Wednesday, April 21, 2010

Lanham Act remedies are same for false advertising, trademark

Rexall Sundown, Inc. v. Perrigo Co., 2010 WL 1438789 (E.D.N.Y.)

Previous discussion. The parties sell glucosamine chondroitin nutritional supplements. Their false advertising claims went to a jury. Rexall sought to recover Perrigo’s profits, and the court ruled that Perrigo bore the burden of making any apportionment with respect to profits. The plaintiff must establish only the defendant’s sales of the product at issue. The defendant bears the burden of showing all costs and deductions, including any portion of sales that was not due to the allegedly false advertising. Perrigo argued that past precedents involved trademark infringement, not false advertising. But §1117(a) of the Lanham Act, which provides for damages, applies to trademark infringement, false designation of origin, false advertising, dilution, and cyberpiracy. Nothing in its text, governing precedent, or history indicated that the burden of apportionment varied with the cause of action asserted.

The court did note that any profit award under the Lanham Act is subject to the principles of equity. So, even if Perrigo couldn’t apportion profits, Rexall wouldn’t necessarily have been entitled to all its profits from the sale of products bearing the challenged Compare To statements, if a different amount would be just.

Note that this ruling is independent of the jury verdict. I am told that the jury found that Rexall failed to prove that Perrigo's use of "compare to" statements constituted a "statement of fact" under the Lanham Act and found for Perrigo on its remaining

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