ThermoLife International LLC v. MusclePharm Corporation

• Court: District Court, D. Arizona
• Decided: July 16, 2020
• Docket: 2:19-cv-02440
• Status: Unknown

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 ThermoLife International LLC, No. CV-19-02440-PHX-SMB

10 Plaintiff, ORDER

11 v.

12 MusclePharm Corporation,

13 Defendant. 14 15 Pending before the Court is MusclePharm Corporation’s Motion to Dismiss Plaintiff 16 ThermoLife International, LLC’s Amended Complaint under Federal Rules of Civil 17 Procedure 12(b)(1) and 12(b)(6), (Doc. 23, “Mot.”; Doc. 24, “Resp.”; Doc. 25, “Reply”). 18 Both parties requested oral argument, but the Court finds it unnecessary for resolving this 19 motion. LRCiv 7.2(f). After accepting the amended complaint’s well-pled allegations as 20 true and considering the relevant law and submissions,1 the motion will be granted. 21 I. BACKGROUND 22 ThermoLife’s litigation in this District is pervasive. As alleged: “This lawsuit is one 23 of several that [it] has filed in this district against dietary supplement companies that are 24 marketing and selling pre-workout and pump products that feature VASO6.” (Doc. 20,

25 1 In addition to its pleadings, MusclePharm submitted three orders dismissing complaints by ThermoLife as supplemental authority and requested that the Court take judicial notice 26 of, without objection, one of ThermoLife’s complaints against a different defendant in this District, which was filed a few months after the one here. (Docs. 26-29, 33.) The Court has 27 considered these orders, one of which was written by this Court, and ThermoLife’s other complaint under Federal Rule of Evidence 201. See Khoja v. Orexigen Therapeutics, Inc., 28 899 F.3d 988, 999-1002 (9th Cir. 2018) (discussing judicial notice under Federal Rule of Evidence 201). 1 “FAC” ¶ 6.) The Arizona company, which felt it necessary to allege “[it] is not a patent 2 troll,”2 is a self-proclaimed “world leader in the use and development of nitrate technology 3 in dietary supplements” with “at least 16 patents with more than 450 claims related to 4 amino acid nitrate compounds, compositions, and their uses in dietary supplements and 5 food products.” (Id. ¶¶ 1, 3, 15, 26, 28.) 6 ThermoLife’s claims arise out of lost sales allegedly stemming from the “massive 7 false advertising campaign surrounding VASO6,” which is apparently “nothing more 8 [than] a common green tea extract,” that is being used as an ingredient in “pre-workout and 9 pump” dietary supplements. (Id. ¶¶ 6-7.) “While ThermoLife’s patented ingredients remain 10 extremely popular,” and virtually “anytime an amino acid is combined with nitrate(s) and 11 sold and marketed to consumers in a dietary supplement, that product relies on 12 [ThermoLife’s] patented technology,” “[its] share of [the dietary supplement] market has 13 been diluted as a result of the intentional false advertising and false marking of [the VASO6 14 ingredient].” (Id. ¶¶ 5, 29-30.) These products containing VASO6, like MusclePharm’s 15 “Wreckage” and “Combat Pre-Workout,” sought by pre-workout and pump consumers 16 alike, have been purchased over the past several years “instead of ThermoLife’s patented 17 ingredients and products that contain [its] patented ingredients,” or “ThermoLife 18 Component Products.” (Id. ¶¶ 5, 7, 58-59.) In fact, even dietary supplement manufacturers 19 like MusclePharm have replaced ThermoLife’s ingredients with VASO6 in some of their 20 products. (Id. ¶¶ 120-121.) 21 Since MusclePharm’s Wreckage and Combat Pre-Workout products compete with 22 other dietary supplements, some of which happen to “contain[] ThermoLife’s patented 23 ingredients and technology,” the “[s]ales of MusclePharm’s products . . . unquestionably 24 harm ThermoLife’s revenue and profits.” (Id. ¶¶ 59, 8.) Indeed, “ThermoLife loses 25 business every time a customer or potential customer chooses a VASO6 Component

