. Plaintiff Arnold is located in, and is a citizen of, the State of Colorado. He is the
sole owner of Cannoid.

ANSWER: Full Spectrum lacks knowledge regarding the truth or falsity of the allegations in

Paragraph 9 of the FAC and, therefore, denies the same.

10. Defendant GCX is a limited liability company organized under the laws of
Delaware with its principal place of business in Colorado.

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ANSWER: Full Spectrum admits that GCX is a Delaware limited liability company. Full

Spectrum lacks knowledge regarding the truth or falsity of the remaining allegations in

Paragraph 10 of the FAC and, therefore, denies the same.

11. Defendant Full Spectrum Nutrition d/b/a Global Cannabinoids is a corporation
organized and existing under the laws of Florida with its principal place of business in
Colorado.

ANSWER: Full Spectrum admits that it is a limited liability company organized under the

laws of Florida. Full Spectrum denies that its principal place of business is in Colorado. Full

Spectrum denies the remaining allegations in Paragraph 11 of the FAC and states that it

mischaracterizes Full Spectrum’s relationship with Global Cannabinoids.

12. Defendant Lewis is located in, and is a citizen of, the State of Colorado.
Defendant Lewis is the vice president of sales and head of global sales for GCX.

ANSWER: Full Spectrum lacks knowledge regarding the truth or falsity of the allegations in

Paragraph 12 of the FAC and, therefore, denies the same.

Jurisdiction and Venue

13. This court has original jurisdiction over Cannoid's trademark claims under 28
U.S.C. §§ 1331 and 1338(a) because they arise under the federal laws relating to
trademarks.

ANSWER: Paragraph 13 of the FAC sets forth legal conclusions to which no response is

required. To the extent a response is deemed required, Full Spectrum admits that this Court has

jurisdiction. Full Spectrum denies any allegations in Paragraph 13 not specifically admitted.

14. This Court also has supplemental jurisdiction over Cannoid’s state-law claims
under 28 U.S.C. § 1367 because they are so related to claims in the action over which the
court has original, federal-question jurisdiction that they form part of the same case or
controversy under Article III of the Federal Constitution.

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ANSWER: Paragraph 14 of the FAC sets forth legal conclusions to which no response is

required. To the extent a response is deemed required, Full Spectrum admits that this Court has

jurisdiction. Full Spectrum denies any allegations in Paragraph 14 not specifically admitted.

15. This Court has personal jurisdiction over Defendants because the companies
reside and regularly transact business in Colorado. In addition, upon information and
belief, all of the companies’ members reside in Colorado as well. This Court also has
personal jurisdiction over Defendant Lewis because he is a citizen of and resides in
Colorado.

ANSWER: Full Spectrum lacks knowledge about Defendant Lewis’ citizenship or residency,

and therefore denies the same. Full Spectrum admits that it regularly conducts business in

Colorado. Full Spectrum denies the remaining allegations in Paragraph 15 of the FAC, but does

not dispute personal jurisdiction.

16. Venue is proper in this judicial district because Defendants reside in Colorado.

ANSWER: Full Spectrum lacks knowledge about Defendant GXC or Mr. Lewis’ residency, and

therefore denies the same. Full Spectrum denies that it is a resident of Colorado but does not

dispute that venue is proper.

Factual Background

17. Plaintiff Arnold is the owner of U.S. Trademark Registration Nos. 5057965 (the
Entourage Design Mark) and 5343774 (the “Entourage Word Mark”) for the marks
ENTOURAGE HEMP E and ENTOURAGE HEMP and Cannoid is the exclusive
licensee of the Entourage Marks.

ANSWER: Full Spectrum admits that the referenced trademarks are registered in Plaintiff

Arnold’s name. Full Spectrum lacks knowledge regarding the truth or falsity of the remaining

allegations in Paragraph 17 of the FAC and therefore denies the same.

18. Cannoid and GCX are direct competitors in the business of selling hemp related
products. GCX’s predecessor, Entourage Nutritional, used marks incorporating the term
“ENTOURAGE” including ENTOURAGE NUTRITIONAL DISTRIBUTORS

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(collectively the “Infringing Marks”) in connection with the sale of hemp related
products. A comparison of the competing design marks is shown below:

ANSWER: Full Spectrum lacks knowledge regarding the truth or falsity of the allegations in

Paragraph 18 of the FAC and therefore denies the same.

19. After repeated unsuccessful attempts to obtain Entourage Nutritional’s agreement
to cease infringing, Plaintiffs filed suit in the District of Colorado on November 21,
2016 (the “Previous Litigation”). The Complaint contained five counts, alleging
trademark infringement, unfair competition, counterfeiting and related state law claims.

ANSWER: Full Spectrum lacks knowledge about the specific details of Plaintiffs’ prior

litigation history and is without actual knowledge sufficient to form a belief as to why Plaintiffs

brought the Previous Litigation, but admits public court records show that Plaintiffs filed a

Complaint against Entourage Nutritional Distributors on November 21, 2016. Full Spectrum

states that the Complaint filed by Plaintiffs on November 21, 2016 speaks for itself. Full

Spectrum denies any allegations in Paragraph 19 of the FAC not specifically admitted.

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20. Entourage Nutritional (now GCX) agreed to settle the Previous Litigation as set
forth in a settlement agreement dated October 5, 2017 (the “Settlement Agreement”).

ANSWER: Full Spectrum states that the Settlement Agreement speaks for itself. To the

extent further response is deemed necessary, Full Spectrum states that it is without actual

knowledge sufficient to form a belief as to the actions or non-actions of GCX or its officers and

therefore denies the same. Full Spectrum denies any allegations in Paragraph 20 of the FAC not

specifically admitted.

21. The Settlement Agreement set March 22, 2018 as the deadline to stop all use of
the Infringing Marks in print or online, including all social media sites (the “Deadline”).

ANSWER: Full Spectrum states that the Settlement Agreement speaks for itself. To the

extent further response is deemed necessary, Full Spectrum states that it is without actual

knowledge sufficient to form a belief as to the allegations in Paragraph 21 of the FAC and

therefore denies the same.

22. The Settlement Agreement mandated that www.entouragenutritional.com and any
other website domains that include the term “Entourage” or any variation of the term
“Entourage” be made inactive (collectively the “Entourage Websites”). GCX agreed to
the explicit requirement that the Entourage Websites would not redirect to any other site,
but rather, that the Entourage Websites would be displayed as inactive (e.g. see Exhibit B
to the Settlement Agreement, which is attached in connection with Exhibit D). GCX also
agreed that it would cease all use of the Infringing Marks online, including on Instagram,
Facebook, LinkedIn, Twitter and YouTube (individually, the “Entourage Instagram
Account”, the “Entourage Facebook Account”, etc., and collectively the “Entourage
Social Media Accounts”).

ANSWER: Full Spectrum states that the Settlement Agreement speaks for itself. To the

extent further response is deemed necessary, Full Spectrum states that it is without actual

knowledge sufficient to form a belief as to the allegations in Paragraph 22 of the FAC and

therefore denies the same.

