individual communications to retailer & regulator weren't advertising or promotion

AHBP LLC v. Lynd Co., 2023 WL 139714, No. SA-22-CV-00096-XR (W.D. Tex. Jan. 9, 2023)

Along with updating its previous decision (I didn’t see anything that affected the Lanham Act analysis of the key issue of whether a retailer can sue a supplier for false advertising), the court addressed a motion to dismiss by defendant ViaClean.

In summer 2020, AHBP began negotiating with the Lynd defendants for the exclusive license to market and sell a surface disinfectant/cleaner known as “Bioprotect 500” manufactured by ViaClean in Argentina. Defendants allegedly made false representations about the quality of the product, including that it was effective against the virus that causes COVID-19 and that it would meet the governmental standards for approval by Argentina’s National Administration of Drugs, Foods and Medical Devices (ANMAT), as required to sell the Product in Argentina.

Looking only at ViaClean’s alleged conduct, its officer/GM allegedly provided AHBP with altered information, and the EPA issued a Stop Sale, Use or Removal Order to ViaClean ordering ViaClean to stop marketing the product with claims that it was effective against public health-related pathogens, including the virus that causes COVID-19.

While common-law fraud and negligent misrepresentation claims against ViaClean survived, the Lanham Act claim didn’t. Although ViaClean and AHBP “may properly be considered competitors under the Lanham Act, given that both were—or intended to be—distributors in the market for sanitizing products,” the claim failed for want of commercial advertisement or promotion.

In order to constitute “commercial advertising or promotion,” the challenged communication must have been “disseminated sufficiently to the relevant purchasing public.” But ViaClean’s only alleged false statements concerning the product were included in a report distributed to the plaintiff and to ANMAT. “The distribution of the Report to Plaintiff and to ANMAT was not itself intended to influence customers, nor was it sufficiently disseminated to the purchasing public to constitute ‘advertising’ or ‘promotion’ within that industry.”