GREGORY A. VEGA
United States Attorney

D. MICHAEL WALTZ
Assistant United States Attorney
California Bar Number 052877
Federal Office Building
880 Front Street
Room 6293
San Diego, CA 92101-8893
(619) 557-7184 (voice)
(619) 557-5004 (facsimile)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF CALIFORNIA

FEDERAL TRADE COMMISSION,
Plaintiff,
v.
ALFA SCIENTIFIC DESIGNS, INC.
Defendant.

Case No. 00CV
STIPULATED PRELIMINARY INJUNCTION

Plaintiff, the Federal Trade Commission ("FTC" or "Commission"), has filed a complaint for permanent injunction and other relief, pursuant to Section 13(b) of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. § 53(b), against defendant Alfa Scientific Designs, Inc. ("Alfa Scientific" or "defendant"), alleging that defendant has engaged in deceptive practices and false advertising in violation of Sections 5(a) and 12 of the FTC Act, 15 U.S.C. §§ 45(a) and 52. The Commission and defendant Alfa Scientific now stipulate and agree to the entry of this preliminary injunction ("Order"), and stipulate as follows:

1. That this Court has jurisdiction over the subject matter of this case, and that the Court has jurisdiction over defendant;

2. That defendant's activities as alleged in the Commission's complaint are in or affecting commerce, as "commerce" is defined in Section 4 of the FTC Act, 15 U.S.C. § 44; and

3. That entry of this Order is in the public interest. 4. Defendant neither admits nor denies the allegations set forth in the Commission's complaint. Nothing in this Order shall be construed as an admission by defendant of any of the Commission's allegations.

ORDER

I.
DEFINITIONS

1. "Human immunodeficiency virus" ("HIV") shall refer to all types or strains of the virus that causes acquired immunodeficiency syndrome ("AIDS"), an infectious disease characterized by immune system failure.

2. "HIV test" shall refer to any product that is advertised, marketed, promoted, offered for sale, distributed or sold with express or implied representations that the product will or may detect the presence of HIV in any human, including the "Alfa HIV 1 / 2 Rapid Test" and any other substantially similar product.

3. "Device" shall mean "device" as defined in Section 15(d) of the FTC Act, 15 U.S.C. § 55(d).

4. A requirement that defendant notify or provide information or documents to the Commission or counsel for the Commission shall mean that defendant shall provide the required notice, information or documents to:

Darren A. Bowie
Karen Jagielski
Federal Trade Commission
600 Pennsylvania Ave., NW, Room S-4002
Washington, DC 20580

II.
PROHIBITED BUSINESS ACTIVITIES

IT IS HEREBY STIPULATED AND ORDERED that defendant and its officers, agents, servants, employees, and attorneys, and all other persons or entities in active concert or participation with them, and each of them, are hereby enjoined from engaging, participating, or assisting in any manner whatsoever, directly or indirectly, in the advertising, marketing, promotion, offer for sale, distribution, or sale of any HIV test. Provided, that this provision shall not prohibit defendant from conducting tests related to the accuracy of any HIV test.

IT IS FURTHER STIPULATED AND ORDERED that defendant and its officers, agents, servants, employees, and attorneys, and all other persons or entities in active concert or participation with them, and each of them, are hereby enjoined from making, or assisting others in making, directly or by implication, any material false or misleading oral or written statement or representation in connection with the advertising, marketing, promotion, offer for sale, distribution, or sale of HIV tests or other devices, including but not limited to:

• Misrepresenting, in any manner, directly or by implication, the accuracy of any HIV test or other device.
• Misrepresenting, in any manner, directly or by implication, that the U.S. Food and Drug Administration or any other local, state, regional, national or international government or public health organization has reviewed, evaluated, is affiliated with, or otherwise endorses or supports, any HIV test or other device.
• Misrepresenting, in any manner, directly or by implication, any other fact material to a consumer's decision to purchase any HIV test or other device.

III.
PRESERVATION OF RECORDS AND OTHER EVIDENCE

IT IS FURTHER STIPULATED AND ORDERED that the defendant, and its officers, agents, servants, employees, and attorneys, and all other persons or entities in active concert or participation with them, and each of them, and any other person or entity served with a copy of this Order by personal service, facsimile, or otherwise, are hereby enjoined from:

