Defendant VPX released Muscle Power, a protein shake, and
CytoSport sued for infringement of its Muscle Milk mark and trade dress (including
layout and font) for the same products, along with false advertising. The products were both marketed in octagonal
tetra-packs, “one of the few available FDA approved packages available for
ready to drink protein drinks.” Their
prices and target markets were similar.
The challenged Muscle Power ads depicted a woman nursing a child with
the caption, “MILK IS FOR BABIES, MUSCLE POWER IS FOR MEN!” and claimed that Muscle
Power contained 600% less sugar and 183% less fat than Muscle Milk. After CytoSport won a preliminary injunction
on the trademark claims, VPX introduced a new product that didn’t resemble
Muscle Milk, but the case continued, including on VPX’s false advertising
claims centered around the use of “Milk” to name a non-dairy product.
The parties submitted conflicting survey evidence on likely
confusion between the products: one found 4.1% confusion and the other 25.4% (I’ll
let you guess which was which), and CytoSport employees also provided declarations
about customer source confusion.
VPX’s false advertising counterclaim relied heavily on an
FDA warning letter that preliminarily determined that “Muscle Milk” was
deceptive as containing no milk. VPX
also used deceptiveness as an equitable defense to enforcing CytoSport’s mark,
and sought cancellation of the mark (available despite the mark’s
incontestability since deceptiveness is a ground for cancellation at any
time). To date, the FDA hasn’t followed
up on its 2011 warning letter with a final determination.
The court excluded a VPX survey about use of the Muscle Milk
mark on a product that contains no milk.
The survey showed respondents three brand names without accompanying
trade dress or product images: Muscle Milk, ProMan-X, and Lean Body. The survey
asked if each product contained a lot, some, or no protein, creatine, and milk.
There was no “I don’t know” option.
While Lean Body is also a protein drink, ProMan-X is a “male enhancement”
supplement. The answers showed an
unacceptable level of guessing. For
ProMan-X, 98% of respondents said it contains protein, 92% creatine, and 68%
milk, but it has none of these. As for Muscle Milk, 80% responded that it
contained milk. The survey expert admitted in his deposition that respondents
were guessing. VPX failed to show that
the survey comported with accepted principles of surveying, and thus it was
excluded.
On the other hand, VPX’s confusion survey was admitted; the
criticisms went to weight rather than admissibility. The confusion survey asked respondents to
examine a container of Muscle Power and determine who made the product. CytoSport
argued that it failed to replicate market conditions, failed to determine
whether or not respondents were aware of CytoSport or Muscle Milk before asking
them questions, and failed to identify respondents who believed that the Muscle
Power product was actually Muscle Milk.
But CytoSport didn’t dispute that the survey was conducted using an
approved format (it’s an Ever-Ready
survey), relevant, and conducted according to accepted principles. The court found the criticisms persuasive, but
that was ultimately for the jury.
Turning to the false advertising claims, the court first
found the Lanham Act counterclaim barred by deference to the FDA under the
recent Pom case. VPX’s primary evidence was the FDA warning
letter. (Thus, if there had been non-excluded
evidence of falsity and materiality independent of the FDA issues, this might
have been a different case.) “The FDA is
aware of CytoSport's labeling and has not acted. If the FDA determines that
CytoSport's use of the term ‘Muscle Milk’ is misleading to consumers, despite
the ‘Contains No Milk’ disclaimer on the label, it will act to enforce the
labeling requirement.” The warning
letter itself was informal and advisory.
Any Lanham Act claims were barred until the FDA issued its decision.
On the other hand, the state law claims weren’t barred to
the extent that state law requirements were “identical” to FDA requirements, as
the FDCA specifically allows. So while
federal courts won’t interpret the FDCA or FDA regulations for Lanham Act
purposes, they may have to do so for state-law false advertising claims.
CytoSport argued that the state law claims were barred by
the statute of limitations, but VPX didn’t suffer any harm (triggering
standing) until it introduced a competing product, and it counterclaimed well
within the FAL/UCL four-year statute of limitations measured from then.
