Herman Miller, Inc v. Palazzetti Imports
Herman Miller, Inc v. Palazzetti Imports
Opinion
5(&200(1'(' )25 )8//7(;7 38%/,&$7,21 +HUPDQ0LOOHU,QFY 1RV 3XUVXDQW WR 6L[WK &LUFXLW 5XOH 3DOD]]HWWL,PSRUWV (/(&7521,& &,7$7,21 )(' $SS 3 WK &LU ([SRUWV,QF )LOH 1DPH DS
LQMXQFWLRQ LW ZLOO EH IUHH WR VHHN D PRGLILFDWLRQ RI WKH 81,7('67$7(6&28572)$33($/6 LQMXQFWLRQIURPWKHGLVWULFWFRXUWDWWKDWWLPHl,ELG )257+(6,;7+&,5&8,7 8QOLNHLQ+HUHjVsRKQQ\,,3DOD]]HWWLLVDOUHDG\RSHUDWLQJ BBBBBBBBBBBBBBBBB LQ D VWDWH WKDW GRHV QRW UHFRJQL]H D SRVWPRUWHP ULJKW RI SXEOLFLW\0RUHRYHULWVSULQFLSDOSODFHRIEXVLQHVVLVLQWKDW VWDWH ,W ZRXOG EH XQMXVW WR LPSRVH 0LFKLJDQ ODZ RQ 3DOD]]HWWLjVRSHUDWLRQVLQ1HZ<RUNDQGRWKHUVWDWHVWKDWKDYH +(50$1 0,//(5 ,1& ; H[SOLFLWO\ UHIXVHG WR UHFRJQL]H D SRVWPRUWHP ULJKW RI 3ODLQWLII$SSHOODQW SXEOLFLW\7KHUHIRUHZHKROGWKDWWKHSRUWLRQRIWKHGLVWULFW &URVV$SSHOOHH FRXUWjV LQMXQFWLRQ UHODWLQJ WR +HUPDQ 0LOOHUjV ULJKW RI 1RV SXEOLFLW\FODLPVVKDOOEHPRGLILHGWRH[FOXGHWKRVHVWDWHVWKDW Y ! H[SOLFLWO\GRQRWUHFRJQL]HDSRVWPRUWHPULJKWRISXEOLFLW\ 9&RQFOXVLRQ 3$/$==(77, ,032576 $1' (;32576 ,1& )RUWKHIRUHJRLQJUHDVRQVWKHMXGJPHQWRIWKHGLVWULFWFRXUW 'HIHQGDQW$SSHOOHH LV$)),50('LQDOOUHVSHFWVH[FHSWIRU WKHGLVPLVVDORI +HUPDQ0LOOHUjVWUDGHGUHVVLQIULQJHPHQWDQGGLOXWLRQFODLPV &URVV$SSHOODQW ZKLFK LV 5(9(56(' ZLWK LQVWUXFWLRQV WKDW WKH LVVXH RI 1 SURWHFWDELOLW\LVSUHVHUYHGIRUWULDODQGWKHGLVWULFWFRXUWPXVW DGGUHVV3DOD]]HWWLjVDIILUPDWLYHGHIHQVHRIDEDQGRQPHQW DQG $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW WKH QDWLRQZLGH ULJKW RI SXEOLFLW\ LQMXQFWLRQ DJDLQVW IRUWKH(DVWHUQ'LVWULFWRI0LFKLJDQDW$QQ$UERU 3DOD]]HWWLZKLFKPXVWEHPRGLILHGWRH[FOXGHWKRVHVWDWHV 1R n%DUEDUD.+DFNHWW6HQLRU'LVWULFWsXGJH WKDWGRQRWUHFRJQL]HDSRVWPRUWHPULJKWRISXEOLFLW\7KLV DFWLRQ LV 5(0$1'(' WR WKH GLVWULFW FRXUW IRU IXUWKHU $UJXHG 1RYHPEHU SURFHHGLQJVQRWLQFRQVLVWHQWZLWKWKLVRSLQLRQ 'HFLGHGDQG)LOHG 2FWREHU %HIRUH .(,7+%2**6DQG&2/(&LUFXLWs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
+HUPDQ0LOOHU,QFY 1RV 1RV +HUPDQ0LOOHU,QFY 3DOD]]HWWL,PSRUWV 3DOD]]HWWL,PSRUWV ([SRUWV,QF ([SRUWV,QF
21%5,() 5DQGDOO*/LWWRQ'RXJODV+6LHJHO35,&( 7KHDSSURSULDWHJHRJUDSKLFVFRSHRIDQLQMXQFWLRQLVVXHG +(1(9(/' &223(5 '(:,77 /,7721 *UDQG WR SURWHFW WKH ULJKW RI SXEOLFLW\ LV FRPSOLFDWHG E\ WKH 5DSLGV 0LFKLJDQ IRU $SSHOODQW 6DPXHO ' /LWWOHSDJH YDULDWLRQV DPRQJ VWDWH VWDWXWHV DQG FRPPRQ ODZ sHIIUH\ 0 3HWUDVK ',&.,1621 :5,*+7 3//& UXOHV7KHLVVXDQFHRIDQLQMXQFWLRQXQGHUVWDWHODZ :DVKLQJWRQ'&IRU$SSHOOHH SURKLELWLQJ RWKHUZLVH ODZIXO FRQGXFW LQ DQRWKHU VWDWH UDLVHV VHULRXV FRQFHUQV 7KXV DOWKRXJK D FRXUW PD\ BBBBBBBBBBBBBBBBB KDYH MXULVGLFWLRQ WR JUDQW EURDG UHOLHI DQ LQMXQFWLRQ SURWHFWLQJ WKH ULJKW RI SXEOLFLW\ VKRXOG RUGLQDULO\ EH 23,1,21 OLPLWHGWRFRQGXFWLQMXULVGLFWLRQVWKDWSURYLGHSURWHFWLRQ BBBBBBBBBBBBBBBBB FRPSDUDEOHWRWKHIRUPHUVWDWH %2**6&LUFXLWsXGJHm%HZDUHRILPLWDWLRQVlZDUQHGD 5(67$7(0(17 7+,5' 2) 81)$,5 &203(7,7,21FPWF SRVWHUGHVLJQHGE\&KDUOHV(DPHVIRU+HUPDQ0LOOHU,QFLQ HPSKDVLVDGGHG 7KHSRVWHULQVWUXFWHGIXUQLWXUHFXVWRPHUVWRmHQMR\WKH FRPIRUW RI WKH UHDO WKLQJ GHVLJQHG E\ &KDUOHV (DPHV IRU ,Q &DUVRQ Y +HUHjV sRKQQ\ 3RUWDEOH 7RLOHWV ,QF WKLV +HUPDQ0LOOHU,QFl2YHUWKLUW\\HDUVODWHU+HUPDQ0LOOHU FRXUWUHMHFWHGWKHGHIHQGDQWjVDUJXPHQWWKDWWKHGLVWULFWFRXUW ,QF m+HUPDQ0LOOHUl ILOHGDFRPSODLQWLQIHGHUDOGLVWULFW DEXVHG LWV GLVFUHWLRQ E\ LPSRVLQJ D QDWLRQZLGH LQMXQFWLRQ FRXUW DJDLQVW D IXUQLWXUH FRPSDQ\ 3DOD]]HWWL ,PSRUWV )G WK &LU SHU FXULDP m+HUHjV ([SRUWV ,QF m3DOD]]HWWLl WKDW LW FODLPV LV SURGXFLQJ sRKQQ\ ,,l 7KH IDFWV RI +HUHjV sRKQQ\ ,, DUH LPLWDWLRQVRIDORXQJHFKDLUDQGRWWRPDQWKDW(DPHVDQGKLV GLVWLQJXLVKDEOHIURPWKHIDFWVRIWKLVFDVH,Q+HUHjVsRKQQ\ ZLIH5D\GHVLJQHGIRU+HUPDQ0LOOHULQ ,,WKHGHIHQGDQWFKDOOHQJHGWKHLPSRVLWLRQRIDQDWLRQZLGH LQMXQFWLRQDUJXLQJWKDWLWEHOLPLWHGWRWKHVWDWHRI0LFKLJDQ $MXU\UHWXUQHGDYHUGLFWLQIDYRURI+HUPDQ0LOOHURQWKUHH ,ELG7KHFRXUWVSHFLILFDOO\QRWHGWKHIDFWWKDWmWKHGHIHQGDQW RI LWV FODLPV WUDGHPDUN LQIULQJHPHQW DQG GLOXWLRQ XQIDLU LVXQFHUWDLQDWWKLVSRLQWZKHWKHULWZDQWVWRXVHWKHSKUDVH FRPSHWLWLRQ DQG ULJKW RI SXEOLFLW\ 7KH GLVWULFW FRXUW µ+HUHjV sRKQQ\j LQ DQ\ VWDWH ZKHUH WKH VXEVWDQWLYH ODZ GLVPLVVHG+HUPDQ0LOOHUjVUHPDLQLQJWZRFODLPV WUDGHGUHVV DUJXDEO\GLIIHUVIURP0LFKLJDQjVl,ELG7KHUHIRUHWKHFRXUW LQIULQJHPHQWDQGGLOXWLRQDQGIDOVHDGYHUWLVLQJ%RWKSDUWLHV FRQFOXGHGWKDWmZHVHHQRKDUPLQOHWWLQJWKHLQMXQFWLRQVWDQG KDYHDSSHDOHGFHUWDLQDVSHFWVRIWKHGLVWULFWFRXUWjVGHFLVLRQV LQLWVSUHVHQWIRUPIRUWKHWLPHEHLQJDWOHDVWl,ELG7KH FRXUWVWDWHGWKDWm>L@IWKHGHIHQGDQWVKRXOGKHUHDIWHUGHFLGH +HUPDQ0LOOHUDSSHDOVWKHGLVPLVVDORILWVWUDGHGUHVVDQG WKDWLWZDQWVWRXVHWKHSKUDVHLQDVWDWH RWKHUWKDQ0LFKLJDQ IDOVH DGYHUWLVLQJ FODLPV DV ZHOO WKH GDPDJHV OLPLWDWLRQ ZKHUH LW EHOLHYHV VXFK XVH ZRXOG EH OHJDO EXW IRU WKH LPSRVHGE\WKHGLVWULFWFRXUWRQ+HUPDQ0LOOHUjVWUDGHGUHVV FODLPV,QDGGLWLRQLWFKDOOHQJHVDSRUWLRQRIWKHSHUPDQHQW LQMXQFWLRQ HQWHUHG E\ WKH GLVWULFW FRXUW DJDLQVW 3DOD]]HWWL ZKLFKDOORZV3DOD]]HWWLWRmIDLUO\LGHQWLI\l&KDUOHVDQG5D\ (DPHVDVWKHRULJLQDOGHVLJQHUVRIWKHIXUQLWXUHUHSURGXFHGE\ ,Q DGGLWLRQ LQ (OYLVO\ <RXUV )G DW WKLV FRXUW DOORZHG D 3DOD]]HWWL QDWLRQZLGH ULJKW RI SXEOLFLW\ LQMXQFWLRQ ,Q WKDW FDVH KRZHYHU WKH GHIHQGDQW GLG QRW UDLVH DQ REMHFWLRQ WR WKH QDWLRQZLGH VFRSH RI WKH LQMXQFWLRQ +HUPDQ0LOOHU,QFY 1RV 1RV +HUPDQ0LOOHU,QFY 3DOD]]HWWL,PSRUWV 3DOD]]HWWL,PSRUWV ([SRUWV,QF ([SRUWV,QF
7KHGLVWULFWFRXUWGLGQRWHUULQUHFRJQL]LQJDSRVWPRUWHP 3DOD]]HWWL FURVVDSSHDOV WKH GLVWULFW FRXUWjV GHQLDO RI ULJKWRISXEOLFLW\XQGHU0LFKLJDQFRPPRQODZ 3DOD]]HWWLjV PRWLRQ IRU VXPPDU\ MXGJPHQW RQ +HUPDQ 0LOOHUjVULJKWRISXEOLFLW\FODLPDVZHOODVWKHJHRJUDSKLF % 1DWLRQZLGH 3HUPDQHQW ,QMXQFWLRQ DV WR +HUPDQ H[WHQWRIWKHSHUPDQHQWLQMXQFWLRQHQWHUHGLQIDYRURI+HUPDQ 0LOOHUjV5LJKWRI3XEOLFLW\&ODLP 0LOOHURQWKHVDPHFODLP 6WDQGDUGRI5HYLHZ )RUWKHIROORZLQJUHDVRQVZHDIILUPLQSDUWDQGUHYHUVHLQ SDUW :H UHYLHZ WKH GLVWULFW FRXUWjV JUDQW RI D SHUPDQHQW LQMXQFWLRQIRUDQDEXVHRIGLVFUHWLRQ6HH&6;7UDQVS,QF ,)DFWV )GDW $ +HUPDQ0LOOHUDQGWKH(DPHVHV $QDO\VLV +HUPDQ0LOOHUKDVEHHQPDQXIDFWXULQJ KRPHDQGRIILFH 3DOD]]HWWLDUJXHVWKDWWKHGLVWULFWFRXUWjVGHFLVLRQJUDQWLQJ IXUQLWXUHVLQFH RULJLQDOO\DVWKH6WDU)XUQLWXUH&RPSDQ\ DQDWLRQZLGHLQMXQFWLRQDVDUHPHG\IRU+HUPDQ0LOOHUjVULJKW DQGDIWHU DVWKH+HUPDQ0LOOHU)XUQLWXUH&RPSDQ\ RISXEOLFLW\FODLPLPSURSHUO\LPSRVHG0LFKLJDQFRPPRQODZ )URPWKHPLG VXQWLOWKHLUGHDWKV+HUPDQ0LOOHUKDGD RQDFWLYLWLHVEH\RQGWKHERXQGDULHVRIWKHVWDWH7KHFUX[RI EXVLQHVV DQG SHUVRQDO UHODWLRQVKLS ZLWK QRWHG &DOLIRUQLD 3DOD]]HWWLj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j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mDSSURSULDWHLQ WR WKH ($0(6 WUDGHPDUN WUDGH GUHVV ULJKWV UHODWHG WR D WKLV FDVH GXH WR WKH LQKHUHQW GLIILFXOW\ LQ SROLFLQJ DQ ORXQJHFKDLUDQGRWWRPDQGHVLJQHGE\WKH(DPHVHVDQGULJKWV LQMXQFWLRQWKDWDWWHPSWVWROLPLWFRQGXFWLQFHUWDLQVWDWHVDQG QRWRWKHUVl 7KH GLVWULFW FRXUW DEXVHG LWV GLVFUHWLRQ &RXUWV VKRXOG 7KH XSSHUFDVH m($0(6l ZLOO EH XVHG WR UHIHU WR WKH ($0(6 H[HUFLVHFDXWLRQLQH[WHQGLQJWKHULJKWRISXEOLFLW\WRVWDWHV WUDGHPDUN 7KH ORZHUFDVH m(DPHVl ZLOO EH XVHG WR UHIHU WR &KDUOHV DQG WKDWGRQRWUHFRJQL]HWKDWULJKW 5D\ (DPHV +HUPDQ0LOOHU,QFY 1RV 1RV +HUPDQ0LOOHU,QFY 3DOD]]HWWL,PSRUWV 3DOD]]HWWL,PSRUWV ([SRUWV,QF ([SRUWV,QF
RISXEOLFLW\LQWKHQDPHVDQGOLNHQHVVHVRI&KDUOHVDQG5D\ DYDLODEOHERG\RIFDVHODZZKHQGHFLGLQJULJKWRISXEOLFLW\ (DPHV FDVHVl/DQGKDPY/HZLV*DORRE7R\V,QF)G WK &LU LQWHUQDO FLWDWLRQ RPLWWHG 2QH &KDUOHV DQG 5D\ (DPHV GHVLJQHG D QXPEHU RI SLHFHV RI REVHUYHUKDVVWDWHGWKDWm>W@KHRYHUZKHOPLQJPDMRULW\UXOH IXUQLWXUH GXULQJ WKHLU UHODWLRQVKLS ZLWK +HUPDQ 0LOOHU XQGHU HLWKHU VWDWXWH RU FRPPRQ ODZ LV WKDW WKH ULJKW RI LQFOXGLQJ D FKDLU NQRZQ FROORTXLDOO\ DV WKH mSRWDWR FKLS SXEOLFLW\ LV GHVFHQGLEOH SURSHUW\ DQG KDV DQ XQFRQGLWLRQDO FKDLUlDQGDWDEOHNQRZQDVWKHmVXUIERDUGWDEOHl,Q SRVWPRUWHPGXUDWLRQl0&$57+< VXSUDQDW &KDUOHVDQG5D\(DPHVGHVLJQHGDORXQJHFKDLUDQGRWWRPDQ 0F&DUWK\QRWHVWKDWIRXUWHHQVWDWHVKDYHUHFRJQL]HGDSRVW RIOHDWKHUDQGZRRG+HUPDQ0LOOHUFODLPVWKDWWKLVLVmWKH PRUWHP ULJKW RI SXEOLFLW\ XQGHU VWDWXWH RU FRPPRQ ODZ PRVW IDPRXVl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mRYHUZKHOPLQJPDMRULW\UXOHl+RZHYHULWLV +HUPDQ0LOOHUFLWHVQLQH GLIIHUHQWDVSHFWVRIWKHORXQJH WUXHWKDWRIWKHVWDWHVWKDWKDYHDGGUHVVHGWKHLVVXHRIDSRVW FKDLUDQGRWWRPDQWKDWLWFODLPVPDNHWKHORXQJHFKDLUDQG PRUWHPULJKWRISXEOLFLW\E\VWDWXWHRUFDVHODZWKHPDMRULW\ RWWRPDQZRUWK\RIWUDGHGUHVVSURWHFWLRQ KDYHUHFRJQL]HGWKHULJKW 6PRRWK FXUYHG PROGHG VKHOOV WKH ORXQJH FKDLU KDYLQJWKUHHVKHOOVWKHRWWRPDQRQH 7KH PROGHG VKHOOV EHLQJ H[SRVHG IURP EHORZ WKH 1LQH VWDWHV H[SOLFLWO\ UHFRJQL]H D SRVWPRUWHP ULJKW RI SULYDF\ E\
RWWRPDQDQGIURPWKHEDFNVLGHVDQGXQGHUVLGHRIWKH VWDWXWH &DOLIRUQLD )ORULGD ,QGLDQD .HQWXFN\ 1HYDGD 2NODKRPD
FKDLU 7HQQHVVHH 7H[DV DQG :DVKLQJWRQ 7ZR VWDWHV LPSOLFLWO\ UHFRJQL]H D SRVWPRUWHP ULJKW RI SXEOLFLW\ DV SDUW RI D mSULYDF\l VWDWXWH 1HEUDVND
7KHHGJHVRIHDFKPROGHGVKHOOEHLQJH[SRVHGIURP DQG 9LUJLQLD )RXU VWDWHV UHFRJQL]H D SRVWPRUWHP ULJKW RI SXEOLFLW\ XQGHU FRPPRQ ODZ *HRUJLD 1HZ sHUVH\ 7HQQHVVHH DQG 8WDK $00 WKHIURQWRIWKHORXQJHFKDLUDQGRWWRPDQ 0 &$57+< 8:57, Q DW 7HQQHVVHH UHFRJQL]HV ERWK D VWDWXWRU\ DQG FRPPRQ ODZ ULJKW RI SXEOLFLW\
