Juul sued Michael Tolmach, 35, and Gregory Grishayev, 34, for alleged trademark infringement in 2018 claiming their company Eonsmoke marketed its vaping pods in social media with associated hashtags too many times. Lawyers for the men have accused Juul and Altria as a corporate bully bent on snuffing out a tiny rival that offered consumers an alternative that was highly differentiated. Tolmach and Grishayev’s attorneys have argued JLI is a corporate miscreant devoted to monopolizing the nicotine vaping industry. Tolmach, who studied at Baruch College and Bronx High School of Science, has a finance background and an expired Series 7, 63, and 3 licenses from his time as a financial advisor prior to founding Eonsmoke.
According to court documents, “Plaintiff’s cherry picked their examples; the great majority of Defendants’ social-media posts did not contain juul hashtags, and the posts that did still contained mostly non-juul hashtags.” Eonsmoke’s expert witnesses are showing a clear lack of likelihood of confusion, no causal nexus between damages and alleged infringement, and limiting damages to e-commerce segments, if any liability is found, based on court documents. Attempts to reach both Juul and Eonsmoke for comments went unanswered for this story.
After a dramatic turn of events; In a January 18th 2020 ruling; the Court, after receiving ten expert witness reports from Eonsmoke, ruled “The Court, sua sponte, is therefore ordering the parties to show cause why its orders of December 22, 2021 and January 13, 2021 should not be vacated or modified. To that end, the parties shall engage in expedited discovery, under the direction of Magistrate Judge Hammer. The hearing before me, scheduled for January 19, 2021 at 2:30 p.m., is cancelled; instead, the parties shall arrange for a conference with The Magistrate Judge at the same time, or as soon thereafter as he is available, for the purpose of scheduling expedited discovery and briefing. In the meantime, the daily fines ordered by the court will be suspended.”
According to court filings, one of Eonsmoke’s consumer survey experts shows a study of 555 likely purchasers of electronic cigarettes/replacement cartridges showing that there is no likelihood of confusion among consumers between Eonsmoke products and JUUL products. Moreover; another Eonsmoke expert in social media marketing is arguing that “hashtags belong to the social media community, not any particular person or company and brands cannot control use of hashtags.”
On April 13th 2021, Eonsmoke, LLC and its principals filed claims against Juul Labs, Inc and Altria and all associated directors and executives. The lawsuit, filed in the district of California, alleging misrepresentation, false advertising, business interference, trade libel, defamation, unfair competition, fraud, civil conspiracy to commit fraud, and racketeering under the Racketeer Influenced and Corrupt Organizations Act (“RICO”) (18 U.S.C. §§ 1962(c)), all arising from a scheme to defraud between and among Defendants that was designed and implemented to wrongfully destroy competitors including Eonsmoke within the vaping industry for market share and to create an illegal operating monopoly that exists currently known as Defendant Juul Labs, Inc. (“JLI” or “Juul” or “JUUL”).