Thermolife Int'l, L.L.C. v. Neogenis Labs, Inc.

411 F.Supp.3d 486

THERMOLIFE INTERNATIONAL, L.L.C., Plaintiff,

v.NEOGENIS LABS, INC., d/b/a HumanN, Defendant.

No. 2:18-cv-2980-HRH

United States District Court, D. Arizona.

Signed September 4, 2019

Cara Molly Louise Rogers, Gregory Blain Collins, Kercsmar & Feltus PLLC, Scottsdale, AZ, for Plaintiff.

Paul Kipp Charlton, Quintin Howard Cushner, Dentons US LLP, Phoenix, AZ, Robert L. Rouder, Pro Hac Vice, Norton Rose Fulbright US LLP, Austin, TX, Saul H. Perloff, Pro Hac Vice, Norton Rose Fulbright US LLP, San Antonio, TX, for Defendant.

ORDER

H. Russel Holland, United States District Judge

Motion to Dismiss

Defendant moves to dismiss plaintiff's first amended complaint.¹ This motion is opposed.² Oral argument was requested and has been heard.

Background

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

Plaintiff further alleges that

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 inventions).^{[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.

Discussion

" ‘To survive a [ Rule 12(b)(6) ] motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.’ " Zixiang Li v. Kerry, 710 F.3d 995, 999 (9th Cir. 2013) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) ). "A claim is facially plausible ‘when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.’ " Id. (quoting Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 ). "The plausibility standard requires more than the sheer possibility or conceivability that a defendant has acted unlawfully." Id. " ‘Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief.’ " Id. (quoting Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 ). "[T]he complaint must provide ‘more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.’ "...