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23. Lewis personally signed a separate non-circumvention provision of the Settlement
Agreement prohibiting him from assisting others from circumventing the restrictions on
the use of the term “Entourage” set out in Section 1 of the Settlement Agreement.

ANSWER: Full Spectrum states that the Settlement Agreement speaks for itself. To the

extent further response is deemed necessary, Full Spectrum states that it is without actual

knowledge sufficient to form a belief as to the actions or non-actions of GCX or its officers and

therefore denies the same. Full Spectrum denies any allegations in Paragraph 23 of the FAC not

specifically admitted.

24. As early as March 6, 2018 counsel for GCX, Henry Baskerville, reached out to
counsel for Plaintiffs. During a teleconference with Plaintiffs’ counsel, Mr. Baskerville
requested that Plaintiffs allow GCX to continue to use the name Entourage for a fee.
Plaintiffs refused Mr. Baskerville’s request, and requested Defendants’ strict compliance
with the Settlement Agreement (see email from Jeffery Kass to Henry Baskerville dated
March 19, 2018, attached as Exhibit E).

ANSWER: Full Spectrum states that Exhibit E to the FAC speaks for itself. To the extent

further response is deemed necessary, Full Spectrum states that it is without actual knowledge

sufficient to form a belief as to the statements or non-statements of Plaintiffs’ or GCX’s counsel

and therefore denies the same. Full Spectrum denies any allegations in Paragraph 24 of the FAC

not specifically admitted.

25. Despite the clear message that none of the parties to the Settlement Agreement
could deviate from the terms expressly negotiated, and despite the fact that Defendants
had more than five and a half months to comply with the terms of the Settlement
Agreement, Defendants continue to use the Infringing Marks in numerous ways.

ANSWER: Full Spectrum states that the Settlement Agreement speaks for itself. To the

extent further response is deemed necessary, Full Spectrum states that it is without actual

knowledge sufficient to form a belief as to the terms or circumstances surrounding the Settlement

Agreement and therefore denies the same. Full Spectrum denies that it was a party to the

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Settlement Agreement or is unlawfully infringing on any valid federal trademark registrations.

Full Spectrum denies any allegations in Paragraph 25 of the FAC not specifically admitted.

26. For example, Lewis is in blatant breach of the Settlement Agreement and willfully
infringed the Entourage Marks in correspondence with suppliers and customers after the
Deadline. Lewis and Merritt continued to use emails after the Deadline that bore the
domain @entouragenutritional.com (see email from John Merritt attached as Exhibit H).
Moreover, Lewis and Merritt’s emails included digital signatures that bear the Infringing
Marks.

In addition to this flagrant breach of the Settlement Agreement, Lewis, Merritt and other
individuals at GCX continued to represent themselves as employees of Entourage, and
continued soliciting sales using the Infringing Marks. The use of the Entourage
Nutritional email addresses and Infringing Marks in digital signatures was done in bad
faith to mislead Entourage Nutritional’s former customers and to generate as much
business as possible before informing the public of the name change. It is clear from their
actions that Defendants Lewis and GCX never planned to abide by the terms of the
Settlement Agreement, and always intended to continue using the Infringing Marks.

ANSWER: Full Spectrum states that it is without actual knowledge sufficient to form a belief

as to the actions or non-actions of GCX or its officers and therefore denies the same. Full

Spectrum denies the remaining allegations in Paragraph 26 of the FAC.

27. Contrary to the requirements in Section 1 that all internet traffic to the Entourage
Nutritional Website receive the message that the web page cannot be displayed, the
Entourage Nutritional websites are still active. All internet traffic to
www.entouragenutritional.com is directed to Global Cannabinoids’ website,
www.globalcannabinoids.io. The website www.globalcannabinoids.io was created on
February 28, 2018, and updated on March, [sic] 21, 2018, one day before the Deadline.

ANSWER: Full Spectrum states that the Settlement Agreement speaks for itself. To the

extent further response is deemed necessary, Full Spectrum admits that the website

www.globalcannabinoids.io was created on February 28, 2018 and states that it is without actual

knowledge sufficient to form a belief as to whether the website was updated on March 21, 2018.

Full Spectrum admits that when a person goes to the website www.entouragenutritional.com, he

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or she is redirected to www.globalcannabinoids.io, but denies that Full Spectrum owns the

www.entouragenutritional.com website. Full Spectrum denies any allegations in Paragraph 27 of

the FAC not specifically admitted.

28. Plaintiffs’ counsel confronted Mr. Baskerville concerning the fact that the
Entourage Websites forward to Global Cannabinoids website shortly after the deadline.
Incredibly, Mr. Baskerville alleged that Global Cannabinoids is a wholly unrelated
third party which took ownership of the domain name and trademarks from another
company which allegedly took them in exchange for helping GCX comply with the
Settlement Agreement.

ANSWER: Full Spectrum states that it is without actual knowledge sufficient to form a belief

as to the statements or non-statements of Plaintiffs’ or GCX’s counsel and therefore denies the

same. Full Spectrum denies any allegations in Paragraph 28 of the FAC not specifically

admitted.

29. Despite Mr. Baskerville’s allegations that Global Cannabinoids is an unrelated
third party, Plaintiffs subpoenaed records from the domain name registrant, Domains by
Proxy, LLC, and discovered that Merritt owns the Global Cannabinoids website, and that
Global Cannabinoids is a subsidiary or d/b/a of Merritt’s company Full Spectrum
Nutrition, LLC (see Domains by Proxy records attached as Exhibit I; see also 2018
Florida LLC Annual Report for Full Spectrum Nutrition, LLC, Exhibit J). Lewis for GCX
and Merritt for Global Cannabinoids have been working together since before the
Deadline to circumvent the terms of the Settlement Agreement.

ANSWER: Full Spectrum states that it is without actual knowledge sufficient to form a belief

as to the statements or non-statements of Plaintiffs’ or GCX’s counsel and therefore denies the

same. Full Spectrum lacks knowledge about what Plaintiffs supposedly have discovered, and

therefore denies the same. Full Spectrum states that Exhibits I and J to the FAC speak for

themselves. To the extent further response is deemed necessary, Full Spectrum states that the

Global Cannabinoids website is registered in Mr. Merritt’s name but is owned by Full Spectrum.

Full Spectrum disagrees with Plaintiff’s characterization of Global Cannabinoids as a subsidiary

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or d/b/a of Full Spectrum Nutrition, LLC. Full Spectrum denies the remaining allegations in

Paragraph 29 of the FAC as well as any allegations in Paragraph 29 not specifically admitted.

30. Lewis and GCX clearly colluded with Merritt and Global Cannabinoids to
redirect traffic from the domain name www.entouragenutritional.com to Global
Cannabinoids’ website.

ANSWER: Full Spectrum denies the allegations in Paragraph 30 of the FAC.

