Case Study 2 Freds Miracle Cough Syrup has hit the market and become a huge success with the burgeoning integrative medicine demographic. Per your advice, Fred has patented his famous concoction and trademarked the Freds Miracle Cough Syrup name and logo.

Demand is so high that Fred and Sally are working full-time on the business. Their children, Sam and Lilly, and their respective spouses, Jane and Tim, have joined the company full-time as well. In fact, Fred and Sally have made Sam and Lilly part owners of the business. Fred, Sam, and Tim handle the production, sales, and delivery. Sally and Lilly handle the majority of the administrative and business management tasks, while Jane acts as the bookkeeper. Sally and Fred are the only authorized signatories on the corporate account. Sally and Lilly have been hard at work securing a new production facility and distribution chain to accommodate an upcoming contract with a national chain.

After locating a large warehouse on several acres, Sally and Lilly approach their local credit union for a loan. The business has only one business credit card used to purchase supplies for the production of Freds Miracle Cough Syrup, and there is a small mortgage outstanding on the family farm. Personal debts of the individual family members consist of small credit-card balances for Fred, Sally, Sam, and Lilly as well as an auto loan on Sams van.

During the commercial loan accounting review process, Sally and Lilly discover that Jane has been siphoning off large amounts of corporate money and cooking the books to hide her actions. Jane has written several checks from the corporate account and forged both Sallys and Freds signatures. Jane has made out all but one of the forged checks to Don, a local loan shark, in an effort to repay her gambling debts. The check Jane did not deliver to Don was made out to Cash, which she slipped into the collection box at church in an effort to absolve her guilt. The embezzlement was so severe that the family fears that Freds Miracle Cough Syrup is now on the brink of bankruptcy.

Meanwhile, Sams refusal to enter into an exclusive distribution deal with the local drugstore has enraged Bob, the owner. Bob has now reverse engineered Freds cough syrup recipe and has posted it online in an act of vengeance. As Fred and Sally tearfully recount the events of the past month, you reassure them that you are on the case, and you begin to ponder the legal issues at hand.

What legal recourse does Fred have against Bob for infringement of intellectual property rights?