(DFK RI WKH PROGHG VKHOOV EHLQJ VKDSHG OLNH D IODWWHQHGm8l 7KHVH VWDWHV DUH ,OOLQRLV 800 ,// &203 67$7 DQG 2KLR 800 2+,2 5(9 &2'( $11 (DFKPROGHGVKHOOZLWKFXVKLRQHGXSKROVWHU\ 2XU UHYLHZ RI FDVHV DQG VWDWXWHV LQGLFDWHV RQO\ WZR VWDWHV WKDW KDYH (DFK PROGHG VKHOO KDYLQJ mEXWWRQVl WKDW FUHDWH H[SOLFLWO\ UHIXVHG WR UHFRJQL]H D SRVWPRUWHP ULJKW RI SXEOLFLW\ 1HZ
SHUPDQHQWFUHDVHVLQWKHXSKROVWHU\ <RUN 800 6WHSKDQR Y 1HZV *URXS 3XEOLFDWLRQV ,QF 1(G 1< DQG :LVFRQVLQ VHH : 6 ,6 7$7 E +DJHQ
7KH EDFN RI WKH ORXQJH FKDLU FRQVLVWLQJ RI WZR Y 'DKPHU 1R &,9 $ & :/ DW (' :LV 2FW XQSXEOLVKHG RSLQLRQ FRQVWUXLQJ : 6 ,6 7$7 PROGHGVKHOOVFRQQHFWHGLQWKHUHDUE\WZRH[SRVHGEDUV E WR SURYLGH D ULJKW RI SXEOLFLW\ RQO\ IRU OLYLQJ SHUVRQV +HUPDQ0LOOHU,QFY 1RV 1RV +HUPDQ0LOOHU,QFY 3DOD]]HWWL,PSRUWV 3DOD]]HWWL,PSRUWV ([SRUWV,QF ([SRUWV,QF
ULJKWV DQG WKHUHIRUH FDQ H[WHQG EH\RQG GHDWK 6HH $FPH HDFK EDU EHLQJ DQJOHG WR WLOW WKH XSSHU PROGHG VKHOO &LUFXV2SHUDWLQJ&RY.XSHUVWRFN)G VOLJKWO\IRUZDUGRIWKHORZHUPROGHGVKHOO Q WK &LU UHFRJQL]LQJ ULJKW RI SXEOLFLW\ DV D SHUVRQDO SURSHUW\ ULJKW VHH DOVR .< 5(9 67$7 $11 7KHDQJOHGEDUVVSDFHGIURPWKHVKHOOV mDSHUVRQKDVSURSHUW\ULJKWVLQKLVQDPHDQG OLNHQHVV ZKLFK DUH HQWLWOHG WR SURWHFWLRQ IURP FRPPHUFLDO 8SKROVWHUHGDUPUHVWVWKDWH[WHQGGRZQZDUGO\LQWR H[SORLWDWLRQl 6WDWH H[ UHO (OYLV 6:G DW WKHFKDLUDQGWKDWFRQQHFWWKHWZRPROGHGEDFNVKHOOVWR m8QTXHVWLRQDEO\DFHOHEULW\ VULJKWRISXEOLFLW\KDVYDOXH WKHPROGHGVHDWVKHOO ,WFDQEHSRVVHVVHGDQGXVHG,WFDQEHDVVLJQHGDQGLWFDQEH WKHVXEMHFWRIDFRQWUDFW7KXVWKHUHLVDPSOHEDVLVIRUWKLV +HUPDQ 0LOOHU SUHVHQWV QXPHURXV IDFWV UHODWHG WR WKH &RXUWWRFRQFOXGHWKDWLWLVDVSHFLHVRILQWDQJLEOHSHUVRQDO ORXQJHFKDLUDQGRWWRPDQLQDWWHPSWLQJWRVXSSRUWLWVWUDGH SURSHUW\l 0&&$57+<VXSUDQDW m7KHULJKWRI GUHVVFODLP,WGHVFULEHVXQVROLFLWHGPHGLDDWWHQWLRQJLYHQWR SXEOLFLW\LVSURSHUW\DQGLVSURSHUO\FDWHJRUL]HGDVDIRUPRI WKH ORXQJH FKDLU DQG RWWRPDQ ZKHQ WKH\ ZHUH GHVLJQHG LQWHOOHFWXDOSURSHUW\l LQFOXGLQJDQLQWHUYLHZE\$UOHQH)UDQFLVRI&KDUOHVDQG5D\ (DPHV RQ 1%&jV 7RGD\ 6KRZ RQ 0DUFK 7KH RQO\ FRPPRQ ODZ GHFLVLRQ QRW UHFRJQL]LQJ D SRVW LQWURGXFLQJWKHORXQJHFKDLUDQGRWWRPDQWKDW&KDUOHV(DPHV PRUWHPULJKWWRSULYDF\LV5HHYHVLQZKLFKWKHGLVWULFWFRXUW VWDWHGKHGHVLJQHGmIRU+HUPDQ0LOOHUl+HUPDQ0LOOHUQRWHV ZDV LQIOXHQFHG E\ DQ 2KLR 6XSUHPH &RXUW GHFLVLRQ WKDW WKDWLWV(DPHVORXQJHFKDLUDQGRWWRPDQZRQWKHJUDQGSUL]H UHMHFWHG WKH FRQFHSW RI WKH ULJKW RI SXEOLFLW\ DV D SURSHUW\ DWWKH0LODQ7ULHQQLDODQGWKDWLWV(DPHVORXQJHFKDLUDQG ULJKW6HH5HHYHV)6XSSDWDIIjG)GDW RWWRPDQDUHRQSHUPDQHQWH[KLELWDWVHYHUDOPXVHXPV :HGRQRWKDYHVLPLODUODZWRJXLGHXVVLQFH0LFKLJDQFRXUWV KDYH \HW WR DGGUHVV WKH ULJKW RI SXEOLFLW\ 0RUHRYHU QR 'HVFULSWLRQV RI WKH ORXQJH FKDLU DQG RWWRPDQ LQ YDULRXV MXULVGLFWLRQRWKHUWKDQ2KLRKDVUHDFKHGDVLPLODUFRQFOXVLRQ ERRNVDQGPDJD]LQHVDUHDOVRSUHVHQWHGGXULQJWKHFRXUVHRI 6HH0&&$57+<VXSUDQDW m2KLRODZVWDQGVDV RYHU ILYH KXQGUHGV SDJHV RI WKH UHFRUG 0DQ\ RI WKHVH DORQHO\PLQRULW\RIRQHl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m+HUPDQ0LOOHU WKHUHIRUHLVGHVFHQGLEOH ,QFl EHORZ WKH SKRWR 7KH HQF\FORSHGLD HQWU\ VWDWHV WKDW &KDUOHV(DPHVmGHYHORSHGDVHULHVRIFKDLUVIRUWKH+HUPDQ ,Q UHDFKLQJ RXU GHFLVLRQ ZH DUH DOVR LQIOXHQFHG E\ WKH 0LOOHU&RPSDQ\GXULQJWKH VDQG VlDQGWKDWm>K@LV QXPEHURIVWDWHVWKDWKDYHUHFRJQL]HGDSRVWPRUWHPULJKWRI PRVWIDPRXVGHVLJQZDVDVRIWOHDWKHUXSKROVWHUHGVZLYHOWLOW SXEOLFLW\,QGHHGm>D@VFDVHODZRQ>WKH@ULJKW>RISXEOLFLW\@ ORXQJHFKDLUDQGRWWRPDQl LV H[FHHGLQJO\ UDUH DQG EHFDXVH RI WKH JHQHUDO FRQVWLWXWLRQDOSROLF\RIPDLQWDLQLQJXQLIRUPLW\LQLQWHOOHFWXDO +HUPDQ0LOOHUDOVRSUHVHQWVDIILGDYLWVRIGHVLJQH[SHUWV SURSHUW\ ODZV FRXUWV W\SLFDOO\ JLYH DWWHQWLRQ WR WKH HQWLUH KLVWRULDQV DXWKRUV DQG HPSOR\HHV RI +HUPDQ 0LOOHU +HUPDQ0LOOHU,QFY 1RV 1RV +HUPDQ0LOOHU,QFY 3DOD]]HWWL,PSRUWV 3DOD]]HWWL,PSRUWV ([SRUWV,QF ([SRUWV,QF
UHFRJQL]LQJ+HUPDQ0LOOHUDVWKHRQO\VRXUFHIRUWKHORXQJH QDPH DQG SHUVRQDOLW\l +HUHjV sRKQQ\ , )G DW FKDLUDQGRWWRPDQ7KHVHDIILGDYLWVDWWHVWWRWKHXQLTXHQDWXUH TXRWLQJ0HPSKLV'HY)GDW 7KHIDFWWKDWWKH DQGGHVLJQRIWKHORXQJHFKDLUDQGRWWRPDQDQGWKHIDFWWKDW FRXUWXVHGWKHZRUGVmGXULQJOLIHlGRHVQRWSUHYHQWXVIURP FXVWRPHUVDVVRFLDWHWKH(DPHVORXQJHFKDLUDQGRWWRPDQZLWK FRQFOXGLQJWKDWWKHGLVWULFWFRXUWGLGQRWHUULQFRQFOXGLQJWKDW +HUPDQ 0LOOHU +HUPDQ 0LOOHU DOVR RIIHUV HYLGHQFH IURP WKHULJKWRISXEOLFLW\LVGHVFHQGLEOHXQGHU0LFKLJDQODZ YDULRXVSXEOLFDWLRQVUHJDUGLQJRZQHUVRIWKH(DPHVORXQJH FKDLUDQGRWWRPDQ,QRQHLQWHUYLHZ,QGLUD*DQGKLVWDWHGWKDW $OWKRXJKWKHULJKWRISXEOLFLW\LVDQRXWJURZWKRIWKHULJKW VKHZRXOGVLWLQKHUm(DPHVFKDLUlUHIHUULQJWRKHU+HUPDQ RISULYDF\WKHWZRULJKWVmSURWHFWIXQGDPHQWDOO\GLIIHUHQW 0LOOHU(DPHVORXQJHFKDLUDQGRWWRPDQ DOWKRXJKVKHGLGQRW LQWHUHVWV DQG PXVW EH DQDO\]HG VHSDUDWHO\l 6HH +HUHjV PHQWLRQ+HUPDQ0LOOHUVSHFLILFDOO\ 2WKHUDUWLFOHVGHVFULEH sRKQQ\ , )G DW 7KH ULJKW RI SULYDF\ ZKLFK FHOHEULWLHVVXFKDV%DUEDUD:DOWHUVZKRRZQ+HUPDQ0LOOHU SURWHFWVWKHULJKWWRDQLQGLYLGXDOjVVHOIHVWHHPDQGGLJQLW\ (DPHV FKDLUV DQG RWWRPDQV VRPH VSHFLILFDOO\ PHQWLRQ W\SLFDOO\ HQGV DW GHDWK 6HH HJ 0DULWRWH Y 'HVLOX +HUPDQ 0LOOHU DQG RWKHUV GR QRW )XUWKHUPRUH +HUPDQ 3URGXFWLRQV ,QF )G WK &LU 0LOOHU RIIHUV DUWLFOHV PHQWLRQLQJ WKDW SURGXFHUV RI WZR UHMHFWLQJULJKWRISULYDF\FODLPEURXJKWXQGHU,OOLQRLVODZE\ WHOHYLVLRQVHULHVWKHKLJKO\UDWHG)UDVLHUDQGWKHOHVVKLJKO\ UHODWLYHVRI$O&DSRQHDQGVWDWLQJWKDWm>L@WLVDQRPDORXVWR UDWHG,W 7DNHV 7ZR DFTXLUHG +HUPDQ 0LOOHUPDQXIDFWXUHG VSHDN RI WKH SULYDF\ RI D GHFHDVHG SHUVRQl /XJRVL Y (DPHVORXQJHFKDLUVDQGRWWRPDQVWRIXUQLVKWKHVHWVRIWKHLU 8QLYHUVDO3LFWXUHV3G &DO m,WLVZHOO VKRZV VHWWOHGWKDWWKHULJKWRISULYDF\LVSXUHO\DSHUVRQDORQH LW FDQQRW EH DVVHUWHG E\ DQ\RQH RWKHU WKDQ WKH SHUVRQ ZKRVH )LQDOO\ +HUPDQ 0LOOHU RIIHUV HYLGHQFH RI VSHFLILF SULYDF\ KDV EHHQ LQYDGHG WKDW LV SODLQWLII PXVW SOHDG DQG UHFRJQLWLRQ RI WKH GLVWLQFWLYHQHVV RI WKH ORXQJH FKDLU DQG SURYH WKDW KLV SULYDF\ KDV EHHQ LQYDGHGl 5(67$7(0(17 RWWRPDQ,Q WKH+HUPDQ0LOOHU(DPHVORXQJHFKDLUDQG 6(&21' 2) 72576 m([FHSW IRU WKH RWWRPDQ ZHUH GHFODUHG DPRQJ WKH m2QH +XQGUHG *UHDWHVW DSSURSULDWLRQRIRQH VQDPHRUOLNHQHVVDQDFWLRQIRULQYDVLRQ 3URGXFWVRI$OO7LPHlE\DJURXSRIGHVLJQHUV,Q WKH RI SULYDF\ FDQ EH PDLQWDLQHG RQO\ E\ D OLYLQJ LQGLYLGXDO &RUSRUDWH 'HVLJQ )RXQGDWLRQ D QRQSURILW UHVHDUFK DQG ZKRVHSULYDF\LVLQYDGHGl HGXFDWLRQDORUJDQL]DWLRQLQFOXGHGLQWKHSUHPLHUHLVVXHRILWV sRXUQDORI%XVLQHVV 'HVLJQDVLOKRXHWWHRIWKHORXQJHFKDLU 7KHULJKWRISXEOLFLW\KRZHYHULVDULJKWWKDWSURWHFWVWKH DV RQH RI VL[WHHQ GLVWLQFWLYH FRUSRUDWH mVKDSHVl 7KH SHFXQLDU\ULJKWDQGLQWHUHVWLQWKHFRPPHUFLDOH[SORLWDWLRQRI GHFODUDWLRQZDVPDGHLQWKHFRQWH[WRIDTXL]LQZKLFKUHDGHUV DFHOHEULW\jVLGHQWLW\6HH+HUHjVsRKQQ\, )GDW ZHUHDVNHGWRPDWFKWKHVKDSHZLWKLWVLGHQWLI\LQJFRPSDQ\ 7KHVHLQWHUHVWVUHIOHFWSURSHUW\ULJKWVDVRSSRVHGWRGLJQLWDU\ 7KHFRUUHFWPDWFKIRUWKHVLOKRXHWWHRIWKHORXQJHFKDLUZDV m(DPHVORXQJHFKDLUl([SODLQLQJWKHDEVHQFHRIm+HUPDQ 0LOOHUlIURPWKHDQVZHUWKHSXEOLVKHURIWKHTXL]VWDWHGm>L@Q +HUHjV sRKQQ\ , IDFW WKH ($0(6 ORXQJH FKDLU DQG RWWRPDQ LV VR FORVHO\ :H QRWH WKDW DOWKRXJK WKH FRXUW XVHG WKH ZRUGV mGXULQJ OLIHl WKH FRXUW ZDV FRQVLGHULQJ WKH ULJKWV RI SXEOLFLW\ RI sRKQQ\ DVVRFLDWHG ZLWK +HUPDQ 0LOOHU ,QF WKDW WKH FKDLU ZDV &DUVRQ ZKR ZDV DQG LV VWLOO OLYLQJ DQG ZDV QRW VSHFLILFDOO\ FRQVLGHULQJ
UHIHUUHG WR DV WKH ($0(6 ORXQJH FKDLU 7KLV V\PERO RI WKH TXHVWLRQ RI ZKHWKHU D SRVWPRUWHP ULJKW RI SXEOLFLW\ H[LVWV XQGHU
+HUPDQ0LOOHUZDVVHOHFWHGRYHUWKHIDPRXV+HUPDQ0LOOHU 0LFKLJDQ ODZ ,Q DGGLWLRQ WKH FRXUW ZDV TXRWLQJ IURP 0HPSKLV m0l GHVLJQ DV DQ LGHQWLI\LQJ FRUSRUDWH V\PEROl $OVR 'HYHORSPHQW D FDVH LQWHUSUHWLQJ 7HQQHVVHH ODZ WKDW VXEVHTXHQWO\ ZDV UHMHFWHG E\ WKH 7HQQHVVHH FRXUWV +HUPDQ0LOOHU,QFY 1RV 1RV +HUPDQ0LOOHU,QFY 3DOD]]HWWL,PSRUWV 3DOD]]HWWL,PSRUWV ([SRUWV,QF ([SRUWV,QF
0LFKLJDQ VKRXOG DSSO\ $OWKRXJK WKH GLVWULFW FRXUW LQFOXGHGLQWKHTXL]ZHUHWKH&%6H\HWKH&RFD&RODERWWOH UHFRJQL]HGWKDW0LFKLJDQFRXUWVKDGQRWDGGUHVVHGHLWKHUWKH WKH $SSOH FRPSXWHU DSSOH WKH 0F'RQDOGj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j LWHPV DQG DQWLTXHV DQG WKDW D VWURQJ VHFRQGDU\ DIIj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jPDUNHWIRUFKDLUV 3UHVOH\,QWjO0HPjO)RXQGY&URZHOO6:G DQGRWWRPDQVSURGXFHGE\+HUPDQ0LOOHUWKHUHLVHYLGHQFH 7HQQ&W$SS 7KLVGHFLVLRQZDVDFNQRZOHGJHGLQ RI D PDUNHW IRU UHSURGXFWLRQV RI WKH FKDLU DQG RWWRPDQ (OYLV3UHVOH\(QWHUSULVHV,QFY(OYLVO\<RXUV,QF1R PDQXIDFWXUHG DQG VROG E\ QXPHURXV RWKHU FRPSDQLHV :/ DW WK &LU $SU +HUPDQ0LOOHURIIHUVVHYHUDOPHGLDDUWLFOHVSRLQWLQJRXWWR XQSXEOLVKHGWDEOHGHFLVLRQ PRGHUQIXUQLWXUHFRQVXPHUVWKHH[LVWHQFHRIWKLVVHFRQGDU\ PDUNHWRImNQRFNRIIVlRIWKHORXQJHFKDLUDQGRWWRPDQDQG 7KLV FRXUW KDV VSHFXODWHG WKDW 0LFKLJDQ FRXUWV ZRXOG VWDWLQJWKDW+HUPDQ0LOOHUSURGXFHVWKHRULJLQDO UHFRJQL]HWKHULJKWRISXEOLFLW\,Q+HUHjVsRKQQ\, )G DWQWKLVFRXUWDFNQRZOHGJHGWKDW0LFKLJDQFRXUWVKDG )RURYHUWKLUW\\HDUV+HUPDQ0LOOHUKDVEHHQDZDUHRIWKLV QRW DGGUHVVHG WKH ULJKW RI SXEOLFLW\ EXW VSHFXODWHG WKDW PDUNHWIRUUHSURGXFWLRQVRIWKHFKDLUDQGRWWRPDQsDPHV 0LFKLJDQFRXUWVZRXOGUHFRJQL]HVXFKDULJKWVLQFHWKH\KDG &KULVWHQVRQ WKH JHQHUDO FRXQVHO RI +HUPDQ 0LOOHU JDYH UHFRJQL]HGDULJKWRISULYDF\7KLVFRXUWYDFDWHGWKHGLVWULFW GHSRVLWLRQWHVWLPRQ\VWDWLQJWKDWVLQFH +HUPDQ0LOOHU FRXUWjVGHFLVLRQWRGLVPLVVWKHSODLQWLIIjVULJKWRISXEOLFLW\ KDV OHDUQHG RI DW OHDVW VL[W\VL[ GLIIHUHQW HQWLWLHV WKDW ZHUH FODLPVWDWLQJm0LFKLJDQODZKDVQRW\HWFOHDUO\DGGUHVVHG VHOOLQJIXUQLWXUHSDWWHUQHGDIWHUWKH(DPHVORXQJHFKDLUDQG WKHULJKWRISXEOLFLW\%XWWKHJHQHUDOUHFRJQLWLRQRIWKHULJKW RWWRPDQ+HUPDQ0LOOHUZURWHDWOHDVWVHYHQW\VHYHQOHWWHUV VXJJHVWVWRXVWKDWWKH0LFKLJDQFRXUWVZRXOGDGRSWWKH WRWKHVHHQWLWLHV,QQRQHRIWKH OHWWHUVGLG+HUPDQ0LOOHU ULJKWl,ELG4XRWLQJIURP0HPSKLV'HYHORSPHQWWKHFRXUW UHTXHVWWKDWWKHFRPSDQ\FHDVHSURGXFWLRQRUPDUNHWLQJRIWKH VWDWHGWKDWm>W@KHIDPRXVKDYHDQH[FOXVLYHOHJDOULJKWGXULQJ ORXQJHFKDLUVDQGRWWRPDQV+HUPDQ0LOOHUGHPDQGHGRQO\ OLIH WR FRQWURO DQG SURILW IURP WKH FRPPHUFLDO XVH RI WKHLU WKDW WKH HQWLWLHV FHDVH XVLQJ WKH ($0(6 WUDGHPDUN LQ +HUPDQ0LOOHU,QFY 1RV 1RV +HUPDQ0LOOHU,QFY 3DOD]]HWWL,PSRUWV 3DOD]]HWWL,PSRUWV ([SRUWV,QF ([SRUWV,QF
