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Obesity Research Inst., LLC v. Fiber Research Int'l, LLC
Citation: 310 F. Supp. 3d 1089Docket: Case No. 15–cv–00595–BAS–MDD
Court: District Court, S.D. California; February 20, 2018; Federal District Court
The Court addressed the motions for partial summary judgment filed by Fiber Research International, LLC (FRI) and the cross motion for summary judgment by Obesity Research Institute, LLC (ORI). Both motions were deemed suitable for determination based on submitted papers without oral argument. The Court granted in part and denied in part both motions. Factual background reveals that both ORI and FRI are involved in the sale of glucomannan dietary supplements derived from the Konjac plant, which is used in weight loss products. A key point of contention is whether variations in glucomannan types, processing, and characteristics affect its weight loss efficacy. In 2002, Fiber Thin, LLC entered into a manufacturing agreement with Natural Alternatives, Inc. (NAI) for a supplement named FiberThin, with glucomannan sourced from Shimizu Chemical Corporation. Subsequently, ORI acquired the rights to sell glucomannan, marketing it under the names "Propolene" and later "Lipozene," though Lipozene does not use Shimizu's glucomannan. In 2003, ORI and NAI funded the "Kaats Study," led by Dr. Gilbert Kaats, which demonstrated significant weight loss and fat reduction among participants receiving treatment compared to those on a placebo. ORI's advertising for Lipozene references findings from this study, specifically highlighting that 78% of the weight lost was attributed to fat loss. Notably, the Kaats Study was independent of any involvement from Shimizu or FRI. A 1984 study by Dr. David Walsh, known as the "Walsh Study," is referenced in relation to glucomannan, with Yoshi Shimizu, CEO of Shimizu, stating that Shimizu supplied the glucomannan used in both the Kaats Study and the Walsh Study. ORI's advertising for Lipozene includes various claims about its effectiveness, supported by the Kaats Study, which asserts that 78% of the weight lost was fat, and emphasizes that participants did not alter their diet or exercise. The packaging claims Lipozene has "no known allergens." Shimizu and Fiber Research, Inc. (FRI), formed on December 22, 2014, entered into a Distribution and Claims Assignment Agreement on February 21, 2015. This agreement assigned to FRI all rights to legal claims related to false advertising based on Shimizu's studies against Obesity Research Group (Lipozene), with a three-year term. It also granted FRI the right to distribute Shimizu's glucomannan product in the U.S. under exclusivity conditions. The agreement was amended on August 18, 2017, to broaden the scope of assigned legal claims to include violations of the Lanham Act, false advertising, and other similar claims against Lipozene, effective February 1, 2017. The amendment established that the legal claims assignment would be permanent unless otherwise agreed upon in writing. On March 10, 2015, FRI sent a letter to ORI's general counsel alleging that ORI's product Lipozene contained "adulterations," was not a true glucomannan product, and had less viscosity than Shimizu's products. FRI accused ORI of misleadingly marketing Lipozene based on clinical studies of pure glucomannan, asserting that ORI's claims were scientifically invalid. The letter also claimed that ORI's actions caused "significant damages" to FRI and involved the theft of research related to a purer product, ultimately leading FRI to suggest that these issues warranted a lawsuit under the Lanham Act. In the procedural developments that followed, ORI filed a Complaint for Declaratory Judgment on March 16, 2015, seeking a court declaration of no liability under the Lanham Act or the Federal Food, Drug, and Cosmetic Act (FFDCA). FRI responded on April 13, 2015, with an Answer asserting unclean hands and filing counterclaims, which were later amended to include allegations of violations of the Lanham Act, California's unfair competition law, and California's false advertising law. ORI's Motion to Dismiss was partially granted and partially denied, leading to ORI amending its Complaint to include Shimizu as a defendant. Shimizu's motion to dismiss for lack of subject matter jurisdiction was granted by the court. Currently, the parties are engaged in motions for partial summary judgment, which seeks to clarify the legal standings and eliminate unsupported claims or defenses. The standard for summary judgment requires the moving party to demonstrate the absence of a genuine issue of material fact and entitlement to judgment as a matter of law, with relevant case law guiding the definitions of materiality and genuineness of fact disputes. Summary judgment is denied if the moving party does not meet the initial burden of proof, and the court does not need to consider the nonmoving party's evidence. If the moving party meets this burden, the nonmoving party must provide more than mere speculation or a scintilla of evidence; they must present specific facts indicating a genuine issue for trial, supported by admissible evidence such as depositions or declarations. Affidavits must be based on personal knowledge and should include facts that could be admissible in court. Conclusory statements in declarations are insufficient unless backed by corroborative evidence. The court must view facts in favor of the nonmoving party, while credibility and evidence weighing are jury functions. The court may limit its review to documents submitted for summary judgment and is not required to search the record for triable issues. Regarding Article III standing, federal courts lack jurisdiction unless affirmatively established. Standing requires an actual 'Case' or 'Controversy' as per the Constitution. The "irreducible constitutional