31. All of the Entourage Social Media Accounts, with the exception of the Entourage
Instagram Account, forward visitors to Global Cannabinoids’ social media accounts.
Each of these social media accounts still uses the Infringing Marks in many of the same
manners as used by GCX’s predecessor, Entourage Nutritional.

ANSWER: Full Spectrum denies the allegations in Paragraph 31 of the FAC.

32. Indeed, the Entourage Facebook Account is a prime example of Global
Cannabinoids’ use of the Infringing Marks and wholesale assimilation of the Entourage
Social Media Accounts. A thorough analysis of the 45 review [sic] left on Global
Cannabinoid’s Facebook account reveals that almost all of the consumers were actually
leaving feedback concerning GCX’s predecessor, Entourage Nutritional Distributors.
Indeed, Global Cannabinoids’ [sic] Facebook account uses the Infringing Marks in
dozens of posts, as if somehow Global Cannabinoids and GCX’s predecessor, Entourage
Nutritional, are the same company.

ANSWER: Full Spectrum states that the Global Cannabinoids Facebook account speaks for

itself. To the extent further response is deemed necessary, Full Spectrum denies the allegations

in Paragraph 32 of the FAC.

33. Global Cannabinoids’ LinkedIn account uses the mark Entourage Nutritional
Distributors in the path to forward visitors to the Global Cannabinoids’ LinkedIn page
(screenshots attached hereto as Exhibit F).

ANSWER: Full Spectrum states that the Global Cannabinoids LinkedIn Account speaks for

itself. To the extent further response is deemed necessary, Full Spectrum denies the allegations

in Paragraph 33 of the FAC.

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34. Global Cannabinoids’ Twitter Account still includes dozens of advertisements
that utilize the Infringing Marks and tweets that utilize the infringing
hashtag #EntourageNutritional (see e.g. Exhibit F).

ANSWER: Full Spectrum states that the Global Cannabinoids Twitter Account speaks for

itself. To the extent further response is deemed necessary, Full Spectrum denies the allegations

in Paragraph 34 of the FAC.

35. A search for Global Cannabinoids’ on Google Maps reveals that Global
Cannabinoids is located at Entourage Nutritional Distributors’ (now GCX’s) former
mailing address, 828 Wooten Rd., Colorado Springs, CO 80915 (see screenshots included
with Exhibit K). Moreover, most of the 17 reviews on Google associated with Global
Cannabinoids are actually reviews for Entourage Nutritional Distributors, and still
explicitly mention Entourage Nutritional Distributors, not Global Cannabinoids (see
Exhibit K).

ANSWER: Full Spectrum denies the allegations in Paragraph 35 of the FAC.

36. Not only is the Entourage YouTube account still active, but Global Cannabinoids’
YouTube account also includes numerous videos that include the Infringing Marks. In
addition to several videos posted by third party providers that should have been removed
by the Deadline, there are almost a dozen instances where videos posted on the Global
Cannabinoids’ YouTube channel use the Infringing Marks, or direct viewers to the
website www.entouragenutritional.com (see e.g. Exhibit F). Indeed, Global
Cannabinoids published a video that utilizes the Infringing Marks as recently as March
17, 2018, only five days before the Deadline. It still remains on the account.

ANSWER: Full Spectrum states that the Global Cannabinoids Youtube Account speaks for

itself. To the extent further response is deemed necessary, Full Spectrum denies the allegations

in Paragraph 36 of the FAC.

37. It appears that Defendants have done nothing to remove the content and the
Infringing Marks from the Entourage Social Media Accounts. Rather, Global
Cannabinoids has deliberately republished social media advertising that includes the
Infringing Marks.

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ANSWER: Full Spectrum states that it is without actual knowledge sufficient to form a belief

as to the intent or actions or non-actions of GCX or its officers and therefore denies the same.

Full Spectrum denies the remaining allegations in Paragraph 37 of the FAC.

38. Global Cannabinoids also has taken over many traditional methods of
communication from Entourage Nutritional without altering the use of the Infringing
Marks. In fact, the voicemail greeting for the telephone number associated with Global
Cannabinoids was recorded by Lewis and suggested after the Deadline that the caller has
reached Entourage Nutritional Distributors (see transcript from Global Cannabinoids’
voice mail, attached hereto as Exhibit G).

ANSWER: Full Spectrum denies the allegations in Paragraph 38 of the FAC. Full Spectrum

states that it is without actual knowledge sufficient to form a belief as to the circumstances or

content of the voicemail greeting referenced by Plaintiff and therefore denies the same.

39. The facts herein make it very clear that Lewis and GCX never intended to abide
by the Settlement Agreement. On the contrary, Lewis has been subverting the Settlement
Agreement and robbing Plaintiffs of the bargain that they struck in exchange for
withdrawing the first lawsuit against Entourage Nutritional (now GCX).

ANSWER: Full Spectrum states that it is without actual knowledge sufficient to form a belief

as to the intent or actions or non-actions of GCX or its officers and therefore denies the same.

Full Spectrum denies any allegations in Paragraph 39 of the FAC not specifically admitted.

COUNT ONE
(Trademark Infringement pursuant to 15 U.S.C. §1114 - Against
Defendant GCX and Global Cannabinoids)

40. Plaintiffs restate the allegations contained in the paragraphs above.

ANSWER: Full Spectrum restates its responses to the allegations to Paragraphs 1

through 39 of the FAC.

41. Defendants GCX and Global Cannabinoids use a mark confusingly similar to the
Entourage Trademarks in commerce in connection with the sale, offering for sale,
distribution, or advertising of goods in connection with which such use is likely to cause
confusion, to cause mistake, and to deceive the public. GCX has used the Infringing
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Marks in communications with suppliers and consumers. Global Cannabinoids operates
numerous social media accounts that it received from GCX without removing any of the
previous uses of the Infringing Marks complained of in the Previous Litigation and
addressed in the Settlement Agreement. By using the Infringing Marks Defendants GCX
and Global Cannabinoids have duped the public into believing that their goods emanate
from the same source or that its goods are affiliated with, sponsored by, or somehow
connected to Cannoid and its owner, Arnold.

ANSWER: Full Spectrum states that the Settlement Agreement speaks for itself. To the

extent further response is deemed necessary, Full Spectrum denies that it was a party to the

Settlement Agreement or is unlawfully infringing on any valid federal trademark registrations.

Full Spectrum states that it is without actual knowledge sufficient to form a belief as to the

actions or non-actions of GCX or its officers and therefore denies the same. Full Spectrum

denies the remaining allegations in Paragraph 41 of the FAC.

42. Defendants GCX and Global Cannabinoids are liable for trademark infringement.

ANSWER: Full Spectrum denies the allegations in Paragraph 42 of the FAC.

43. Defendants GCX and Global Cannabinoids’ infringement is willful, especially
given that there was a settlement to cover these items.

ANSWER: Full Spectrum states that the Settlement Agreement speaks for itself. To the

extent further response is deemed necessary, Full Spectrum denies the allegations in Paragraph

43 of the FAC.

