Monday, November 08, 2021

Dastar bars some claims about "patented" statements but related superiority statements are still at issue

BPI Sports, LLC v. ThermoLife Int’l, LLC, 2021 WL 4972975, No. 19-60505-CIV-SMITH (S.D. Fla. Jul. 27, 2021)

BPI sued ThermoLife for violations of the Lanham Act, 15 U.S.C. § 1125(a), common law unfair competition, and false patent marking. ThermoLife’s Muscle Beach Nutrition CRTN-3 says, on the label and on its website, (1) that CRTN-3 is a “first-time fusion of Creatine Nitrate, Creatine HCl, and Creatine Monohydrate”; (2) that CRTN-3 has a “Hyper Infused Creatine Matrix”; (3) that CRTN-3 has a “Hydro-GO electrolyte matrix”; (4) that CRTN-3 has “THREE OF THE MOST EFFECTIVE FORMS OF CREATINE IN ONE CUTTING-EDGE FORMULA”; and (5) that CRTN-3 will “INCREASE VASODILATION.” ThermoLife’s website also advertises its “Patented Nitrate Technology.” (DE 178-3.) ThermoLife claims to hold “19 Nitrate Related Patents,” “More Than 450 Valid Claims,” and “Patent Coverage in 26 Countries.” It states:

If you are interested in making a dietary supplement with nitrates in it there is a very good chance your intended use or composition is covered by one or more of the 450 valid claims in our patent portfolio, so make sure to speak with us about a license. We are the only legitimate source for patented and licensed amino acid nitrates.

It requires licensees to use its NO3-T logo on products containing ingredients or technology purportedly protected by any one or more of ThermoLife’s patents. Between 2015-2019, its website identified 14 patents as “protect[ed]” by the logo, though in 2019 it modified the site to include a table purporting to demonstrate which of ThermoLife’s patents were practiced by ThermoLife’s licensees. One of the patents was reexamined in a way that did not favor ThermoLife.

ThermoLife argued that BPI didn’t show materiality. But a factfinder could conclude that “the challenged advertising statements are material in that the statements involve inherent qualities or characteristics of the CRTN-3 product that could influence a consumer’s decision to purchase the product.” Each of the five targeted statements “plainly relate to the quality or describe a characteristic of the CRTN-3 product as a dietary supplement,” whether to ingredient quality/characteristics or to purported performance benefits:

The quality of ingredients that compose a dietary supplement directly correlates to the nutritional and/or performance benefits that derive from consuming the product. While most consumers could care less about the chemical composition of glue, it is possible that a consumer who purchases a dietary or nutritional supplement with a desire to “push harder, get stronger, recover quicker, and reach [his or her goals] faster” could be so scrupulous as to care about the quality of ingredients contained within and the performance results advertised to derive from the product that he or she ingests.

Injury: likewise a factual issue. BPI’s CEO’s declaration stated that it suffered a decline in sales of its creatine products because of the introduction of products containing creatine nitrate, which compromised its ability to fairly compete in the market with its traditional creatine-based product. This evidence of lost market share was sufficient to get to a factfinder.

Falsity: Some (“expert” or other) evidence of misleadingness would be required, but the plaintiff could still argue that the ads were misleading even though it didn’t produce market research or a consumer survey; it did produce declarations stating that the ads created a false impression in the marketplace that creatine nitrate was a new, superior form of creatine. And BPI’s expert offered opinions that the five challenged statements were literally false (and misleading and unsubstantiated).

What about statements about the scope of patents? ThermoLife relied on Baden Sports, Inc. v. Molten USA, Inc., 556 F.3d 1300 (Fed. Cir. 2009) and Robert Bosch LLC v. Pylon Mfg. Corp., 632 F. Supp. 2d 362 (D. Del. 2009), to argue that they weren’t covered by the Lanham Act. Baden relied on Dastar to hold that “authorship, like licensing status, is not a nature, characteristic, or quality, as those terms are used in [the Lanham Act].” BPI didn’t successfully distinguish the cases, though the statements about proprietary rights to and licensing requirements for creatine nitrate could be used in support of the remaining claims, where applicable.

False marking: The court previously concluded that ThermoLife didn’t have patent rights in the composition of matter “creatine nitrate” under one of the cited patents. As for intent to deceive, it could be inferred from circumstantial evidence: Notwithstanding the fact that the USPTO rejected ThermoLife’s claim for creatine nitrate, a decision that was affirmed by the PTAB and the Federal Circuit Court of Appeals, it continued to assert propriety rights to creatine nitrate on its websites, and issued a press release entitled “ThermoLife To Be Announced Additional Patent Claims on Creatine Nitrate By The USPTO, Effectively Monopolizing The Use of Creatine Nitrate in Dietary Supplements.” For damages, BPI argued that the false marking prevented it from entering the creatine nitrate market itself and caused decreased sales of its own creatine-based products. This was enough to create a genuine issue of material fact.

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