minimum" for standing includes: (1) the plaintiff must show a concrete and particularized injury that is actual or imminent; (2) there must be a causal link between the injury and the defendant's actions; and (3) it must be likely that the injury will be addressed by a favorable court decision. The burden of proof for establishing federal jurisdiction lies with the party invoking it. If a case lacks Article III standing, it must be dismissed due to lack of subject matter jurisdiction. Under the Lanham Act, a person can sue for false advertising if they believe they are likely to be harmed by the defendant's actions. The Supreme Court clarified that plaintiffs must demonstrate their interests fall within the statute's "zone of interests" and that their injuries are proximately caused by violations of the Act. The "zone of interest" test is lenient, allowing claims unless a plaintiff's interests are only marginally related to the statute's objectives. In cases of false advertising, plaintiffs must show economic harm or damage to their commercial reputation. To prove proximate cause, a plaintiff typically needs to demonstrate that the defendant’s deceptive advertising directly led to their economic or reputational loss, which stems from consumers choosing not to engage with the plaintiff. Proximate causation can still be established even if the parties are not direct competitors, as shown in cases where non-competitors were found to have standing due to shared commercial interests. The document also addresses the procedural aspects of evidence related to motions for partial summary judgment, distinguishing between requests for judicial notice and evidentiary objections. Judicial notice under Federal Rule of Evidence 201 permits courts to acknowledge facts that are not reasonably disputable, either because they are widely recognized within the court's jurisdiction or verifiable from credible sources. Courts can recognize "matters of public record" but cannot acknowledge facts that are subject to reasonable dispute. While the existence of documents may be acknowledged, their contents are not automatically accepted. In this case, both parties submitted requests for judicial notice of various documents, which were contested, indicating disputes over their accuracy. The Court chose not to take judicial notice of any documents related to the summary judgment motions due to remaining material fact questions and the inappropriateness of many documents for judicial notice, although it did recognize the FDA regulation under 21 C.F.R. 101.100 as it is mandated to take notice of federal regulations. Regarding evidentiary objections in summary judgment motions, parties are not required to present evidence in a form admissible at trial, as Rule 56(c) only necessitates that the evidence be potentially admissible. The focus is on the admissibility of the evidence's content rather than its form. While the Court considers evidentiary objections, many are redundant to the summary judgment standard itself, particularly those concerning foundation, speculation, hearsay, and relevance. The Court noted that the volume of objections, largely from ORI, is extensive and opted to grant or deny them as necessary rather than addressing each individually. ORI's objections to the evidence presented at summary judgment are largely unfounded, as they incorrectly assert that such evidence must be admissible at trial. The objections are characterized as boilerplate and lack specific analysis, warranting their rejection. Despite ORI's submission of amended objections, the volume remains excessive and unproductive, and the Court will address specific objections only as necessary, deeming the remaining objections moot. The Court will first assess whether FRI has standing to bring representative claims for Shimizu, focusing on the enforceability of Shimizu's assignment of legal claims under Nevada law and the existence of a "case or controversy." ORI challenges the validity of Shimizu's assignment to FRI, claiming that Nevada law forbids the assignment of tort and fraud claims and that any claims assigned were "bare" or merely a non-exclusive license. FRI counters that it received both the legal claims and an exclusive interest to sell Shimizu's products. The Court finds that Shimizu validly assigned its legal claims to FRI through the February 2015 Agreement, which also includes a non-exclusive license for distribution in the U.S. The standing analysis will consider the parties' positions at the time the lawsuit was filed. Shimizu and FRI entered into a "Distribution and Claims Assignment Agreement" on February 21, 2015, which was amended in August 2015 and February 2017. The validity of the unamended February 2015 Agreement will be evaluated for standing purposes, as FRI must demonstrate it had standing when it filed its counterclaim, with both amendments occurring post-filing. FRI asserts Lanham Act claims on behalf of Shimizu, with the court evaluating the validity of the assignment under the February 2015 Agreement and Nevada law. The assignment provision explicitly includes rights related to false advertising claims linked to Shimizu's studies against Obesity Research Group (ORI). The court finds the language clear and unambiguous, thereby encompassing the Lanham Act claim. The claim is characterized as (1) against ORI; (2) a legal claim; and (3) based on ORI's alleged false advertising regarding its glucomannan product, which refers to Shimizu's studies. Regarding the validity of the assignment, the court rules it valid under Nevada law, noting that while Nevada prohibits the assignment of personal injury tort claims, it does not extend this prohibition to property damage claims. The rationale for barring the assignment of personal injury claims stems from their inherently personal nature, necessitating the involvement of