Dymatize Enterprises Inc. v. Maximum Human Performance, Inc., 2010 WL 6111631 (N.D. Tex.) This slightly older magistrate judge's recommendation just showed up in my Westclip; I thought it was interesting enough to share. Dymatize sued MHP for a declaratory judgment that it wasn't engaging false advertising; after some venue manuevering, MHP counterclaimed for false advertising and unfair competition under the Lanham Act and New Jersey law. MHP sells Probolic-SR, a "nutritional supplement that contains whey, soy and casein protein, and employs proprietary, time-release micro-feed technology to deliver protein and amino acids over a 12-hour period after ingestion." Its sustained release technology is patented, and, until 2007, it was the only 12-hour protein product on the nutritional supplement market. Then Dymatize launched Elite 12, also a mix of whey, soy, and casein proteins. It made a number of claims about Elite 12, such as "Elite-12 Hour Meal Replacements are engineered to fuel muscles up to 12 hours whether taken as a meal or a snack"; "Extended protein release fuels muscles up to 12 hours"; "Dymatize understands that building muscle is an around-the-clock process only when there is protein available around the clock. Elite 12-Hour Protein has been formulated with this in mind; Elite 12-hour's protein blend is formulated for sustained release so you get positive nutritional support for Repair, Recovery, and Growth 24-7" ; "Engineered to feed your muscles all day long"; and so on. MHP commissioned a number of dissolution tests for Probolic-SR and Elite 12 to test these claims. Unfortunately for MHP, the initial tests showed that MHP's Probolic-SR was 37.3% dissolved after 12 hours, Elite 12 was 51.7% dissolved after 12 hours, and George Foreman, a control substance, was 29.5% dissolved after 12 hours. MHP representatives remarked in e-mail that the results were the revserse of what they expected. MHP was further frustrated in its attempts to design an experiment to prove falsity. Another dissolution test showed that Probolic-SR was 93.5% dissolved at twelve hours, and its dissolution curve line continued upward over the twelve-hour period, while Elite 12 was 81.4 % dissolved at twelve hours, and the dissolution curve line peaked at nine hours. Yet another test showed that Probolic-SR was 95.3% dissolved at twelve hours, while Elite 12 was 93.8% dissolved at twelve hours and its dissolution curve peaked at nine hours. Dymatize then filed for declaratory judgment. During discovery, Dymatize admitted that it didn't, as previously asserted, use specific coating ingredients, or indeed any other aqueous coating system, to extend the product's nitrogen levels. It also admitted that, though it used a blend of oils, the oil blend was "probably mostly for the flavor and mouth feel" and that "longer absorption would be a side-effect of going for a better mouth feel and flavor." MHP presented an expert report relying on published studies and on Dymatize's admission that it didn't use the previously specified coating ingredients, as well as Dymatize's manufacturing records and certificates of analysis. The expert opined that there were no ingredients in the product that would have the ability to provide "12 Hour Protein." The proteins in Elite 12 are whey, casein, and soy, each with expected release rates. The expert concluded that, without a coating compound, despite individual variation, in no event would the release period exceed 8 hours or reach 12 hours. There was "no substantiation" for a 12-hour release claim. (Very interesting teeing up of whether an unsubstantiated claim is false.) Dymatize's expert opined that "release" was ambiguous and could infer dissolution of protein or circulation of amino acids from digested protein. Also, Elite 12 had additional proteins and ingredients not studied in the publications on which MHP's expert relied. He opined that those ingredients would change the dissolution rate of protein, and that any oils included in Elite 12 could also affect the dissolution rate. The court addresssed the New Jersey consumer protection claims along with the Lanham Act claims, though it pointed to "some confusion in the Fifth Circuit" over whether the same standard applies to unfair competition and false advertising claims under §43(a). These were all false advertising claims; if the statements were literally false "a court must assume that the statements actually misled consumers, without requiring any evidence of their impact on consumers," while with ambiguous or literally true but misleading claims, a plaintiff must present evidence of actual consumer deception (citing Pizza Hut, which mushed up deception and materiality). Dymatize argued that MHP had no evidence of harm. Injury can be shown without proving actual damages; there must simply be evidence sufficient for a jury to infer that the plaintiff was in some way injured. Dymatize cited IQ Product Company v. Pennzoil Products Company., 305 F.3d 368, 375 (5th Cir. 2002) and its progeny "for the proposition that a false advertising plaintiff must present evidence that consumers would have bought the plaintiff's products instead of the accused advertiser's products absent the accused's advertisements." But an earlier Fifth Circuit case to the contrary, Logan v. Burgers Ozark Country Cured Hams Inc., 263 F.3d 447 (5th Cir.2001), was binding, since a panel can't overrule an earlier panel. MHP offered testimony by its president to show injury. His declaration said that Elite 12's introduction to the market negatively affected Probolic sales, since Probolic was the only 12-hour protein on the market until then. MHP also argued that a jury could infer injury from its competitive relationship with Dymatize. The court found that MHP had offered sufficient evidence to survive summary judgment. Dymatize also moved for summary judgment on literal falsity. MHP had the burden of showing literal falsity. Dymatize argued that promising "up to" 12 hours of protein was not false, since even MHP's evidence substantiated 8 hours. (I would think this argument is (1) laughable-if 8 is "up to" 12, why isn't it "up to" 24? 96?-and (2) for that reason, in conflict with various guidelines for price-when you advertise "up to" 30% savings, it has to be reasonably possible for an ordinary consumer to achieve those savings.) "Whether a product that fuels muscles for 12 hours literally satisfies the condition of fueling muscles up to 12 hours is a question of fact more appropriate for the jury to decide, especially when there is an expert report stating that in no event would the protein release period of that product exceed eight hours or reach up to twelve hours." The court then pointed out that many of the challenged statements went beyond "up to," such that a jury could find that the literal claims were that Elite 12 could provide the release of protein for 12 hours, not "up to" 12 hours, especially in the overall context of the ad: "Elite 12 is a 12 Hour Protein", "12 Hours of complete muscle resurgence"; "Engineered to feed your muscles all day long"; and "Elite 12-Hour protein's time release formula works overtime to develop and repair your muscle mass all day long." MHP's expert report that none of the ingredients would give the product the ability to provide "12 hour protein," explaining that the proteins in the product have expected release rates of well under 12 hours and that the product doesn't use a coating compound to slow release, was enough to create a genuine issue of material fact on literal falsity. What about MHP's own dissolution tests? The court concluded that, even if this evidence supported Dymatize's claims, the expert report could lead a reasonable jury to find literal falsity "[w]hether or not MHP can design an experiment to prove its point." This seems to accept that complete absence of substantiation is equivalent to falsity, a move I support, since there's no benefit in allowing advertisers to make claims for which they have no evidence. But I'm still not quite sure what's going on here –if the dissolution tests prove that the stuff is still hanging around, even if no one knows why, doesn't that provide substantiation? Or do the dissolution tests not measure the same thing as the release rate?
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