Source: http://az.findacase.com/research/wfrmDocViewer.aspx/xq/fac.20190904_0002278.DAZ.htm/qx
Timestamp: 2020-02-22 20:59:27
Document Index: 703423622

Matched Legal Cases: ['§ 292', '§ 292', '§ 1117', '§ 292', '§ 292', '§ 292', '§ 292', '§ 292', '§ 292']

FindACase™ | Thermolife International L.L.C. v. NeoGenis Labs, Inc.
Thermolife International L.L.C. v. NeoGenis Labs, Inc.
Defendant moves to dismiss plaintiff's first amended complaint.[1] This motion is opposed.[2] Oral argument was requested and has been heard.
Plaintiff is ThermoLife International, LLC. Defendant is NeoGenis Labs, Inc. d/b/a Human N.
Plaintiff alleges that it was founded in 1998 by Ron Kramer and that it “is a world leader in the use and development of nitrate technology.”[3] Plaintiff alleges that it “holds 23 separate and distinct patents that protect its innovative development and use of ingredients in dietary supplements and food products.”[4] Plaintiff alleges that it also “holds several patents related to the use of amino acids in combination with nitrates to increase performance” and that it is “the exclusive licensee of U.S. Patent No. 9, 180, 140 (‘the ‘140 Patent'), titled ‘Performance enhancing composition and use thereof.”[5] Plaintiff alleges that it “licenses the use of its patented technology . . . to many of the largest dietary supplement companies in the USA, including JYM Supplement Science.”[6] Plaintiff also alleges that it “supplies the raw materials necessary to practice its patented inventions” and that raw materials supplied by it “are included in some of the top-selling dietary supplements, including Cellucor's C4 and NO3 Ultimate, Purus Labs' Noxygen, Evlution Nutrition's PumpMode, Build Fast Formula's Vasoblitz, Ghost Pump by Ghost, and PEScience's High Volume.”[7]
Defendant “sells nitric oxide test strips and dietary supplements[, ]” including SuperBeets, BeetElite and Neo40.[8] Plaintiff alleges that defendant was “formed in 2009” and that “Joel Kocher, Dr. Nathan Bryan, [and] Janet Zand are all co-founders of” defendant.[9] Plaintiff alleges that [t]he majority of [defendant's] products rely on beets to provide consumers nitrates” and that defendant “is a dominant force in the beet supplementation market.”[10]
Plaintiff alleges that defendant's products compete with products that use plaintiff's raw materials and products that are produced using plaintiff's patented nitrate technology.[11] Although plaintiff does not currently market oxide testing strips, plaintiff alleges that in October 2018, it began “working with Shawn Green” to “develop a consumer product test strip to support the use of products that include” plaintiff's “patented technologies.”[12]Plaintiff alleges that “[w]hile the business deal is not finalized, when the deal is reached, ” it “will be in . . . direct competition” with defendant's “Nitric Oxide Test Strip[.]”[13]
Plaintiff alleges that defendant is falsely claiming “that it has developed a ‘patent pending' method to determine ‘if you are N-O [nitric-oxide] deficient' and/or ‘if you're getting enough dietary nitrate through the foods that you eat': HumanN's nitric oxide Indicator Strips.”[14] Plaintiff alleges that this claim is false because “[i]n fact, on August 13, 2013, HumanN's Dr. Nathan Bryan applied for a patent for a ‘method of determining the level of nitric oxide (NO) or nitrite (NO2-)” but “[t]he United States Patent Office rejected all 35 proposed patent claims.”[15]
Plaintiff also alleges that defendant is falsely claiming that the N-O Indicator Strips “can determine whether an individual is nitric oxide deficient[.]”[16] Plaintiff alleges, however, that “it is well-settled that you cannot determine whether an individual is ‘deficient in N-O [nitric oxide]' and/or ‘getting sufficient nitric-oxide activating nutrients through [their] diet' simply by testing their saliva one time.”[17] Plaintiff alleges that a 2015 study (the Clodfelter study) tested defendant's N-O Indicator Strips, along with other similar products, and concluded that “‘[t]here is no correlation between plasma NO2- and salivary NO3- . . . . Our results argue against the use of salivary NO2- as a marker for NO bioavailability.'”[18]
