ingredient supplier has standing against disparagement of products/false claims about competing product

ThermoLife Int’l LLC v. Vital Pharms. Inc., No.
19-cv-61380-BLOOM/Valle, 2019 WL 4954622 (S.D. Fla. Oct. 8, 2019)
ThermoLife licenses/sells a patented creatine nitrate used
in dietary supplements, which is allegedly included in many top-selling dietary
supplements. VPX allegedly attacked ThermoLife’s creatine nitrate in its own
advertising, including with false and misleading statements about VPX’s own “Super
Creatine,” because products including ThermoLife’s creatine nitrate compete
directly with VPX’s products.
The court found that Thermolife was within the zone of
interests protected by the Lanham Act: it alleged that its business,
reputation, goodwill, sales and profits were harmed “when consumers are misled
to purchase a falsely advertised product that competes with products containing
creatine nitrate sourced from Thermolife. These are the type of commercial
interests the Lanham Act seeks to protect.” 
And disparagement means that direct competition isn’t required for proximate
cause: it was plausible that disparagement of creatine nitrate would affect
sales of competing products containing creatine nitrate sourced from
Thermolife. (though here the court didn’t distinguish the disparaging parts
from the allegedly false self-promotion about VPX’s own product; I support the
result but would have appreciated more clarity that it’s not just disparagement
that can create proximate cause).
VPX next argued that the complaint didn’t satisfy FRCP 9(b)’s
heightened pleading standard. Since there was no controlling precedent, the
court declined “to expand Rule 9(b) absent instruction from the Eleventh Circuit
or persuasive guidance from its sister districts.”
Nor were the alleged misstatements clearly opinions or
nonactionable puffery: VPX allegedly advertised that creatine nitrate was “minimally
effective,” “useless,” “can be dangerous,” and “that there is ZERO scientific
evidence it can increase performance.” VPX also allegedly falsely and
misleadingly compared the solubility of “Super Creatine” to creatine nitrate; blurred
the concepts of dissolution rate and solubility; and claimed that “Super
Creatine is the world’s only water-stable creatine,” that it is “much more bioavailable
than regular creatine,” that it can “beef up your muscles and your brain,” that
it can cross the blood brain barrier “twenty times more efficiently than
regular creatine,” and that it helps with “all forms of dementia, including
Alzheimer’s, Parkinson’s, Huntington’s, and other forms of dementia.” Those
were actionable. VPX’s analysis of why its statements were true went to denials
of the alleged facts and weren’t a basis for dismissal.

from Blogger

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