• Destroying, erasing, mutilating, concealing, altering, transferring or otherwise disposing of, in any manner, directly or indirectly, any HIV test advertised, marketed, promoted, offered for sale, distributed, sold or purchased by defendant.
• Destroying, erasing, mutilating, concealing, altering, transferring or otherwise disposing of, in any manner, directly or indirectly, contracts, agreements, customer files, customer lists, customer addresses and telephone numbers, correspondence, advertisements, brochures, sales material, training material, sales presentations, documents evidencing or referring to the accuracy of defendant's HIV tests or other devices, data, computer tapes, disks, or other computerized records, books, written or printed records, handwritten notes, telephone logs, "verification" or "compliance" tapes or other audio or video tape recordings, receipt books, invoices, postal receipts, ledgers, canceled checks and check registers, bank statements, appointment books, copies of federal, state or local business income or property tax returns, and other documents or records of any kind, including electronically-stored materials, that relate to the business practices or finances of defendant or other entity directly or indirectly under the control of defendant; and
• Failing to create and maintain books, records, and accounts which, in reasonable detail, accurately, fairly, and completely reflect the incomes, disbursements, transactions and use of monies by defendant or other entity directly or indirectly under the control of defendant.

IV.
SERVICE OF ORDER

IT IS FURTHER STIPULATED AND ORDERED that copies of this Order and the initial pleadings and papers filed in this matter may be served by employees or agents of the Commission, including without limitation private process servers, and by employees or agents of any other law enforcement agency, upon defendant, any agent or employee of defendant, or any other person, partnership, corporation, or other entity that may be in possession of any records, assets, property, or property right of defendant, or that may be subject to any provision of this Order.

V.
ACCOUNTING PROVISIONS

IT IS FURTHER STIPULATED AND ORDERED that, within five business days after entry of this Order,

1. Defendant shall serve on counsel for the Commission a detailed accounting of:

(1) all gross revenues obtained from the sale of HIV tests from inception of sales through the date of the issuance of this Order;

(2) all net profits obtained from the sale of HIV tests from inception of sales through the date of the issuance of this Order;

(3) the total number of HIV tests sold by defendant;

(4) the full names, addresses, telephone numbers, and e-mail addresses of all purchasers of HIV tests from defendant, the number of tests purchased by each purchaser, and the lot number(s) of the tests purchased by each purchaser;

(5) the full names, addresses, telephone numbers, and e-mail addresses of all individuals or entities who supplied HIV tests or any component of any HIV test to defendant, including without limitation all manufacturers and mid-level distributors, and including without limitation the lot number(s) of tests supplied to defendant.

2. Within two weeks after entry of this Order, defendant shall prepare and deliver to the counsel for the Commission a completed financial statement including all information requested in Department of Treasury Collection Information Statement for Businesses (Form 433-B), which is accurate as of the date and time of service of this Order.

VI.
EXPEDITED DISCOVERY

IT IS FURTHER STIPULATED AND ORDERED that in light of the need to promptly ascertain possible consumer injury, the need to identify documents subject to this Order, and the need to monitor compliance with this Order, the Commission is granted leave to conduct certain expedited discovery, and that, commencing with the time and date of this Order, in lieu of the time periods, notice provisions, and other requirements of Rules 26, 30, 34, and 45 of the Federal Rules of Civil Procedure, expedited discovery shall proceed as follows:

A. Pursuant to Fed. R. Civ. P. 30 and 45, the Commission may take depositions upon oral examination of any party regarding defendant's sale, distribution, or purchase of HIV tests; the status and location of defendant's HIV tests; the nature, location, status, and extent of defendant's assets; the status and location of documents reflecting defendant's business transactions; and compliance with this Order, on two days notice of any such deposition.

This Subparagraph shall not be construed in any manner to preclude the right of plaintiff to take subsequent depositions of the same witnesses on the merits of this action. Any deposition taken pursuant to this Subparagraph is in addition to, and not subject to, the presumptive limits on depositions set forth in Fed. R. Civ. P. 30(a)(2)(A).

B. Pursuant to Fed. R. Civ. P. 34(b) and 45, the defendant and any other party shall produce all documents relating to defendant's sale, distribution or purchase of HIV tests; the status and location of defendant's HIV tests; the nature, location, status, and extent of defendant's assets; the status and location of documents reflecting defendant's business transactions; and compliance with this Order, that are requested by the Commission, within five (5) days of service of such request, with production of documents made to such person or place as counsel for the Commission may direct in writing.

VII.
CONSUMER REPORTS

IT IS FURTHER STIPULATED AND ORDERED that pursuant to Section 604(1) of the Fair Credit Reporting Act, 15 U.S.C. § 1681b(1), any consumer reporting agency may furnish a consumer report concerning defendant to plaintiff.

VIII.
RETENTION OF JURISDICTION

IT IS FURTHER STIPULATED AND ORDERED that this Court shall retain jurisdiction of this matter for all purposes.

SO STIPULATED:

IT IS SO ORDERED, this day of , 2000.

JUDGE OF THE DISTRICT COURT