PDUNHWLQJWKHUHSURGXFWLRQV$UHFLSLHQWRIRQHRIWKHOHWWHUV SDUODQFHm(DPHVFKDLUlFRXOGUHIHUWRHLWKHU0RUHRYHUWKH DVNHG +HUPDQ 0LOOHU KRZ LW PLJKW VXEVHTXHQWO\ VHOO LWV WHVWLPRQ\LQGLFDWHVWKDW3DOD]]HWWLHPSOR\HHVWROGFXVWRPHUV UHSURGXFWLRQ RI WKH ORXQJH FKDLU DQG RWWRPDQ ZLWKRXW LQ WKHLU VKRZURRPV WKDW 3DOD]]HWWLjV SURGXFWV ZHUH LQIULQJLQJ RQ WKH ($0(6 WUDGHPDUN +HUPDQ 0LOOHUjV UHSURGXFWLRQV 7KH RQO\ HYLGHQFH WKDW +HUPDQ 0LOOHU LQWHOOHFWXDOSURSHUW\FRXQVHOUHVSRQGHG µLWLVSURSHUWRUHIHU SURYLGHV WKDW LQGLFDWHVSRVVLEOH GHFHSWLRQ OHW DORQH DFWXDO WRDFKDLUGHVLJQHGE\&KDUOHV(DPHV$SSURSULDWHXVHRI0U GHFHSWLRQ RU D WHQGHQF\ WR GHFHLYH LV WKH WHVWLPRQ\ RI D (DPHVj>VLF@QDPHZRXOGEHDVIROORZV m3DWWHUQHGDIWHUD +HUPDQ 0LOOHU HPSOR\HH DW +HUPDQ 0LOOHUjV /RV $QJHOHV FKDLU GHVLJQHG E\ &KDUOHV (DPHVjl ,Q DGGLWLRQ WKHUH LV VKRZURRPZKRZDVDVNHGE\DFXVWRPHULI+HUPDQ0LOOHUjV HYLGHQFHRIOHWWHUVVHQWE\+HUPDQ0LOOHUjVFRXQVHOWRDWOHDVW (DPHV ORXQJH FKDLU DQG RWWRPDQ ZDV WKH VDPH DV RQH WKH WKUHH IXUQLWXUH PDQXIDFWXUHUV DQG RQH GLVWULEXWRU WKDW DOVR FXVWRPHU KDG VHHQ LQ 3DOD]]HWWLjV VKRZURRP 7KH GLVWULFW ZHUHNQRZQWREHVHOOLQJUHSURGXFWLRQVRIWKH(DPHVORXQJH FRXUW SURSHUO\ JUDQWHG MXGJPHQW DV D PDWWHU RI ODZ WR FKDLUDQGRWWRPDQ,QHDFKFDVH+HUPDQ0LOOHUDVNHGWKDW 3DOD]]HWWLDVWRWKLVLVVXH WKHHQWLW\QRWXVHWKH($0(6WUDGHPDUN ,9$QDO\VLV 3DOD]]HWWLjV&URVV$SSHDO & 3DOD]]HWWLDQG,WV%XVLQHVV 3DOD]]HWWLUDLVHVWZRLVVXHVRQFURVVDSSHDOERWKUHODWLQJ 3DOD]]HWWL LV D 1HZ <RUN FRUSRUDWLRQ ZLWK LWV SULQFLSDO WR+HUPDQ0LOOHUj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jV JUDQW RI VXPPDU\ DQH[DFWUHSOLFDRIWKHRULJLQDO(DPHVGHVLJQ%HJLQQLQJLQ MXGJPHQWGHQRYRXVLQJWKHVDPHVWDQGDUGHPSOR\HGE\WKH sDQXDU\ 3DOD]]HWWL DGYHUWLVHG WKH ORXQJH FKDLU DQG GLVWULFWFRXUW6HH'DGG\jVsXQN\ )GDW RWWRPDQ LQ 7KH 1HZ <RUN 7LPHV 3DOD]]HWWL FRQWLQXHG WR DGYHUWLVH WKH ORXQJH FKDLU DQG RWWRPDQ LQ WKDW SXEOLFDWLRQ $QDO\VLV SHULRGLFDOO\GXULQJWKHQH[WILYH\HDUV 3DOD]]HWWLFRQWHVWVWKHGLVWULFWFRXUWjVGHFLVLRQUHFRJQL]LQJ ' +HUPDQ0LOOHUjV.QRZOHGJHRI3DOD]]HWWLjV$FWLYLWLHV D SRVWPRUWHP ULJKW RI SXEOLFLW\ XQGHU 0LFKLJDQ FRPPRQ ODZ,QLWVWKLUGPRWLRQIRUVXPPDU\MXGJPHQW3DOD]]HWWL $VHDUO\DV0DUFK +HUPDQ0LOOHUEHFDPHDZDUHWKDW DUJXHGWKDW+HUPDQ0LOOHUjVULJKWRISXEOLFLW\FODLPVKRXOG 3DOD]]HWWLZDVPDQXIDFWXULQJIXUQLWXUHSDWWHUQHGDIWHUGHVLJQV EHGLVPLVVHGEHFDXVHQHLWKHU0LFKLJDQQRU1HZ<RUNODZ FUHDWHG E\ &KDUOHV DQG 5D\ (DPHV +HUPDQ 0LOOHU UHFRJQL]HVDSRVWPRUWHPULJKWRISXEOLFLW\7KHGLVWULFWFRXUW GLVFRYHUHGWKDW3DOD]]HWWLZDVDGYHUWLVLQJDUHSURGXFWLRQRI GHQLHG WKH PRWLRQ ILQGLQJ WKDW WKH LQWHUHVWV RI 0LFKLJDQ WKH (DPHVGHVLJQHG PROGHG SO\ZRRG FKDLU NQRZQ DV WKH +HUPDQ0LOOHUjVKRPHVWDWH SUHGRPLQDWHGRYHUWKHLQWHUHVWV RI1HZ<RUN 3DOD]]HWWLjVKRPHVWDWH DQGWKDWWKH ODZ RI +HUPDQ0LOOHU,QFY 1RV 1RV +HUPDQ0LOOHU,QFY 3DOD]]HWWL,PSRUWV 3DOD]]HWWL,PSRUWV ([SRUWV,QF ([SRUWV,QF
LH HYLGHQFH WKDW LQGLYLGXDO FRQVXPHUV SHUFHLYHG WKH mSRWDWRFKLSFKDLUl)URP0DUFK WKURXJKsXQH DGYHUWLVLQJ LQ D ZD\ WKDW PLVOHG WKHP DERXW WKH SODLQWLIIjV +HUPDQ0LOOHUDQG3DOD]]HWWLFRUUHVSRQGHGUHJDUGLQJ SURGXFW l ,ELG $ SODLQWLII PXVW SUHVHQW HYLGHQFH WKDW D 3DOD]]HWWLjVPDQXIDFWXULQJDQGPDUNHWLQJRIWKHmSRWDWRFKLS mVLJQLILFDQW SRUWLRQl RI WKH FRQVXPHU SRSXODWLRQ ZDV FKDLUl GHFHLYHG ,G DW FLWDWLRQ DQG LQWHUQDO TXRWDWLRQV RPLWWHG $OWKRXJKVXUYH\VDUHQRWUHTXLUHGm>V@XFFHVVIXO ,Q +HUPDQ 0LOOHUjV ILUVW OHWWHU WR 3DOD]]HWWL +HUPDQ SODLQWLIIV XVXDOO\ >XVH VXUYH\V WR@ SUHVHQW HYLGHQFH RI WKH 0LOOHUjVFRXQVHOGHPDQGHGWKDW3DOD]]HWWLmLPPHGLDWHO\FHDVH SXEOLFjVUHDFWLRQl,ELG FLWLQJsRKQVRQ sRKQVRQ0HUFN DQGGHVLVWDOOIXUWKHUXVHRIWKHGHVLJQDWLRQ($0(6LQ &RQVXPHU 3KDUPV &R Y 5KRQH3RXOHQF 5RUHU 3KDUPV \RXU DGYHUWLVLQJ :H DOVR GHPDQG WKDW \RX LPPHGLDWHO\ ,QF )G G&LU $SODLQWLIIVHHNLQJ FHDVH DQG GHVLVW IURP DOO IXUWKHU VDOH RI WKH JRRGV ZKLFK LQMXQFWLYHUHOLHIIRUIDOVHDGYHUWLVLQJIDFHVDORZHUVWDQGDUGRI VLPXODWHWKH($0(6GHVLJQVl$IWHUDUHVSRQVHIURP mVKRZLQJRQO\WKDWWKHGHIHQGDQWjVUHSUHVHQWDWLRQVDERXWLWV 3DOD]]HWWLLQGLFDWLQJWKDWLWZDVPDNLQJmIDLUXVHlRIWKHQDPH SURGXFWKDYHDWHQGHQF\WRGHFHLYHFRQVXPHUVl&HUWLILHG m(DPHVl+HUPDQ0LOOHUUHVSRQGHGZLWKDOHWWHUVWDWLQJWKDW 3RGLDWULF 3K\VLFLDQV )G DW TXRWLQJ 0D[ mLWPD\EHSRVVLEOHWRUHVROYHWKLVGLVSXWHVLPSO\E\KDYLQJ 'DHWZ\OHU&RUSY,QSXW*UDSKLFV,QF)6XSS \RXLQGLFDWHFOHDUO\LQ\RXUOLWHUDWXUHWKDW\RXUSURGXFWVDUHLQ ('3D LQWHUQDOTXRWDWLRQVRPLWWHG QRZD\DVVRFLDWHGZLWK+HUPDQ0LOOHU,QFDQGDUHQRWWKH DXWKRUL]HG RU OLFHQVHG YHUVLRQV RI &KDUOHV (DPHVj >VLF@ 7KHGLVWULFWFRXUWSURSHUO\JUDQWHGMXGJPHQWDVDPDWWHURI GHVLJQVl ODZWR3DOD]]HWWLDVWR+HUPDQ0LOOHUjVFODLPVIRUGDPDJHV DQG LQMXQFWLYH UHOLHI IRU IDOVH DGYHUWLVLQJ +HUPDQ 0LOOHU 3DOD]]HWWLjVFRXQVHOUHVSRQGHGWR+HUPDQ0LOOHUjVVHFRQG GRHVQRWSURYLGHDQ\FRQVXPHUVXUYH\VWRVXSSRUWLWVIDOVH OHWWHUE\VWDWLQJWKDW3DOD]]HWWLGLGQRWLQWHQGmWRFKDQJHLWV DGYHUWLVLQJFODLPV,QVWHDGLWUHOLHVRQWZRFXVWRPHUOHWWHUV SUDFWLFHVZKHUHLWLVQRWOHJDOO\UHTXLUHGWRGRVRl+HUPDQ WR 3DOD]]HWWL UHIHUULQJ WR 3DOD]]HWWLjV ORXQJH FKDLU DQG 0LOOHU WKHQ VHQW D WKLUG OHWWHU WR 3DOD]]HWWL UHTXHVWLQJ WKDW RWWRPDQ DV DQ m(DPHV FKDLU DQG RWWRPDQl RU DQ m(DPHV 3DOD]]HWWLLQGLFDWHLQLWVPDUNHWLQJPDWHULDOWKDWWKHmSURGXFW FKDLUl DV ZHOO DV WHVWLPRQ\ IURP +HUPDQ 0LOOHU DQG LVLQIDFWDUHSURGXFWLRQDQGQRWDSURGXFWPDQXIDFWXUHGE\ 3DOD]]HWWL HPSOR\HHV FRQFHUQLQJ UHSUHVHQWDWLRQV PDGH WR WKH RIILFLDO OLFHQVHH +HUPDQ 0LOOHU ,QFl 3DOD]]HWWL FXVWRPHUVZKRFDPHWR3DOD]]HWWLjVVKRZURRPVDWUDGHVKRZ UHVSRQGHG E\ D OHWWHU GDWHG sXQH LQ ZKLFK LW DQGD+HUPDQ0LOOHUVKRZURRP7KLVHYLGHQFHIDOOVIDUVKRUW FRQWLQXHGWRUHIXVHWRDFFHGHWR+HUPDQ0LOOHUjVUHTXHVWV RIGHPRQVWUDWLQJWKDWDmVLJQLILFDQWSRUWLRQlRIWKHFRQVXPHU DQGUHSHDWHGWKDWLWZDVPDNLQJIDLUXVHRIWKHQDPHm(DPHVl SRSXODWLRQZDVGHFHLYHGE\3DOD]]HWWLjVDGYHUWLVLQJZKLFKLV QHFHVVDU\ IRU GDPDJHV ,W DOVR IDLOV WR PHHW WKH ORZHU +HUPDQ0LOOHUGLGQRWUHVSRQGWR3DOD]]HWWLjVILQDOOHWWHURI VWDQGDUGRIVKRZLQJDWHQGHQF\WRGHFHLYHZKLFKLVQHFHVVDU\ sXQH 7KLQNLQJWKDW+HUPDQ0LOOHUHLWKHUDEDQGRQHG IRULQMXQFWLYHUHOLHI LWVFODLPVRUUHFRJQL]HGWKHYDOLGLW\RI3DOD]]HWWLjVSRVLWLRQ 3DOD]]HWWLFRQWLQXHGWRVHOOWKHORXQJHFKDLUDQGRWWRPDQDQG 7KH OHWWHUV VLPSO\ PDNH JHQHUDO UHIHUHQFH WR DQ m(DPHV RWKHU(DPHVGHVLJQHGIXUQLWXUHDQGWRDGYHUWLVHWKHORXQJH FKDLUDQGRWWRPDQlDQGm(DPHVFKDLUlDQGJLYHQRLQGLFDWLRQ FKDLUDQGRWWRPDQLQ7KH1HZ<RUN7LPHV ZKHWKHUWKHFRQVXPHUVWKRXJKWWKH\KDGDFWXDOO\SXUFKDVHG RULJLQDO LWHPV UDWKHU WKDQ UHSURGXFWLRQV ,Q FRPPRQ +HUPDQ0LOOHU,QFY 1RV 1RV +HUPDQ0LOOHU,QFY 3DOD]]HWWL,PSRUWV 3DOD]]HWWL,PSRUWV ([SRUWV,QF ([SRUWV,QF
+HUPDQ0LOOHUSUHVHQWVWHVWLPRQ\WKDWLWKDGQRNQRZOHGJH % LQ FRPPHUFLDO DGYHUWLVLQJ RU SURPRWLRQ RI3DOD]]HWWLjVDGYHUWLVLQJRILWV(DPHVGHVLJQHGORXQJHFKDLU PLVUHSUHVHQWVWKHQDWXUHFKDUDFWHULVWLFVTXDOLWLHVRU DQGRWWRPDQXQWLO :KHQ+HUPDQ0LOOHUGLVFRYHUHG JHRJUDSKLFRULJLQRIKLVRUKHURUDQRWKHUSHUVRQjV 3DOD]]HWWLjVDGYHUWLVLQJRI(DPHVGHVLJQHGIXUQLWXUHLQ JRRGVVHUYLFHVRUFRPPHUFLDODFWLYLWLHV LW RQO\ GLVFRYHUHG DGYHUWLVLQJ RI WKH mSRWDWR FKLS FKDLUl 3DOD]]HWWLDGYHUWLVHGLWVORXQJHFKDLUDQGRWWRPDQLQ7KH1HZ VKDOO EH OLDEOH LQ D FLYLO DFWLRQ E\ DQ\ SHUVRQ ZKR <RUN7LPHVIRUIRXUGD\VLQ WKUHHGD\VLQ QRQHLQ EHOLHYHVWKDWKHRUVKHLVRULVOLNHO\WREHGDPDJHGE\ IRXUWHHQGD\VLQ DQGQLQHWHHQGD\VE\6HSWHPEHU VXFKDFWV 86& D % +HUPDQ 0LOOHU DJDLQ ZURWH 3DOD]]HWWL RQ 6HSWHPEHU GHPDQGLQJWKDW3DOD]]HWWLFHDVHXVHRIWKHGHVLJQDWLRQ 7RSURYHDFODLPIRUIDOVHDGYHUWLVLQJXQGHUWKH/DQKDP m&(DPHVl3DOD]]HWWLGHFOLQHGWRGRVREXWVWDWHGWKDWLW $FWDSODLQWLIIPXVWHVWDEOLVKWKDW WKHGHIHQGDQWKDVPDGH ZRXOGPDNHFOHDUWKDWLWRQO\XVHGWKH(DPHVQDPHWRLGHQWLI\ IDOVHRUPLVOHDGLQJVWDWHPHQWVRIIDFWFRQFHUQLQJKLVSURGXFW WKHRULJLQDOGHVLJQHU+HUPDQ0LOOHUGLGQRWUHVSRQGWRWKH RUDQRWKHUjV WKHVWDWHPHQWDFWXDOO\RUWHQGVWRGHFHLYHD OHWWHUDQGLQsXQH ILOHGLWVLQLWLDOFRPSODLQWLQWKLVFDVH VXEVWDQWLDOSRUWLRQRIWKHLQWHQGHGDXGLHQFH WKHVWDWHPHQW LV PDWHULDO LQ WKDW LW ZLOO OLNHO\ LQIOXHQFH WKH GHFHLYHG 'XULQJGLVFRYHU\+HUPDQ0LOOHUIRXQGYDULRXVUHIHUHQFH FRQVXPHUjVSXUFKDVLQJGHFLVLRQV WKHDGYHUWLVHPHQWVZHUH WR(DPHVLQ3DOD]]HWWLjVDGYHUWLVHPHQWVFDWDORJSRVWHUSULFH LQWURGXFHGLQWRLQWHUVWDWHFRPPHUFH DQG WKHUHLVVRPH OLVWDQGLQYRLFHV+HUPDQ0LOOHUDOVRGLVFRYHUHGFXVWRPHU FDXVDOOLQNEHWZHHQWKHFKDOOHQJHGVWDWHPHQWVDQGKDUPWRWKH OHWWHUVUHIHUULQJWR3DOD]]HWWLjVIXUQLWXUHDVDQm(DPHVFKDLU SODLQWLII6HH&HUWLILHG3RGLDWULF3K\VLFLDQV)GDW DQG RWWRPDQl DQG DV DQ m(DPHV FKDLUl ,Q DGGLWLRQ FXVWRPHUVLQ3DOD]]HWWLjVVWRUHVDVNHGWRSXUFKDVH3DOD]]HWWLjV 3DOD]]HWWLjV DGYHUWLVLQJ ZKLOH QRW IDOVH FRXOG EH m(DPHVlSURGXFWV PLVOHDGLQJLQWKDWLWZDVmOLWHUDOO\WUXH\HWGHFHSWLYHRUWRR DPELJXRXVWRVXSSRUWDILQGLQJRIOLWHUDOIDOVLW\l,GDW +HUPDQ0LOOHUUHIHUVWRHYLGHQFHWKDW3DOD]]HWWLZDVDZDUH 3DOD]]HWWL KDG WKH ULJKW WR PDNH UHSURGXFWLRQV RI (DPHV WKDW+HUPDQ0LOOHUZDVXVLQJWKH($0(6WUDGHPDUNZKHQ GHVLJQHG IXUQLWXUH 3DOD]]HWWL GLG QRW VWDWH WKDW LW ZDV 3DOD]]HWWLEHJDQWRPDQXIDFWXUHDQGVHOOLWVUHSURGXFWLRQV,Q PDUNHWLQJRULJLQDOSLHFHVRI(DPHVGHVLJQHGIXUQLWXUH UDWKHU DGGLWLRQ +HUPDQ 0LOOHU QRWHV WKDW QRQH RI 3DOD]]HWWLjV LWIDLOHGWRVWDWHFOHDUO\WKDWLWZDVRIIHULQJUHSURGXFWLRQVRI SULQWHG PDWHULDOV PDNLQJ UHIHUHQFH WR LWV (DPHVGHVLJQHG (DPHVGHVLJQHGIXUQLWXUH3DOD]]HWWLjVDGYHUWLVLQJWKHUHIRUH IXUQLWXUHLQGLFDWHWKDWWKHIXUQLWXUHLVDUHSURGXFWLRQDQGWKDW ZKLOHOLWHUDOO\WUXHKDGWKHSRWHQWLDOWREHPLVOHDGLQJLQWKDW LWZDVRQO\ZKHQFXVWRPHUVZHUHLQ3DOD]]HWWLjVVKRZURRPV LWFRXOGJLYHFXVWRPHUVWKHLPSUHVVLRQ3DOD]]HWWLZDVRIIHULQJ WKDW 3DOD]]HWWL HPSOR\HHV UHIHUUHG WR WKH SURGXFWV DV RULJLQDO SLHFHV RI (DPHVGHVLJQHG IXUQLWXUH SURGXFHG E\ mUHSURGXFWLRQVl +HUPDQ0LOOHU :KHQ D SODLQWLII PDNHV D FODLP IRU GDPDJHV XQGHU WKH /DQKDP$FWEDVHGRQGHFHSWLYHRUDPELJXRXVDGYHUWLVLQJWKH FODLPmFDQRQO\EHHVWDEOLVKHGE\SURRIRIDFWXDOGHFHSWLRQ +HUPDQ0LOOHU,QFY 1RV 1RV +HUPDQ0LOOHU,QFY 3DOD]]HWWL,PSRUWV 3DOD]]HWWL,PSRUWV ([SRUWV,QF ([SRUWV,QF