26 2 This is one of the many argumentative and distracting allegations that ThermoLife writes in its “short and plain statement of the claim showing that [it] is entitled to relief.” Fed. R. 27 Civ. P. 8(a)(2). Based on the alleged causes of action, the Court is entirely unconcerned with whether “MusclePharm and its attorney have repeatedly levied accusations of patent 28 trolling at ThermoLife.” (FAC ¶ 31.) The Court also finds unprofessional how ThermoLife characterizes one of MusclePharm’s positions as “laughable.” (Resp. at 17.) 1 Product, instead of a ThermoLife Component Product.” (Id. ¶ 117.) Based on ThermoLife’s 2 “real and protectable interest in the market for dietary supplements,” and MusclePharm’s 3 use of VASO6 instead of ThermoLife ingredients in some of its dietary supplements, 4 ThermoLife brings claims of false advertising under the Lanham Act, 25 U.S.C. § 1125(d), 5 false patent marking under 35 U.S.C. § 292, and common law unfair competition. (Id. ¶¶ 6 9, 53 126-145.) MusclePharm moves to dismiss each with prejudice under Federal Rules 7 of Civil Procedure 12(b)(1) and 12(b)(6). 8 II. LEGAL STANDARD 9 “Federal courts are courts of limited jurisdiction. They possess only that power 10 authorized by Constitution and statute[.]” Kokkonen v. Guardian Life Ins. Co. of Am., 511 11 U.S. 375, 377 (1994). As a result, “[i]t is to be presumed that a cause lies outside this 12 limited jurisdiction and the burden of establishing the contrary rests with the party asserting 13 jurisdiction.” Id. (internal and external citations omitted). Under Federal Rule of Civil 14 Procedure 12(b)(1), a party may move to dismiss for lack of subject-matter jurisdiction. 15 Carijano v. Occidental Petroleum Corp., 643 F.3d 1216, 1227 (9th Cir. 2011). Rule 16 12(b)(1) motions to dismiss “may attack either the allegations of the complaint as 17 insufficient to confer upon the court subject matter jurisdiction, or the existence of subject 18 matter jurisdiction in fact.” Renteria v. United States, 452 F.Supp.2d 910, 919 (D. Ariz. 19 2006) (citing Thornhill Publ’g Co., Inc. v. Gen. Tel. & Elec. Corp., 594 F.2d 730, 733 (9th 20 Cir. 1979)). For these motions, “unlike a motion under Rule 12(b)(6), the moving party 21 may submit ‘affidavits or any other evidence properly before the court.’” Assoc. of Am. 22 Med. Colleges v. United States, 217 F.3d 770, 778 (9th Cir. 2000) (quoting St. Clair v. City 23 of Chico, 880 F.2d 199, 201 (9th Cir. 1989)). If the moving party submits evidence showing 24 a lack of subject matter jurisdiction, “[i]t then becomes necessary for the party opposing 25 the motion to present affidavits or any other evidence necessary to satisfy its burden of 26 establishing that the court, in fact, possesses subject matter jurisdiction.” St. Clair, 880 27 F.2d at 201. But “[w]hen the motion to dismiss attacks the allegations of the complaint is 28 insufficient[,]” like here, “all allegations of material fact are taken as true and construed in 1 the light most favorable to the nonmoving party.” Renteria, 452 F.Supp.2d at 919 (citing 2 Fed’n of African Am. Contr. v. City of Oakland, 96 F.3d 1204, 1207 (9th Cir. 1996)). 3 In addition to moving to dismiss for lack of subject-matter jurisdiction, a party may 4 move to dismiss for failure to state a claim under Rule 12(b)(6). Fed. R. Civ. P. 12(b)(6). 5 When evaluating a complaint under Rule 12(b)(6), well-pled factual allegations are 6 presumed true and construed in the light most favorable to the nonmoving party. Cousins 7 v. Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009). To survive a Rule 12(b)(6) motion to 8 dismiss, a complaint must meet Rule 8(a)(2)’s minimum requirements. Rule 8(a)(2) 9 requires a “short and plain statement of the claim showing that the pleader is entitled to 10 relief,” so that the defendant has “fair notice of what the . . . claim is and the grounds upon 11 which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. 