ThermoLife Int’l, L.L.C. v. NeoGenis Labs, Inc., 2019 WL
4193968, No. 18-cv-2980-HRH (D. Ariz. Sept. 4, 2019)
ThermoLife allegedly holds a number of patents related to
dietary supplement/food ingredients, including those related to “the use of
amino acids in combination with nitrates to increase performance.” It allegedly
“licenses the use of its patented technology...to many of the largest dietary
supplement companies” and “supplies the raw materials necessary to practice its
patented inventions.”
NeoGenis “sells nitric oxide test strips and dietary
supplements[,]” and was allegedly “a dominant force in the beet supplementation
market.” NeoGenis products allegedly competed with products that use TL’s raw
materials and products produced with its patented nitrate technology. TL
doesn’t currently market oxide testing strips, though it’s trying to get into
that market.
NG allegedly falsely advertised “that it has developed a
‘patent pending’ method to determine ‘if you are N-O [nitric-oxide] deficient’
and/or ‘if you’re getting enough dietary nitrate through the foods that you
eat’: HumanN’s nitric oxide Indicator Strips.” But the patent, while applied
for in 2013, was allegedly rejected in its entirety. In addition, NG allegedly
falsely advertised that its strips “can determine whether an individual is
nitric oxide deficient[.]” A one time saliva test allegedly can’t do that. NG also allegedly engaged in false patent
marking because the listed six (later three) patents weren’t practiced in the
marked products (the patents allegedly required a nitrite salt not present in
the products, and anyway they failed to include a sufficient quantity of
nitrites of any sort to practice the listed patents). Similarly, NG allegedly falsely
claimed that its “licensed patents protect ‘patented Nitric Oxide technology’”
and that its research was “Nobel-Prize winning.” Finally, NG allegedly falsely claimed that
its products were foods or dietary supplements.
After dismissal for want of standing, TL filed an amended
complaint.
False marking: “Title 35 section 292(a) prohibits, in part,
‘mark[ing] upon...in connection with any unpatented article, the word ‘patent’
or any word or number importing that the same is patented, for the purpose of
deceiving the public.’ … Section 292(b) provides a private right of action to
enforce § 292(a) to any ‘person who has suffered a competitive injury as a
result of a violation of this section.’ ”
A “competitive injury” is “ ‘[a] wrongful economic loss
caused by a commercial rival, such as the loss of sales due to unfair
competition,’ ” but someone who’s attempted to enter the market (in intent and
action) can have standing.
TL alleged that, since at least October 2018, it had been
working with someone on testing/monitoring nitric oxide over “several face-to-face
meeting[s] and numerous phone conferences” and that “when the deal is reached,
[it] will be in...direct competition with HumanN’s Nitric Oxide Test Strip[s].”
This was too late, since TL sued in September 2018 and standing is measured at
the time suit is filed and not later. [Is this correct where the issue is
statutory “standing,” a la Lexmark, rather than Article III standing?]
As for the beet supplements, TL alleged that NG was still
showing pictures of these products on the internet that list six patents on the
products’ labels even though defendant removed three of the patents from the
actual product labels, and also that that these products do not practice the
three patents which are still listed on the products’ actual labels. As for the
internet claims, NG argued that the claim wasn’t plausible because, when a
product carries both proper and false patent markings, a plaintiff must show
specifically that the falsely marked patents caused it harm, and that it
definitely practiced one patent, the ‘999. However, it was still plausible
injury “because a consumer might be more likely to purchase a product that
lists several patents as opposed to a product that lists only one patent.”
As for the other patents: TL argued that some relevant
patents required a ‘nitrite salt’ to practice the patented inventions, and
alleged that the accused products didn’t contain a nitrite salt. NG offered a Certificate of Analysis showing
that the product being tested, “NEO Dry Blend BC Flavor w/ Vit C[,]” contained
sodium nitrite, which it said was a nitrite salt. But even if the court took
judicial notice of the certificate, it wasn’t clear that product was used in
the accused products. Also, TL alleged that, regardless, it did lab tests on
two of the products in two separate months and found insufficient nitrites to
practice the patent. NG made a bunch of arguments about the proper chemicals
and their measurement that weren’t appropriate for a motion to dismiss. (But as for a product as to which TL didn’t
allege tests, just alleged that the product didn’t practice the patents, that
was too conclusory to be plausible yet.)
NG next argued that the complaint flunked Rule 9(b) because
it wasn’t plausible that NG, a sophisticated business, would license patent
rights from the University of Texas, presumably paying some royalties therefor,
without even bothering to practice the patents. The court disagreed.
Lanham Act false advertising: There was the same problem
with the N-O Indicator Strips. TL was not a competitor; a potential competitor
didn’t have Lexmark standing.
Specific claims: it was plausible that claims that NG’s
products use “patented Nitric Oxide technology” constituted false advertising,
see above. NG argued that it never claimed it had won the Nobel Prize, just
referred to the prize awarded to 1998 for discoveries concerning nitric oxide as a
signaling molecule in the cardiovascular system, more than ten years before NG’s
predecessor company was founded. You can see why this might be an implicit
falsity claim—defendant allegedly used this website text:
[o]ur research on Nitric Oxide
first began with the discovery of its unique impact on cardiovascular health.
Its immense importance as a biological signaling molecule resulted in the
awarding of the Nobel Prize in 1998. Realizing that the discovery of Nitric
Oxide had immense potential, it didn’t take long for our interest in N-O to
become our passion.
TL also alleged that NG asserted a connection to “Nobel
Prize-winning research” and advertised that “the discovery of Nitric Oxide, the
first gas to be identified as such, won the Nobel Prize in 1998. This discovery
is what HumanN is built on.” This was sufficient to allege a false implication
of connection to Nobel Prize winning research.
TL alleged that NG falsely advertised that it was “the only
company that can practice ‘patented N-O platform technology.’ ” But the only alleged
example didn’t say that; it said “ ‘there is not any product out there, despite
dozens if not hundreds of...nitric oxide products on the market, food or
supplement, that do[es] what our technology does.’ ” That’s not the same thing
(and seems like puffery), so the claim was dismissed.
TL’s claim that defendant falsely advertised its products
as foods or dietary supplements failed insofar as it was just alleging
misbranding in violation of the FDCA, which doesn’t provide a private cause of action.
It would be possible to plead a plausible claim that defendant was falsely
advertising that its products were foods or dietary supplements, as those terms
are defined by the FDA, but the allegations here were too conclusory.
State law claims fared exactly the same.
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