FRXUWFRQFOXGHGWKDW3DOD]]HWWLVXIIHUHGSUHMXGLFHEHFDXVHRI ,,3URFHGXUDO+LVWRU\ +HUPDQ0LOOHUjVGHOD\VLQFH3DOD]]HWWLjVSRWHQWLDOOLDELOLW\IRU GDPDJHV LQFUHDVHG +HUPDQ 0LOOHU RIIHUV QR HYLGHQFH $ +HUPDQ0LOOHUjV&RPSODLQW LQGLFDWLQJ WKDW 3DOD]]HWWL ZDV QRW SUHMXGLFHG E\ +HUPDQ 0LOOHUjVIRXU\HDUGHOD\LQEULQJLQJVXLWWRHQIRUFHLWVWUDGH +HUPDQ 0LOOHU ILOHG D FRPSODLQW LQ WKH 8QLWHG 6WDWHV GUHVV ULJKWV 7KHUHIRUH WKH GLVWULFW FRXUW SURSHUO\ JUDQWHG 'LVWULFW&RXUWIRUWKH:HVWHUQ'LVWULFWRI0LFKLJDQRQsXQH VXPPDU\MXGJPHQWWR3DOD]]HWWLDVWRWKLVLVVXH 7KH FRPSODLQW DOOHJHG WKDW 3DOD]]HWWL ZDV YLRODWLQJ +HUPDQ 0LOOHUjV ULJKWV LQ WKH ($0(6 WUDGHPDUN DQG WKH ' sXGJPHQW DV D 0DWWHU RI /DZ WR 3DOD]]HWWL DV WR (DPHV ORXQJH FKDLU DQG RWWRPDQ WUDGH GUHVV DQG +HUPDQ +HUPDQ0LOOHUjV)DOVH$GYHUWLVLQJ&ODLP 0LOOHUjV ULJKWV RI SXEOLFLW\ LQ WKH QDPHV DQG OLNHQHVVHV RI &KDUOHV(DPHVDQG5D\(DPHV6SHFLILFDOO\+HUPDQ0LOOHU 6WDQGDUGRI5HYLHZ DOOHJHGWKDW3DOD]]HWWLZDVXVLQJWKHWUDGHPDUNWUDGHGUHVV DQG QDPHV DQG OLNHQHVVHV RI WKH (DPHVHV WR VHOO LPSRUWHG sXGJPHQWDVDPDWWHURIODZLVDSSURSULDWHZKHUHmWKHUHLV FRSLHVRI+HUPDQ0LOOHUjV(DPHVORXQJHFKDLUDQGRWWRPDQ QROHJDOO\VXIILFLHQWHYLGHQWLDU\EDVLVIRUDUHDVRQDEOHMXU\WR 3DOD]]HWWLREMHFWHGWRMXULVGLFWLRQFRQWHQGLQJWKDWWKHUHZDV ILQGIRUWKDWSDUW\RQWKDWLVVXHl)(' 5 &,9 3 D DQLQVXIILFLHQWQH[XVWRVXVWDLQSHUVRQDOMXULVGLFWLRQLQIHGHUDO 7KLVFRXUWjVUHYLHZLVGHQRYRDSSO\LQJWKHVDPHVWDQGDUG GLVWULFW FRXUW LQ WKH :HVWHUQ 'LVWULFW RI 0LFKLJDQ 2Q XVHGE\WKHGLVWULFWFRXUWDQGYLHZLQJWKHHYLGHQFHLQWKHOLJKW 'HFHPEHU +HUPDQ0LOOHUYROXQWDULO\GLVPLVVHGWKH PRVW IDYRUDEOH WR WKH QRQPRYLQJ SDUW\ 6HH $PHULFDQ DFWLRQ &RXQFLO RI &HUWLILHG 3RGLDWULF 3K\VLFLDQV DQG 6XUJHRQV Y $PHULFDQ%RDUGRI3RGLDWULF6XUJHU\,QF)G 2QsXQH EDVHGRQWKHVDPHIDFWXDODOOHJDWLRQV WK&LU +HUPDQ0LOOHUILOHGWKHSUHVHQWDFWLRQLQWKH8QLWHG6WDWHV 'LVWULFW&RXUWIRUWKH(DVWHUQ'LVWULFWRI0LFKLJDQ+HUPDQ $QDO\VLV 0LOOHUjVFODLPVZHUHWKDW 3DOD]]HWWLjVVDOHRIWKHORXQJH FKDLU DQG RWWRPDQ FRQVWLWXWHG WUDGHPDUN LQIULQJHPHQW DQG +HUPDQ 0LOOHU DUJXHV WKDW WKH GLVWULFW FRXUW LPSURSHUO\ XQIDLUFRPSHWLWLRQXQGHUWKH/DQKDP$FW86& JUDQWHG MXGJPHQW DV D PDWWHU RI ODZ WR 3DOD]]HWWL DV WR HW VHT DQG WKH FRPPRQ ODZ RI 0LFKLJDQ DQG D IDOVH +HUPDQ 0LOOHUjV FODLPV IRU GDPDJHV DQG LQMXQFWLYH UHOLHI GHVLJQDWLRQ RI RULJLQ XQGHU 86& D EDVHG RQ LWV DOOHJDWLRQV WKDW 3DOD]]HWWL HQJDJHG LQ IDOVH 3DOD]]HWWLHQJDJHGLQIDOVHDGYHUWLVLQJXQGHUWKH/DQKDP$FW DGYHUWLVLQJ7KH/DQKDP$FWLVWKHVWDWXWRU\EDVLVIRUDIDOVH DQG WKH FRPPRQ ODZ RI 0LFKLJDQ 3DOD]]HWWLjV DFWLRQV DGYHUWLVLQJFODLP,WVWDWHV FRQVWLWXWHGWUDGHGUHVVLQIULQJHPHQWXQGHUWKH/DQKDP$FW 3DOD]]HWWL ZDV GLOXWLQJ +HUPDQ 0LOOHUjV ($0(6 D $Q\SHUVRQZKRRQ RULQFRQQHFWLRQZLWKDQ\ WUDGHPDUN DQG WUDGH GUHVV DQG 3DOD]]HWWLjV FRQGXFW JRRGVRUVHUYLFHVXVHVLQFRPPHUFHDQ\ZRUGRU YLRODWHG+HUPDQ0LOOHUjVULJKWRISXEOLFLW\LQWKHm(DPHVl IDOVH GHVLJQDWLRQ RI RULJLQ IDOVH RU PLVOHDGLQJ QDPHXQGHUWKHODZVRI&DOLIRUQLDDQG0LFKLJDQ GHVFULSWLRQRIIDFWRUIDOVHRUPLVOHDGLQJUHSUHVHQWDWLRQV RIIDFWZKLFKo +HUPDQ0LOOHU,QFY 1RV 1RV +HUPDQ0LOOHU,QFY 3DOD]]HWWL,PSRUWV 3DOD]]HWWL,PSRUWV ([SRUWV,QF ([SRUWV,QF
% 6XPPDU\s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mRQ D )HEUXDU\ WKHGLVWULFWFRXUWHQWHUHGDQRUGHUJUDQWLQJ PRQWKO\ EDVLV IRU WKH QH[W ILYH \HDUVl DIWHU WKHPRWLRQLQSDUWDQGGHQ\LQJLWLQSDUW7KHFRXUWUXOHG HPSKDVLV DGGHG 7KH UHFRUG LQGLFDWHV WKDW 3DOD]]HWWL WKDW +HUPDQ0LOOHUNQHZRI3DOD]]HWWLjVXVHRIWKHQDPH DGYHUWLVHG WKH ORXQJH FKDLU DQG RWWRPDQ LQ 7KH 1HZ <RUN m(DPHVlLQFRQQHFWLRQZLWKIXUQLWXUHDVHDUO\DV0DUFK 7LPHVRQO\IRXUWLPHVLQ WKUHHWLPHVLQ ]HURWLPHV IXUQLWXUHVROGE\3DOD]]HWWLLQ ZDVWKHVDPHIXUQLWXUH LQ IRXUWHHQ WLPHV LQ DQG QLQHWHHQ WLPHV E\ FRYHUHG E\ WKH ODZVXLW LW GLG QRW PDWWHU ZKHWKHU 6HSWHPEHU ZKHQ+HUPDQ0LOOHUFODLPVLWILUVWEHFDPH 3DOD]]HWWLNQHZLQ RIHDFKDQGHYHU\SDUWLFXODUSLHFHRI DZDUH RI 3DOD]]HWWLjV DGYHUWLVLQJ RI WKH (DPHVGHVLJQHG IXUQLWXUHVROGE\3DOD]]HWWLWKDWPD\EHFRPHVXEMHFWWRWKH ORXQJHFKDLUDQGRWWRPDQ ODZVXLW DQG WKHSHULRGRIGHOD\LQEULQJLQJVXLWEHJDQLQ $V D UHVXOW WKH FRXUW KHOG WKDW D UHEXWWDEOH (YHQWKRXJK3DOD]]HWWLGLGQRWDGYHUWLVHWKHORXQJHFKDLU SUHVXPSWLRQRIODFKHVZDVFUHDWHGE\+HUPDQ0LOOHUjVIDLOXUH DQGRWWRPDQRQDUHJXODUEDVLVWKLVLVQRH[FXVHIRU+HUPDQ WREULQJVXLWXQWLO 7KHFRXUWGHWHUPLQHGWKDW+HUPDQ 0LOOHUjVODFNRIGLOLJHQFH7KHIDFWVLQWKHUHFRUGLQGLFDWH 0LOOHUFRXOGQRWUHEXWWKHSUHVXPSWLRQRIODFKHV7KHFRXUW WKDW3DOD]]HWWLGLGDGYHUWLVHWKHORXQJHFKDLUDQGRWWRPDQLQ UXOHG WKDW ODFKHV EDUUHG +HUPDQ 0LOOHU IURP UHFRYHULQJ DPDMRUQHZVSDSHULQWKHHDUO\ VDWWKHWLPHDQGDIWHUWKH GDPDJHV IRU SDVW WUDGHPDUN DQG WUDGH GUHVV LQIULQJHPHQW WLPHWKDW+HUPDQ0LOOHUEHFDPHDZDUHWKDW3DOD]]HWWLZDV 7KHFRXUWDOVRUXOHGKRZHYHUWKDWWKHGHOD\GLGQRWHVWRS DOUHDG\UHSURGXFLQJWKH(DPHVGHVLJQHGmSRWDWRFKLSFKDLUl +HUPDQ 0LOOHU IURP IXWXUH LQMXQFWLYH UHOLHI RU SRVWVXLW 0RUHRYHUHYHQZLWKRXWWKHDGYHUWLVLQJWKHIDFWWKDW+HUPDQ PRQHWDU\UHOLHI 0LOOHU ZDV DZDUH WKDW 3DOD]]HWWL ZDV UHSURGXFLQJ VRPH (DPHVGHVLJQHG IXUQLWXUH SXW +HUPDQ 0LOOHU RQ QRWLFH WR & 6XPPDU\sXGJPHQWWR3DOD]]HWWLDVWR7UDGH'UHVV FRQGXFWIXUWKHULQYHVWLJDWLRQVXFKDVREWDLQLQJ3DOD]]HWWLjV SURGXFWFDWDORJVRUYLVLWLQJLWV1HZ<RUNVKRZURRP(LWKHU 2Q $SULO 3DOD]]HWWL ILOHG D VHFRQG PRWLRQ IRU DFWLRQZRXOGKDYHUHYHDOHGWR+HUPDQ0LOOHUWKDW3DOD]]HWWL VXPPDU\ MXGJPHQW RQ +HUPDQ 0LOOHUjV WUDGH GUHVV ZDVUHSURGXFLQJDQGVHOOLQJWKH(DPHVGHVLJQHGORXQJHFKDLU LQIULQJHPHQWDQGGLOXWLRQFODLPVDUJXLQJWKDW+HUPDQ0LOOHU DQG RWWRPDQ LQ *LYHQ WKDW +HUPDQ 0LOOHU ZDV RQ KDGDEDQGRQHGDQ\ULJKWVWKDWLWPLJKWKDYHKDGLQWKHWUDGH QRWLFHRI3DOD]]HWWLjVPDUNHWLQJRIUHSURGXFWLRQVRI(DPHV GUHVVRIWKHORXQJHFKDLUDQGRWWRPDQ3DOD]]HWWLj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
ILOHVXLWXQWLO +HUPDQ0LOOHUFODLPVWKDWWKHGLVWULFW m(DPHVl EXW GLG QRW VWRS WKHLU SURGXFWLRQ RU VDOH RI WKH FRXUW HUUHG LQ WZR UHVSHFWV ILUVW E\ ILQGLQJ WKDW WKH ORXQJHFKDLUVDQGRWWRPDQV DQDORJRXV VWDWXWH RI OLPLWDWLRQV KDG UXQ DQG VHFRQG E\ XOWLPDWHO\ILQGLQJLQIDYRURI3DOD]]HWWLDVWRODFKHV 7KHGLVWULFWFRXUWJUDQWHG3DOD]]HWWLj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jV WUDGH GUHVV VWDWXWH RI OLPLWDWLRQV LVVXH DQG WKH ILUVW SDUW RI WKH ODFKHV LQIULQJHPHQWFODLPUHVXOWHGLQGLVPLVVDORI+HUPDQ0LOOHUjV LQTXLU\FDQEHDQDO\]HGWRJHWKHU+HUPDQ0LOOHUDOORZHGWKH WUDGHGUHVVGLOXWLRQFODLPVXEVLOHQWLR VWDWXWH RI OLPLWDWLRQV WR ODSVH E\ LWV ODFN RI GLOLJHQFH LQ SXUVXLQJLWVWUDGHGUHVVULJKWVLQWKHORXQJHFKDLUDQGRWWRPDQ ' 'HQLDORI3DOD]]HWWLjV0RWLRQIRU6XPPDU\sXGJPHQW ,Q +HUPDQ0LOOHUNQHZWKDW3DOD]]HWWLZDVUHSURGXFLQJ DVWR5LJKWRI3XEOLFLW\ (DPHVGHVLJQHGIXUQLWXUHDQGUHIHUULQJWRWKHQDPHm(DPHVl +HUPDQ 0LOOHU DGPLWV WKDW LQ LW EHFDPH DZDUH WKDW 2Q sXQH 3DOD]]HWWL ILOHG D WKLUG PRWLRQ IRU 3DOD]]HWWLZDVVHOOLQJUHSURGXFWLRQVRIWKH(DPHVGHVLJQHG VXPPDU\MXGJPHQW3DOD]]HWWLVRXJKWGLVPLVVDORI+HUPDQ mSRWDWRFKLSFKDLUl,QDGGLWLRQ+HUPDQ0LOOHUHQJDJHGLQ 0LOOHUjVFODLPVZLWKUHVSHFWWRLWVULJKWVRISXEOLFLW\LQWKH FRUUHVSRQGHQFH ZLWK 3DOD]]HWWL LQ UHJDUGLQJ LWV QDPHV DQG OLNHQHVVHV RI &KDUOHV DQG 5D\ (DPHV XQGHU PDUNHWLQJ RI UHSURGXFWLRQV RI (DPHVGHVLJQHG IXUQLWXUH &DOLIRUQLDDQG0LFKLJDQODZ3DOD]]HWWLDUJXHGWKDWQHLWKHU +HUPDQ0LOOHUDUJXHVKRZHYHUWKDWWKLVZDVDQLPSURSHU 0LFKLJDQQRU1HZ<RUN 3DOD]]HWWLjVKRPHVWDWH UHFRJQL]HG EDVLV IRU WKH GLVWULFW FRXUW WR DSSO\ ODFKHV VLQFH LW ZDV QRW DSRVWPRUWHPULJKWRISXEOLFLW\2Q)HEUXDU\ WKH XQWLO WKDW+HUPDQ0LOOHUVSHFLILFDOO\EHFDPHDZDUHRI FRXUW GHQLHG 3DOD]]HWWLjV PRWLRQ 7KH FRXUW IRXQG WKDW 3DOD]]HWWLj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mGHOD\ ,QODWH6HSWHPEHUDQGHDUO\2FWREHU DMXU\WULDOZDV DWWULEXWDEOHWRWKHSODLQWLIIPXVWEHPHDVXUHGIURPWKHWLPHDW KHOGDVWRWKHUHPDLQLQJLVVXHV2Q2FWREHUDWWKHFORVHRI ZKLFK WKH SODLQWLII NQHZ RU VKRXOG KDYH NQRZQ WKDW +HUPDQ0LOOHUjVHYLGHQFH3DOD]]HWWLPRYHGIRUMXGJPHQWDV >GHIHQGDQWjV@ LQIULQJHPHQW KDG ULSHQHG LQWR D SURYDEOH DPDWWHURIODZRQ+HUPDQ0LOOHUjVIDOVHDGYHUWLVLQJFODLP FODLPl HPSKDVLVDGGHG +HUPDQ0LOOHUWDNHVLVVXHZLWK 7KHPRWLRQZDVJUDQWHGIURPWKHEHQFK WKH GLVWULFW FRXUWjV FRQFOXVLRQ WKDW mDQ\l LQYHVWLJDWLRQ +HUPDQ0LOOHU,QFY 1RV 1RV +HUPDQ0LOOHU,QFY 3DOD]]HWWL,PSRUWV 3DOD]]HWWL,PSRUWV ([SRUWV,QF ([SRUWV,QF