12 Gibson, 355 U.S. 41, 47 (1957)). A complaint setting forth a cognizable legal theory 13 survives a motion to dismiss if it contains sufficient factual matter stating a claim to relief 14 that is “plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting 15 Twombly, 550 U.S. at 570). Facial plausibility only exists if the pleader sets forth “factual 16 content that allows the court to draw the reasonable inference that the defendant is liable 17 for the misconduct alleged.” Id. “Threadbare recitals of the elements of a cause of action, 18 supported by mere conclusory statements, do not suffice.” Id. Plausibility does not equal 19 “probability,” but requires “more than a sheer possibility that a defendant has acted 20 unlawfully.” Id. “Where a complaint pleads facts that are ‘merely consistent’ with a 21 defendant’s liability, it ‘stops short of the line between possibility and plausibility of 22 entitlement to relief.’” Id. (quoting Twombly, 550 U.S. at 557). 23 III. DISCUSSION 24 “Because the issue of standing presents a ‘threshold question of justiciability,’ the 25 Court will address the parties’ Rule 12(b)(1) standing arguments first.” ThermoLife Int’l 26 LLC v. Am. Fitness Wholesalers LLC, No. CV-18-04189-PHX-JAT, 2019 WL 3840988, 27 at *1 (D. Ariz. Aug. 15, 2019); TrafficSchool.com, Inc. v. Edriver Inc., 653 F.3d 820, 825 28 (2011) (“[T]he district court should have undertaken an independent analysis of Article III 1 standing before determining standing under the Lanham Act.”). Only if ThermoLife has 2 standing to sue will the Court address the other arguments. See DaimlerChrysler Corp. v. 3 Cuno, 547 U.S. 332, 341 (2006) (“If a dispute is not a proper case or controversy, the courts 4 have no business deciding it, or expounding the law in the course of doing so.”); Ex parte 5 McCardle, 74 U.S. 506, 514 (1868) (“Without jurisdiction the court cannot proceed at all 6 in any cause. Jurisdiction is power to declare the law, and when it ceases to exist, the only 7 function remaining to the court is that of announcing the fact and dismissing the cause.”). 8 A. Lack of Subject Matter Jurisdiction 9 “Article III standing is a species of subject matter jurisdiction.” Carijano, 643 F.3d 10 at 1227. To have Article III standing, “a plaintiff must demonstrate (1) that [it] suffered an 11 injury in fact that is concrete, particularized, and actual or imminent, (2) that the injury was 12 caused by the defendant, and (3) that the injury would likely be redressed by the requested 13 judicial relief.” Thole v. U.S. Bank N.A., 140 S.Ct. 1615, 1618 (2020). 14 MusclePharm claims that ThermoLife lacks standing because “[it] has not alleged 15 any injury proximately caused by the alleged false marking or advertising.” (Mot. at 10- 16 11; Reply at 2 (“ThermoLife . . . does not identify any specific lost sales or deals giving 17 rise to a plausible inference that anything [MusclePharm] has done has caused ThermoLife 18 injury.”)). It further claims that ThermoLife’s allegations concerning how its ingredient 19 licensees offer “top-selling” pre-workout products undercut any reasonable inference 20 ThermoLife was injured by MusclePharm’s conduct. (Mot. at 11; Reply at 2.) 