44. Plaintiffs have been damaged by GCX’s and Global Cannabinoids’ infringement.

ANSWER: Full Spectrum denies the allegations in Paragraph 44 of the FAC.

45. As a result of Defendants’ wrongful conduct, this is a clear “exceptional case”
under the Lanham Act.

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ANSWER: Paragraph 45 of the FAC sets forth legal conclusions to which no response is

required. To the extent a response is deemed required, Full Spectrum denies the allegations in

Paragraph 45.

COUNT TWO
(Breach of Contract – Against GCX and Lewis)

46. Plaintiffs restate the allegations contained in the paragraphs above.

ANSWER: Full Spectrum restates its responses to the allegations to Paragraphs 1

through 45 of the FAC.

47. With respect to the Settlement Agreement, Plaintiffs have performed all the
conditions, covenants and promises on their part to be performed.

ANSWER: The allegations in Paragraph 47 of the FAC do not pertain to Full Spectrum;

therefore, no response is required. To the extent a response is required, Full Spectrum states that

it is without actual knowledge sufficient to form a belief as to the actions or non-actions of

Plaintiffs and therefore denies the same. Full Spectrum denies any allegations in Paragraph 47 of

the FAC not specifically admitted.

48. Under the Settlement Agreement, GCX was required to cease all use of the
Infringing Marks no later than March 22, 2018. GCX is only permitted to use the term
“Entourage” in a non-trademark or branding manner, in connection with the description
of a certain “Entourage Effect”. Moreover, the Settlement Agreement mandated that the
Entourage Websites be made inactive and that the Entourage Websites would not be used
for any purpose including redirecting a user to another site.

ANSWER: The allegations in Paragraph 48 of the FAC do not pertain to Full Spectrum;

therefore, no response is required. To the extent a response is required, Full Spectrum states that

the Settlement Agreement speaks for itself. Full Spectrum denies any allegations in Paragraph

48 of the FAC not specifically admitted.

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49. GCX has breached the Settlement Agreement by continuing to use the Infringing
Marks. GCX has further breached the Settlement Agreement by transferring the
Infringing Marks, the Entourage Social Media Accounts and
www.entouragenutritional.com such that they suspiciously ended up in the hands of
Global Cannabinoids.

ANSWER: The allegations in Paragraph 49 of the FAC do not pertain to Full Spectrum;

therefore, no response is required. To the extent a response is required, Full Spectrum states that

it is without actual knowledge sufficient to form a belief as to the actions or non-actions of GCX

or its officers and therefore denies the same. Full Spectrum denies any allegations in Paragraph

49 of the FAC not specifically admitted.

50. Defendant Lewis breached the non-circumvention provision of the Settlement
Agreement that he signed in his individual capacity by transferring the infringing marks,
the Entourage Social Media Accounts, and the domain name
www.enotouragenutritional.com to Global Cannabinoids. Lewis also breached the non-
circumvention provision by utilizing the Infringing Marks in digital signatures to emails,
and by representing himself as an employee of Entourage Nutritional and soliciting sales
using the Infringing Marks after the Deadline.

ANSWER: The allegations in Paragraph 50 of the FAC do not pertain to Full Spectrum;

therefore, no response is required. To the extent a response is required, Full Spectrum states that

the Settlement Agreement speaks for itself and that it is without actual knowledge sufficient to

form a belief as to the actions or non-actions of GCX or its officers and therefore denies the

same. Full Spectrum denies any allegations in Paragraph 50 of the FAC not specifically

admitted.

51. As a direct and proximate result of the conduct of Defendants GCX and Lewis,
Plaintiffs have suffered a loss, the value of which is presently unknown.

ANSWER: The allegations in Paragraph 51 of the FAC do not pertain to Full Spectrum;

therefore, no response is required. To the extent a response is required, Full Spectrum states that

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it is without actual knowledge sufficient to form a belief as to the actions or non-actions of GCX

or its officers and therefore denies the same. Full Spectrum denies any allegations in Paragraph

51 of the FAC not specifically admitted.

COUNT THREE
(Breach of the Implied Covenant of Good Faith and Fair Dealing
under Colorado Law – against GCX and Lewis)

52. Plaintiffs restate the allegations contained in the paragraphs above.

ANSWER: Full Spectrum restates its responses to the allegations to Paragraphs 1 through 51

of the FAC.

53. The Settlement Agreement contained an implied-in-law covenant of good faith
and fair dealing that neither party would do anything to injure the right of the other party
to enjoy the benefits of the contract.

ANSWER: The allegations in Paragraph 53 of the FAC do not pertain to Full Spectrum and

sets forth legal conclusions to which no response is required. To the extent a response is

required, Full Spectrum states that the Settlement Agreement speaks for itself. Full Spectrum

denies any allegations in Paragraph 53 of the FAC not specifically admitted.

54. In, continuing to utilize the Infringing Marks, transferring the Entourage Social
Media Accounts such that it ended up in the hands of Global Cannabinoids, and by
transferring the domain name www.entouragenutritional.com with the full knowledge
that Global Cannabinoids would redirect internet traffic from
www.entouragenutritional.com to www.globalcannabinoids.io, Defendants GCX and
Lewis breached this covenant of good faith and fair dealing.

ANSWER: The allegations in Paragraph 54 of the FAC do not pertain to Full Spectrum;

therefore, no response is required. To the extent a response is required, Full Spectrum states that

it is without actual knowledge sufficient to form a belief as to the actions or non-actions of GCX

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or its officers and therefore denies the same. Full Spectrum denies any allegations in Paragraph

54 of the FAC not specifically admitted.

55. As a direct and proximate result of the conduct of Defendants GCX and Lewis,
Plaintiffs have suffered a loss, the value of which is presently unknown.

ANSWER: The allegations in Paragraph 55 of the FAC do not pertain to Full Spectrum;

therefore, no response is required. To the extent a response is required, Full Spectrum states that

it is without actual knowledge sufficient to form a belief as to the actions or non-actions of GCX

or its officers and therefore denies the same. Full Spectrum denies any allegations in Paragraph

55 of the FAC not specifically admitted.

COUNT FOUR
(Tortious Interference with a Contractual Relationship
under Colorado Law by Global Cannabinoids)

56. Plaintiffs restate the allegations contained in the paragraphs above.

ANSWER: Full Spectrum restates its responses to the allegations to Paragraphs 1 through 56

of the FAC.

57. Plaintiffs settled the Previous Litigation in exchange for Defendant GCX’s
agreement to stop using the Infringing Marks as described in Section 1 of the Settlement
Agreement.

ANSWER: Full Spectrum states that the Settlement Agreement speaks for itself. To the

extent further response is deemed necessary, Full Spectrum states it was not a party to the

Settlement Agreement and is without actual knowledge sufficient to form a belief as to the

allegations in Paragraph 57 of the FAC and therefore denies the same. Full Spectrum denies any

allegations in Paragraph 57 of the FAC not specifically admitted.