the injured party. Conversely, the Lanham Act does not impose such personal requirements or a fraud element, distinguishing it from claims that involve personal defrauding. Therefore, the court concludes that the assignment of the Lanham Act claims is permissible and aligns with Nevada law. The Court does not find that Nevada state law prohibits the assignment of federal false advertising claims, including those under the Lanham Act. While there are precedents that restrict the assignment of certain federal claims to prevent nuisance suits, ORI's assertion lacks supportive legal authority. Although Nevada law bars the assignment of personal injury tort and fraud claims under specific circumstances, these claims are not relevant here, leading the Court to validate the assignment. Regarding FRI's licensing status, the Court concludes that FRI held a non-exclusive license to distribute Shimizu products in the U.S. at the time of filing its counterclaims. The agreement between FRI and Shimizu is not truly exclusive, as FRI does not hold sole distribution rights; instead, Shimizu retained exclusive rights for itself, and FRI's distribution rights are shared with Propol and possibly other parties. For Article III standing, three elements are essential: (1) the plaintiff must demonstrate a concrete and particularized injury that is actual or imminent; (2) there must be a causal connection between the injury and the defendant's conduct; and (3) it must be likely that the injury will be redressed by a favorable court decision. Before granting declaratory relief, the Court must ensure the presence of an actual controversy, which aligns with the constitutional requirements of Article III. ORI asserts that FRI lacks Article III standing to bring claims on behalf of Shimizu, relying on a prior Court Order (ECF No. 335) which found that ORI did not demonstrate its own standing against Shimizu. The Court previously concluded that ORI failed to establish a "substantial controversy" with Shimizu necessary for a declaratory judgment, largely due to insufficient evidence of an "actual" or "imminent" claim. ORI neglected to address the critical element of immediacy in its arguments, despite Shimizu's clear statement that it had no intention of pursuing claims against ORI as it believed it had assigned its rights to FRI. The Court clarified that its prior Order did not resolve the validity of the assignment or any potential claims Shimizu may have had against ORI. Consequently, ORI's arguments misinterpret the Court's reasoning, and even assuming ORI's claims were valid, it still failed to demonstrate standing for a declaratory judgment. The Court then analyzed FRI's standing to bring Shimizu's claims and determined that FRI does have standing. FRI established that Shimizu suffered actual injuries related to lost opportunities and research investments due to ORI's actions, which were linked to allegedly false advertisements. Although ORI did not directly harm FRI, the injury was assigned to FRI by Shimizu, allowing FRI to pursue the claims. Additionally, the Court found that FRI's claims were likely to be remedied by a favorable ruling, as FRI sought both monetary and injunctive relief. Regarding the Lanham Act claims, ORI contended that FRI lacked statutory standing as an assignee without the requisite underlying interest in the intellectual property. The Court rejected this argument, affirming that FRI has statutory standing to pursue these claims on behalf of Shimizu, noting that ORI misapplied the relevant standing standards. ORI contends that a plaintiff must have an interest in the asset harmed to establish standing for false advertising claims under section 43(a) of the Lanham Act. This requirement, however, is relevant only to trademark infringement claims under section 32, which are not applicable in this case. The court refers to the Adidas case, which clarifies that section 43(a) allows a broader class of plaintiffs compared to section 32. ORI's interpretation is supported by cases that misapply the relevant Lanham Act provisions, predominantly focusing on trademark claims rather than false advertising. Section 43(a) addresses unfair competition and permits any person who believes they may be damaged by false advertising to bring a civil action, irrespective of trademark ownership. The distinction is crucial: while section 32 limits standing to the registrant of a trademark, section 43(a) allows for claims based on injuries to commercial interests, such as reputation or sales. Thus, even if FRI does not own the intellectual property at issue, it can still pursue a claim for Shimizu, as the assignment of legal claims permits FRI to act on Shimizu's behalf. The court emphasizes that standing under section 43(a) does not require ownership of the underlying intellectual property. An assignee of a contract holds the same legal rights as the original party, meaning they cannot obtain more rights than the assignor had. The 'zone of interest' test is lenient, favoring the party alleging a cause of action. For standing in a false advertising claim under the Lanham Act, a plaintiff must demonstrate an injury to commercial interests in reputation or sales. Evidence indicates that Shimizu invested significantly in product development and partnered with FRI to distribute products in the U.S., enhancing the likelihood of injury due to ORI's advertising practices. ORI's marketing for Lipozene, which does not use Shimizu's Propol-branded glucomannan, is contested by Shimizu, as it allegedly misrepresents the product's quality. The Court concludes that FRI has shown Shimizu likely suffered an injury and that ORI's actions proximately caused this harm. The Court affirms that a plaintiff must demonstrate injury directly related to deceptive advertising and finds that FRI has standing to pursue Shimizu's Lanham Act