general competitor has Lanham Act standing even if it doesn't compete in alleged false advertiser's subcategory

Colorado Biolabs, Inc. v. Three Arrows Nutra, LLC, No. 3:25-CV-0601-D, 2025 WL 2524313 (N.D. Tex. Sept. 2, 2025)

CBL sued Three Arrows for breach of a settlement agreement and related claims; Three Arrows counterclaimed along similar lines. The parties sell iron supplements. CBL sells Proferrin, an which contains heme iron polypeptide sourced from bovine blood. This, allegedly, has a much higher absorption rate than non-heme iron, and is more desirable than plant-derived iron insofar as it can be taken with or without food and does not require a simultaneous dose of Vitamin C for absorption. Before the lawsuit, Three Arrows’ products were called IronRepair Heme Plus and IronRepair Simply Heme.

CBL noticed that Three Arrows’ products were colored brown, not black like Proferrin, and got suspicious. “Internal testing of Three Arrows’ products revealed that IronRepair Heme Plus contained only 3-7% of the amount of iron represented on its label and that IronRepair Simply Heme contained just 1-2% of the amount of iron reflected on its label. Further testing by an outside laboratory revealed that Heme Iron was ‘not detectable’ in IronRepair Simply Heme or IronRepair Heme Plus.” A lawsuit followed, which was settled by Three Arrows, among other things, rebranding its IronRepair products to eliminate all representations that the products constitute or contain Heme Iron.

Afterwards, various members of the Iron Protocol Facebook Group, an online community focused on iron deficiency, posted questions and comments about the omission of the word “heme” from Three Arrows’ new labeling. Three Arrows’ owner responded: “Nothing fishy going on. Heme iron is animal derived. Iron Repair is made from bovine spleen only.” Asked for further clarification, she responded that “[t]he batches currently in production will list Iron 20 mg [a]s non-GMO grass fed & finished bovine spleen.” In response to a question whether Three Arrows’ products are “all heme,” she posted that “the iron is 100% derived from bovine spleen (animal sourced).” (Originally she said “yes, the iron is 100% derived from bovine spleen (animal sourced),” but after CBL notified Three Arrows that it was in breach of the Settlement Agreement, she deleted the word “yes” from her post.)

CBL alleged that, through March 2025, Three Arrows tried to “dupe” its customers into believing that the IronRepair products contain heme iron by “simultaneously espousing the myriad benefits of Heme Iron over Non-Heme Iron, making clear that Heme Iron comes from animal sources, and stating that the IronRepair products are made with bovine spleen.” Its Amazon storefront also allegedly marketed its IronRepair products as containing heme iron by using old product labels and descriptions and Q&A responses that specifically include the word “heme.”

In addition, Three Arrows Brand Ambassador Hartigan (who’s paid a commission when customers buy using her discount code) manages and administers the Iron Protocol Facebook Group. CBL alleged that, in response to questions, Hartigan falsely communicated that the IronRepair products contain Heme Iron and posted disparaging statements regarding CBL, Proferrin, and the first lawsuit. Three Arrows allegedly didn’t correct these statements made on its behalf.

The settlement agreement didn’t bar claims based on conduct post-dating the agreement.

Common-law business disparagement under Texas law requires that “(1) the defendant published false and disparaging information about it, (2) with malice, (3) without privilege, (4) that resulted in special damages to the plaintiff.” “[P]roof of special damages is a ‘fundamental element of the tort.’ ” CBL failed to allege special damages, which require “direct pecuniary loss that has been realized or liquidated, such as specific lost sales, loss of trade, or loss of other dealings.”

CBL alleged that, in the Facebook group, Hartigan posted allegations that CBL only sued because it was “mad that they took a chunk of their market share and wanted to bleed them dry in legal battles. Easier for [Three Arrows] to settle on removing the word heme than going out of business due to legal fees” and similar statements. One group member then posted, “boo proferrin! I [heart] three arrows. I think this group and three arrows saved my life.” But that statement didn’t indicate that the lawsuit, or Hartigan’s comments, caused a lost sale as to that poster.

Lanham Act false advertising: were the statements disseminated broadly enough to constitute actionable commercial advertising or promotion? Three Arrows argued that the Facebook group wasn’t a commercial forum for advertisements, but instead a private online community, and isolated posts responding to others “are merely isolated comments unrelated to any commercial advertising campaign.” It also argued that “[m]erely posting information on a company’s own website, without more, is insufficient to establish broad dissemination to the relevant consumer base” under the Lanham Act and that “[t]he mere availability of product descriptions or comments on an Amazon page—without allegations regarding paid promotions, sponsored product placements, extensive advertising campaigns, or targeted consumer outreach—is insufficient to constitute actionable advertising or promotion.”

That argument goes about as well as you’d imagine. The only thing I’d even spend time on is the Facebook group. CBL alleged that it “has approximately 166,300 members,” and that “[b]ecause of its focus and membership, [it] is an important part of the iron supplement market and a valuable source of potential iron supplement customers.” Good enough for a motion to dismiss! Likewise, own-website and Amazon pages were “available to the consuming public at all times.”

In its advertising-related counterclaims, Three Arrows alleged that CBL implied in a post on the Reddit subreddit for persons with anemia that Three Arrows admitted liability in the first lawsuit; misrepresented on its own website that it is the only company that manufacturers heme iron in the United States when at least one other competitor also does so; and misrepresented to its customers the amount of heme iron that its products contain (10.5 mg/capsule versus less than 10 mg).

CBL challenged standing, because Three Arrows isn’t a domestic heme iron manufacturer and can’t make claims about its own products having heme iron. Three Arrows argued that, as a competitor whose products are made in the US, it was within the class of commercial actors with standing. The court agreed. Three Arrows adequately alleged competitive injury within the entire iron supplement market, not just the market for products containing heme iron. (And of course disparagement gives standing to the disparaged competitor.) Three Arrows’ alleged injuries—the loss of customers, confusion and deception in the supplement industry, and the deprivation “of business and good will”—were injuries to precisely the sorts of commercial interests the Lanham Act protects.