Fortunately for CytoSport, competitor FAL/UCL claims are
judged by Lanham Act standards (except for the preclusion part—is your head
spinning enough yet?), and VPX didn’t have enough evidence of falsity or
materiality. Along with the FDA warning
letter, VPX offered as evidence of deception the PTO’s initial rejection of the
mark MUSCLE MILK ACTIVE; NAD’s decision to refer CytoSport to the FDA and FTC
for refusing to participate in a proceeding with Nestle on this issue; preliminary
actions from Canadian IP authorities; and CytoSport’s decision to add a “Contains
no Milk” disclaimer, which it has also registered as a mark. None of this was enough to show unambiguous
falsity—the decisions were all preliminary and the disclaimer wasn’t an
admission of previous deceptiveness.
Without the VPX survey, CytoSport’s expert report was uncontradicted,
and it tended to show that consumers were no more confused by Muscle Milk’s
label than by a generic control bottle label.
Materiality was a separate problem. There was no evidence that a mistaken belief
that the product contained milk would cause consumers to choose Muscle Milk
over the alternatives. And it followed
that VPX couldn’t show harm, since without materiality there can be no harm—something
I really wish trademark cases would recognize!
Thus, all VPX’s counterclaims, including the cancellation
claim, failed for want of admissible evidence supporting them.
However, CytoSport’s motion for summary judgment on its
infringement claims was also denied. VPX
was still allowed to raise deceptiveness as a defense. (I’m not sure why, if no reasonable jury
could find in its favor on the cancellation claim, a reasonable jury could find
in its favor on the defense, but ok.)
Also, there were material issues on likely confusion. As to mark similarity, VPX noted that there
were many products in the protein supplement market using “muscle,” and the PTO
allowed both marks. But the similarity
in fond and placement of the marks on the packaging was strong, and the PTO
didn’t have marketplace evidence in front of it. Still, VPX raised a genuine
issue of material fact. A reasonable
jury could look at “power” and “muscle” as the key words, and CytoSport’s
argument also rested at least in part on its trade dress claims, as to which it
hadn’t sought summary judgment. Trade
dress was relevant in creating the context for comparison, but “what confusion
stems from the similarity of the marks and what confusion stems from trade
dress is primarily a question for a jury to answer.”
Likewise, actual confusion was disputed given the competing
surveys; the jury could also regard the CytoSport employee statements about
consumer confusion as de minimis. Intent
was also in dispute. VPX’s CEO looked at
every tetra-pak packaged protein shake before choosing the Muscle Power design;
CytoSport argued that this should lead to an inference of intent to copy. VPX
responded that it ran comparative ads disparaging Muscle Milk, which was
evidence of intent to distinguish. A
reasonable jury could go either way.
Considering the packaging of every protein shake on the market doesn’t
necessarily lead to an inference of intent to copy. The CEO “may have intended to create a
package that was an amalgamation of many competitors' designs or merely a
design that met existing industry expectations.”
Turning to those disparaging ads: CytoSport argued that VPX’s
claims that Muscle Power had 600% less sugar and 183% less fat than Muscle Milk
were literally false because they described mathematical impossibilities. The parties agreed that Muscle Milk contained
six times more sugar and 1.83 times more fat than Muscle Power. VPX argued that a reasonable jury could find
that the ads conveyed a “colloquial” message that Muscle Power contained 1/6th
the sugar and 100/183rds the fat of Muscle Milk. “Mathematically nonsensical” claims couldn’t
be literally false. A reasonable jury
could find that innumerate consumers would receive a truthful message, so there
was no literal falsity (though misleadingness was apparently preserved for
trial).
VPX sought a motion to stay until the FDA acted, which might
allow it to use the deceptiveness of CytoSport’s mark as a defense. The court disagreed, because the FDA’s
standards were different from Lanham Act standards (how?) and the FDA’s
reasoning was already laid out in the warning letter (which could be presented
to the jury?). I’m still a bit confused
how this defense will work given the rejection of the FDA-based claims.
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