Nutrition Distribution LLC v. Pep Research, LLC, 2019 WL
652391, No. 16cv2328-WQH-BLM (S.D. Cal. Feb. 15, 2019)

Nutrition Distribution sued Pep for false advertising under
the Lanham Act, alleging that its competitor, a supplement company, falsely
advertised certain prescription-only drugs and synthetic peptides as “research
peptides and chemicals” that are “not for human consumption” and “intended for
laboratory research only” while also marketing the products for personal use
and consumption by bodybuilders, which is misleading because Pep fails to
disclose that the [roducts are banned from sporting events and pose health and
safety risks. Pep’s website states, for example, that one product has
“undergone several recent studies … reveal[ing] rises in lean body mass and
decreases in body fat,” and “a considerable rise in strength, well being, along
with healing possibilities”; another product “enhance[s] bone toughness as well
as stop[s] weakening of bones”; and another product “decreases the risk and
severity of atherosclerosis.”

A page also states:

All customers represent and warrant
that through their own review and study that they are fully aware and
knowledgeable about the following:

The[] government regulations
regarding the importation, purchase, possession and use of research products
and other peptides.

The health and safety hazards
associated with the handling of our products in a research setting.

That our products are NOT intended
to be used as a food additive, drug, vitamin, supplement, cosmetic or any other
inappropriate application. Such a sale would be otherwise denied.

Other allegedly disingenuous pages state: “Safety
Information: For Research Use Only. Not Intended for Diagnostic or Human Use.
Information is for educational purposes and product is not intended to treat,
cure, or diagnose any condition or disease” and “All products are intended for
laboratory and research use only, unless otherwise explicitly stated. They are
not intended for human ingestion, use, or for use in products that may be
ingested.”

Somehow, however, ads for the products turned up on worldclassbodybuilding.com
and peakmuscle.com.  Moreover, the
products are allegedly intended for human consumption given that they’re “sold
in liquid form in dropper vials, for easy oral use, along with the amount of
liquid to take for an active oral dose.” Pep allegedly targets “bodybuilders,
athletes, and fitness enthusiasts,” using social media and terminology specific
to that audience. For example, an affiliate offered a free give away via social
media post, and one customer tagged an amateur bodybuilding competitor in the
post.

The court granted summary judgment to Pep for failure to
show literal falsity.  The problem here
seems to be a contradiction: the clear warnings against human consumption are
combined with marketing to human consumers, in a wink-wink-nudge-nudge fashion.
 Pep argued that failure to disclose safety
risks wasn’t false advertising (which is not the case, though it’s often harder
to show falsity by omission than to show affirmative falsity) and that use of a
particular advertising forum couldn’t constitute falsity (which I think is also
wrong as a blanket statement: use of a forum itself can make a representation
that the products advertised are appropriate for the target market).

The court seems to have answered a slightly different question, framing the issue
as whether the claims “for research purposes only” and “not for human
consumption” were literally false, and it then concluded that there was no
evidence that these statements were false. 
The fact that the products pose health risks to humans wasn’t
inconsistent with those statements. “To demonstrate falsity by necessary
implication, there must be evidence showing that a particular unambiguous
conclusion ‘necessarily flow[s]’ from the Representations in the context of the
Product marketing, and that the conclusion is false. There is no evidence in
the record demonstrating an unambiguous message necessarily implied by the
Representations in the context of the Product marketing.” There was also no
evidence submitted of a false implicit message. 
[It seems that one possibility here, other than consumer survey evidence,
would be expert evidence about how bodybuilders are induced to try unapproved
products.  Interesting question about how
to frame the survey: in some sense, you’re looking for bodybuilders/other
targets to explain how they’d react to seeing an ad for these products in a
bodybuilding context.  I am guessing they’d
infer that the products could be used by humans to improve performance, given
that the only point of advertising them to bodybuilders instead of to research
scientists is to suggest that bodybuilders try them.]

Without more, the record (viewed in the light most favorable
to plaintiff) showed only that defendants advertised to bodybuilders online,
described the products’ putative benefits, sold consumer-usable formulations,
and didn’t provide information about health risks or anti-doping bans.  That wasn’t enough to show falsity as a logically
necessary conclusion.  [I suspect a
government agency could get a different result on whether this combination
encourages unlawful use, if the use is in fact unlawful (those do sound like disease/drug
claims).]