2Q 2FWREHU WKH MXU\ UHWXUQHG D YHUGLFW DJDLQVW GLVWULFWFRXUW6HH'DGG\jVsXQN\ )GDW:KHQWKH 3DOD]]HWWLRQWKHLVVXHRIOLDELOLW\DVWRWKHUHPDLQLQJFODLPV UHFRUG EHIRUH WKH GLVWULFW FRXUW RQ D PRWLRQ IRU VXPPDU\ ILQGLQJWKDW 3DOD]]HWWLKDGLQIULQJHG+HUPDQ0LOOHUjV MXGJPHQWVKRZVIDFWXDOLVVXHVLQGLVSXWHWKDWFRXOGDIIHFWWKH ($0(6 WUDGHPDUN 3DOD]]HWWL KDG GLOXWHG +HUPDQ HTXLW\RIWKHDSSOLFDWLRQRIODFKHVWREDUWKHFODLPWKHGLVWULFW 0LOOHUjV ($0(6 WUDGHPDUN 3DOD]]HWWL KDG HQJDJHG LQ FRXUWPXVWGHQ\WKHPRWLRQDQGSHUPLWWKHSDUWLHVWRSUHVHQW XQIDLUFRPSHWLWLRQ DQG 3DOD]]HWWLKDGYLRODWHG+HUPDQ WKHLU SURRI 6HH :DWNLQV Y 1RUWKZHVWHUQ 2KLR 7UDFWRU 0LOOHUjV ULJKW RI SXEOLFLW\ LQ WKH QDPHV DQG OLNHQHVVHV RI 3XOOHUV$VVjQ,QF)G WK&LU &KDUOHV(DPHVDQG5D\(DPHV $QDO\VLV 2Q2FWREHU WKHGLVWULFWFRXUWLVVXHGDSHUPDQHQW LQMXQFWLRQHQMRLQLQJ3DOD]]HWWLIURP XVLQJm(DPHVlm& 7KHGLVWULFWFRXUWJUDQWHG3DOD]]HWWLVXPPDU\MXGJPHQWDV (DPHVlm&KDUOHV(DPHVlRUm5D\(DPHVlDVDWUDGHPDUN WRODFKHVZLWKUHVSHFWWRDOORI+HUPDQ0LOOHUjVFODLPV7KLV DFWVFDXVLQJGLOXWLRQRIWKH($0(6WUDGHPDUN DQG ILQGLQJ EDUUHG +HUPDQ 0LOOHU IURP REWDLQLQJ SUHVXLW XVLQJWKHQDPHVDQGOLNHQHVVHVRI&KDUOHVRU5D\(DPHVLQ PRQHWDU\GDPDJHVUHODWHGWRWKHVHFODLPV+HUPDQ0LOOHU FRQQHFWLRQZLWK3DOD]]HWWLjVIXUQLWXUH7KHLQMXQFWLRQDSSOLHG RQO\ DSSHDOV WKH GLVWULFW FRXUWjV ILQGLQJ RI ODFKHV DV WR LWV QDWLRQZLGH7KHSHUPDQHQWLQMXQFWLRQSHUPLWWHG3DOD]]HWWLWR WUDGHGUHVVFODLPV mIDLUO\ LGHQWLI\l &KDUOHV DQG 5D\ (DPHV DV WKH RULJLQDO GHVLJQHUV RI IXUQLWXUH DIWHU ZKLFK 3DOD]]HWWL SDWWHUQHG RU /DFKHVLVWKHmQHJOLJHQWDQGXQLQWHQWLRQDOIDLOXUHWRSURWHFW UHSURGXFHGLWVRZQIXUQLWXUH RQHjV ULJKWVl (OYLVO\ <RXUV )G DW $ SDUW\ DVVHUWLQJODFKHVPXVWVKRZ ODFNRIGLOLJHQFHE\WKHSDUW\ 2Q 2FWREHU WKH GLVWULFW FRXUW DSSURYHG D DJDLQVWZKRPWKHGHIHQVHLVDVVHUWHGDQG SUHMXGLFHWRWKH VWLSXODWHGSDUWLDOMXGJPHQW DZDUGLQJ+HUPDQ0LOOHUSRVW SDUW\DVVHUWLQJLW6HH,QGXFW20DWLF&RUSY,QGXFWRWKHP ILOLQJ GDPDJHV RI IRU WKH WUDGHPDUN LQIULQJHPHQW &RUS)G WK&LU 7KHUHLVDVWURQJ WUDGHPDUNGLOXWLRQXQIDLUFRPSHWLWLRQDQGULJKWRISXEOLFLW\ SUHVXPSWLRQWKDWDSODLQWLIIjVGHOD\LQEULQJVXLWIRUPRQHWDU\ FODLPV DOORZLQJ3DOD]]HWWLWRVHHNDSSHOODWHUHYLHZRIWKH UHOLHILVQRWXQUHDVRQDEOHDVORQJDVWKHDQDORJRXVVWDWXWHRI YHUGLFW DQG DOORZLQJ +HUPDQ 0LOOHU WR VHHN DSSHOODWH OLPLWDWLRQV KDV QRW ODSVHG 6HH 7DQG\ &RUS Y 0DORQH UHYLHZRIWKHJUDQWRIVXPPDU\MXGJPHQWRQWKHWUDGHGUHVV +\GH ,QF )G WK &LU m2QO\ LVVXH DQG DGGLWLRQDO GDPDJHV RQ DFFRXQW RI WUDGH GUHVV UDUHO\VKRXOGODFKHVEDUDFDVHEHIRUHWKHDQDORJRXVVWDWXWH LQIULQJHPHQW KDVUXQl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
3DOD]]HWWLLVQRWDOORZHGWRH[SORLWWKHLGHQWLW\RIWKH(DPHVHV ,,,$QDO\VLV +HUPDQ0LOOHUjV$SSHDO FRPPHUFLDOO\EXWDWWKHVDPHWLPHLWFDQDFFXUDWHO\LGHQWLI\ WKHUHSURGXFWLRQVWKDWLWLVHQWLWOHGWRSURGXFH7KHGLVWULFW +HUPDQ0LOOHUUDLVHVIRXULVVXHVLQLWVDSSHDORIWKHGLVWULFW FRXUWjVUHPHG\SUHYHQWVmKDUPIXORUH[FHVVLYHFRPPHUFLDO FRXUW SURFHHGLQJV :H ZLOO DGGUHVV HDFK RI WKHVH IRXU XVHlRIWKHLGHQWLW\RIWKH(DPHVHVE\OLPLWLQJ3DOD]]HWWLjV DUJXPHQWVLQWXUQ DELOLW\WRUHIHUWRWKHQDPHVDQGOLNHQHVVHVRI&KDUOHVDQG5D\ (DPHV$WWKHVDPHWLPHLWmDIIRUGVSURWHFWLRQDJDLQVWIDOVH $ 6XPPDU\ sXGJPHQW WR 3DOD]]HWWL DV WR +HUPDQ VXJJHVWLRQV RI HQGRUVHPHQW RI VSRQVRUVKLSl EHFDXVH LW 0LOOHUjV7UDGH'UHVV&ODLPV HQDEOHV3DOD]]HWWLWRVWDWHWKDWLWVIXUQLWXUHLVEDVHGRQWKH (DPHVHVjVGHVLJQVDQGWKHUHIRUHLVQRWDQRULJLQDOSLHFHRI 6WDQGDUGRI5HYLHZ IXUQLWXUHGHVLJQHGE\WKH(DPHVHV 7KLV FRXUW UHYLHZV D GLVWULFW FRXUWjV JUDQW RI VXPPDU\ ,QRUGHUWRRYHUWXUQDQLQMXQFWLRQIRUDQDEXVHRIGLVFUHWLRQ MXGJPHQWGHQRYRXVLQJWKHVDPHVWDQGDUGHPSOR\HGE\WKH ZHPXVWEHOHIWZLWKmDGHILQLWHDQGILUPFRQYLFWLRQWKDWWKH GLVWULFWFRXUW6HH+ROORZD\Y%UXVK)G WK WULDO FRXUW FRPPLWWHG D FOHDU HUURU RI MXGJPHQWl 'HDQ Y &LU HQEDQF 'DGG\jVsXQN\0XVLF6WRUHV,QFY%LJ 0RWHO2SHUDWLQJ/3)G WK&LU 'DGG\jV)DPLO\0XVLF&HQWHU )G WK&LU FLWDWLRQ DQG LQWHUQDO TXRWDWLRQV RPLWWHG :H DUH QRW OHIW 6XPPDU\ MXGJPHQW LV DSSURSULDWH ZKHUH mWKH ZLWKVXFKDFRQYLFWLRQLQWKLVFDVH7KHUHIRUHZHXSKROGWKH SOHDGLQJV GHSRVLWLRQV DQVZHUV WR LQWHUURJDWRULHV DQG VFRSHRIWKHGLVWULFWFRXUWjVLQMXQFWLRQ DGPLVVLRQVRQILOHWRJHWKHUZLWKWKHDIILGDYLWVLIDQ\VKRZ WKDWWKHUHLVQRJHQXLQHLVVXHDVWRDQ\PDWHULDOIDFWDQGWKDW & 6XPPDU\ sXGJPHQW WR 3DOD]]HWWL RQ /DFKHV DV WR WKHPRYLQJSDUW\LVHQWLWOHGWRDMXGJPHQWDVDPDWWHURIODZl +HUPDQ0LOOHUjV7UDGH'UHVV&ODLPV )(' 5 &,9 3 F ,Q GHFLGLQJ D PRWLRQ IRU VXPPDU\ MXGJPHQWWKLVFRXUWYLHZVWKHIDFWXDOHYLGHQFHDQGGUDZVDOO 6WDQGDUGRI5HYLHZ UHDVRQDEOHLQIHUHQFHVLQIDYRURIWKHQRQPRYLQJSDUW\6HH 1DWLRQDO(QWHUV,QFY6PLWK)G WK&LU 7KLV FRXUW UHYLHZV D GLVWULFW FRXUWjV JUDQW RI VXPPDU\ MXGJPHQWGHQRYRXVLQJWKHVDPHVWDQGDUGHPSOR\HGE\WKH $QDO\VLV D 7UDGH'UHVV%DFNJURXQGDQGWKH(IIHFWRI6DPDUD ,Q WKLV VHQVH JLYLQJ 3DOD]]HWWL WKH ULJKW WR mIDLUO\ LGHQWLI\l LWV IXUQLWXUH DV RULJLQDOO\ GHVLJQHG E\ WKH (DPHVHV PD\ DFWXDOO\ EH WR %URWKHUV +HUPDQ 0LOOHUjV EHQHILW $V ZH XQGHUVWDQG +HUPDQ 0LOOHUjV SRVLWLRQ ZH VKRXOG DPHQG WKH GLVWULFW FRXUWjV LQMXQFWLRQ VR WKDW 3DOD]]HWWL FRXOG QRW +HUPDQ0LOOHUEULQJVLWVWUDGHGUHVVFODLPVXQGHUVHFWLRQ PHQWLRQ WKH QDPH m(DPHVl DW DOO )RU FXVWRPHUV ZKR FDQ UHFRJQL]H D RIWKH/DQKDP$FWZKLFKSURKLELWVDQ\SHUVRQIURP IXUQLWXUH WKH (DPHVHV SURGXFHG EXW QRW WKH IDFW WKDW +HUPDQ 0LOOHU XVLQJmDQ\IDOVHGHVLJQDWLRQRIRULJLQlWKDWmLVOLNHO\WRFDXVH SURGXFHV WKH RULJLQDO YHUVLRQ RI WKLV IXUQLWXUH QRW DOORZLQJ 3DOD]]HWWL WR FRQIXVLRQRUWRFDXVHPLVWDNHRUWRGHFHLYHDVWRWKH XVH WKH QDPH m(DPHVl DW DOO PD\ JLYH WKH LPSUHVVLRQ WKDW 3DOD]]HWWL LV VHOOLQJ mRULJLQDOl (DPHV IXUQLWXUH VLQFH 3DOD]]HWWL ZRXOG QRW EH DEOH WR RULJLQ RI KLV RU KHU JRRGV l 86& mIDLUO\ LGHQWLI\l WKH (DPHVHV DV WKH RULJLQDO GHVLJQHUV mRI WKH IXUQLWXUH DIWHU ZKLFK 3DOD]]HWWL SDWWHUQHG RU UHSURGXFHG LWV RZQ IXUQLWXUHl +HUPDQ0LOOHU,QFY 1RV 1RV +HUPDQ0LOOHU,QFY 3DOD]]HWWL,PSRUWV 3DOD]]HWWL,PSRUWV ([SRUWV,QF ([SRUWV,QF
D $ 7UDGH GUHVV UHIHUV WR mWKH LPDJH DQG HQOLJKWHQ WKH WUDGH UHJDUGLQJ WKH VXSSRVHG YLUWXHV RI WKH RYHUDOODSSHDUDQFHRIDSURGXFWl$OOLHG0NWJ*URXS,QFY UHSURGXFWLRQl+\SHUWKHUP)GDW &'/ 0NWJ ,QF )G WK &LU ,W mHPERGLHVWKDWDUUDQJHPHQWRILGHQWLI\LQJFKDUDFWHULVWLFVRU 3XUVXDQWWRWKHGLVWULFWFRXUWjVLQMXQFWLRQ3DOD]]HWWLFDQQRW GHFRUDWLRQVFRQQHFWHGZLWKDSURGXFWZKHWKHUE\SDFNDJLQJ XVHWKH($0(6WUDGHPDUNPHDQLQJLWFDQQRWXVHWKHZRUG RU RWKHUZLVH LQWHQGHG WR PDNH WKH VRXUFH RI WKH SURGXFW m(DPHVlLQWKHVHFRQGDU\PHDQLQJFUHDWHGE\WKHWUDGHPDUN GLVWLQJXLVKDEOH IURP DQRWKHU DQG WR SURPRWH LWV VDOHl +RZHYHUWUDGHPDUNODZLQGLFDWHVWKDWLQWKHLQWHUHVWVRIIUHH )HUUDUL63$(VHUFL]LRY5REHUWV )G WK FRPSHWLWLRQ 3DOD]]HWWL FDQ XVH WKH ZRUG m(DPHVl LQ LWV &LU FLWDWLRQDQGLQWHUQDOTXRWDWLRQVRPLWWHG RULJLQDOGHVFULSWLYHDQGSULPDU\VHQVH,QOLJKWRIWKHULJKW RISXEOLFLW\GHFLVLRQDJDLQVW3DOD]]HWWLKRZHYHU3DOD]]HWWLjV 7RSURYHDFODLPRIWUDGHGUHVVLQIULQJHPHQWXQGHU D WUDGHPDUNIDLUXVHULJKWVLQWKHZRUGm(DPHVlZHUHLQHIIHFW RI WKH /DQKDP $FW +HUPDQ 0LOOHU PXVW HVWDEOLVK E\ D VLJQLILFDQWO\UHGXFHGVLQFH3DOD]]HWWLORVWWKHULJKWVWRXVHWKH SUHSRQGHUDQFHRIWKHHYLGHQFH WKDWLWVWUDGHGUHVVLQWKH QDPHVRUOLNHQHVVHVRI&KDUOHVDQG5D\(DPHVLQFRQQHFWLRQ (DPHVORXQJHFKDLUDQGRWWRPDQLVSURWHFWDEOH WKDWWKHUH ZLWKLWVUHSURGXFWLRQVRIIXUQLWXUHRULJLQDOO\GHVLJQHGE\WKH LVDOLNHOLKRRGRIFRQIXVLRQEHWZHHQ+HUPDQ0LOOHUjVORXQJH (DPHVHV 7KLV LV EHFDXVH XQGHU WKH ULJKW RI SXEOLFLW\ mD FKDLU DQG RWWRPDQ DQG WKDW RI 3DOD]]HWWL DQG WKDW WKH FHOHEULW\KDVDSURWHFWHGSHFXQLDU\LQWHUHVWLQWKHFRPPHUFLDO DSSURSULDWHG IHDWXUHV RI WKH ORXQJH FKDLU DQG RWWRPDQ DUH H[SORLWDWLRQ RI KLV LGHQWLW\l &DUVRQ Y +HUHjV sRKQQ\ SULPDULO\QRQIXQFWLRQDO6HHLELG7KHGLVWULFWFRXUWJUDQWHG 3RUWDEOH 7RLOHWV ,QF )G WK &LU VXPPDU\ MXGJPHQW WR 3DOD]]HWWL RQ WKH EDVLV WKDW +HUPDQ m+HUHjVsRKQQ\,l 7KHUHIRUH 0LOOHUj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s FRQFXUULQJ m>7@KH &RXUW LQWHUSUHWV > D @ DV VSRQVRUVKLS KDYLQJ FUHDWHG D IHGHUDO FDXVH RI DFWLRQ IRU LQIULQJHPHQW RI XQUHJLVWHUHG WUDGHPDUN RU WUDGH GUHVV DQG FRQFOXGHV WKDW VXFK D PDUN RU WUDGH GUHVV 5(67$7(0(17 7+,5' 2) 81)$,5 &203(7,7,21FPWF VKRXOG UHFHLYH HVVHQWLDOO\ WKH VDPH SURWHFWLRQ DV WKRVH WKDW DUH UHJLVWHUHGl VHH DOVR s 7+20$6 0&&$57+< 0&&$57+< 21 75$'(0$5.6 81)$,5 &203(7,7,21 WK HG m7KH FOHDU 7KHGLVWULFWFRXUWOLPLWHG3DOD]]HWWLjVULJKWVDSSURSULDWHO\ PHVVDJH RI WKH %,.4 ,s,3, FDVH LV WKDW WKH JHQHUDO UXOHV RI WUDGHPDUN YDOLGLW\ DQG LQIULQJHPHQW DUH WR EH DSSOLHG WR LQIULQJHPHQW FODLPV EURXJKW LQOLJKWRIWKHSXUSRVHVRIWKHULJKWRISXEOLFLW\E\SUHYHQWLQJ XQGHU /DQKDP $FW D l 3DOD]]HWWL IURP XVLQJ WKH QDPHV DQG OLNHQHVVHV RI WKH (DPHVHVLQDQ\FLUFXPVWDQFHH[FHSWIRUWKHOLPLWHGDELOLW\RI 7KH SDUWLHV KDYH QRW OLWLJDWHG WKH RWKHU WZR QHFHVVDU\ FRPSRQHQWV 3DOD]]HWWL WR LGHQWLI\ DFFXUDWHO\ LWV IXUQLWXUH DV EDVHG RQ RI D /DQKDP $FW YLRODWLRQ EHIRUH WKH GLVWULFW FRXUW 7KHUHIRUH ZH ZLOO QRW RULJLQDO GHVLJQV RI &KDUOHV DQG 5D\ (DPHV $V D UHVXOW DGGUHVV WKHP RQ DSSHDO +HUPDQ0LOOHU,QFY 1RV 1RV +HUPDQ0LOOHU,QFY 3DOD]]HWWL,PSRUWV 3DOD]]HWWL,PSRUWV ([SRUWV,QF ([SRUWV,QF