21 ThermoLife argues, in quoting 35 U.S.C. § 292(b), that it has standing because its 22 amended complaint alleges a “competitive injury.” (Resp. at 9; id. at 11 (“ThermoLife has 23 pleaded a competitive injury. [Its] claims should move forward.”)). Although relying on a 24 federal statute in asserting constitutional standing misses the mark, ThermoLife’s injury is 25 summarized in its response: 26 Obviously, MusclePharm’s promotion of VASO6 and its sale 27 of products that include VASO6, like its Combat Pre-Workout 28 and Wreckage products has [sic] caused ThermoLife 1 “competitive harm.” Due to MusclePharm’s false advertising and false claims, the consumer demand for VASO6 (in part, 2 created by MusclePharm) has driven other dietary supplement 3 companies to include VASO6 in their products, rather than include ThermoLife’s ingredients. Moreover, as a direct result 4 of MusclePharm’s false advertising and false patent marking, 5 consumers are misled into purchasing dietary supplements that include the falsely advertised and falsely marked VASO6, like 6 MusclePharm’s Wreckage and Combat Pre-Workout products, 7 instead of purchasing products that include ThermoLife’s patented ingredients (ThermoLife Component Products). 8

9 (Id. at 3-4.) And although ThermoLife’s “ingredients and technology currently dominate 10 the market in the pre-workout and pump category, ‘anytime a company like MusclePharm 11 falsely advertises the properties of an ingredient in a product marketed in the pump and/or 12 pre-workout category, and [it] makes a sale based on that false advertising[,] [it] steals a 13 potential sale from a ThermoLife Component Product [company].” (Id. at 9 (quoting FAC 14 ¶ 52)). This “unquestionably harm[s] ThermoLife’s revenue and profits” and is “directly 15 attributable to the false advertising of products that compete directly against ThermoLife 16 Component Products.” (Id. (quoting FAC ¶¶ 8, 31)). 17 While the Court seriously questions whether ThermoLife’s vaguely identified lost 18 sales are in fact fairly traceable to MusclePharm’s false advertising or marking of its 19 products, its general allegations are enough for Article III purposes right now. See Lujan 20 v. Defs. of Wildlife, 504 U.S. 555, 561 (1992) (“At the pleading stage, general factual 21 allegations of injury resulting from the defendant’s conduct may suffice, for on a motion 22 to dismiss we ‘presum[e] that general allegations embrace those specific facts that are 23 necessary to support the claim.’” (quotation marks and citation omitted)); Steel Co., 523 24 U.S. 83, 104, (1998) (“[W]e must presume that the general allegations in the complaint 25 encompass the specific facts necessary to support those allegations.” (citation omitted)). 26 Therefore, since ThermoLife has standing, the Court turns to the Rule 12(b)(6) arguments. 27 B. Failure to State a Claim Under Rule 12(b)(6) 28 ThermoLife’s false advertising, common law unfair competition, and false marking 1 claims are each premised on allegations that MusclePharm falsely advertised or marked its 2 dietary supplements containing VASO6. (See FAC ¶¶ 9, 53 126-145.) MusclePharm moves 3 to dismiss each for failure to state a claim.3 4 1. False Advertising Under the Lanham Act 5 One source of Lanham Act liability is false advertising. Lexmark Int’l, Inc. v. Static 6 Control Components, 572 U.S. 118, 122 (2014); 15 U.S.C. § 1125(a)(1)(B). These claims 7 require alleging that: 8 (1) The defendant made a false statement either about the 9 plaintiff’s or its own product; (2) the statement was made in 10 commercial advertisement or promotion; (3) the statement actually deceived or had the tendency to deceive a substantial 11 segment of its audience; (4) the deception is material; (5) the 12 defendant caused its false statement to enter interstate commerce; and (6) the plaintiff has been or is likely to be 13 injured as a result of the false statement, either by direct 14 diversion of sales from itself to the defendant, or by a lessening of goodwill associated with the plaintiff’s product. 15

