Second Circuit reverses literal falsity finding based on dispute over meaning of "brand"

Zesty Paws LLC v. Nutramax Laboratories, Inc., --- F.4th ----, No. 24-1810, 2025 WL 2810078 (2d Cir. Oct. 3, 2025)

The court of appeals reverses the district court opinion discussed here, which had granted a preliminary injunction on Zesty’s Lanham Act false advertising claim about Nutramax’s “#1 brand of pet supplement” claims, remanding for re-analysis of both literal and implied falsity. A concurrence would have remanded only on implied falsity.

The district court reasoned that Nutramax is a brand, and it is undisputed that the combined sales of Nutramax pet supplement products exceeded the combined sales of Zesty Paws pet supplement products. The district court therefore concluded that Zesty Paws’s advertising claims were likely literally false. The court of appeals agreed with Zesty that its #1 brand advertising claims were not unambiguously false given that they were at least reasonably susceptible to the interpretation that they compared Zesty Paws’s combined sales to the sales of each individual brand of Nutramax’s pet supplement products, such as Cosequin and Dasuquin.  

It was undisputed that the sales of each of Nutramax’s individual products do not exceed Zesty Paws’s aggregate product sales. (Gotta admit, I’m on Nutramax’s side here. Burger King isn’t the number one fast food brand even if it sells more Whoppers than McDonald’s sells Big Macs.)

The court of appeals began with the proposition that, “if the language or graphic is susceptible to more than one reasonable interpretation, the advertisement cannot be literally false.” The district court erred by focusing exclusively on whether Nutramax had shown that Nutramax is a brand. But “Nutramax had the burden of showing not only that the #1 Claims could have referred to Nutramax, but that, to a reasonable consumer, they unambiguously did so.” But the district court didn’t explain why Zesty Paws’s proffered interpretation—namely, that the #1 Claims compared the Zesty Paws brand to only the individual brands of pet supplements Nutramax sells, such as Cosequin and Dasuquin—was unreasonable. (Because it’s apples to oranges?)

Also, the district court did not sufficiently address “much of Zesty Paws’s evidence” supporting the reasonableness of its interpretation it advances, such as evidence that Nutramax’s product packaging featured Dasuquin and Cosequin labels in larger font, while simultaneously displaying the Nutramax label in a smaller font, referring to Nutramax as the “Company,” or relegating the Nutramax label to the back of the product packaging. Internal Nutramax documents also showed that Nutramax employees viewed Nutramax’s individual named products, not Nutramax, as its “principal brands.” “The strength (or lack thereof) of the Nutramax brand is probative as to whether a reasonable consumer could understand the #1 Claims to compare the Zesty Paws brand to only Nutramax’s individual product brands, rather than to Nutramax itself.” Thus, the district court should address on remand whether the #1 Claims are so unambiguous that a reasonable consumer could not share Zesty Paws’s interpretation. It could also analyze implicit falsity.

Judge Menashi concurred in the judgment, reasoning that, on this record, the #1 Claims cannot be literally false, because “brand” was susceptible to more than one reasonable interpretation given the parties’ divergent branding strategies—Zesty Paws’ “branded house” strategy versus Nutramax’s “house of brands.” “Even if it would be reasonable to regard Nutramax itself as a brand—and to understand the #1 Claims to compare all Zesty Paws products to all Nutramax products—the record forecloses the conclusion that the #1 Claims are susceptible only to that interpretation.”

After all, Nutramax’s own marketing materials distinguish between these “brands” and the parent “company” Nutramax. The packaging for Cosequin prominently identifies Cosequin as the “#1 Veterinarian Recommended Brand,” but Nutramax appears only in small print on the back of the bottle. Dasuquin likewise touts itself as the “#1 Joint Health Brand Recommended by Veterinarians,” with a Nutramax logo in smaller print at the top, and it specifically refers to Nutramax as the “#1 Veterinarian Recommended Supplement Company.” Nutramax internally referred to its “house of brand[s],” a portfolio of “16 brands” with “1 national brand of scale (Cosequin).” Its internal analyses identified Cosequin and Dasuquin as brands that compete against Zesty Paws and admitted that Zesty Paws “holds the #1 brand spot in supplements.” Thus, the concurrence would have remanded only for implicit falsity.