OpTree

Shaklee announced that they have reached a settlement with Masimo Corporation regarding pending litigation in a patent infringement case.

The suit, filed in 2007 was filed by Shaklee and NIR Diagnostics who claimed that Masimo’s pulse oximeter infringed on patented products licensed by NIR to the Shaklee Corporation.

The settlement was reached without Masimo incurring any liability to either Shaklee or NIR.
Masimo Corporation develops products that help monitor vital signs through non-invasive methods.

The suit was filed in July of 2007, shortly before Masimo’s IPO. Shaklee initially filed the lawsuit in U.S. District Court in California. NIR Diagnostics later joined Shaklee in the suit against Masimo. The plaintiffs claimed that Masimo pulse oximeter, which measure oxygen in the blood through finger monitors, incorporated patents that were licensed to Shaklee by NIR.

Though all details of the suit were not released, Masimo managed to settle the suit without having to pay any damages to either Shaklee or NIR.

Popularity: 1% [?]

We reported a few months ago about the barrage of claims against Herbalife regarding high lead content in several of their products. After a couple months with no word about it, Herbalife has announced that the claims made by the Fraud Discovery Institute. Something smells very fishy here.

We’ve told you all about the FDI and its Founder, Barry Minkow and his determination to take Herbalife down, as well as several other MLM companies, and made claims back in May that the group had scientific proof from independent labs that Herbalife products were dangerous and contained illegal levels of lead (interestingly enough, the letter has been taken down from Fraud Discovery’s website).

Now, Herbalife and the FDI have apparently reached an agreement to avoid any further litigation, and the FDI has retracted its original claims against the nutritional supplement company. No other details of the agreement were made public. But wait a second…if you had alleged scientific proof, was it all just a lie or did FDI disappear for some other reason? Something absolutely doesn’t make sense here.

“It is evident to the Fraud Discovery Institute that Herbalife produces products that are safe, and that the company strives for continuous improvement in product quality,” the company said in a statement. Say what? Minkow has been going after Herbalife with a vengeance listing 3 separate exhibits of “proof” that Herbalife’s products contained excessive amounts of lead. In fact, there was even a lawsuit filed by a woman claiming to suffer from liver damage as a result of the products and the lawsuit broke just days after Minkow’s “findings”.

There is something VERY fishy about what is going on here. This is the second time that a company Minkow and the FDI have gone after all of a sudden reached an agreement with no public announcement of the terms. if the findings were indeed proven to be false (which we would not be surprised by) why didn’t Herbalife sue Minkow and FDI for making false claims? You cant just make claims against a company, show “proof” by “scientists” etc and then retract it after you made the press. That is absurd.

This is the second time in a short period of time that Minkow and FDI have settled against a company they were going after with no report on the settlement. Just last month, USANA reached an agreement and all of a sudden all of the negative statements Minkow and FDI were saying about that company disappeared as well. Maybe this is all in relation to the FDA cracking down on false claims made but from companies in the industry and against them but either way, Minkow is losing a lot of credibility and kudos for both USANA and Herbalife to make this noise go away.

Popularity: 5% [?]

Coming up towards the end of summer and there is not a great deal of news in the industry as many are taking well earned vacations over the next two weeks. One company who has no time for rest is YTB. The embattled company has been dealing with not only the lawsuit filed against them by the California DA but others have jumped on the bandwagon to attack the Co. What is great to see though is that there are a number of YTB distributors who have been coming to the support of the company.

As the Olympics come to a close this Sunday, there are a few bright spots for MLM sponsored athletes. USANA’s Becca Ward got the Bronze in fencing. Nutrilite’s Liu Xiang wasn’t as fortunate after pulling up with a tendon injury and forcing one of China’s most popular athletes to pull out of the track and field events. As we pointed out, one has to wonder about the “curse” of the Nutrilite commercial since other athletes who appear in the ad were all expected to do very well and haven’t at all.

Popularity: 2% [?]

YTB released their second quarter financials, the news, while not all bad, is -as you can expect, less than spectacular. The online travel agency that has been under heavy fire lately from the California Attorney General, and several former distributors, said that it lost $199,500 in the quarter that ended June 30th, compared to a profit of $1.67 million a year ago. Net loss for the six months ended June 30, 2008 was $3.7 million, or $0.04 per diluted share, compared to a net loss of $0.5 million, or $0.01 per diluted share, for the same period of 2007.  Not a good sign.

Some good news for YTB- they saw a significant increase in their revenue for last year. According to SEC filings, they had a revenue increase to $44.8 million which is a 37% percent increase over the $32.8 million a year earlier. The company also has some very loyal independent agents. Thousands of YTB agents met earlier this month at the company’s annual convention and defended the travel company as a legitimate operation that has empowered thousands to start and run their own businesses.

Scott Tomer, Chief Executive Officer of YTB, commented on the second quarter results, stating, “Our Company has experienced dramatic growth over the last 12 months, and we have witnessed an equally dramatic growth in the revenues achieved during that period. Like many rapidly growing companies, we have had to increase our spending to ensure that we have the proper infrastructure in place to support this growth, and to ensure that the quality of services that we provide does not suffer. We have worked to narrow our net loss on a sequential basis, and are committed to identifying areas for cost savings and improved efficiencies within our business.”

YTB has also finally released an official claim in regards to the California lawsuit, saying, “The complaint was filed after 18 months of dialogue, initiated by the company with the attorney general to discuss the implementation of a new California law’s potential effect on the company’s business model,” YTB said in its filing. “Throughout these discussions, which broadened over time, the company has consistently cooperated with the state’s information requests and provided detailed evidence in face-to-face meetings explaining how and why the company’s business model is in full compliance with California law. The parties recently came to a standstill and the Aug. 4 complaint is a result of this standstill. The company believes it has meritorious defenses to the claims, intends to advocate its position aggressively and believes it will ultimately prevail in the case.”

To decipher what that can mean, the State Attorney General was probably asking for information from YTB to disprove the allegations against them and our guess is that YTB was unable to provide sufficient info.  It is not a good sign at all when you get to a standstill with a high power government agency.  The government will make inquiries and requests for information to either support or disprove allegations against a company/person.  If you are unable (or unwilling) to provide such information or agree that you have acted in a way that could be or was detrimental to parties involved, you end up in a standstill.  It is never a wise decision to end up in a standstill with the government since they have nothing but time and unlimited resources to pursue their objectives.

Stay tuned, this one may be coming to end sooner than we all may expect.

Popularity: 1% [?]