16 Bobbleheads.com v. Wright Bros., Inc., 259 F.Supp.3d 1087, 1096-97 (S.D. Cal. 2017) 17 (quoting Newcal Indus., Inc. v. Ikon Office Sol., 513 F.3d 1038, 1052 (9th Cir. 2008)). 18 MusclePharm does not seriously challenge whether these elements are alleged. It 19 instead argues that “ThermoLife’s causes of action must be dismissed pursuant to Rule . . 20 . 12(b)(6) for lack of standing.” (Mot. at 10 (emphasis added)). The Court interprets this as 21 MusclePharm challenging whether ThermoLife has statutory standing to bring its claim. 22 Lexmark, 572 U.S. at 128. Thus, “[t]he question is whether the statute grants [ThermoLife] 23 the cause of action that [it] asserts.” Bank of Am. Corp. v. City of Miami, 137 S.Ct. 1296, 24 1302 (2017). 25 a. “Zone of Interests” 26 The Lanham Act’s text “authorizes suit by ‘any person who believes that he or she 27

28 3 MusclePharm also specifically challenges ThermoLife’s false marking claim under Federal Rule of Civil Procedure 9(b). (Mot. at 16-18.) 1 is likely to be damaged’ by a defendant’s false advertising.” Lexmark, 572 U.S. at 129 2 (quoting 15 U.S.C. § 1125(a)(1)). But not everyone with Article III standing can bring a 3 false advertising claim. City of Oakland v. Lynch, 798 F.3d 1159, 1164 (9th Cir. 2015). A 4 false advertising plaintiff’s alleged Article III injury must fall within the Lanham Act’s 5 “zone of interests.” See Lexmark, 572 U.S. at 127-30. Congress clearly identified those 6 interests in the Lanham Act, which states: 7 The intent of this chapter is to regulate commerce within the 8 control of Congress by making actionable the deceptive and 9 misleading use of marks in such commerce; to protect registered marks used in such commerce from interference by 10 State, or territorial legislation; to protect persons engaged in 11 such commerce against unfair competition; to prevent fraud and deception in such commerce by the use of reproductions, 12 copies, counterfeits, or colorable imitations of registered 13 marks; and to provide rights and remedies stipulated by treaties and conventions respecting trademarks, trade names, and 14 unfair competition entered into between the United States and 15 foreign nations.

16 15 U.S.C. § 1127 (emphasis added). 17 With this statutory text in mind, the Supreme Court held that “to come within the 18 zone of interests in a suit for false advertising under § 1125(a), a plaintiff must allege an 19 injury to a commercial interest in reputation or sales.” Lexmark, 572 U.S. at 131-32; POM 20 Wonderful LLC v. Coca-Cola Co., 573 U.S. 102, 107 (2014) (“Competitors are within the 21 class that may invoke the Lanham Act because they may suffer ‘an injury to a commercial 22 interest in sales or business reputation proximately caused by defendant’s 23 misrepresentations.” (quoting Lexmark, 572 U.S. at 132). Noncompetitors fit in this class 24 too. Lexmark, 572 U.S. at 136 (“To be sure, a plaintiff who does not compete with the 25 defendant will often have a harder time establishing proximate causation. But a rule 26 categorically prohibiting all suits by noncompetitors would read too much into the Act’s 27 reference to ‘unfair competition’ in § 1127.”). 28 Here, ThermoLife’s alleged injury is inappropriately classified as one within the 1 Lanham Act’s zone of interests. Cf. id. at 131-32. ThermoLife’s “obvious,” yet vaguely 2 identified, persisting lost sales allegedly occurring because MusclePharm uses VASO6 3 instead of ThermoLife ingredients in its products barely identifies an injury, let alone one 4 sufficiently alleged to be commercial in nature to be remedied by the Lanham Act. As an 5 ingredient supplier, ThermoLife is only baldly alleged to compete against MusclePharm in 6 its role as a manufacturer. But there are no specific factual allegations that permit a 7 reasonable inference that these two companies offer similar products or even compete in 8 similar consumer market segments. In fact, by ThermoLife’s own allegations, the Arizona 9 company merely supplies ingredients