58. Defendant Global Cannabinoids was at all times aware of the existence and terms
of Plaintiffs’ Settlement Agreement with GCX.

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ANSWER: Full Spectrum denies the allegations in Paragraph 58 of the FAC.

59. Merritt and other individuals at Global Cannabinoids coordinated with Lewis and
other individuals at GCX for the purpose of depriving Plaintiffs of the benefit of the
bargain struck in the Settlement Agreement.

ANSWER: Full Spectrum denies the allegations in Paragraph 59 of the FAC.

60. GCX and Lewis did, in fact, breach the Settlement Agreement with Plaintiff, by
continuing to use the Infringing Marks and by transferring the Infringing Marks,
infringing Entourage Social Media Accounts and domain name such that they ended up
in the hands of Global Cannabinoids, and Global Cannabinoids continues to use the
Infringing Marks in the manner described above.

ANSWER: Full Spectrum states that it is without actual knowledge sufficient to form a belief

as to the actions or non-actions of GCX or its officers and therefore denies the same. Full

Spectrum denies the remaining allegations in Paragraph 60 of the FAC.

61. As a direct and proximate result of these actions, Defendants have suffered actual
damages.

ANSWER: Full Spectrum denies the allegations in Paragraph 61 of the FAC.

COUNT FIVE
(Civil Conspiracy under Colorado law by Lewis and Global Cannabinoids)

62. Plaintiffs restate the allegations contained in the paragraphs above.

ANSWER: Full Spectrum restates its responses to the allegations to Paragraphs 1 through 61

of the FAC.

63. Defendant Lewis conspired with Merritt on behalf of Global Cannabinoids for
there to be a willful and malicious continued use of the Infringing Marks beyond the
Deadline, and to cause GCX to breach and/or avoid its obligations under the Settlement
Agreement.

ANSWER: Full Spectrum denies the allegations in Paragraph 63 of the FAC.

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64. Upon information and belief, Lewis and Global Cannabinoids came to an
understanding as to the object of the conspiracy.

ANSWER: Full Spectrum denies the allegations in Paragraph 64 of the FAC.

65. As evidenced by the continued use of the Infringing Marks and the redirection of
all social media and internet traffic from www.entouragenutritional.com to Global
Cannabinoids’ website, Lewis and Merritt on behalf of Global Cannabinoids committed
an unlawful overt act in furtherance of the conspiracy and there was actual damage to the
Plaintiffs as a result of the conspiracy.

ANSWER: Full Spectrum denies the allegations in Paragraph 65 of the FAC.

66. Plaintiffs have been damaged by the actions of Defendants Lewis and Merritt on
behalf of Global Cannabinoids. Lewis and Merritt’s willful and wanton actions in causing
damage to Plaintiffs were fraudulent, deceitful, and malicious.

ANSWER: Full Spectrum denies the allegations in Paragraph 66 of the FAC.

67. Compensatory damages will not suffice to deter others from engaging in similar
conduct in the future. Accordingly, the actions of Defendants Lewis and Merritt on behalf
of Global Cannabinoids justify an award of punitive damages as well as compensatory
damages.

ANSWER: Paragraph 67 of the FAC sets forth legal conclusions to which no response is

required. To the extent a response is deemed required, Full Spectrum denies the allegations in

Paragraph 67 and states that punitive damages may not be included in the initial claim for relief

under Colorado law. See C.R.S. 13-21-102(1.5).

[The FAC does not contain Paragraph numbers 68-70, therefore no response is required.]

COUNT SIX
(Federal False Advertising Pursuant to 15 U.S.C. 1125(a) by Global Cannabinoids)

71. Plaintiffs restate the allegations contained in the paragraphs above.

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ANSWER: Full Spectrum restates its responses to the allegations to Paragraphs 1 through 70

of the FAC.

72. Global Cannabinoids has disseminated advertising materials which are untrue
and/or misleading, and have used a false description of their products in violation of
Section 43(a) of the Lanham Act, 15 U.S.C. §1125(a).

ANSWER: Paragraph 72 of the FAC sets forth legal conclusions to which no response is

required. To the extent a response is deemed required, Full Spectrum denies the allegations in

Paragraph 72.

73. Global Cannabinoids social media accounts include dozens of posts and reviews
that utilize the Infringing Marks and create a false impression that Global Cannabinoids
is related to GCX’s predecessor, Entourage Nutritional. Global Cannabinoids, according
to GCX’s lawyer, is not related to Entourage Nutritional.

ANSWER: Full Spectrum states that it is without actual knowledge sufficient to form a belief

as to the statements or non-statements of Plaintiffs’ or GCX’s counsel and therefore denies the

same, but states that Global Cannabinoids is not related to Entourage Nutritional. Full Spectrum

denies the remaining allegations in Paragraph 73 of the FAC.

74. Global Cannabinoids’ statements are false statements of fact about their products
which misrepresents the nature of their products.

ANSWER: Full Spectrum denies the allegations in Paragraph 74 of the FAC.

75. Because of Global Cannabinoids’ false statements, consumers are likely to be
deceived into believing that Global Cannabinoids is affiliated with Entourage Nutritional.

ANSWER: Full Spectrum denies the allegations in Paragraph 75 of the FAC.

76. Plaintiffs are harmed by Global Cannabinoids’ false statements.

ANSWER: Full Spectrum denies the allegations in Paragraph 76 of the FAC.

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77. Global Cannabinoids’ acts complained of herein have been committed willfully
and with knowledge that such conduct falsely describes itself and its products as
originating from or related to Entourage Nutritional, with the intent to cause confusion,
and mistake, or to deceive the public.

ANSWER: Full Spectrum denies the allegations in Paragraph 77 of the FAC.

78. Global Cannabinoids threatens to continue the conduct complained of herein, and
unless enjoined, will continue such conduct causing irreparable harm to Plaintiffs for
which Plaintiffs have no adequate remedy at law. Plaintiffs have also suffered damages
for this conduct in an amount yet to be determined, and/or in the form of disgorgement of
Global Cannabinoids’ profits.

ANSWER: Paragraph 78 of the FAC sets forth legal conclusions to which no response is

required. To the extent a response is deemed required, Full Spectrum denies the allegations in

Paragraph 78.

79. As a direct and proximate result of Global Cannabinoids’ conduct, Plaintiffs are
entitled to damages and a permanent injunction enjoining and restraining Global
Cannabinoids and its respective agents and assigns from engaging in the above
mentioned acts.

ANSWER: Paragraph 79 of the FAC sets forth legal conclusions to which no response is

required. To the extent a response is deemed required, Full Spectrum denies the allegations in

Paragraph 79.

PRAYER FOR RELIEF

Paragraphs (A) through (J) of the FAC state Plaintiffs’ prayer for relief, to which no

response is required. However, to the extent a response is deemed required, Full Spectrum

denies each such allegation. Full Spectrum further denies that Plaintiffs are entitled to any of the

relief requested in paragraphs (A) through (J).

AFFIRMATIVE DEFENSES

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Defendant Full Spectrum denies each and every averment in the FAC not specifically and

unequivocally admitted above.

