ThermoLife continues mixed record in pleading competitive injury from other supplements

ThermoLife International LLC v. Compound Solutions Inc., No.
CV-19-01473-PHX-SMM, 2019 WL 5448804 (D. Ariz. Jul. 30, 2019)
ThermoLife develops “amino acid nitrates used in dietary
supplements to increase vasodilation,” and alleged that vasodilators are
“included in nearly every pre-workout product on the market.” ThermoLife has
over 16 patents that protect its use of amino acid nitrates, and one involves
Creatine Nitrate for use in dietary supplements to promote vasodilation. Compound
Solutions sells a patented green tea extract called VASO6 as a vasodilator. It
allegedly falsely marked and advertised VASO6 as patented, because the patent
with which VASO6 is marked is not being practiced, according to independent
testing.
The court dismissed the complaint: the false patent marking
claim didn’t properly allege competitive injury, and the false advertising
claims failed Lexmark. 
Specifically, ThermoLife didn’t identify any specific licensees of
ThermoLife’s patents or allege that it “actually manufactures, markets or sells
any dietary supplements or any ingredients” that compete with VASO6. Allegations
that VASO6 is “in direct competition with ThermoLife’s patented ingredients and
products that license ThermoLife’s patented ingredients,” that “numerous
ThermoLife customers and potential customers have been fooled by Compound
Solutions’ lies, having included VASO6 in their products and/or inquired with
ThermoLife about VASO6 and how this ingredient compares to ThermoLife’s
nitrates,” and that Compound Solutions’ false advertising “is likely to
discourage or deter persons and companies from commercializing competing
products or pursing research and development…which injures ThermoLife and the
public by stifling competition and increasing the costs of goods” were no more than
conclusory, showing again that Twiqbal is what you make it. 
Although ThermoLife alleged that the products had “at least
one” similar purpose, ThermoLife failed to allege decreased sales due to
competition with VASO6, or harm to its reputation, or harm to sales of specific
nitrates, and failed to identify any licenses to a specific manufacturer who
sells a competing product. “Generally alleging that ThermoLife and Compound
Solutions are in the same industry is insufficient. To support a cognizable
legal claim, ThermoLife must identify products that use Creatine Nitrate or
identify sublicensees who use Creatine Nitrate in their products that compete
with VASO6.”
For the same reasons, the state law claims were
insufficiently pleaded. Although the shorthand is that Lanham Act and state law
claims require the same elements, I think that’s potentially misleading, especially
when it comes to doctrine from Lexmark, which relied very much on
principles about federal statutory interpretation and applied them to a
statute, the Lanham Act, that is worded very differently from the average state
consumer protection law.  With that
caveat, the court is certainly on solid precedential ground to say this (because
so many federal courts before it have not been interested in doing a separate
state law analysis, before or after Lexmark):  “Under Arizona law, an unfair competition
claim requires a plaintiff to ‘either show that it was engaged in competitive
business with [the defendant] … or that [the defendant’s] actions were likely
to produce public confusion.’ In the Ninth Circuit, common law unfair
competition claims are ‘substantially congruent’ to Lanham Act claims and thus
share the same analysis.”

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