that are then incorporated into finished products with 10 many other ingredients, which are in turn manufactured and sold by other companies like 11 MusclePharm that offer dietary supplement products to consumers. To say ThermoLife has 12 a remedy for its vaguely identified lost sales stemming from unalleged harm to its 13 unidentified licensees implausibly defies the realities of business, and is certainly not 14 actionable as an injury to a commercial interest in reputation or sales under the Lanham 15 Act. Iqbal, 556 U.S. at 678. In fact, no “top-selling” licensee is even alleged to have been 16 harmed. To the contrary, they are doing quite well. (FAC ¶¶ 29-30, 52.) Even accepting 17 the allegations as true, such a vague injury falls outside the Lanham Act’s zone of interests. 18 Cf. Lexmark, 572 U.S. at 137. If it were enough, there would be no company whose conduct 19 is not actionable under the Lanham Act in our interconnected modern economy. 20 The Court also finds ThermoLife’s alleged injury outside the Lanham Act’s zone 21 of interests based on its failure to meaningfully show otherwise. See United States v. 22 Sineneng-Smith, 140 S.Ct. 1575, 1578-79 (2020) (explaining the court’s responsibility to 23 follow the principle of party presentation in “our adversarial system of adjudication”). 24 ThermoLife’s reasoning is straightforward, yet unconvincing: 25 ThermoLife’s falls within the “zone of interest [meant to be 26 protected by the Lanham Act. . . [it] is entitled to a chance to 27 prove its case.” 28 1 (Resp. at 4 (citing Lexmark, 572 U.S. at 118)). Generally citing Lexmark and blankly 2 arguing something falls within the “zone of interests” is not enough here, or in any case. 3 Nor is alleging that an injury is competitive without supporting factual allegations show 4 how ThermoLife’s vague lost sales somehow inflicted by MusclePharm through 5 ThermoLife’s licensees enough. (See id. at 9-10.) ThermoLife’s approach seemingly asks 6 the Court to comb through the amended complaint and develop a theory for an injury, 7 beyond blank allegations that there is one, that is directly attributable to MusclePharm’s 8 conduct and protected by the Lanham Act. That request is inappropriate. For these reasons, 9 the Court finds that ThermoLife has failed to allege an injury within the Lanham Act’s 10 zone of interests. Lexmark, 572 U.S. at 137. 11 b. Proximate Cause 12 Even if ThermoLife meaningfully argued a plausibly alleged injury within the 13 Lanham Act’s zone of interests, it would also have to allege that the injury was proximately 14 caused by MusclePharm’s conduct. See id. at 133. Proximate cause is different than 15 “traceability” under Article III. Id. at 134 n.6. It addresses “whether the harm alleged has 16 a sufficiently close connection to the conduct the statute prohibits.” Bank of Am. Corp., 17 137 S.Ct. at 1305 (quoting Lexmark, 572 U.S. at 133). And “like any other element of a 18 cause of action, it must be adequately alleged at the pleading stage in order for the case to 19 proceed.” Lexmark, 572 U.S. at 134 n.6. To show proximate cause, “a plaintiff suing under 20 § 1125(a) ordinarily must show economic or reputational injury flowing directly from the 21 deception wrought by the defendant’s advertising; and that occurs when deception of 22 consumers causes them to withhold trade from the plaintiff.” Id. at 133. This showing is 23 “generally not made when the deception produces injuries to a fellow commercial actor 24 that in turn affect the plaintiff.” Id. at 133-34. 25 Here, MusclePharm allegedly injured ThermoLife, again who “sells and licenses 26 nitrate amino acid compositions, and nitrate amino acid compounds as dietary supplement 27 ingredients for use in dietary supplements,” by “falsely market[ing] VASO6 as a dietary 28 supplement ingredient that is ‘clinically proven’ and ‘patented’ to increase vasodilation.” 