claim. Regarding statutory standing, the Court previously determined that FRI met its burden, despite ORI's current challenge regarding FRI's evidentiary support for its claims. ORI's arguments regarding FRI's standing to sue under the Lanham Act were found insufficient by the Court. Even if ORI had met its burden, FRI presented adequate evidence demonstrating economic or reputational harm resulting from ORI's false advertisements. The Court emphasized that establishing standing under the Lanham Act is not stringent and is designed to protect those engaged in commerce from unfair competition. It clarified that a plaintiff's interests must only be reasonably related to the statute's purposes to allow for a lawsuit. The Court is permitted to consider sworn affidavits for summary judgment, which must be based on personal knowledge and factual rather than conclusory statements. FRI's declarations were deemed specific and detailed, outlining the steps taken to enter the glucomannan supplement market and the injuries suffered due to ORI's actions. Additionally, FRI's claims that ORI misused clinical studies involving Shimizu's products for false advertising were supported by the February 2015 Agreement and a subsequent demand letter. The Court noted that having sales is not a prerequisite for standing under the Lanham Act, countering ORI's emphasis on that point. A party does not need to demonstrate a loss of sales to establish standing when seeking to enjoin conduct that violates section 43(a) of the Lanham Act, as outlined in Harper House, Inc. v. Thomas Nelson, Inc. and Oreck Direct v. Dyson, Inc. It suffices that there is a reasonable belief that an advertising claim could cause injury. FRI claims that it was economically harmed by being excluded from the glucomannan supplement market due to ORI's false advertisements, supported by attempts to compete and a demand letter sent to ORI. The evidence suggests a reasonable juror could conclude that FRI was blocked from market entry partly due to ORI's claims regarding its exclusive source of glucomannan. The court acknowledges FRI's standing to pursue Lanham Act claims, despite the limited weight of certain evidence. FRI seeks a judicial determination of ORI's liability for false advertising based on six allegedly false statements and asserts entitlement to injunctive relief and monetary damages, including ORI's profits. ORI contends there is no genuine issue of material fact regarding the elements of a Lanham Act claim. To succeed under the Lanham Act, FRI must prove: (1) a false statement of fact in a commercial advertisement about a product, (2) that the statement deceived or had the potential to deceive a substantial audience, (3) that the deception is material and likely influences purchasing decisions, (4) that the statement entered interstate commerce, and (5) that FRI has suffered or is likely to suffer injury as a result. To establish falsity under the Lanham Act, a plaintiff can demonstrate that a statement is literally false or misleading to consumers, as outlined in Southland Sod Farms v. Stover Seed Co. The case involves FRI's claims against ORI for six alleged false advertising statements regarding Lipozene, which include claims about weight loss, clinical studies, and product composition. The first four statements focus on the Kaats and Walsh Studies, with FRI asserting that these studies did not analyze Lipozene but rather Shimizu's Propol-branded glucomannan. FRI contends that only Shimizu's product has been clinically proven to aid weight loss, while ORI counters that Lipozene is effectively the same glucomannan used in the studies, claiming it is a rebranded and improved version of Fiber Thin, which was tested in the Kaats Study. Both parties reference various studies, expert testimonies, and evidence to support their claims, debating the production conditions and testing methods of glucomannan. The resolution of these factual disputes is deemed appropriate for a jury to decide. Summary: The Court finds that summary judgment is not appropriate regarding the element of falsity related to the claims of "78% fat lost" and "clinically studied" associated with Lipozene, as genuine issues of material fact exist concerning the Kaats and Walsh Studies. Regarding the claim that the Kaats Study is a "major university study," FRI argues that it is false because the study was conducted by Dr. Kaats's private organization rather than a major university. ORI counters that the study's design was approved by Texas Women's University and involved reviewers affiliated with major universities. However, the Court determines that FRI has sufficiently demonstrated that the Kaats Study does not qualify as a major university study, as Dr. Kaats himself stated there was no university involvement, and he previously requested ORI to stop misrepresenting the study as Georgetown University-sponsored. ORI's evidence, which includes a design approval from Texas Women's University and minor affiliations with other universities, does not sufficiently support its claim. The Court concludes that ORI does not provide enough evidence for a reasonable juror to find the "major university study" claim to be true, indicating that mere affiliations do not equate to sponsorship or qualification as a major university study. Almost all studies require an Institutional Review Board (IRB), whose primary role is to ensure the protection of study subjects. There is no evidence that clinical studies, including the Kaats Study, adopt the IRB's sponsorship or affiliations. The record does not indicate any reference to the Kaats Study as a Texas Women's University study by ORI, Dr. Kaats, or others. ORI's claim that the Kaats Study is a "major university study" based on the affiliations of two reviewers is unsupported; there is no evidence that a reviewer's university affiliation