IXUQLWXUH RULJLQDOO\ GHVLJQHG E\ WKH (DPHVHV $OWKRXJK 6LQFHWKHGLVWULFWFRXUWLVVXHGLWVGHFLVLRQLQWKLVFDVHWKH +HUPDQ0LOOHUREMHFWVWR3DOD]]HWWLjVUHSURGXFWLRQVRIWKHVH SURWHFWDELOLW\DQDO\VLVLQDWUDGHGUHVVFODLPEDVHGRQSURGXFW RWKHUSLHFHVRIIXUQLWXUH+HUPDQ0LOOHUKDVQRWDVVHUWHGWUDGH GHVLJQKDVFKDQJHGFRQVLGHUDEO\$WWKHWLPHRIWKHGLVWULFW GUHVV ULJKWV LQ WKHVH GHVLJQV 5HFRJQL]LQJ WKLV IDFW WKH FRXUWjVGHFLVLRQWUDGHGUHVVZDVSURWHFWDEOHLILWZDVSURYHQ GLVWULFWFRXUWDOORZHG3DOD]]HWWLDOLPLWHGDELOLW\WRDFFXUDWHO\ HLWKHU WR EH LQKHUHQWO\ GLVWLQFWLYH RU WR KDYH DFTXLUHG LGHQWLI\WKHVHSLHFHVRIIXUQLWXUHDVKDYLQJEHHQRULJLQDOO\ GLVWLQFWLYHQHVVWKURXJKVHFRQGDU\PHDQLQJ6HH7ZR3HVRV GHVLJQHGE\&KDUOHVDQG5D\(DPHV 86DW7KHGLVWULFWFRXUWGHWHUPLQHGWKDW+HUPDQ 0LOOHUjV (DPHV ORXQJH FKDLU DQG RWWRPDQ QHLWKHU ZHUH 7KHGLVWULFWFRXUWDOVRZDVIRUFHGWREDODQFH3DOD]]HWWLjV LQKHUHQWO\GLVWLQFWLYHQRUKDGDFTXLUHGVHFRQGDU\PHDQLQJ IDLUXVHULJKWVLQWUDGHPDUNZLWK+HUPDQ0LOOHUjVULJKWVRI 7KHUHIRUHWKHFRXUWJUDQWHGVXPPDU\MXGJPHQWWR3DOD]]HWWL SXEOLFLW\LQWKHQDPHVDQGOLNHQHVVHVRIWKH(DPHVHV8QGHU RQ+HUPDQ0LOOHUjVWUDGHGUHVVFODLP WKHGRFWULQHRImIDLUXVHlWKHKROGHURIDWUDGHPDUNFDQQRW SUHYHQWRWKHUVIURPXVLQJWKHZRUGWKDWIRUPVWKHWUDGHPDUN ,Q:DO0DUW6WRUHV,QFY6DPDUD%URWKHUV 86 LQLWVSULPDU\RUGHVFULSWLYHVHQVH WKH 6XSUHPH &RXUW KHOG WKDW mLQ DQ DFWLRQ IRU LQIULQJHPHQWRIXQUHJLVWHUHGWUDGHGUHVVXQGHU D RIWKH 7KHRQO\ULJKWRIH[FOXVLRQWKDWWUDGHPDUNODZFUHDWHVLQ /DQKDP$FWDSURGXFWjVGHVLJQLVGLVWLQFWLYHDQGWKHUHIRUH DGHVFULSWLYHZRUGLVLQWKHVHFRQGDU\QHZmWUDGHPDUNl SURWHFWDEOH RQO\ XSRQ D VKRZLQJ RI VHFRQGDU\ PHDQLQJl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mWRLGHQWLI\WKHSURGXFWLWKDVFRSLHGVRORQJ WUDGHGUHVVOLNHDWUDGHPDUNFRXOGEHLQKHUHQWO\GLVWLQFWLYH DVQRPLVUHSUHVHQWDWLRQLVPDGHDQGQRFRQIXVLRQLVJHQHUDWHG 6HH7ZR3HVRV86DW DVWRWKHVRXUFHVSRQVRUVKLSRULGHQWLI\RIWKHHUDWV]JRRGVl +\SHUWKHUP,QFY3UHFLVLRQ3URGV,QF)G ,Q 6DPDUD %URWKHUV WKH 6XSUHPH &RXUW QRWHG VHYHUDO VW &LU VHH DOVR 3HEEOH %HDFK &R Y 7RXU , UHDVRQV ZK\ WKH LQKHUHQWO\ GLVWLQFWLYH WHVW VKRXOG QRW EH /LPLWHG)G WK&LU 7KHUHIRUHm>D@V DSSOLHGLQWUDGHGUHVVFDVHVEDVHGRQSURGXFWGHVLJQ7KH ORQJ DV DQ LPLWDWLRQ LV PDUNHWHG DV VXFK LWV YRWDULVWV PD\ &RXUWQRWHGWKHIDFWWKDWSURGXFWGHVLJQmDOPRVWLQYDULDEO\ UHIHU GHVFULSWLYHO\ WR WKH RULJLQDO FRSLHG SURGXFW WR VHUYHV SXUSRVHV RWKHU WKDQ VRXUFH LGHQWLILFDWLRQl VXFK DV PDNLQJSURGXFWVPRUHXVHIXORUDSSHDOLQJ 86DW 7KH &RXUW DOVR VWDWHG WKDW DSSOLFDWLRQ RI WKH LQKHUHQWO\ GLVWLQFWLYH WHVW LQ SURGXFW GHVLJQ FDVHV FRXOG GHSULYH
FRQVXPHUVRImWKHEHQHILWVRIFRPSHWLWLRQZLWKUHJDUGWRWKH 2I FRXUVH LI +HUPDQ 0LOOHU LV XQDEOH WR SUHYDLO RQ LWV WUDGH GUHVV XWLOLWDULDQDQGHVWKHWLFSXUSRVHVWKDWSURGXFWGHVLJQRUGLQDULO\ FODLP 3DOD]]HWWL FDQ FRQWLQXH WR SURGXFH WKH ORXQJH FKDLU DQG RWWRPDQ DV VHUYHVl,ELG ZHOO +HUPDQ0LOOHU,QFY 1RV 1RV +HUPDQ0LOOHU,QFY 3DOD]]HWWL,PSRUWV 3DOD]]HWWL,PSRUWV ([SRUWV,QF ([SRUWV,QF
7KH&RXUWWKHQGLIIHUHQWLDWHG6DPDUD%URWKHUVIURP7ZR SURKLELWLQJWKHGHIHQGDQWIURPXVLQJWKHSODLQWLIIjVWUDGHPDUN 3HVRV 6DPDUD %URWKHUV FRQFHUQHG D FODLP EURXJKW E\ D DQGSXEOLFLW\ULJKWVmIRUDQ\SXUSRVHZKDWVRHYHUl,ELG:H FKLOGUHQjVFORWKLQJGHVLJQHUDQGPDQXIDFWXUHUDOOHJLQJWKDW FRQFOXGHGWKDWWKHSURKLELWLRQ :DO0DUW ZDV VHOOLQJ mNQRFNRIIl FRSLHV RI WKH GHVLJQHUjV FORWKHV QDPHO\ mD OLQH RI VSULQJVXPPHU RQHSLHFH LV WRR EURDG LQVRIDU DV LW FRYHUV PRUH WKDQ WKH VHHUVXFNHURXWILWVGHFRUDWHGZLWKDSSOLTXHVRIKHDUWVIORZHUV XQDXWKRUL]HG FRPPHUFLDO XVH RU H[SORLWDWLRQ RI >WKH IUXLWVDQGWKHOLNHl 86DW,Q7ZR3HVRVWKH SODLQWLIIjV@ULJKWV7KHUHDUHYDULRXVDFWLYLWLHVWKDW>WKH &RXUW KHOG WKDW WKH WUDGH GUHVV RI D FKDLQ RI 0H[LFDQ GHIHQGDQW@FRXOGHQJDJHLQWKDWZRXOGQRWYLRODWH>WKH UHVWDXUDQWVZKLFKWKHSODLQWLIIGHVFULEHGDVmDIHVWLYHHDWLQJ SODLQWLIIjV@ OHJLWLPDWH WUDGHPDUN DQG SXEOLFLW\ ULJKWV DWPRVSKHUHKDYLQJLQWHULRUGLQLQJDQGSDWLRDUHDVGHFRUDWHG VXFKDVZULWLQJDPDJD]LQHDUWLFOHRUERRNDERXW(OYLV ZLWKDQWLTXHVEULJKWFRORUVSDLQWLQJVDQGPXUDOVlLGDW 3UHVOH\ RU GHDOLQJ LQ SURSHUO\ OLFHQVHG SURGXFWV 7KH TXRWLQJ7ZR3HVRV86DW FRXOGEHSURWHFWHG LQMXQFWLRQ VKRXOG EH OLPLWHG VR DV WR SURKLELW >WKH XQGHU D ZLWKRXW D VKRZLQJ RI VHFRQGDU\ PHDQLQJ GHIHQGDQWjV@XQDXWKRUL]HGXVHRIWKHSXEOLFLW\ULJKWVRU 6DPDUD%URV 86DW FLWLQJ7ZR3HVRV86DW WUDGHPDUNVRI>WKHSODLQWLII@IRUFRPPHUFLDOSXUSRVHV 7KH6DPDUD%URWKHUV&RXUWGLIIHUHQWLDWHG7ZR3HVRV RQ WKH EDVLV WKDW WKH mWUDGH GUHVV DW LVVXH WKH GHFRU RI D ,ELG7KH&RXUWLQ(OYLVO\<RXUVUHFRJQL]HGWKDWDULJKWRI UHVWDXUDQW VHHPV WR XV QRW WR FRQVWLWXWH SURGXFW GHVLJQl SXEOLFLW\LQMXQFWLRQFDQQRWSUHYHQWDGHIHQGDQWIURPPDNLQJ 6DPDUD%URV 86DW7KH&RXUWVWDWHGWKDWLWZDV UHIHUHQFHWRDSHUVRQjVQDPHRUOLNHQHVVLQDOOFLUFXPVWDQFHV HLWKHUmSURGXFWSDFNDJLQJnZKLFKQRUPDOO\LVWDNHQE\ EXW RQO\ LQ FDVHV RI mXQDXWKRUL]HG FRPPHUFLDO XVH RU WKHFRQVXPHUWRLQGLFDWHRULJLQlRUmVRPHWHUWLXPTXLGWKDWLV H[SORLWDWLRQ RI >WKH SODLQWLIIjV@ ULJKWVl ,ELG VHH DOVR DNLQWRSURGXFWSDFNDJLQJDQGKDVQREHDULQJRQWKHSUHVHQW 5(67$7(0(17 7+,5' 2) 81)$,5 &203(7,7,21FPWF FDVHl,ELG m%HFDXVH RI WKH OLPLWHG VFRSH RI WKH ULJKW RI SXEOLFLW\ DQ LQMXQFWLRQ ZLOO RUGLQDULO\ SURKLELW RQO\ $IWHU6DPDUD%URWKHUVWUDGHGUHVVFODLPVEDVHGRQSURGXFW XQDXWKRUL]HGXVHRIWKHSODLQWLIIjVLGHQWLW\LQDGYHUWLVLQJRU SDFNDJLQJFDQEHSURYHQXSRQDVKRZLQJRIHLWKHULQKHUHQW PHUFKDQGLVLQJ DFWLYLWLHVl 7KHUHIRUH D SHUPDQHQW GLVWLQFWLYHQHVVRUVHFRQGDU\PHDQLQJEXWWUDGHGUHVVFODLPV LQMXQFWLRQ UHODWLQJ WR D ULJKW RI SXEOLFLW\ FODLP PXVW EH EDVHGRQSURGXFWGHVLJQFDQEHSURYHQRQO\XSRQDVKRZLQJ OLPLWHGLQVFRSHWRWKRVHDFWLYLWLHVWKDWWKHULJKWSURWHFWV RIVHFRQGDU\PHDQLQJ7KH&RXUWQRWHGWKDWWKLVGLVWLQFWLRQ FRXOGSURGXFHVRPHKDUGFDVHVmDWWKHPDUJLQl,ELG7KH 7KHGLVWULFWFRXUWLQWKLVFDVHZDVIDFHGZLWKWKHFKDOOHQJH &RXUWFLWHGRQHH[DPSOH RIEDODQFLQJVHYHUDOFRPSHWLQJOHJDOLQWHUHVWV)RURQHWKH GLVWULFWFRXUWZDVIRUFHGWREDODQFH+HUPDQ0LOOHUjVULJKWRI D FODVVLF JODVV &RFD&ROD ERWWOH IRU LQVWDQFH PD\ SXEOLFLW\LQWKHQDPHVDQGOLNHQHVVHV RIWKH(DPHVHVZLWK FRQVWLWXWHSDFNDJLQJIRUWKRVHFXVWRPHUVZKRGULQNWKH 3DOD]]HWWLjVULJKWWRUHSURGXFHIXUQLWXUHRULJLQDOO\GHVLJQHGE\ &RNHDQGWKHQGLVFDUGWKHERWWOHEXWPD\FRQVWLWXWHWKH WKH(DPHVHV(YHQLI+HUPDQ0LOOHUZHUHWRSUHYDLORQLWV SURGXFW LWVHOI IRU WKRVH FRQVXPHUV ZKR DUH ERWWOH WUDGH GUHVV FODLP UHODWHG WR WKH ORXQJH FKDLU DQG RWWRPDQ FROOHFWRUV RU SDUW RI WKH SURGXFW LWVHOI IRU WKRVH 3DOD]]HWWLZRXOGVWLOOKDYHDULJKWWRSURGXFHUHSURGXFWLRQVRI FRQVXPHUV ZKR EX\ &RNH LQ WKH FODVVLF JODVV ERWWOH WKH mSRWDWR FKLS FKDLUl WKH mVXUIERDUG WDEOHl DQG RWKHU +HUPDQ0LOOHU,QFY 1RV 1RV +HUPDQ0LOOHU,QFY 3DOD]]HWWL,PSRUWV 3DOD]]HWWL,PSRUWV ([SRUWV,QF ([SRUWV,QF
$QDO\VLV UDWKHUWKDQDFDQEHFDXVHWKH\WKLQNLWPRUHVW\OLVKWR GULQNIURPWKHIRUPHU +HUPDQ0LOOHUDUJXHVWKDWLWZDVLPSURSHUIRUWKHGLVWULFW FRXUWWRFUHDWHDmIDLUXVHlH[FHSWLRQLQLWV2FWREHU ,ELG7RWKHH[WHQWWKDWGLIILFXOWFDVHVH[LVWWKH&RXUWVWDWHG SHUPDQHQWLQMXQFWLRQLVVXHGSXUVXDQWWRWKHMXU\YHUGLFWLQ WKDW mFRXUWV VKRXOG HUU RQ WKH VLGH RI FDXWLRQ DQG FODVVLI\ IDYRURI+HUPDQ0LOOHURQLWVWUDGHPDUNXQIDLUFRPSHWLWLRQ DPELJXRXVWUDGHGUHVVDVSURGXFWGHVLJQWKHUHE\UHTXLULQJ DQGULJKW RISXEOLFLW\FODLPV6SHFLILFDOO\+HUPDQ0LOOHU VHFRQGDU\PHDQLQJl,ELG WDNHVLVVXHZLWKSDUDJUDSKRIWKHLQMXQFWLRQZKLFKDOORZV 3DOD]]HWWLWRmIDLUO\LGHQWLI\&KDUOHV(DPHVDQGRU5D\(DPHV 7KLVLVQRWDKDUGFDVHKRZHYHU+HUPDQ0LOOHUjVWUDGH DVWKHRULJLQDOGHVLJQHUVRIWKHIXUQLWXUHDIWHUZKLFK3DOD]]HWWL GUHVVFODLPVUHJDUGLQJWKH(DPHVORXQJHFKDLUDQGRWWRPDQ SDWWHUQHGRUUHSURGXFHGLWVRZQIXUQLWXUHl DUH EDVHG RQ SURGXFW GHVLJQ DQG FDQQRW EH FRQIXVHG ZLWK SURGXFWSDFNDJLQJ7KHUHIRUHRQDSSHDOZHPXVWDQDO\]H 7KHLQMXQFWLRQIRUELGV3DOD]]HWWLIURP XVLQJWKHQDPHV +HUPDQ 0LOOHUjV WUDGH GUHVV FODLPV VROHO\ WR GHWHUPLQH LI m&KDUOHV(DPHVlm&(DPHVlm5D\(DPHVlDQGRUm(DPHVl +HUPDQ0LOOHUFDQGHPRQVWUDWHWKDWLWV(DPHVORXQJHFKDLU DV D WUDGHPDUN IRU IXUQLWXUH FDXVLQJ GLOXWLRQ RI WKH DQGRWWRPDQKDYHDFTXLUHGVXIILFLHQWVHFRQGDU\PHDQLQJLQ GLVWLQFWLYHTXDOLW\RIWKH($0(6WUDGHPDUN DQG XVLQJ WKH PDUNHWSODFH WKDW WKH\ KDYH EHFRPH DVVRFLDWHG LQ WKH WKHQDPHVRUOLNHQHVVHVRI&KDUOHV(DPHVRU5D\(DPHVLQ SXEOLFjV PLQG ZLWK +HUPDQ 0LOOHU 7KH GLVWULFW FRXUWjV FRQQHFWLRQZLWKWKHVDOHRIIXUQLWXUH7KHILUVWWZRSRUWLRQV LQKHUHQWO\ GLVWLQFWLYH DQDO\VLV LV QR ORQJHU UHOHYDQW WR WKLV RIWKHLQMXQFWLRQUHODWHWR+HUPDQ0LOOHUjVWUDGHPDUNFODLP FDVH LQ OLJKW RI WKH 6XSUHPH &RXUWjV KROGLQJ LQ 6DPDUD ZKLOH WKH WKLUG SRUWLRQ UHODWHV WR +HUPDQ 0LOOHUjV ULJKW RI %URWKHUV SXEOLFLW\FODLP+HUPDQ0LOOHUDVVHUWVWKDW3DOD]]HWWLPD\EH DEOHWRmIDLUO\LGHQWLI\lWKH(DPHVHVDVWKHRULJLQDOGHVLJQHUV E3URWHFWDEOH7UDGH'UHVVDQG$EDQGRQPHQW RILWVIXUQLWXUHXQGHUWKHmIDLUXVHlH[FHSWLRQWRWKHWUDGHPDUN SRUWLRQRIWKHLQMXQFWLRQ+RZHYHU+HUPDQ0LOOHUFODLPV %HIRUHDQDO\]LQJZKHWKHU+HUPDQ0LOOHUjV(DPHVORXQJH WKDW 3DOD]]HWWL FDQQRW EH DOORZHG WR mIDLUO\ LGHQWLI\l WKH FKDLU DQG RWWRPDQ KDYH EHFRPH SURWHFWDEOH WUDGH GUHVV E\ (DPHVHVXQGHUWKHULJKWRISXEOLFLW\SRUWLRQRIWKHLQMXQFWLRQ DFTXLULQJVHFRQGDU\PHDQLQJZHPXVWQRWHWKHSURFHGXUDO VLQFHWKDWSRUWLRQRIWKHLQMXQFWLRQIRUELGV3DOD]]HWWL IURP SRVWXUHRI+HUPDQ0LOOHUjVWUDGHGUHVVFODLPV3DOD]]HWWLjV XVLQJ WKH mQDPHV RU OLNHQHVVHV RI &KDUOHV (DPHV DQG 5D\ VXPPDU\MXGJPHQWPRWLRQDVWR+HUPDQ0LOOHUjVWUDGHGUHVV (DPHVLQFRQQHFWLRQZLWKWKHVDOHRIIXUQLWXUHl7KHUHIRUH FODLPVZDVEDVHGRQWKHDUJXPHQWWKDW+HUPDQ0LOOHUKDG +HUPDQ0LOOHUFODLPVWKDWWKHGLVWULFWFRXUWHUUHGLQDOORZLQJ DEDQGRQHG DQ\ WUDGH GUHVV ULJKWV LW PD\ KDYH KDG LQ WKH 3DOD]]HWWLWRmIDLUO\LGHQWLI\lWKH(DPHVHV (DPHV ORXQJH FKDLU DQG RWWRPDQ ,W ZDV RQO\ LQ +HUPDQ 0LOOHUj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