Plaintiff next alleges that defendant is falsely claiming “that [its] top-selling BeetElite, SuperBeets, and Neo40 products practice six patents that HumanN exclusively licenses from the University of Texas[.]”[19] Plaintiff alleges that defendant formerly “list[ed] six patent numbers” on the labels of these products but that in mid-2017, defendant “removed [three] patent numbers from these products' labels that the products clearly never practiced[.]”[20]Plaintiff alleges, however, that “[defendant's] website, Amazon.com, and countless other websites on the internet where consumers go to actually purchase the product, still mislead consumers by showing all six patent numbers.”[21]
As for the three patents still listed on the SuperBeets and BeetElite labels, the ‘589, ‘570, and ‘999 patents, plaintiff alleges that BeetElite and SuperBeets “do not practice” any of these patents.[22] Plaintiff alleges that all three patents “require a ‘nitrite salt' to practice the patented inventions” but that defendant “is well aware that its SuperBeets and BeetElite products do not contain a nitrite salt[.]”[23]
even if the nitrites in the BeetElite and SuperBeets products could be considered ‘nitrite salts' (which they cannot), the products would still also be falsely marked, falsely advertised, misbranded, and prohibited for sale in interstate commerce because they are under-dosed (i.e., they fail to include sufficient quantity of nitrites of any sort to practice the patented inven-tions).[24]
Plaintiff alleges that it did laboratory testing on the BeetElite and SuperBeets products in 2016 and 2018 and that both tests showed that the products contained an insufficient amount of nitrites to practice the ‘589 and ‘570 patents.[25]
Plaintiff also alleges that defendant is falsely claiming that its “licensed patents protect ‘patented Nitric Oxide technology'[.]”[26] Plaintiff alleges that
[o]f the six patents that [defendant] has licensed from the University of Texas, . . . three are merely composition patents that protect a mixture of certain nitrites and nitrates and the other three patents protect methods of administering compositions; however, none of the patents include a claim for producing nitric oxide. In fact, not one of the 75 claims included in the six patents falsely marked on [defendant's] products even include the phrase “nitric oxide” in any claim.[27]
Plaintiff next alleges that defendant is falsely claiming “that HumanN's research is ‘Nobel-Prize winning'[.]”[28] Plaintiff alleges that defendant had nothing to do with the 1998 Nobel Prize to which it refers and that defendant “falsely advertises itself as a Nobel Prize winner in order to falsely convey to consumers that its owns a monopoly on ‘patented nitric oxide technology.'”[29]
Plaintiff next alleges that defendant is falsely claiming that it “is the only company that can practice ‘patented N-O platform technology.'”[30] Plaintiff alleges that there are other products “that rely on nitric oxide technology, ” including products that use creatine nitrate, which is supplied by plaintiff and “included in many of the top-selling dietary supplements in the world.”[31]
Finally, plaintiff alleges that defendant is falsely claiming that its products are Foods or Dietary Supplements.[32]
Plaintiff commenced this action on September 20, 2018. In its original complaint plaintiff asserted false marking claims pursuant to 35 U.S.C. § 292, Lanham Act false advertising claims, and common law unfair competition claims. Plaintiff's complaint was dismissed for lack of standing because plaintiff failed to adequately allege a competitive or commercial injury. Plaintiff was given leave to amend its complaint, and on April 26, 2019, plaintiff filed its first amended complaint. Plaintiff again asserts false marking claims pursuant to 35 U.S.C. § 292, Lanham Act false advertising claims, and common law unfair competition claims. For relief, plaintiff seeks “an accounting for the past five years of all gains, profits, and advantages derived by [d]efendant's false marking of the BeetElite, SuperBeets, Neo40, and N-O Indicator Strips products[, ]” damages, a disgorgement of profits, treble damages under 15 U.S.C. §§ 1117 and 1125(a), pre- and post-judgment interest, and “such other and further relief as this [c]ourt may deem just and proper.”[33]
Pursuant to Rule 12(b)(6), Federal Rules of Civil Procedure, defendant now moves to dismiss plaintiff's first amended complaint.