1. The FAC fails to state a claim upon which relief may be granted.

2. Plaintiffs’ fail to state a claim for a violation of the Lanham Act, 15 U.S.C. §

1114.

3. Plaintiffs’ claims are barred, in whole or in part, by waiver.

4. Plaintiffs’ claims are barred, in whole or in part, by estoppel.

5. Plaintiffs’ claims are barred, in whole or in part, by laches.

6. Plaintiffs’ claims are barred by the doctrine of unclean hands.

7. Plaintiffs have failed to mitigate their claimed damages, if any.

8. Plaintiffs’ claimed damages, if any, were caused by their own acts or omissions.

9. Plaintiffs’ claimed damages, if any, were caused by third parties over whom Full

Spectrum has no control.

10. Plaintiffs’ claims are barred, in whole or in part, on the basis that Plaintiff

Arnold’s trademarks are merely descriptive and not entitled to protection.

11. Plaintiffs’ claims are barred, in whole or in part, on the basis that Full Spectrum’s

alleged use of any mark in commerce has not, does not, and will not cause a likelihood of

confusion about the source of any goods.

12. Plaintiffs’ claims are barred, in whole or in part, on the basis that Full Spectrum

have not engaged in any activities that constitute infringement of any valid and enforceable

trademarks owned by Plaintiffs.

13. Plaintiffs’ claims are barred, in whole or in part, by the doctrine of Fair Use.

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14. Plaintiffs’ claims are barred, in whole or in part, on the basis that any use of the

term “entourage” was good-faith, non-trademark, descriptive, or functional use.

15. Plaintiffs’ claims are barred, in whole or in part, by the doctrine of trademark

misuse.

16. Plaintiffs’ claims are barred, in whole or in part, because of fraud on the U.S.

Patent and Trademark Office.

Defendant Full Spectrum reserves the right to amend its Answer to the FAC and to assert

any additional affirmative defenses as are indicated by investigation and discovery.

WHEREFORE, Defendant Full Spectrum Nutrition, LLC respectfully requests this Court

enter judgment in its favor, dismissing Plaintiffs’ claims with prejudice and awarding Full

Spectrum reasonable attorney fees and costs, and for such other and further relief as this Court

deems just.

COUNTERCLAIMS

Defendant and Counterclaim Plaintiff Full Spectrum Nutrition, LLC (“Full Spectrum”)

alleges and states for its counterclaims against Cannoid, LLC and William Arnold (collectively,

“Plaintiffs” or “Counterclaim Defendants”) the following:

Nature of the Action

1. Defendant and Counterclaim Plaintiff Full Spectrum Nutrition, LLC seeks

cancellation under 15 U.S.C. §§ 1064 and 1119 of federally registered trademarks and a

declaration of non-infringement.

2. Plaintiff and Counterclaim Defendant William Arnold is the record owner of two

federally registered trademarks issued by the United States Patent and Trademark Office

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(“USPTO”), namely, U.S. Registration No. 5,057,965 for a design mark for ENTOURAGE

HEMP E and U.S. Registration No. 5343774 for the word mark ENTOURAGE HEMP

(collectively the “Trademark Registrations”).

3. One or both of the Counterclaim Defendants claim ownership of the trademark

registrations for the design mark “ENTOURAGE HEMP E” and word mark “ENTOURAGE

HEMP.”

4. The Trademark Registrations should be cancelled because the term “entourage”

refers to the entourage effect of a marijuana plant and is commonly used to describe hemp

products that contain the full spectrum profile of the marijuana plant that can enable the

entourage effect. Therefore, the term “entourage” is merely a descriptive term that cannot be

used to the exclusion of others.

5. The Trademark Registrations should also be cancelled because they were obtained

fraudulently and because Plaintiffs are using the mark for an unlawful purpose in commerce in

violation of 21 USC § 841(a)(1).

The Parties

6. Full Spectrum is a corporation organized and existing under the laws of Florida

with its principal place of business in Medellin, Columbia.

7. Upon information and belief, Cannoid, LLC is a Colorado limited liability

company, with its principal place of business in Colorado.

8. Upon information and belief, William Arnold is an individual residing in

Colorado.

Jurisdiction and Venue

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9. This Court has jurisdiction over this matter pursuant to 15 U.S.C. §§ 1119 and

1121, and 28 U.S.C. §§ 1331 and 2202.

10. This Court has personal jurisdiction over the parties because they transact

business within this District.

11. Venue in this District is proper under 28 U.S.C. § 1391 because substantial events

giving rise to this action occurred in this District.

Facts

“Entourage” is a Generic and/or Descriptive Term

12. The term “entourage,” in relation to cannabis plants, describes a particular quality

or feature of the plant and its derivatives: the interaction between active and inactive cannabinoid

chemical agents. When working as a group—or entourage—the effect of the cannabinoids

magnifies the therapeutic benefits of the plant’s individual components, so that the medicinal

impact of the whole plant is greater than the sum of its parts. This synergy is known as the

entourage effect.

13. The term “entourage” to describe this quality originated in 1998 from the

medicinal research of Dr. Shimon Ben-Shabat, which distinguished the quality of natural plant-

based marijuana products from laboratory synthesized ones. Ben-Shabat, S., et al., An entourage

effect: inactive endogenous fatty acid glycerol esters enhance 2-arachnidonoyl-glycerol

cannabinoid activity, Eur. J. Pharmacol, 1998 July 17,

https://www.ncbi.nlm.nih.gov/pubmed/9721036.

14. Since then, the term “entourage” has been widely adopted in the medicinal and

industrial hemp industry to refer to the natural quality of cannabis. For example, Plaintiffs and

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Counterclaim Defendants are even quoted in an article in Whole Foods Magazine that discusses

the entourage effect. See Sebastian Krawiec, Getting Comfortable with Phytocannabinoids,

WHOLE FOODS MAGAZINE, April 2017, at 38-42, 52 (attached as Exhibit A).

15. The term “entourage” is commonly used to describe hemp products that contain

the full spectrum profile of the marijuana plant so consumers know that the products can enable

the therapeutic benefits of the entourage effect. This description allows consumers to distinguish

entourage-inducing hemp products from products that only utilize cannabidiol (“CBD”) isolates

which lack the entourage effect.

16. An internet search of the term “entourage” in conjunction with cannabis reveals

volumes of information about the entourage effect, many of which are from sources that have no

affiliation, sponsorship or endorsement from Plaintiffs and Counterclaim Defendants. See

Exhibit B, which is a true and correct copy of the Google.com search.

17. A product search of the term “entourage hemp” on Amazon.com produced 24

results for hemp oil products from sources that have no affiliation, sponsorship or endorsement

from Plaintiffs and Counterclaim Defendants. See Exhibit C, which is a true and correct copy of

the Amazon.com search.

18. A number of third parties sort their entourage-inducing products into “entourage”

labeled categories. Examples of such use are attached hereto as Exhibit D.

