Thursday, October 10, 2019

ingredient supplier has standing against disparagement of products/false claims about competing product

ThermoLife Int’l LLC v. Vital Pharms. Inc., No. 19-cv-61380-BLOOM/Valle, 2019 WL 4954622 (S.D. Fla. Oct. 8, 2019)

ThermoLife licenses/sells a patented creatine nitrate used in dietary supplements, which is allegedly included in many top-selling dietary supplements. VPX allegedly attacked ThermoLife’s creatine nitrate in its own advertising, including with false and misleading statements about VPX’s own “Super Creatine,” because products including ThermoLife’s creatine nitrate compete directly with VPX’s products.

The court found that Thermolife was within the zone of interests protected by the Lanham Act: it alleged that its business, reputation, goodwill, sales and profits were harmed “when consumers are misled to purchase a falsely advertised product that competes with products containing creatine nitrate sourced from Thermolife. These are the type of commercial interests the Lanham Act seeks to protect.”  And disparagement means that direct competition isn’t required for proximate cause: it was plausible that disparagement of creatine nitrate would affect sales of competing products containing creatine nitrate sourced from Thermolife. (though here the court didn’t distinguish the disparaging parts from the allegedly false self-promotion about VPX’s own product; I support the result but would have appreciated more clarity that it’s not just disparagement that can create proximate cause).

VPX next argued that the complaint didn’t satisfy FRCP 9(b)’s heightened pleading standard. Since there was no controlling precedent, the court declined “to expand Rule 9(b) absent instruction from the Eleventh Circuit or persuasive guidance from its sister districts.”

Nor were the alleged misstatements clearly opinions or nonactionable puffery: VPX allegedly advertised that creatine nitrate was “minimally effective,” “useless,” “can be dangerous,” and “that there is ZERO scientific evidence it can increase performance.” VPX also allegedly falsely and misleadingly compared the solubility of “Super Creatine” to creatine nitrate; blurred the concepts of dissolution rate and solubility; and claimed that “Super Creatine is the world’s only water-stable creatine,” that it is “much more bioavailable than regular creatine,” that it can “beef up your muscles and your brain,” that it can cross the blood brain barrier “twenty times more efficiently than regular creatine,” and that it helps with “all forms of dementia, including Alzheimer’s, Parkinson’s, Huntington’s, and other forms of dementia.” Those were actionable. VPX’s analysis of why its statements were true went to denials of the alleged facts and weren’t a basis for dismissal.

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