David vs. Goliath - Why we no longer sell Natural Calm
Calm Natural and Natural Calm In a Nutshell:
Calm Natural Ltd. began as a distributor for Natural Calm Magnesium Citrate, both through e-commerce and in the European market. For a variety of reasons, we amicably parted ways with Natural Calm, and received their CEO’s blessing to make our own magnesium product. Shortly after we created MAG365, Natural Calm sued us, claiming we copied their patented formula. (Spoiler alert: we didn’t.) Like most small businesses, we could not afford a one million dollar lawsuit, but we truly believed our product could make a difference in people’s lives, so we leveraged everything we could to fight this injustice. After 14 gruelling months, Natural Calm approached us with a settlement.. As part of the settlement, we agreed to sign a non-compete with Natural Calm in North America for three years, and —as you may have guessed — that non-compete is now up. We are excited to introduce MAG365 — Ireland and the UK’s top selling ionic magnesium citrate — and PrizMAG’s pure magnesium bisglycinate to North America!
Of course, there is much more to this story. If you like a good read, join us for the juicy details of a tale we call, “David vs. Goliath.”
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The History of Calm Natural Ltd.
The events leading up to the lawsuit:
In 2006, Janet Esser invited her husband, George, and their daughter, Lynae, to an event that was featuring and selling e-commerce platforms. Janet convinced George this would be a good business venture for them, with the hope of building a legacy to hand over to their children one day. George began looking for a great product to sell. He was soon introduced to an American-made magnesium citrate supplement called “Natural Calm.” Because of its popularity and efficacy, George decided to pursue selling Natural Calm. He approached Natural Vitality — the company that manufactures Natural Calm, they agreed to sell to him.
In 2008, George and Janet started a European branch of the company which is now known as ITL Health Ltd., and started marketing and selling Natural Calm in the United Kingdom. There was a legal issue with the name of the product, according to European regulations, so Natural Calm became “Magnesium Supreme” in the European market.
Magnesium Supreme had a slow start. The month it was launched, Lehman Brothers went bankrupt, and a large-scale recession followed. ITL Health was able to weather the recession over the next six years, and managed to launch their products in three different countries during that time: the UK, Ireland, and the Netherlands. Soon the products were in almost every health store in Ireland, and were gaining traction in the UK and the Netherlands.
In February 2014, an Italian entity claimed rights to the name “Magnesium Supreme”, so the name of the European product was changed to TrüMAG. Three months after launching the new name, Natural Vitality — the manufacturers of Natural Calm — decided they were no longer going to use the name TrüMAG, as they found consumers didn’t receive it well. Their plan was to go back to using the name Natural Calm. However, due to the aforementioned legality of using the name “Natural Calm” in Europe, ITL Health believed it would result in yet another name change. Continuing to change the name of the product was becoming costly and caused customers to lose confidence in the brand. As a result, the distributorship ended amicably. When Justin Farmer, the CEO of Natural Vitality, asked George what he would do next, George told him about his plan to make his own magnesium products. Justin gave George his blessing and wished him well.
In the summer of 2014, ITL Health created their own magnesium supplement and added another branch to their company, ITL Health BV, a Netherlands limited company. Approximately two months later, Natural Vitality served ITL Health with a “cease and desist” letter. This was concerning, as ITL Health’s main product, MAG365, was set to launch in October 2014 at a trade show. It also caused confusion, as ITL Health was given the OK by Natural Vitality’s CEO to make their own supplement. Because of this, ITL Health chose to carry on with their business plan in good faith.
In 2015, Natural Vitality sued ITL Health for copying their magnesium formula, and took them to the Federal Court of Texas for trial by jury. Not only did they sue the main company and all of its branches, they sued the owners personally. ITL Health tried to have the case dismissed, but because the presiding judge allowed the personal suit to stand, George and Janet Esser had no choice but to fight or risk losing everything.
When ITL Health began distributing the European version of Natural Calm in the Netherlands, the government requested a copy of the formula for regulatory reasons. ITL Health hired a consultant to take care of this, and Natural Vitality gave their formula to the consultant, without ITL Health being involved in the process. In the lawsuit, Natural Vitality claimed ITL Health illegally obtained this formula from their consultant. They also had an affidavit from the Canadian distributor of Natural Calm, claiming George told them he had stolen the formula. Justin Farmer, the CEO of Natural Vitality, also gave an affidavit claiming he tested ITL Health’s new product (MAG365) and had never seen anything so similar to Natural Calm.
Neither claim was true, and it became increasingly clear Natural Vitality had no case against ITL Health. The people behind Natural Vitality were aware ITL Health was a small, family-owned company and didn’t have the resources a larger company would have to fight such a lawsuit.
The court’s discovery process made the following clear:
- George Esser had created his own formulas.
- Natural Vitality was initially on board with ITL Health creating their own products, until they witnessed the superiority of ITL Health’s flagship product.
- The formula Natural Vitality gave to the consultant in the Netherlands was a fake formula, designed to catch people who break contracts. (Even if George had stolen this “formula,” it would not have worked to make a new product.)
- Before signing the affidavit, the CEO didn’t lab-test the product, he only did an organoleptic test.
- In 2014, after Natural Vitality had officially analyzed MAG365, they changed their formula. This new formula was closer to MAG365’s formula.
- Natural Vitality was purchased by Justin Farmer from the original formulator and owner, for $3.8 million, using profits from the company. It was sold again just a few years later for $100 million. The first $60 million of that sale was received up front, and the remaining $40 million would follow three years later, based on performance.
One week before trial, the plaintiff approached ITL Health with a settlement offer that ITL Health accepted. The settlement included a 3-year non-compete in the North American market. Because most of their business was in Europe at the time of settling, this was easy for ITL Health to agree to.
As you may have guessed by now, our 3-year non-compete is up! We have been excited to share our story and bring our product to the North American market. The American branch of our company is still called Calm Natural Ltd but our European and Canadian branches are known as ITL Health. If you want to try MAG365, our flagship product which has created a lot of buzz (between getting sued, winning over ten awards in Europe, and becoming Ireland and the UK’s top selling ionic magnesium citrate), we are giving an introductory offer of 50% off! To thank you for taking the time to read our story and hopefully share it with others, please use code FREESTORY at checkout to claim 50% off your tub of MAG365. Happy shopping!