First Cause of Action - false marking claims
“Title 35 section 292(a) prohibits, in part, ‘mark[ing] upon . . . in connection with any unpatented article, the word ‘patent' or any word or number importing that the same is patented, for the purpose of deceiving the public.'” Sukumar v. Nautilus, Inc., 785 F.3d 1396, 1399 (Fed. Cir. 2015) (quoting 35 U.S.C. § 292(a)). “Section 292(b) provides a private right of action to enforce § 292(a) to any ‘person who has suffered a competitive injury as a result of a violation of this section.'” Id. (quoting 35 U.S.C. § 292(b)).
Defendant first argues that plaintiff lacks standing to bring a false marking claim in connection with the N-O Indicator Strips because plaintiff has still not alleged that it suffered a competitive injury as a result of defendant's alleged false marking of this product. A “competitive injury” has been defined as “‘[a] wrongful economic loss caused by a commercial rival, such as the loss of sales due to unfair competition[.]'” Id. at 1400 (quoting Black's Law Dictionary (9th ed. 2009)). However, “§ 292(b) extends standing to sue for a violation of § 292(a) to some potential competitors.” Id. “[A] potential competitor is engaged in competition if it has attempted to enter the market, which includes intent to enter the market and action to enter the market.” Id.
In its amended complaint, plaintiff alleges that it is attempting to enter the nitric-oxide test strip market. Plaintiff alleges that “[s]ince at least October 2018, [it] has been working with Shawn Green on this project. Mr. Green is the former owner of Berkeley Test, LLC, which holds U.S. Patents Nos. 9, 759, 716 and 9, 360, 490. . . . Both patents relate to methods for testing and monitoring biomarkers of nitric oxide.”[34] Plaintiff further alleges that “Mr. Green is currently working on a next generation saliva test strip[] to monitor salivary nitrite levels in relation to blood pressure and . . . strips that measure NO probiotic in saliva.”[35]Plaintiff alleges that it has had “several face-to-face meeting[s] and numerous phone conferences” to discuss this project with Mr. Green and that “when the deal is reached, [it] will be in . . . direct competition with HumanN's Nitric Oxide Test Strip[s].”[36]
“‘[S]tanding is to be determined as of the commencement of suit.'” United States v. Maricopa County, 151 F.Supp.3d 998, 1009 n.6 (D. Ariz. 2015) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 570, n.5 (1992)). Here, plaintiff alleges that it began working on the test strip project in October 2018, which was after plaintiff commenced this lawsuit in September 2018.
Plaintiff, however, argues that “[t]he Court must measure standing by the state of the world as of the date of the [a]mended [c]omplaint.'” G & E Real Estate, Inc. v. Avison Young-Wash., D.C., LLC, 168 F.Supp.3d 147, 159 (D.D.C. 2016). Plaintiff contends that the Ninth Circuit adopted this rule in Northstar Financial Advisors Inc. v. Schwab Investments, 779 F.3d 1036 (9th Cir. 2015).
But, plaintiff is wrong. As the Ninth Circuit has noted, Northstar did
not actually address whether standing is measured at the time of an initial complaint or at the time of an amended complaint, as opposed to whether the allegations in an amended complaint may sometimes be considered in evaluating whether there was standing at the time the case was originally filed or whether an amended complaint may be considered a supplemental pleading under Federal Rule of Civil Procedure 15(d).