confers that affiliation onto the study itself. Additionally, Dr. Preuss from Georgetown expressed dissatisfaction with any characterization of the Kaats Study as affiliated with Georgetown University. Similarly, there is no evidence of the Kaats Study being referred to as a University of Texas study. The independent agreement between ORI and NAI seeking a "university-affiliated" study does not demonstrate that this condition was satisfied by a "major university." The Court concludes that FRI has shown the absence of a genuine issue of material fact regarding ORI's claim and grants FRI summary judgment on this point of its Lanham Act claim. Regarding claims about lifestyle changes, ORI advertised that subjects in the Kaats Study were "asked not to change their lifestyle," which FRI argues is literally false. The Kaats Study participants received no instructions about their lifestyle, diet, or exercise. The study's methodology explicitly states that subjects were instructed only to take the supplement with no lifestyle recommendations provided. Therefore, any assertion that subjects were "asked" to refrain from changing their lifestyle is misleading, as they were free to follow any diet or exercise regimen they chose. A participant in a weight loss study had the option to either follow a personal diet/exercise regimen or rely solely on a supplement for weight loss. The study indicated that the effectiveness of the supplement was independent of any dietary or exercise changes made by participants. The Kaats Study aimed to test the supplement in a realistic environment with minimal intervention, explicitly stating that participants were not required to alter their lifestyles. Despite this, ORI claimed their "no lifestyle change" advertisements were accurate, suggesting that participants did not need to change their diet or exercise to lose weight. However, the study allowed participants the freedom to modify their diet or exercise, which could influence weight loss, contradicting ORI's claims. The court concluded that ORI's assertion of "no lifestyle change" was false, granting FRI summary judgment on this claim under the Lanham Act. Regarding the "Pure Glucomannan" claim, ORI requested dismissal based on the FACC's lack of allegations. The court interpreted FRI's argument as a motion to amend the FACC, granting permission to do so in accordance with Federal Rule of Civil Procedure 15(b). The court emphasized that amendments should be allowed liberally unless factors such as bad faith or undue delay are present. Five factors guide this assessment: bad faith, undue delay, prejudice to the opposing party, among others. The court evaluates five factors regarding the amendment of a complaint: futility, potential prejudice to the opposing party, previous amendments, and other relevant considerations. Among these factors, the potential prejudice to the opposing party is deemed the most significant. Absent such prejudice, strong evidence on the other factors may still lead to a denial of leave to amend. The court grants FRI permission to amend its complaint to include false advertising claims related to ORI's assertions about Lipozene being made with "100% pure Glucomannan." The court finds no evidence of bad faith by FRI in omitting this allegation and determines that ORI will not suffer prejudice from the amendment, as related false statement claims were previously addressed in ORI's opposition. FRI contends that ORI's marketing claims about Lipozene's composition are misleading, asserting that Lipozene is not made of "pure glucomannan." FRI provides evidence that Lipozene consists of various ingredients, primarily glucomannan. However, ORI argues that its statements do not imply that Lipozene is composed entirely of glucomannan but rather highlight it as a significant ingredient. The court finds that ORI has effectively demonstrated there is no genuine material fact dispute regarding the truthfulness of its claims about "pure glucomannan," concluding that the context of ORI's statements supports its position. The court also notes that while literally true statements can be misleading under the Lanham Act, FRI has not provided sufficient evidence to support its claims of misleading advertising. Consequently, the court grants summary judgment in favor of ORI on this issue, determining FRI's Lanham Act claim regarding the "pure glucomannan" statement fails as a matter of law. Lastly, FRI challenges ORI's assertion that Lipozene contains "no known allergens," claiming this is false due to the presence of excessive sulfite levels. FRI contends that excessive sulfite levels in Lipozene qualify as a "known allergen" under FDA regulations, which ORI contests by referencing the Food Allergen Labeling and Consumer Protection Act of 2004 (FALCPA), asserting that excessive sulfites are not classified as a "major food allergen." ORI argues that Lipozene does not contain any ingredients listed as major allergens under FALCPA, which includes items like milk, eggs, and nuts. Both parties failed to demonstrate that no genuine issue of material fact exists regarding the truthfulness of the "no known allergens" claim. While FRI has evidence indicating excessive sulfite levels per FDA standards, it hasn't proven that these standards apply to ORI's advertising statement. Conversely, ORI did not establish that only major allergens under FALCPA pertain to "known allergens" in advertising. Consequently, a genuine factual dispute persists regarding which standard applies to dietary supplement advertisements concerning allergens. The court denies both parties' summary judgment requests on this aspect of the Lanham Act claim. For the deception element of the Lanham Act claim, FRI seeks summary judgment, arguing that ORI's false statements have deceived a significant portion of the audience. ORI combines its arguments