19. A number of third parties use the term “entourage” in their product names or on

their product labels. Examples of such use are attached hereto as Exhibit E.

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20. A number of third parties use the term “entourage” in connection with hemp

products as part of their product description. Examples of such use are attached hereto as

Exhibit F.

21. Hemp products that contain the full spectrum profile of the marijuana plant are

also commonly referred to as being an “entourage” mixture or described as being made with

“entourage” oil or ingredients. Examples of this are attached hereto as Exhibit G.

22. Plaintiff and Counterclaim Defendant Cannoid, LLC sells hemp products under

the brand Entourage Hemp. The name Entourage Hemp was inspired by the entourage effect.

23. Third party marketing materials for Entourage Hemp state that the entourage

effect “inspired the brand name Entourage, and the full-spectrum (CBD + Terpene) blend in all

of their products makes them worthy of this name.” A true and correct copy of third party

marketing materials describing the Entourage Hemp products is attached hereto as Exhibit H.

Plaintiffs’ Fraud upon the USPTO and Unlawful Use in Commerce

24. In January 2016, Plaintiff and Counterclaim Defendant William Arnold filed

applications with the USPTO for the design mark “ENTOURAGE HEMP E” and word mark

“ENTOURAGE HEMP” for products comprised of hemp or hemp extracts.

25. During prosecution of these trademarks, the Trademark Examiner issued Office

Actions for each of the applications, requesting that Mr. Arnold submit a written statement

indicating whether the goods identified in the application comply with the Controlled

Substances Act (“CSA”), 21 U.S.C. §§801-971. A true and correct copy of the Office Actions

are attached hereto as Exhibits I and J.

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26. The Examiner also requested that Mr. Arnold provide written responses to the

following questions:

1. Do applicant’s identified goods include marijuana, cannabis,
marijuana-based, cannabis-based preparations, or marijuana-based,
cannabis-based extracts or derivatives, synthetic marijuana, or any
other illegal controlled substances?

2. Identify the source plant used in obtaining the CBD used in the goods,
e.g., from marijuana, from imported industrial hemp.

3. Are the applicant’s goods lawful pursuant to the Controlled Substances
Act?

27. The Examiner explained that registration of the applied-for marks would be

refused if the mark, as used in connection with the identified goods, was not in lawful use in

commerce.

28. In response to these Office Actions, Mr. Arnold falsely represented to the USPTO

that the marks would be lawfully used in commerce and concealed the fact the marks would be

used with goods that contain illegal controlled substances.

29. Mr. Arnold represented to the USPTO that the marks would be used in connection

with goods that do not contain illegal controlled substances. A true and correct copy Mr.

Arnold’s Office Action Responses are attached hereto as Exhibits K and L.

30. Mr. Arnold specifically represented to the USPTO that the marks would only be

used in connection with goods made from legal, imported industrial hemp.

31. Mr. Arnold specifically represented to the USPTO that the marks would only be

used in connection with goods that do not contain marijuana, marijuana derivatives, or any other

illegal controlled substances.

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32. Mr. Arnold specifically represented to the USPTO that the marks would only be

used in connection with goods that complied with U.S. law, including the CSA.

33. Reasonably relying upon the truth of Mr. Arnold’s false statements, the USPTO

approved Mr. Arnold’s applications for registration.

34. Mr. Arnold concealed and did not disclose the fact that Plaintiffs and Counter

Defendants manufacture, process, market, promote, and sell products containing extracts from

domestic hemp in violation of the CSA.

35. The CSA prohibits, among other things, manufacturing, distributing, dispensing,

or possessing certain controlled substances, including marijuana and marijuana-based

preparations.

36. CBD from domestic industrial hemp constitutes an illegal marijuana extract or

derivative under the CSA, even if the sale of such products may be legal under state law.

37. It is unlawful for companies to manufacture, process, or sell products that contain

domestic, non-imported industrial hemp extracts.

38. Plaintiffs and Counter Defendants’ website, www.entouragehemp.com (the

“Entourage Hemp Website”), states that the CBD extracts in their products come from domestic

sources. See Exhibit M.

39. Plaintiffs and Counter Defendants’ manufacture, process, and/or sell products

containing extracts derived from domestic, non-imported hemp.

40. Plaintiffs and Counter Defendants process domestic hemp.

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41. The Entourage Hemp Website states that Plaintiff and Counter Defendant

Cannoid, LLC has secured domestic hemp processing certification with a state government. See

Exhibit N.

42. Plaintiffs and Counter Defendants do not grow, cultivate, use, or market industrial

hemp for research purposes.

43. Plaintiffs and Counter Defendants are not an institution of higher education or

State department of agriculture.

44. As such, Plaintiffs and Counter Defendants do not meet the requirements to

lawfully grow, cultivate, or use industrial hemp products under the Agricultural Act of 2014 (the

“Farm Bill”).

45. Plaintiffs and Counter Defendants’ sale of products containing domestic industrial

hemp extracts violates federal law and accordingly invalidates the Trademark Registrations.

COUNT I

Cancellation of U.S. Registration Nos. 5,057,965 and 5,343,774 – Generic and/or Merely
Descriptive
(15 U.S.C. §§ 1064 and 1119)

46. Full Spectrum incorporates its answers to paragraphs 1 through 45 as set forth

herein.

47. This Court has the power to order cancellation of the Trademark Registrations and

otherwise make appropriate entries on the Federal Register with respect to the subject marks

pursuant to 15 U.S.C. §§ 1064 and 1119.

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48. One or both of the Counterclaim Defendants claim ownership of the trademark

registrations for the design mark “ENTOURAGE HEMP E” and word mark “ENTOURAGE

HEMP.”

49. The Trademark Registrations are not incontestable.

50. The Trademark Registrations should be cancelled pursuant to 15 U.S.C. §§ 1064

and 1119, because the term “entourage” is generic and/or merely descriptive and has not

acquired secondary meaning.

51. As set forth above, the term “entourage” as used by the Counterclaim Defendants

in its Trademark Registrations merely describes a particular quality, feature, function, or

characteristic of the cannabis plant and its derivatives: the interaction between active and

inactive cannabinoid chemical agents known as the entourage effect.

52. The term “Entourage” as used in the Trademarks Registrations is also generic in

that the primary significance of these registered marks to the relevant public is not to identify a

course of the goods, but to describe products that contain the full spectrum profile of the

marijuana plant and can enable the entourage effect.

53. The Trademarks Registrations do not require any exercise of the imagination to be

understood as merely describing purported qualities and characteristics of Counterclaim

Defendants’ hemp products.

54. The Counterclaim Defendants cannot claim exclusive rights to use the term

“entourage” alone or in combination with any other generic or descriptive term in connection

with hemp products.

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55. In light of the Counterclaim Defendant’s reliance on their purported rights in the

Trademarks Registrations to support their claims against Full Spectrum in this action, Full

Spectrum has been and will continue to be damaged by the continued registration of the

“ENTOURAGE HEMP E” and “ENTOURAGE HEMP” marks.

