ThermoLife wins appeal of Lexmark-based dismissal of claims

Thermolife Int’l, LLC v. Compound Solutions, Inc., No.
20-16138, — Fed.Appx. —-, 2021 WL 963782 (9th Cir. Mar. 15,
2021)

ThermoLife got a significant success in this appeal of the
dismissal of its false patent marking, false advertising, and unfair
competition claims.

One part was affirmed: TL alleged that Compound falsely
marked one of its products, “VASO6,” as patented even though VASO6 does not
practice a patented invention and is merely common green tea extract. Although
TL sufficiently pled false marking by alleging that lab results confirmed that
there were no patented materials in it, it didn’t plausibly allege an intent to
deceive the public. It wasn’t enough to allege that Compound was a “sophisticated”
seller.

TL also alleged that Compound falsely advertised that VASO6
has vasodilative properties, “and therefore potential customers were deceived
into purchasing VASO6 and that such false advertising diverted sales away from
ThermoLife’s nitrates.” Was TL allowed to sue under Lexmark? Yes. Its
injury was in the Lanham Act’s zone of interests because ThermoLife alleged
that customers chose VASO6 over ThermoLife’s nitrates, which is a commercial
injury to sales. And it alleged proximate cause by alleging that its nitrates
directly compete with Compound’s falsely advertised VASO6. It alleged that both
its nitrates and VASO6 [purportedly] increase vasodilation “and are sold at the
same level in the dietary supplement supply chain to pump and pre-workout
manufacturers for licensing and use in their own products.” Further, some of TL’s
customers considered replacing or replaced TL’s nitrates with VAS06.  Products containing the ingredients are
allegedly displayed side-by-side in the “pump and pre-workout” sections of
online shops and brick-and-mortar stores. This sufficed, and so the Lanham Act
and congruent state law claims were revived.

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