on falsity and deception, consistent with Ninth Circuit precedent, which presumes consumer deception when a competitor expends substantial resources to mislead consumers. The court finds no reason to deviate from this reasoning, noting that ORI has not rebutted the presumption of deception. Therefore, the court grants FRI summary judgment regarding the deception element related to the "major university" and "no lifestyle change" claims, while denying FRI's request for summary judgment on other claims due to lack of established falsity. Regarding materiality, FRI requests the court to rule that ORI's false advertising statements are materially significant. FRI argues that if the court finds ORI's statements false, materiality should be presumed, citing relevant case law to support this assertion. ORI contends that FRI has not met its burden of proof regarding claims of materiality and consumer deceit, primarily arguing that FRI's reliance on presumptions rather than evidence is insufficient. FRI's claims of injuries, materiality, causation, and consumer deceit lack supporting evidence, particularly concerning the statements about "78% fat lost," "clinically studied," and "no known allergens." As a result, the court denies both parties' requests for summary judgment on materiality for these claims. For the remaining statements, "major university study" and "no lifestyle change," FRI asserts that materiality should be presumed due to the nature of actual false claims under the Lanham Act. However, the court finds no Ninth Circuit precedent supporting this presumption and points out that materiality is determined by whether the false statements likely influence purchasing decisions. While FRI argues that the "no lifestyle change" statement is materially deceptive, ORI successfully demonstrates a genuine issue of material fact regarding its impact on consumers, referencing the Kaats Study. The court disagrees with ORI's assertion that extensive empirical evidence is needed to determine consumer perception and notes that FRI has not provided evidence to substantiate its claims of material deception. Ultimately, the court rejects FRI's argument that the "no lifestyle change" statement pertains to an inherent product quality, indicating that FRI has not met its burden of proof on materiality. The "no lifestyle change" statement is identified as a test condition for Kaats Study participants, not inherently linked to Lipozene's qualities or effects. FRI asserts that the "major university" study statement is significant enough to influence consumer purchasing decisions, a point ORI does not adequately address regarding its materiality. The court acknowledges that a "major university" affiliation enhances credibility and likely impacts consumer choices. FRI references Dr. Kaats's testimony indicating that university studies are significantly more expensive to conduct, emphasizing the cost-effectiveness of their own approach. ORI expressed interest in a university-affiliated study in its proposal for Kaats Study. The court concludes that a reasonable jury would find the "major university" statement likely influential, granting FRI summary judgment on this aspect while denying it for other statements, and also denying ORI's cross-summary judgment request. Regarding likelihood of injury, a plaintiff must show that false statements have caused or are likely to cause harm, either by diverting sales or diminishing goodwill. Under section 43(a) of the Lanham Act, competitors need not prove injury to seek injunctions against violations. However, for damage claims, actual evidence of injury is necessary, although lack of actual damages does not prevent recovery. Courts have discretion to determine relief based on circumstances, and to obtain a portion of a defendant’s profits, proof of willfulness is required. When considering attorney fees, courts should assess the totality of circumstances to determine if a case is exceptional, using a preponderance of the evidence standard. A permanent injunction is sought against ORI to prevent false advertising, marketing, packaging, labeling, and selling of Lipozene based on misleading representations. FRI claims damages due to lost sales and profits from Obesity Research, which are linked to ORI's deceptive practices. The court recognizes that FRI does not need to demonstrate future injury for injunctive relief under section 43(a) of the Lanham Act, as the focus is on protecting competitors and consumers. However, for monetary damages, FRI must provide evidence of actual injury and show that ORI acted willfully, which ORI contests, asserting that FRI lacks proof of injury. The court finds a genuine issue of material fact exists regarding whether FRI and Shimizu were likely harmed by ORI's actions, as supported by declarations indicating their market exclusion and reputational risks due to ORI's advertising practices. While FRI's evidence of damages is insufficient, the court deems that the evaluation of both parties' evidence is appropriate for a jury. Therefore, the requests for summary judgment regarding monetary damages are denied, and FRI must also satisfy all criteria for a permanent injunction. To obtain a permanent injunction, a plaintiff must demonstrate: (1) irreparable injury; (2) inadequacy of legal remedies like monetary damages; (3) that an equitable remedy is justified based on the balance of hardships; and (4) that the public interest will not be harmed. In the case of eBay Inc. v. MercExchange, the court acknowledged that FRI successfully proved its Lanham Act claim regarding a misleading statement. However, FRI failed to establish irreparable harm necessary for injunctive relief, as it did not provide evidence of such harm and instead relied on a presumption from out-of-circuit case law. The court concluded that ORI successfully rebutted this presumption