In re Zappos.com, Inc., 888 F.3d 1020, 1028 n.10 (9th Cir. 2018). The rule in the Ninth Circuit is that “standing-where it would have been necessary to bring the claim in the district court-cannot be created retroactively. . . .” Western Watersheds Project v. Kraayenbrink, 632 F.3d 472, 483 n.6 (9th Cir. 2011); see also, Friends of the Earth, Inc. v. Laidlaw Environmental Services (TOC), Inc., 528 U.S. 167, 180 (2000) (courts have “an obligation to assure [themselves] that [a plaintiff] had Article III standing at the outset of the litigation”). Plaintiff did not have standing to bring its false marking claims with respect to the N-O Indicator Strips “at the outset of th[is] litigation[.]” Id. Thus, plaintiff's false marking claims with respect to the N-O Indicator Strips are dismissed. Plaintiff is not given leave to amend these claims because it is unlikely that plaintiff could ever allege that it had standing to bring these claims at the outset of this litigation and because plaintiff has already had two opportunities to adequately plead standing.
Defendant next argues that plaintiff's false marking claims as to SuperBeets, BeetElite, and Neo40 should be dismissed as implausible. These claims consist of two groups. One group is claims based on allegations that defendant is still showing pictures of these products on the internet that list six patents on the products' labels even though defendant removed three of the patents from the actual product labels in 2017 (the internet claims). The other group is claims based on allegations that these products do not practice the three patents which are still listed on the products' actual labels (the under-dosed claims).
“‘The two elements of a § 292 false marking claim are (1) marking an unpatented article and (2) intent to deceive the public.'” Juniper Networks, Inc. v. Shipley, 643 F.3d 1346, 1350 (Fed. Cir. 2011) (quoting Forest Grp. Inc. v. Bon Tool Co., 590 F.3d 1295, 1300 (Fed. Cir. 2009)). “Intent to deceive is a state of mind arising when a party acts with sufficient knowledge that what it is saying is not so and consequently that the recipient of its saying will be misled into thinking that the statement is true.” Clontech Laboratories, Inc. v. Invitrogen Corp., 406 F.3d 1347, 1352 (Fed. Cir. 2005).
Defendant argues that the first group of claims, the internet claims, are not plausible for two reasons. First, defendant argues that when a product carries both proper and false patent markings, a plaintiff must show specifically that the falsely marked patents caused it harm. This argument is based on Sukumar, in which the court observed that “a potential competitor must show that the falsely marked patents deterred market entry, but that-for some reason-the properly marked patents did not deter market entry.” 785 F.3d at 1402. Defendant contends that because it properly marks its products with at least one patent (the ‘999 patent), plaintiff must plead sufficient facts to show that it was somehow injured by the other patent markings, which, according to defendant, plaintiff has not done.
“When the [false marking] statute refers to an ‘unpatented article' the statute means that the article in question is not covered by at least one claim of each patent with which the article is marked.” Clontech Laboratories, 406 F.3d at 1352. In other words, “courts must consider whether a product is falsely marked with each patent.” DP Wagner Mfg. Inc. v. Pro Patch Systems, Inc., 434 F.Supp.2d 445, 455 (S.D. Tex. 2006). Even if SuperBeets, BeetElite, and Neo40 practice the ‘999 patent, it is plausible that they do not practice at least some of the other five patents and it is plausible to infer that plaintiff has been injured as a result of this false marking because a consumer might be more likely to purchase a product that lists several patents as opposed to a product that lists only one patent.
Defendant also argues that the internet claims should be dismissed because plaintiff has not adequately alleged intent. Defendants argue that the removal of the three patents from the product labels “militate against an intent to deceive the public. . . .” Public Patent Foundation, Inc. v. GlaxoSmithKline Consumer Healthcare, L.P., 801 F.Supp.2d 249, 265 (S.D.N.Y. 2011). But given that plaintiff has alleged that defendant still continues to list all six patents on its products as they are advertised on the internet, plaintiff has plausibly alleged intent.
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As for the second group of claims, the under-dosed claims, plaintiff alleges that BeetElite and SuperBeets do not practice the three patents because &ldquo;[t]he &lsquo;589 Patent, &lsquo;570 Patent, and &lsquo;999 Patent all require a &lsquo;nitrite salt&#39; to practice the patented inventions: but SuperBeets and BeetElite . . . do not contain a nitrite salt[.]&rdquo;[37] Defendant argues that these claims are not plausible because it has offered a Certificate of Analysis, which the court took judicial notice of, which shows that the ...