3DOD]]HWWLjVFODLPRIDEDQGRQPHQW,QLWVEULHIWRWKHGLVWULFW )LIWK$YH,QF )G G&LU UHMHFWLQJ FRXUW+HUPDQ0LOOHUQRWHGWKDWDEDQGRQPHQWRFFXUVm>R@QO\ DEDQGRQPHQW FODLP RQ EDVLV WKDW mWKH HYLGHQFH EHORZ ZKHQDOOULJKWVRISURWHFWLRQDUHH[WLQJXLVKHGl:DOOSDSHU VXJJHVWVWKDW>SODLQWLIIjV@GHVLJQVFRQWLQXHWRLQGLFDWHWKHLU 0DQXIDFWXUHUV/WGY&URZQ:DOOFRYHULQJ&RUS)G VRXUFHDQGWKDW>SODLQWLII@YLJRURXVO\SXUVXHGPDQXIDFWXUHUV &&3$ +HUPDQ0LOOHUXVHGWKHLQKHUHQWO\ RI NQRFNRII JRRGV LQ DQ HIIRUW WR SURWHFW LWV PDUNl GLVWLQFWLYH DQG VHFRQGDU\ PHDQLQJ LQTXLULHV UHODWHG WR 6ZHHWKHDUW3ODVWLFV,QFY'HWURLW)RDPLQJ,QF)G SURWHFWDEOHWUDGHGUHVVDVDPHDQVRIDUJXLQJWRWKHGLVWULFW WK &LU m(YLGHQFH RI D WUDGHPDUN FRXUW WKDW LWV ORXQJH FKDLU DQG RWWRPDQ KDYH UHWDLQHG WKHLU RZQHUjV IDLOXUH WR SURVHFXWH LQIULQJHUV LV UHOHYDQW WR D mVWUHQJWKDVDQLQGLFDWRURIVRXUFHlDQGWKHUHIRUHKDYHQRW GHWHUPLQDWLRQRIWKHGHIHQVHRIDEDQGRQPHQWRQO\ZKHUHVXFK EHHQ DEDQGRQHG +HUPDQ 0LOOHU DSSHDUV WR KDYH EHHQ IDLOXUH DPRXQWV WR WKH PDUNjV ORVLQJ VLJQLILFDQFH DV DQ FRQIODWLQJ WKH SURWHFWDEOH WUDGH GUHVV LQTXLU\ DQG WKH LQGLFDWLRQRIVRXUFHl DEDQGRQPHQW LQTXLU\ 7KH\ DUH VHSDUDWH DQG GLVWLQFW $FFRUGLQJWR6HFWLRQRIWKH/DQKDP$FWWUDGHGUHVVPD\ 7R VXPPDUL]H ZH UHYHUVH WKH GLVWULFW FRXUWjV GHFLVLRQ EHDEDQGRQHG JUDQWLQJ VXPPDU\ MXGJPHQW WR 3DOD]]HWWL DV WR +HUPDQ 0LOOHUjV WUDGH GUHVV FODLPV +HUPDQ 0LOOHUjV WUDGH GUHVV ZKHQDQ\FRXUVHRIFRQGXFWRIWKHRZQHULQFOXGLQJDFWV LQIULQJHPHQW DQG GLOXWLRQ FODLPV DUH UHYLYHG :H UHPDQG RIRPLVVLRQDVZHOODVFRPPLVVLRQFDXVHVWKHPDUNWR WKHVHFODLPVWRWKHGLVWULFWFRXUWZLWKLQVWUXFWLRQVWKDW WKH EHFRPHWKHJHQHULFQDPHIRUWKHJRRGVRUVHUYLFHVRQRU LVVXHRISURWHFWDELOLW\LVSUHVHUYHGIRUWULDODQG WKHGLVWULFW LQFRQQHFWLRQZLWKZKLFKLWLVXVHGRURWKHUZLVHWRORVH FRXUW PXVW DGGUHVV 3DOD]]HWWLjV DIILUPDWLYH GHIHQVH RI LWVVLJQLILFDQFHDVDPDUN DEDQGRQPHQW 86&7KHUHIRUHWKHIDFWWKDWWUDGHGUHVVPD\EH % 3HUPDQHQW,QMXQFWLRQ(QDEOLQJ3DOD]]HWWLWRm)DLUO\ SURWHFWDEOHE\DFTXLULQJVHFRQGDU\PHDQLQJGRHVQRWPHDQLW ,GHQWLI\lWKH(DPHVHV LVDXWRPDWLFDOO\SURWHFWHGVLQFHWKHRZQHUjVWUDGHGUHVVULJKWV PLJKWKDYHEHHQDEDQGRQHGWKURXJKDFWLRQVRIWKHRZQHUWKDW 6WDQGDUGRI5HYLHZ FDXVHG WKH WUDGH GUHVV WR EHFRPH JHQHULF RU ORVH LWV VLJQLILFDQFHDVDPDUN 7KLVFRXUWUHYLHZVDGLVWULFWFRXUWj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
6HH )ULVFKjV 5HVWDXUDQWV ,QF Y (OE\jV %LJ %R\ RI LVVXH RI DEDQGRQPHQW VLQFH WKHUH ZDV QR WUDGH GUHVV WKDW 6WHXEHQYLOOH,QF)G WK&LU m7KH +HUPDQ0LOOHUFRXOGKDYHDEDQGRQHG VWURQJHUWKHPDUNWKHPRUHOLNHO\LWLVWKDWHQFURDFKPHQWRQ LWZLOOSURGXFHFRQIXVLRQl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jVPDUN,WLVSRVVLEOHWKDW LWVWUDGHGUHVV7KHUHIRUHLWKDVSUHVHUYHGWKLVLVVXHIRUWULDO WKHSODLQWLIIjVPDUNKDVEHHQµZHDNHQHGjE\ZLGHVSUHDG +RZHYHUWKHIDFWWKDW+HUPDQ0LOOHUKDVUDLVHGDJHQXLQH XVH LQ WKH PDUNHW DQG WKDW VXFK XVH UHVXOWHG IURP LVVXHRIPDWHULDOIDFWDVWRZKHWKHULWV(DPHVORXQJHFKDLUDQG SODLQWLIIjVIDLOXUHWRVXHLQIULQJHUV7KDWLVWKHRQO\ZD\ RWWRPDQ WUDGH GUHVV LV SURWHFWDEOH GRHVQRW GLVSRVH RI WKH WR SUHYHQW D PDUNHW IURP EHFRPLQJ µFURZGHGj ZLWK LVVXHRIDEDQGRQPHQWZKLFKZHZLOOUHPDQGWRWKHGLVWULFW VLPLODUPDUNVLVDSURJUDPRIDJJUHVVLYHHQIRUFHPHQW FRXUWIRUIXUWKHUFRQVLGHUDWLRQDVWKHGLVWULFWFRXUWGLGQRW FRQVLGHUWKLVLVVXHLQLWVVXPPDU\MXGJPHQWGHFLVLRQ 0&$57+<VXSUDQDW F +DYH WKH /RXQJH &KDLU DQG 2WWRPDQ $FTXLUHG $WWKHVDPHWLPHWKHREVHUYHUKDVVWDWHGWKDWmLIWKURXJK 6HFRQGDU\0HDQLQJ" IDLOXUHWRSURVHFXWHDPDUNFRQWLQXDOO\ORVHVµVWUHQJWKjDQG µGLVWLQFWLYHQHVVjLWZLOOHYHQWXDOO\KHPRUUKDJHVRPXFKWKDW ,QFRQWUDVWWRWKHLQKHUHQWO\GLVWLQFWLYHWHVWWKHVHFRQGDU\ LWGLHVDVDPDUN7KDWZRXOGEHµDEDQGRQPHQWjWKURXJKDFWV PHDQLQJWHVWIRFXVHVRQDFTXLUHGGLVWLQFWLYHQHVV6HFRQGDU\ RIRPLVVLRQl,ELG+RZHYHUWKHREVHUYHUJRHVRQWRVWDWH PHDQLQJKDVEHHQGHILQHGDVIROORZV WKDWm>W@KHLVVXHLVKDUGO\HYHUµDEDQGRQPHQWjEHFDXVHWKDW UHTXLUHV SURRI WKDW WKH PDUN KDV ORVW DOO VLJQLILFDQFH DV DQ 7RDFTXLUHDVHFRQGDU\PHDQLQJLQWKHPLQGVRIWKH LQGLFDWLRQRIRULJLQl,ELG$OWKRXJKLWDSSHDUVXQOLNHO\WKDW EX\LQJSXEOLFDQDUWLFOHRIPHUFKDQGLVHZKHQVKRZQWR IDLOXUHWRSURVHFXWHE\LWVHOIFDQHVWDEOLVKWKDWWUDGHGUHVVKDV D SURVSHFWLYH FXVWRPHU PXVW SURPSW WKH DIILUPDWLRQ EHHQDEDQGRQHGLWLVSRVVLEOHWKDWLQH[WUHPHFLUFXPVWDQFHV m7KDWLVWKHDUWLFOH,ZDQWEHFDXVH,NQRZLWVVRXUFHlDQG IDLOXUH WR SURVHFXWH PD\ FDXVH WUDGH GUHVV ULJKWV WR EH QRWWKHQHJDWLYHLQTXLU\DVWRm:KRPDNHVWKDWDUWLFOH"l H[WLQJXLVKHGE\FDXVLQJDPDUNWRORVHLWVVLJQLILFDQFHDVDQ ,QRWKHUZRUGVWKHDUWLFOHPXVWSURFODLPLWVLGHQWLILFDWLRQ LQGLFDWLRQRIVRXUFH6HH+HUPHV,QWjOY/HGHUHUGH3DULV ZLWKLWVVRXUFHDQGQRWVLPSO\VWLPXODWHLQTXLU\DERXWLW )HUUDUL )GDW TXRWLQJ:HVW3RLQW0IJ&RY 'HWURLW 6WDPSLQJ &R )G WK &LU LV DQ LVVXH RI YDOLGLW\ IRU QRQLQKHUHQWO\ GLVWLQFWLYH GHVLJQDWLRQV +HUPDQ0LOOHUPXVWGHPRQVWUDWHWKDWLWV(DPHVORXQJHFKDLU µVWUHQJWKj LV DQ HQTXLU\ LQWR D IDFWRU OHDGLQJ WR WKH GHWHUPLQDWLRQ RI LQIULQJHPHQW RI DQ\ NLQG RI PDUN 7KH FRPPRQ GHQRPLQDWRU DQGRWWRPDQKDYHEHFRPHLGHQWLILHGZLWK+HUPDQ0LOOHULQ LV WKH QDWXUH RI WKH HYLGHQFH XVHG WR VXSSRUW ERWK OHJDO FRQFHSWV WKHPLQGVRIWKHSRWHQWLDOFXVWRPHU 0 &$57+< 8:57, Q DW +HUPDQ0LOOHU,QFY 1RV 1RV +HUPDQ0LOOHU,QFY 3DOD]]HWWL,PSRUWV 3DOD]]HWWL,PSRUWV ([SRUWV,QF ([SRUWV,QF
7KHGLVWULFWFRXUWDSSOLHGDVL[IDFWRUWHVWGHYLVHGE\WKH /DQKDP $FW YLRODWLRQ IRU WUDGH GUHVV LQIULQJHPHQW o 6HFRQG&LUFXLWLQDQDO\]LQJWKHLVVXHRIVHFRQGDU\PHDQLQJ OLNHOLKRRGRIFRQIXVLRQDQGQRQIXQFWLRQDOLW\oLVVXHVWKDW 6HH &HQWDXU &RPPXQLFDWLRQV /WG Y $60 QHLWKHU SDUW\ UDLVHG DW VXPPDU\ MXGJPHQW ,Q DGGLWLRQ &RPPXQLFDWLRQV,QF)G G&LU +HUPDQ 0LOOHUjV WUDGH GUHVV GLOXWLRQ FODLP LV UHYLYHG 6LQFHWKHGLVWULFWFRXUWjVGHFLVLRQWKLVFRXUWKDVDGRSWHGD )LQDOO\WKHGLVWULFWFRXUWPXVWVWLOODGGUHVVWKHRULJLQDOEDVLV VLPLODUEXWVOLJKWO\EURDGHUVHYHQIDFWRUWHVW6HH0DUNHWLQJ IRU 3DOD]]HWWLjV VXPPDU\ MXGJPHQW PRWLRQ DV WR +HUPDQ 'LVSOD\V,QFY7UDI)L['HYLFHV,QF)G WK 0LOOHUjVWUDGHGUHVVFODLPV 3DOD]]HWWLjVGHIHQVHWKDW+HUPDQ &LU UHYj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jVWUDGH GUHVVIRUSXUSRVHVRIHVWDEOLVKLQJOLNHOLKRRGRIFRQIXVLRQDQG GLUHFWFRQVXPHUWHVWLPRQ\ ZKHWKHU +HUPDQ 0LOOHU KDV DEDQGRQHG LWV WUDGH GUHVV FRQVXPHUVXUYH\V ULJKWVLQWKHORXQJHFKDLUDQGRWWRPDQ H[FOXVLYLW\OHQJWKDQGPDQQHURIXVH DPRXQWDQGPDQQHURIDGYHUWLVLQJ 2QH RI WKH QHFHVVDU\ IDFWRUV WR DQDO\]H LQ GHWHUPLQLQJ DPRXQWRIVDOHVDQGQXPEHURIFXVWRPHUV OLNHOLKRRGRIFRQIXVLRQLVWKHVWUHQJWKRIWKHSODLQWLIIjVPDUN HVWDEOLVKHGSODFHLQWKHPDUNHW DQG SURRIRILQWHQWLRQDOFRS\LQJ :KLOH WKH HYLGHQFH H[DPLQHG LV VLPLODU WKH GHWHUPLQDWLRQ RI 7UDI)L[)GDW 1RVLQJOHIDFWRULVGHWHUPLQDWLYH mVHFRQGDU\ PHDQLQJl IRU DVFHUWDLQLQJ LI WKH WUDGH GUHVV KDV EHFRPH DQGHYHU\RQHQHHGQRWEHSURYHQ6HH&HQWDXU)GDW SURWHFWDEOH WKURXJK DFTXLUHG GLVWLQFWLYHQHVV GLIIHUV IURP WKH
GHWHUPLQDWLRQ RI WKH VWUHQJWK RI WKH WUDGH GUHVV IRU DVFHUWDLQLQJ OLNHOLKRRG RI FRQIXVLRQ
:KHQ GHWHUPLQLQJ WKH FRPPHUFLDO RU PDUNHWSODFH VWUHQJWK RI D
PDUN WKH FRXUWV ORRN WR WKH VDPH NLQG RI HYLGHQFH RI UHDO ZRUOG 7UDI)L[ LQYROYHG D SODLQWLII ZKR ZDV DWWHPSWLQJ WR REWDLQ WUDGH UHFRJQLWLRQ RI WKH PDUN DV LV XVHG WR GHFLGH WKH SUHVHQFH RU GUHVV SURWHFWLRQ IRU WKH :LQG0DVWHU WUDIILF VLJQ VWDQG D GXDOVSULQJ DEVHQFH RI VHFRQGDU\ PHDQLQJ WR GHWHUPLQH ZKHWKHU D GHVLJQ PHFKDQLVP XVHG WR KROG XS WHPSRUDU\ URDG VLJQV DJDLQVW VWURQJ QRQLQKHUHQWO\ GLVWLQFWLYH GHVLJQDWLRQ LV RU LV QRW D YDOLG PDUN JXVWV RI ZLQG 7KLV FRXUW UHYHUVHG WKH GLVWULFW FRXUWjV JUDQW RI VXPPDU\ %HFDXVH WKH HYLGHQFH LV RI WKH VDPH QDWXUH VRPH FRXUWV MXGJPHQW LQ IDYRU RI WKH GHIHQGDQW RQ WKH JURXQGV WKDW WKH GLVWULFW FRXUW RFFDVLRQDOO\ PLVDSSO\ WKH OHJDO ODEHO mVHFRQGDU\ PHDQLQJl WR LPSURSHUO\ UXOHG WKDW WKHUH ZDV QR JHQXLQH LVVXH RI PDWHULDO IDFW DV WR GHQRWH WKH NLQG RI PDUNHWSODFH UHFRJQLWLRQ HYLGHQFH QHHGHG WR VHFRQGDU\ PHDQLQJ DQG WKDW WKH WUDGH GUHVV ZDV D IXQFWLRQDO SURGXFW GHWHUPLQH WKH GHJUHH RI VWUHQJWK IRU D PDUN 7KLV FDQ OHDG WR FRQILJXUDWLRQ 7UDI)L[ )G DW 7KH 6XSUHPH &RXUW UHYHUVHG GLVRULHQWDWLRQ IRU ERWK MXGJHV DQG DWWRUQH\V 7KH GLVWLQFWLRQ RQ WKH EDVLV WKDW WKH WUDGH GUHVV ZDV IXQFWLRQDO 7UDI)L[ 6 &W DW EHWZHHQ WKH OHJDO FRQFHSWV RI µVHFRQGDU\ PHDQLQJj DQG µVWUHQJWKj LV ERWK UHDO DQG FULWLFDO :KLOH µVHFRQGDU\ PHDQLQJj +HUPDQ0LOOHU,QFY 1RV 1RV +HUPDQ0LOOHU,QFY 3DOD]]HWWL,PSRUWV 3DOD]]HWWL,PSRUWV ([SRUWV,QF ([SRUWV,QF