and indicated that a jury should assess the evidence concerning FRI's damages. Consequently, FRI's request for a permanent injunction was denied. Regarding FRI's claims under the False Advertising Law (FAL) and Unfair Competition Law (UCL), FRI sought summary judgment based on the same arguments as its Lanham Act claims. ORI's counterarguments for summary judgment were contingent on the outcome of the Lanham Act claims. The court granted ORI summary judgment concerning the FAL and UCL claims related to the "pure glucomannan" statement but allowed FRI's other Lanham Act claims to proceed, thus leaving the UCL and FAL claims unresolved. Additionally, ORI raised defenses including laches, arguing that FRI's delay of over ten years in bringing claims was unreasonable and prejudicial. The court affirmed that laches is an appropriate defense for Lanham Act claims, requiring ORI to prove both an unreasonable delay by FRI and prejudice to ORI. The delay is assessed from when a plaintiff is aware, or should have been aware, of the grounds for their claim. If FRI was unaware of ORI's conduct, the laches defense would not apply. ORI's further arguments for summary judgment were denied as they failed to carry the burden of proof. Courts assess the reasonableness of delays by examining their causes, as outlined in *Danjaq*. A defendant may show prejudice from a delay either through evidentiary loss (e.g., lost evidence or faded memories) or expectations-based claims (e.g., actions taken or consequences suffered due to untimely suit). Laches, an equitable remedy, is not applicable if public interest strongly favors the suit, particularly in cases involving harmful products (*Jarrow*). Furthermore, a party cannot invoke laches if they have "unclean hands," which applies only if the court is convinced that the defendant acted with fraudulent intent. In this case, the court finds that ORI has not demonstrated that there are no factual issues regarding whether Shimizu (or FRI) delayed in filing its counterclaim. ORI claims Shimizu was aware of the alleged false advertising as early as 2005, but the cited emails reference different products and do not substantiate ORI's argument. Moreover, Shimizu's prior threats to litigate do not directly relate to the false advertising claims at issue. ORI's argument that Shimizu should have recognized viable claims a decade ago is undermined by evidence showing that ORI's prior actions do not correlate to the current allegations of false marketing. Ultimately, the court concludes that the question of whether FRI's delay was "reasonable" should be determined by a jury, and therefore, ORI's assertion that FRI's claim is barred by laches is unsubstantiated. Regarding the doctrine of unclean hands, ORI's argument that FRI is barred from claiming issues related to the Kaats Study lacks the necessary evidence to warrant judgment in ORI's favor, as the doctrine applies only when the plaintiff's prior conduct violates equitable principles. The relevant inquiry in adjudicating claims under the "unclean hands" doctrine focuses on whether a plaintiff or counterclaimant engaged in inequitable conduct related to their claims, rather than the mere fact of any wrongdoing. In the current case, FRI's claim against ORI involves allegations of false advertising concerning Lipozene's supposed clinical testing in the Kaats Study. For ORI to successfully invoke the unclean hands defense, it must demonstrate that FRI also engaged in similar deceptive advertising practices. However, the evidence presented does not substantiate this claim. FRI's advertisement for its "OptiFiber Lean" product makes references to various studies, including the Walsh Study, but does not clearly connect its claims to the Kaats Study without adequate citations. Furthermore, an email from Mr. Alkire discussing the Kaats Study does not imply that FRI made false statements regarding Propol A's testing in that study. Consequently, ORI fails to establish any inequitable conduct by FRI, leading to the denial of ORI's motion for summary judgment based on unclean hands. The court also questions the applicability of the unclean hands defense, emphasizing that it should not be applied automatically to allow a defendant to benefit from their wrongdoing simply because the plaintiff may have also violated the law. In addition, ORI seeks a declaratory judgment affirming it has "no liability" under the Federal Food, Drug, and Cosmetic Act (FFDCA). The Declaratory Judgment Act allows courts to clarify the legal relationships of parties in cases of actual controversy, aiming to provide an early resolution of federal issues to prevent future litigation. The term "case of actual controversy" as defined in the Declaratory Judgment Act pertains to justiciable matters under Article III, requiring federal courts to establish subject matter jurisdiction. To grant declaratory relief, the court must ascertain the existence of an actual controversy at all review stages, with the burden of proof resting on the party seeking relief. In this case, ORI's assertions for declaratory judgment were insufficient, lacking evidence of an impending claim from FRI regarding the FFDCA, leading the court to determine that no substantial controversy existed between the parties. Consequently, the court partially granted and denied both FRI's motion for partial summary judgment and ORI's cross motion for summary judgment. Specifically, the court ruled in favor of FRI regarding the falsity of ORI's statements about a "major university study" and the materiality of its claims, while denying requests concerning other issues. The court also ordered the parties to coordinate with Magistrate Judge Dembin for rescheduling and noted the submission of undisputed material facts. Lastly, ORI's objections to FRI's evidence were denied as insufficient to challenge