Sunglasses maker Verso is pressing a Florida court to enforce an arbitral award issued in a $3 million dispute with an Israeli pop star who allegedly undercut a deal to promote the brand in Israel by conspiring with a distributor to sell counterfeit sunglasses.
Verso Israel LLC argued in a brief filed Wednesday that the court has no reason not to enforce the award, which orders Omer Adam’s company, PAI Production Adam Investment Ltd., to halt its involvement in a competing business with Verso’s Israeli distributor, Opticana – The First Opti-Store Ltd., for a new brand of eyewear called Cattleya. The award does not address the question of damages, instead leaving that issue to be decided later.
Verso has accused Adam and PAI of breaching the deal his company had inked in 2018, saying he went around Verso’s back to strike his own deal with Opticana to star in a campaign to market counterfeit Verso sunglasses, and to eventually participate in a campaign to launch the Cattleya brand.
PAI has been a no-show in the arbitration, refusing to appear due to concurrent litigation filed in Israel, according to court documents. The litigation does not name Adam as a defendant, since the tribunal determined that it lacked jurisdiction over him. However, Adam is the sole owner of PAI, according to Verso.
Verso told the underlying arbitral tribunal that it was unclear how much its brand had been damaged in Israel as a result of Adam’s alleged conduct, though it believes that Adam has pocketed as much as $3 million in ill-gotten profits.
Counsel for Verso, Jordan A. Shaw of Zebersky Payne Shaw Lewenz LLP, told Law360 that they are “pleased with the outcome of the arbitration thus far. We are hopeful for a positive outcome in the confirmation process, so we can focus our efforts on enforcement and expanding the award to include a concrete damage number.”
Representatives for Adam and PAI could not immediately be reached for comment on Thursday.
The dispute has its origins in a licensing agreement that Verso signed with PAI in 2018 to promote the brand in Israel. Verso later accused Adam of forming a “clandestine” arrangement with Opticana, under which he allegedly starred in a campaign for counterfeit Verso products that had been manufactured by Opticana.
Verso claims that Adam is now directly competing against it, using the connection with Opticana to enter into a new deal with that company to launch the Cattleya brand.
Among Adam’s alleged infringements of their deal was a move by his company, PAI, to “weasel” its way into negotiations when Opticana tried to purchase a portion of the Verso brand, even though the deal did not give PAI any ownership of the brand, Verso alleges. Although those negotiations were not fruitful, PAI subsequently entered into its own deal with Opticana under which Adam became its brand ambassador — first for the counterfeit Verso products and later for the Cattleya brand, according to Verso.
The sunglasses maker said that its deal with Adam forbade him from providing services to any other brand in the field of eyewear and sun wear for the entire period of the licensing agreement and for two years thereafter, meaning that he could not compete with Verso until July of this year.
Beyond that, Adam has helped to create and publish content using the Verso name, brand and logo without the company’s approval, Verso alleges.
Verso brought the dispute to arbitration before the American Arbitration Association’s International Centre for Dispute Resolution in September 2020. The company said that Adam has yet to appear in or pay for any part of the arbitration. It called his excuse for not participating “simply bogus.”
Verso Israel is represented by Zachary Dean Ludens and Jordan A. Shaw of Zebersky Payne Shaw Lewenz LLP.
The case is Verso Israel LLC v. PAI Production Adam Investment Ltd., case number 0:22-cv-60684, in the U.S. District Court for the Southern District of Florida, Fort Lauderdale Division.