56. Accordingly, the Court should enter an order cancelling federal trademark

registration nos. 5,057,965 and 5,343,774, or requiring other rectification of the Federal

Trademark Register as it pertains to that purported registrations.

COUNT II

Cancellation of U.S. Registration Nos. 5,057,965 and 5,343,774 – Unlawful Use and/or
Fraud
(15 U.S.C. §§ 1064 and 1119)

57. Full Spectrum incorporates its answers to paragraphs 1 through 56 as set forth

herein.

58. Plaintiff and Counterclaim Defendant William Arnold filed applications with the

USPTO for the design mark “ENTOURAGE HEMP E” and word mark “ENTOURAGE

HEMP,” and has obtained registrations for these marks.

59. One or both of the Counterclaim Defendants claim ownership of the trademark

registrations for the design mark “ENTOURAGE HEMP E” and word mark “ENTOURAGE

HEMP.”

60. Trademark rights in the U.S., whether Federal or Common Law are based upon

use. Specifically, “Use in Commerce” is a prerequisite to securing and maintaining Federal

Trademark Rights. 15 U.S.C §§ 1057, 1127; 35 C.F.R. § 2.69.

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61. “Use in Commerce” sufficient to secure trademark rights must be lawful and legal

use of the mark in commerce. 15 U.S.C. § 1127.

62. Plaintiffs’ products bearing the “ENTOURAGE HEMP” marks contain a

controlled substance in violation of 21 USC § 841(a)(1).

63. Where rights in a trademark were acquired and/or maintained based on use of the

mark in violation of U.S. law, such use constitutes “Unlawful Use” of a trademark and is

grounds for cancellation pursuant to 15 U.S.C. § 1064, particularly where the registration was

fraudulently obtained on account of Plaintiffs’ knowing misrepresentation to the USPTO as to

use of the mark.

64. Plaintiff and Counterclaim Defendant William Arnold’s statements to the USPTO

were false, deceptive and misleading when made, made with the requisite intent to deceive the

USPTO and were relied upon by the USPTO in its decision to grant Plaintiffs’ trademark

applications.

65. Because the Trademark Registrations were obtained through fraud and/or because

Plaintiffs are using the Trademark Registrations for an unlawful purpose in commerce,

the Trademark Registrations should be cancelled.

66. In light of the Counterclaim Defendant’s reliance on their purported rights in the

Trademark Registrations to support their claims against Full Spectrum in this action, Full

Spectrum has been and will continue to be damaged by the continued registration of the

“ENTOURAGE HEMP E” and “ENTOURAGE HEMP” marks.

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67. Accordingly, the Court should enter an order cancelling federal trademark

Registration Nos. 5,057,965 and 5,343,774, or requiring other rectification of the Federal

Trademark Register as it pertains to that purported registrations.

COUNT III
Declaratory Relief
(28 U.S.C. §§ 2201 - 2202)

68. Full Spectrum incorporates its answers to paragraphs 1 through 67 as set forth

herein.

69. An actual and present controversy exists between Full Spectrum and

Counterclaim Defendants with respect to Full Spectrum’s ability to use the term “entourage,” as

evidenced by the instant lawsuit filed by Plaintiffs, alleging that Full Spectrum has infringed on

Plaintiffs’ trademarks, which Plaintiffs assert are valid and enforceable.

70. Full Spectrum denies Plaintiffs’ allegations of trademark infringement.

71. Full Spectrum believes that the term “entourage” is descriptive and not capable of

trademark protection, and therefore the Trademark Registrations are invalid and should be

cancelled.

72. Even if the Court were to determine that Counterclaim Defendants somehow are

entitled to protection in connection with the term “entourage,” any use of that term by Full

Spectrum nonetheless constitutes “fair use,” pursuant to 15 U.S.C. §1115.

73. Full Spectrum seeks a declaratory judgment under 28 U.S.C. §§ 2201-2202 that

Full Spectrum has not infringed on Plaintiffs’ asserted Trademark Registrations.

74. Full Spectrum seeks a declaratory judgment under 28 U.S.C. §§ 2201-2202 that

the term “entourage” is descriptive and/or generic and not entitled to trademark protection, that

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Case 1:18-cv-00925-PAB-SKC Document 52 Filed 08/31/18 USDC Colorado Page 37 of 39

the Trademark Registrations are invalid and should be cancelled, and that even if the Court were

to determine that Counterclaim Defendants somehow are entitled to protection in connection

with the term “entourage,” any use of that term by Full Spectrum nonetheless constitutes “fair

use,” pursuant to 15 U.S.C. §1115.

Prayer for Relief

WHEREFORE, Full Spectrum Nutrition, LLC requests relief as follows:

A. That Plaintiffs take nothing by their First Amended Complaint;

B. A declaration of non-infringement with respect to Plaintiffs’ asserted trademarks;

C. A declaration that the Trademark Registrations are invalid and cancellation or

non-registration of the same;

D. An award of Full Spectrum’s costs of suit, attorney’s fees, and expenses in

defending against Plaintiffs’ First Amended Complaint; and

E. Such other and further relief as this Court shall deem just and proper.

Demand for Jury Trial

Full Spectrum demands a trial by jury of all issues so triable, whether presented by

Plaintiffs’ claims against Full Spectrum, Full Spectrum’s counterclaims against Plaintiffs, or

otherwise.

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Respectfully submitted this 31st day of August, 2018.

By: /s/ William M. Ojile, Jr.
William M. Ojile, Jr.
Cindy N. Pham
Armstrong Teasdale LLP
4643 South Ulster Street, Suite 800
Denver, Colorado 80237
Telephone: (720) 200-0676
Facsimile: (720) 200-0679
bojile@armstrongteasdale.com
cpham@armstrongteasdale.com

Attorneys for Defendant Full Spectrum
Nutrition, LLC

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CERTIFICATE OF SERVICE

I hereby certify that on this 31st day of August, 2018, a true and correct copy of the

foregoing DEFENDANT FULL SPECTRUM NUTRITION, LLC’S ANSWER AND

COUNTERCLAIMS TO PLAINTIFFS’ FIRST AMENDED COMPLAINT was transmitted

to all counsel of record in this matter via the CM/ECF system, which will send email notification

of such filing, as follows:

Jeffrey H. Kass, Esq.
William W. Mauke, Esq.
LEWIS BRISBOIS BISGAARD & SMITH LLP
1700 Lincoln Street, Suite 4000
Denver, Colorado 80203
jeffrey.kass@lewisbrisbois.com
william.mauke@lewisbrisbois.com

Attorneys for Plaintiffs

Henry Baskerville, IV, Esq.
Cara F. Thornton, Esq.
Fortis Law Partners
1900 Wazee Street, Suite 300
Denver, CO 80202
hbaskerville@fortislawpartners.com
cthornton@fortislawpartners.com

Attorneys for GCX, LLC and Ryan Lewis

/s/ Alyssa R Gilliam
Alyssa R Gilliam

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