Creditors of BSML, a company that offers teeth-whitening services through its BriteSmile spas, have filed an involuntary bankruptcy petition against the company under Chapter 7 of the U.S. bankruptcy laws, according to Discus Dental.
In 2006, Discus purchased substantially all assets of BSML's predecessor company, BriteSmile, and its related entities, for $35 million. Discus currently owns the rights to the BriteSmile trademark in connection with teeth-whitening services offered in dental offices, where it is the exclusive supplier of BriteSmile teeth-whitening products and procedures.
As part of the 2006 transaction, Discus agreed to provide BSML with limited rights to use the BriteSmile trademark and related patents for certain teeth-whitening procedures that BSML offers in its spa locations. BSML also retained the limited right to use the trademark for certain types of toothpaste, mouth rinse, and teeth-whitening pens that it offers over the Internet and on the QVC home shopping network.
But in June 2009, Discus Dental filed a lawsuit against BSML, alleging that BSML was abusing the Discus BriteSmile trademarks, mainly in its BSML-owned and BSML-operated BriteSmile Spas.
That lawsuit, which is pending in federal court in Los Angeles, seeks to end the license agreement with BSML for use of the Discus-owned BriteSmile trademark, a court order prohibiting BSML from future use of the trademark, and damages to its intellectual property rights associated with the trademarked brand. The lawsuit alleges that BSML has breached the license agreement and violated Discus trademark rights by harming the goodwill, reputation, and value of its BriteSmile trademark based on various BSML actions.
"Discus has never had any ownership interest in the BSML Spas, nor has Discus had any involvement in BSML's conduct in operating the BSML Spas or BSML's Internet or retail outlets," Discus stated April 13 in a press release. "Unfortunately, BSML's alleged conduct in operating its BSML Spas using the BriteSmile trademarks has resulted in hundreds of complaints to Discus by confused purchasers of BSML's BriteSmile-branded goods and services mistakenly believing that Discus was associated with BSML."
According to Discus Dental, these complaints allege that unqualified BSML personnel performed teeth-whitening procedures, that BSML purchasers were charged for services they never received from BSML, that BSML failed to pay wages to its employees, and that BSML closed BSML Spa locations without notice to customers. TV news investigative reports have been broadcast in New York City, San Francisco, and elsewhere exposing BSML's alleged conduct.
The bankruptcy case against BSML, filed April 8, is pending in the U.S. Bankruptcy Court for the Southern District of Florida (Bankruptcy Petition No. 10-19119-PGH).
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