admissibility at trial. The Court will reference the Kaats Study using Exhibit 99 and has denied ORI's objections to Exhibits 93-95, which were based on claims of improper authentication. ORI failed to demonstrate that this evidence would be inadmissible at trial. Previously, the Court ruled that FRI lacked standing to pursue UCL and FAL claims on behalf of Shimizu due to FRI's indirect damages, which do not meet the statutory requirements for those claims. Nevada law governs the February 2015 Agreement, which includes a choice-of-law provision specifying Nevada law for interpretation. ORI's argument cites prior findings about FRI's lack of standing as an uninjured assignee under California law, which prohibits such standing. However, the Lanham Act does not impose a similar requirement, and its policy concerns differ, as it does not necessitate personal fraud to establish a claim. ORI introduced an argument regarding the invalidity of Shimizu's goodwill assignment for the first time in its reply, which the Court will not consider, adhering to the principle that new arguments in reply briefs are typically waived. The Court was surprised by a discrepancy in FRI's motion regarding Fiber Research being the only authorized distributor of Propol supplements, as it contradicted Mr. Shimizu's statement. The Court cautioned counsel against overly aggressive advocacy that could undermine their credibility. ORI's objection to certain evidence was denied, as it did not sufficiently demonstrate why that evidence would not be admissible. Most of the case law cited by ORI was not relevant to standing in false advertising claims under the Lanham Act, primarily addressing other areas of law such as trademark and patent infringement. In National Licensing Association, LLC v. Inland Joseph Fruit Co., the court addressed standing under section 43 of the Lanham Act, emphasizing that ORI incorrectly focused on section 32 standing analysis. The case highlights that section 43 does not require ownership of intellectual property rights for standing, contrary to ORI's reliance on a North Carolina unpublished case that asserts such a requirement without analysis. The Lanham Act’s language permits any person who believes they may be harmed by false advertising to sue. Additionally, case law supports that competitors can bring claims under section 43(a) based on false advertising, regardless of trademark misuse. Ownership is deemed immaterial for standing under section 43(a), as mere users of trademarks can have standing. ORI's references to Nevada case law concerning assignments do not pertain to standing under section 43. It is clarified that to maintain a section 43(a) claim, the plaintiff must demonstrate a commercial interest that is likely to be damaged, not ownership of the underlying intellectual property. The February 2015 Agreement between Shimizu and FRI included both distribution rights and a legal claims assignment, providing FRI with sufficient commercial interest to establish standing under section 43(a). Courts have recognized that non-exclusive licenses can constitute adequate commercial interests for such claims. Defendant did not provide authority to support the claim that a non-exclusive licensee lacks standing under Section 43(a) of the Lanham Act. The court noted that ownership of the trademark is not necessary for a non-exclusive licensee to pursue a claim under this section, which contributed to the denial of ORI's objections to the admissibility of certain evidence. ORI's objections failed to demonstrate that the evidence would be inadmissible at trial. FRI argued that it could not enter the market with a dietary supplement similar to the one tested in a study due to Lipozene's low pricing, despite ORI's counterclaim that FRI offers a lower-priced glucomannan product. FRI contends that it faces significant challenges in competing with ORI's prices and that ORI's allegedly false claims hinder its market entry. FRI's claims are based on the Lanham Act, asserting that these claims are closely aligned with its California False Advertising Law (FAL) claims, as violations of the Lanham Act would also violate the Unfair Competition Law (UCL). The court clarified that FRI's claims focus on false advertising under Section 43(a)(1)(B) rather than false association under Section 43(a)(1)(A). The court found no evidence that FRI had alleged false association, as all filings and motions referenced only false advertising. The parties agreed that ORI's advertising occurs in interstate commerce, and they submitted a limited number of undisputed facts for consideration. FRI contends that ORI's claims do not pertain to Texas Women's University but to Georgetown University. The Court rejects ORI's hearsay objection, allowing Dr. Kaats and others to testify about the letter's contents, as the statements are admissible for their effect on the listener rather than the truth of the assertions. FRI acknowledges that the "major university" comment relates to the Kaats Study but does not imply anything about Lipozene's quality. Under Section 1117 of the Lanham Act, a plaintiff may recover the defendant's profits, damages, and litigation costs if a violation is established. Although FRI cites case law on comparative advertisements, the Court finds it irrelevant since ORI does not compare products directly or indirectly. The Court denies ORI's objections regarding the evidence's admissibility, including those related to untimely disclosure, as ORI did not substantiate its claims. The Court notes that the Ninth Circuit has not ruled on whether a statutory presumption for injunctive relief exists under the Lanham Act, and it declines to analyze this issue since it does not affect the current ruling. The Court also remarks on the undated nature of a lower email but finds ORI's objections insufficient to exclude the evidence.