,QWjO.HQQHO&OXERI&KLFDJR,QFY0LJKW\6WDU,QF 'LUHFWFRQVXPHUWHVWLPRQ\ )G WK&LU SUHOLPLQDU\LQMXQFWLRQIRU SODLQWLII XSKHOG EDVHG RQ LWV KDOIFHQWXU\ XVH RI QDPH +HUPDQ 0LOOHU SURYLGHV DIILGDYLW HYLGHQFH IURP GHVLJQ DGYHUWLVLQJ VXEVWDQWLDO IUHH SXEOLFLW\ DQG ZLGHUDQJLQJ H[SHUWV DXWKRUV KLVWRULDQV DQG SDVW DQG SUHVHQW +HUPDQ DFWLYLWLHVLQVXSSRUWRIGRJJURXSV $s&DQILHOG&RY9HVV 0LOOHU HPSOR\HHV WR VXSSRUW LWV FODLP WKDW FRQVXPHUV %HYHUDJHV ,QF )G WK &LU DVVRFLDWHWKH(DPHVORXQJHFKDLUDQGRWWRPDQZLWK+HUPDQ SUHOLPLQDU\LQMXQFWLRQIRUSODLQWLIIXSKHOGEDVHGRQLWVXVHRI 0LOOHU,QDGGLWLRQ+HUPDQ0LOOHUSUHVHQWVPHGLDFRYHUDJH ZRUGV mFKRFRODWH IXGJHl LQ FRQQHFWLRQ ZLWK FKRFRODWH UHODWLQJWRLQGLYLGXDOVZKRVSHFLILFDOO\RZQ+HUPDQ0LOOHU IODYRUHGVRIWGULQNIRUWKLUWHHQ\HDUVQDWLRQZLGHSXEOLFLW\ (DPHV ORXQJH FKDLUV DQG RWWRPDQV DQG SURGXFHUV RI DQGQXPHURXVOHWWHUVDQGSKRQHFDOOVmDOOVHDUFKLQJIRUWKH WHOHYLVLRQVKRZVWKDWVSHFLILFDOO\SXUFKDVHG+HUPDQ0LOOHU HOXVLYHGLHWFKRFRODWHIXGJHGULQNl (DPHV ORXQJH FKDLUV DQG RWWRPDQV IRU WKHLU VHWV +HUPDQ 0LOOHUDOVRKDVSUHVHQWHGHYLGHQFHRIDH[WHQVLYHVHFRQGDU\ 7KH GLVWULFW FRXUW UHMHFWHG +HUPDQ 0LOOHUjV WUDGH GUHVV PDUNHW VSHFLILFDOO\ LQ (DPHV ORXQJH FKDLUV DQG RWWRPDQV FODLPSULQFLSDOO\RQWKHJURXQGVWKDWWKHUHZDVQRHYLGHQFH SURGXFHG E\ +HUPDQ 0LOOHU )LQDOO\ +HUPDQ 0LOOHU KDV mWKDW WKH JHQHUDO SXEOLF DWWULEXWHV WKH ORXQJH FKDLU DQG SUHVHQWHGYDULRXVPDJD]LQHDQGQHZVSDSHUDUWLFOHVZDUQLQJ RWWRPDQWR>+HUPDQ0LOOHU@l7KHUHLVVXIILFLHQWHYLGHQFH WKHFRQVXPLQJSXEOLFVHHNLQJD+HUPDQ0LOOHU(DPHVORXQJH LQGLFDWLQJ WKH +HUPDQ 0LOOHU HVWDEOLVKHG D FRQQHFWLRQ FKDLUDQGRWWRPDQRIWKHH[LVWHQFHRIDPDUNHWIRUNQRFNRIIV EHWZHHQLWVHOIDQGWKH(DPHVORXQJHFKDLUDQGRWWRPDQLQmD RI(DPHVGHVLJQHGIXUQLWXUH VPDOOEXWYHU\ZHOOGHILQHGJURXSRISHRSOHlWKDWIRUPWKH FRQVXPLQJ SXEOLF LQ PRGHUQ IXUQLWXUH ,QWjO .HQQHO &OXE 'LUHFW FRQVXPHU WHVWLPRQ\ mQHHG QRW WDNH WKH IRUP RI )G DW $V D UHVXOW WKH GLVWULFW FRXUW HUUHG LQ H[SOLFLWWHVWLPRQ\IURPFRQVXPHUVVWDWLQJWKDWµ,FDUHWKDW; JUDQWLQJ3DOD]]HWWLVXPPDU\MXGJPHQWRQ+HUPDQ0LOOHUjV SURGXFHGWKLVSURGXFWjl7KRPDV %HWWV&RUSY3DQGXLW WUDGHGUHVVFODLPVRQWKHEDVLVWKDW+HUPDQ0LOOHUFRXOGQRW &RUS )G WK &LU ,QVWHDG RI WKLV HVWDEOLVKWKHSURWHFWDELOLW\RILWVWUDGHGUHVV H[SOLFLWWHVWLPRQ\+HUPDQ0LOOHUKDVSUHVHQWHGDYDULHW\RI FLUFXPVWDQWLDOWHVWLPRQ\LQGLFDWLQJDOLQNEHWZHHQ+HUPDQ G&RQFOXVLRQ 0LOOHUDQGWKH(DPHVORXQJHFKDLUDQGRWWRPDQLQWKHPLQG RIWKHFRQVXPLQJSXEOLFIRUPRGHUQIXUQLWXUH,QFRQFOXGLQJ 7KHUH LV D JHQXLQH LVVXH RI PDWHULDO IDFW DV WR ZKHWKHU WKDWWKHSODLQWLIISUHVHQWHGVXIILFLHQWHYLGHQFHRIVHFRQGDU\ +HUPDQ0LOOHUjVWUDGHGUHVVLQWKH(DPHVORXQJHFKDLUDQG PHDQLQJ LQ 7UDI)L[ WKLV FRXUW QRWHG WKH ODFN RI GLUHFW RWWRPDQ KDV DFTXLUHG VHFRQGDU\ PHDQLQJ 7KHUHIRUH WKH FXVWRPHU WHVWLPRQ\ EXW LQVWHDG UHOLHG XSRQ GHSRVLWLRQ LVVXHRIWKHSURWHFWDELOLW\RI+HUPDQ0LOOHUjVWUDGHGUHVVLV WHVWLPRQ\ RI HPSOR\HHV RI WKH GHIHQGDQW DQG IRUPHU SUHVHUYHGIRUWULDO HPSOR\HHVRIWKHSODLQWLIILQGLFDWLQJWKH\FRXOGUHFRJQL]HWKH SODLQWLIIjVVLJQZKLFKZDVWKHVXEMHFWRIWKHGLVSXWHGWUDGH :HQRWHKRZHYHUWKDWm>I@LQGLQJVHFRQGDU\PHDQLQJLVQRW GUHVV FODLP )G DW 7KH HYLGHQFH LQ WKLV FDVH WKHHQGRIWKHHQTXLU\EXWRQO\WKHEHJLQQLQJl0&$57+< UHODWLQJ WR D FRQQHFWLRQ EHWZHHQ +HUPDQ 0LOOHU DQG WKH VXSUDQDW 2QUHPDQGVHYHUDOLVVXHVPXVWVWLOOEH (DPHVORXQJHFKDLUDQGRWWRPDQDPRQJWKHFRQVXPLQJSXEOLF UHVROYHGE\WKHGLVWULFWFRXUW7KHVHLQFOXGHWKHUHPDLQLQJ LVHYHQPRUHH[WHQVLYH HOHPHQWV WKDW +HUPDQ 0LOOHU PXVW HVWDEOLVK WR SURYH D +HUPDQ0LOOHU,QFY 1RV 1RV +HUPDQ0LOOHU,QFY 3DOD]]HWWL,PSRUWV 3DOD]]HWWL,PSRUWV ([SRUWV,QF ([SRUWV,QF
&RQVXPHUVXUYH\V WKDWVHFRQGDU\PHDQLQJZDVGHPRQVWUDWHGE\HYLGHQFHWKDW WKHGHIHQGDQWLQWHQWLRQDOO\FRSLHG)HUUDULjVFDUGHVLJQDVZHOO 7KH GLVWULFW FRXUW SDUWLFXODUO\ QRWHG WKH DEVHQFH RI DVDIILGDYLWVIURPWZRPDJD]LQHHGLWRUVDQGFRQVXPHUVXUYH\V FRQVXPHU VWXGLHV RU VXUYH\V OLQNLQJ WKH ORXQJH FKDLU DQG VXSSRUWLQJWKHSURSRVLWLRQWKDWWKHFDUGHVLJQZDVDVVRFLDWHG RWWRPDQZLWK+HUPDQ0LOOHUm%HFDXVHWKHGHWHUPLQDWLRQRI ZLWK )HUUDUL )G DW $OWKRXJK +HUPDQ 0LOOHU ZKHWKHUDPDUNKDVDFTXLUHGVHFRQGDU\PHDQLQJLVSULPDULO\ GRHVQRWSUHVHQWFRQVXPHUVXUYH\VLWGRHVSURYLGHWKHRWKHU DQHPSLULFDOLQTXLU\VXUYH\HYLGHQFHLVWKHPRVWGLUHFWDQG HYLGHQFH UHOLHG XSRQ LQ )HUUDUL DQG DQ DEXQGDQFH RI SHUVXDVLYHHYLGHQFH6XUYH\HYLGHQFHLVQRWWKHRQO\UHOHYDQW DGGLWLRQDO HYLGHQFH 0RUHRYHU FRQVXPHU VXUYH\V ZKLOH HYLGHQFHKRZHYHUl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jO &RUS Y +RVKLQR *DNNL &R )G )HG&LU +XQWLQJ+DOORI)DPH)RXQGY 6DIDUL&OXE,QWjO8634G '$UL] 0LOOHU
:KLOHFRQVXPHUVXUYH\VFHUWDLQO\ZRXOGKDYHEHHQKHOSIXOWR $OWKRXJK LW FHUWDLQO\ ZRXOG VWUHQJWKHQ +HUPDQ 0LOOHUjV SRVLWLRQ +HUPDQ0LOOHUjVFODLPWKHLUDEVHQFHLVQRWIDWDODWOHDVWRQ FDVHODZ GRHV QRW VXSSRUW +HUPDQ 0LOOHUjV DUJXPHQW :KLOH WKH ODZ
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mEHFRPH V\QRQ\PRXVl 7KLV ZDV QRW D VXUYH\ KRZHYHU ,I DQ\WKLQJ LW UHFRJQL]HV WKH ORXQJH FKDLU DQG RWWRPDQ DV mDQ (DPHVl LW UHFRJQL]HV WKDW TXDOLILHV DV HYLGHQFH RI GLUHFW FRQVXPHU WHVWLPRQ\ DORQJ ZLWK WKH RWKHU mDQ (DPHVl FRPHV IURP RQH VRXUFH o RQH DQRQ\PRXV PDQXIDFWXUHU 7KH WHVWLPRQ\ WKDW +HUPDQ 0LOOHU KDV SURYLGHG +RZHYHU ZH PXVW JLYH LW HYLGHQFH WKDW +HUPDQ 0LOOHU SUHVHQWV VLPSO\ DVVRFLDWLQJ WKH ORXQJH FKDLU OLWWOH ZHLJKW EHFDXVH WKH FRUUHFW DQVZHU PDWFKLQJ WKH VLOKRXHWWH RI WKH DQG RWWRPDQ ZLWK WKH (DPHVHV DQG QRW +HUPDQ 0LOOHU IDLOV WR LQGLFDWH ORXQJH FKDLU ZDV m(DPHV ORXQJH FKDLUl 7KHUH ZDV QR PHQWLRQ RI WKDW LQ WKH PLQG RI WKH FRQVXPLQJ SXEOLF WKH IXUQLWXUH LV FRQQHFWHG ZLWK +HUPDQ 0LOOHU LQ WKH TXL] 7R VXSSRUW LWV XVH RI WKLV HYLGHQFH +HUPDQ D VLQJOH WKRXJK DQRQ\PRXV VRXUFH WKDW PDQXIDFWXUHUV LW $OWKRXJK 0LOOHU UHOLHV XSRQ WKH FRQFOXVRU\ VWDWHPHQW RI WKH SXEOLVKHU RI WKH TXL] +HUPDQ 0LOOHU DQG WKH (DPHV HVWDWH DUH ZHOO DZDUH RI WKH UHODWLRQVKLS WKDW mWKH ($0(6 ORXQJH FKDLU DQG RWWRPDQ LV VR FORVHO\ DVVRFLDWHG ZLWK EHWZHHQ WKH (DPHVHV DQG +HUPDQ 0LOOHU WKLV GRHV QRW DXWRPDWLFDOO\ +HUPDQ 0LOOHU ,QF WKDW WKH FKDLU ZDV RQO\ UHIHUUHG WR DV WKH ($0(6 PHDQ WKDW D PHPEHU RI WKH FRQVXPLQJ SXEOLF VHDUFKLQJ IRU mDQ (DPHVl ORXQJH FKDLUl LV DZDUH RI WKLV UHODWLRQVKLS +HUPDQ0LOOHU,QFY 1RV 1RV +HUPDQ0LOOHU,QFY 3DOD]]HWWL,PSRUWV 3DOD]]HWWL,PSRUWV ([SRUWV,QF ([SRUWV,QF
PDWHULDO IDFW DV WR ZKHWKHU WKH mFRQVXPLQJ SXEOLFl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m>W@KHGXUDWLRQRIXVHRIWKHPDUNFDQHVWDEOLVK (DPHVORXQJHFKDLUDQGRWWRPDQPDQXIDFWXUHGE\+HUPDQ VHFRQGDU\ PHDQLQJ ZKHUH WKH GXUDWLRQ LV PRUH WKDQ D 0LOOHU DIILGDYLW WHVWLPRQ\ UHJDUGLQJ WKH FRQQHFWLRQ UHODWLYHO\ VKRUW SHULRGl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mXQVROLFLWHGPHGLDFRYHUDJHl +HUPDQ0LOOHU(DPHVORXQJHFKDLUVDQGRWWRPDQV 6HH&HQWDXU)GDW4XRWLQJ'XUDFR3URGXFWV DQG FRQWLQXRXVSURGXFWLRQRIWKH+HUPDQ0LOOHU(DPHV ,QFYsR\3ODVWLF(QWHUSULVHV/WG)G G ORXQJHFKDLUDQGRWWRPDQVLQFH &LU WKH GLVWULFW FRXUW UHMHFWHG WKLV HYLGHQFH RQ WKH EDVLVWKDWLWmUHIOHFW>V@LQWHUHVWPRUHLQDQXQXVXDOSURGXFW>RU 7DNHQ WRJHWKHU +HUPDQ 0LOOHU KDV SURGXFHG VXIILFLHQW LQGLYLGXDO@WKDQLQWKHVRXUFHRIWKHSURGXFWl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mDQ (DPHVl +HUPDQ0LOOHUDQGWKH(DPHVHV,QWKLVVHQVHWKHGHVLJQ EXW QRW QHFHVVDULO\ DV mD +HUPDQ 0LOOHUl +HUPDQ 0LOOHU FODLPV WKDW WKLV SDUWQHUVKLS EHWZHHQ +HUPDQ 0LOOHU DQG WKH (DPHVHV PDNHV QR GLIIHUHQFH VLQFH DOO WKDW LV VLJQLILFDQW LV WKDW SXUFKDVHUV DVVRFLDWH WKH WUDGH GUHVV ZLWK mD VLQJOH VRXUFHl 6HH &DQ $P (QJjJ &R Y +HQGHUVRQ *ODVV ,QF ) 6XSS (' 0LFK DIIj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mDVFORVHO\DVSRVVLEOHlWKH WKHLQWURGXFWLRQRIWKHORXQJHFKDLUDQGRWWRPDQLQ 7KH mRULJLQDOl+HUPDQ0LOOHUGHVLJQ,QDGGLWLRQ+HUPDQ0LOOHU GLVWULFWFRXUWGLVFRXQWHGWKLVHYLGHQFHRQWKHEDVLVWKDWVDOHV SRLQWV WR HYLGHQFH IURP 3DOD]]HWWL SXEOLFDWLRQV LQFOXGLQJ VXFFHVV DORQH GRHV QRW HVWDEOLVK WKH QHFHVVDU\ FRQVXPHU m(DPHVlLQWKHLGHQWLILFDWLRQRIWKHORXQJHFKDLUDQGRWWRPDQ DVVRFLDWLRQ EHWZHHQ WKH IXUQLWXUH DQG LW VRXUFH 6HH 7KLVHYLGHQFHLVHVSHFLDOO\KHOSIXOWRHVWDEOLVKLQJVHFRQGDU\ $SSDODFKLDQ/RJ)GDW m6DOHVYROXPHWKRXJK PHDQLQJmEHFDXVHµWKHUHLVQRORJLFDOUHDVRQIRUWKHSUHFLVH UHOHYDQWLVQRWQHFHVVDULO\VXIILFLHQWWRLQGLFDWHUHFRJQLWLRQ FRS\LQJVDYHDQDWWHPSWWRUHDOL]HXSRQDVHFRQGDU\PHDQLQJ RIWKHPDUNE\SXUFKDVHUVDVDQLQGLFDWLRQRIWKHVRXUFHl WKDW LV LQ H[LVWHQFHjl )HUUDUL )G DW TXRWLQJ 7KH FRXUW VWDWHG WKDW HYLGHQFH RI VDOHV VXFFHVV LV QRW $XGLR )LGHOLW\ ,QF Y +LJK )LGHOLW\ 5HFRUGLQJV ,QF SDUWLFXODUO\XVHIXOLQWKHDEVHQFHRIRWKHUHYLGHQFHEHFDXVH )G WK &LU VHH DOVR 2VHP )RRG VDOHVVXFFHVVFRXOGEHUHODWHGWRIDFWRUVRWKHUWKDQVHFRQGDU\ ,QGXVWULHV/WGY6KHUZRRG)RRGV,QF )G PHDQLQJVXFKDVJRRGGHVLJQRUDHVWKHWLFHGLILFDWLRQ6HH WK&LU m:KHQDQHZFRPHUWRWKHPDUNHWFRSLHVD 'XUDFR3URGV)GDW7KHIDFWVLQGLFDWHKRZHYHU FRPSHWLWRU VWUDGHGUHVVLWVLQWHQWPXVWEHWREHQHILWIURPWKH WKDW+HUPDQ0LOOHUSUHVHQWHGDYDULHW\RIHYLGHQFHVXSSRUWLQJ JRRGZLOO RI WKH FRPSHWLWRU V FXVWRPHUV E\ JHWWLQJ WKHP WR VHFRQGDU\ PHDQLQJ LQ DGGLWLRQ WR WKH DPRXQW RI (DPHV EHOLHYHWKDWWKHQHZSURGXFWLVHLWKHUWKHVDPHRURULJLQDWHV ORXQJHFKDLUVDQGRWWRPDQVLWKDVVROG7KHUHIRUHWKLVILJXUH IURPWKHVDPHVRXUFHDVWKHSURGXFWZKRVHWUDGHGUHVVZDV FDQQRW EH GLVPLVVHG DQG DGGV VXSSRUW WR +HUPDQ 0LOOHUjV FRSLHGl FODLP
(VWDEOLVKHGSODFHLQWKHPDUNHW +HUPDQ0LOOHUKDVSUHVHQWHGVXIILFLHQWHYLGHQFHWRFUHDWH 7KHUHLVQRPDUNHWVKDUHLQIRUPDWLRQSUHVHQWHG+HUPDQ DJHQXLQHLVVXHRIPDWHULDOIDFWDVWRZKHWKHUWKHORXQJHFKDLU 0LOOHUSUHVHQWVHYLGHQFHIURPDIILGDYLWVERRNVPDJD]LQHV DQGRWWRPDQKDYHDFTXLUHGVHFRQGDU\PHDQLQJ6HFRQGDU\ DQGDQHQF\FORSHGLDHQWU\VSHFLILFDOO\VWDWLQJWKDW +HUPDQ PHDQLQJLVSURYHQZKHQE\DSUHSRQGHUDQFHRIWKHHYLGHQFH 0LOOHULVWKHVRXUFHIRUWKH(DPHVORXQJHFKDLUDQGRWWRPDQ mLW FDQ EH GHWHUPLQHG WKDW WKH DWWLWXGH RI WKH FRQVXPLQJ ,QDGGLWLRQ+HUPDQ0LOOHUSUHVHQWVHYLGHQFHWKDWWKHUHLVD SXEOLFWRZDUGWKHPDUNGHQRWHVDVLQJOHWKLQJFRPLQJIURPD VWURQJ VHFRQGDU\ PDUNHW IRU XVHG +HUPDQ 0LOOHU (DPHV VLQJOHVRXUFHl$SSDODFKLDQ/RJ)GDW FLWDWLRQ ORXQJH FKDLUV DQG RWWRPDQV DQG WKDW FXVWRPHUV ZLWKLQ WKLV DQG LQWHUQDO TXRWDWLRQV RPLWWHG +HUPDQ 0LOOHU KDV VHFRQGDU\PDUNHWUHFRJQL]HWKDW+HUPDQ0LOOHULVWKHRQO\ SUHVHQWHG VXIILFLHQW HYLGHQFH WR UDLVH D JHQXLQH LVVXH RI
Reference
- Status
- Published