1 (Resp. at 9.) “VASO6,” in turn, “directly competes with ThermoLife’s nitrate amino acid 2 compositions, and nitrate amino acid compounds.” (Id. at 10.) “This false advertising and 3 false marking,” ThermoLife argues, “has caused significant harm to ThermoLife—[its] 4 direct customers (dietary supplement companies) are using VASO6 . . . , instead of [its] 5 patented, nitrate ingredients, and consumers are being misled to buy VASO6-based 6 products instead of [its licensees’ products].” (Id. (emphasis added)). MusclePharm claims 7 that this inadequately alleges it proximately caused ThermoLife’s injuries. (Mot. at 12-13; 8 Reply at 6-8.) It argues, inter alia, that “ThermoLife erroneously claims that it is 9 necessarily the case that any time a consumer purchases Combat or Wreckage it deprives 10 ThermoLife of a sale.” (Mot. at 12.) The Court agrees with MusclePharm that proximate 11 cause is inadequately alleged. 12 Proximate cause “generally bars suits for alleged harm that is ‘too remote’ from the 13 defendant’s unlawful conduct.” Lexmark, 572 U.S. at 133. “That is ordinarily the case if 14 the harm is purely derivative of ‘misfortunes visited upon a third party by the defendant’s 15 act.’” Id. (quoting Holmes v. Sec. Inv’r Prot. Corp., 503 U.S. 258, 268-269 (1992)). 16 Proximate cause, in other words, is generally not satisfied “when the deception produces 17 injuries to a fellow commercial actor that in turn affect the plaintiff.” Id. at 133-34. This is 18 precisely how the Court sees ThermoLife’s alleged injury. Its lost sales are allegedly 19 caused by consumers purchasing dietary supplements, like those manufactured and sold by 20 MusclePharm that contain VASO6 instead of ThermoLife ingredients. But this attenuated 21 chain of chance events leading to ThermoLife’s vaguely defined lost sales is difficult to 22 follow. To be clear, the amended complaint describes no plausible instance “[w]here the 23 injury alleged is so integral [to] an aspect of the [violation] alleged, there can be no 24 question’ that proximate cause is satisfied.” Id. at 139 (quoting Blue Shield of Va. V. 25 McCready, 457 U.S. 465, 479 (1982)). 26 To the contrary, ThermoLife’s own allegations illustrate “‘discontinuity’ between 27 the injury to the direct victim [(ThermoLife’s licensees)] and the injury to the indirect 28 victim [(ThermoLife)], so that the latter is not surely attributable to the former (and thus 1 also to the defendant’s conduct), but might instead have resulted from ‘any number of 2 [other] reasons.” Id. at 140 (quoting Anza v. Ideal Steel Supply Corp., 547 U.S. 451, 458- 3 59 (2006)). One of these many “other reasons” includes the ubiquitous and multi-faceted 4 nature of dietary supplement consumer preferences. A pump or pre-workout consumer 5 might choose to purchase MusclePharm products over ones containing ThermoLife 6 ingredients for any number of reasons besides the fact that they contain VASO6—such as 7 price, unavailability of other products, or even simply because MusclePharm’s products 8 taste better. There are no allegations plausibly connecting MusclePharm’s conduct to 9 ThermoLife’s injury in such a way that these alternatives are less likely. Iqbal, 556 U.S. at 10 679 (“Determining whether a complaint states a plausible claim for relief will . . . be a 11 context-specific task that requires the reviewing court to draw on its judicial experience 12 and common sense.”). Common sense dictates that such an attenuated relationship between 13 ThermoLife as an ingredient supplier and MusclePharm as a manufacturer, as alleged in 14 ThermoLife’s amended complaint, does not show ThermoLife’s injuries were proximately 15 caused by MusclePharm. Rather, the more immediate victim from MusclePharm’s 16 conduct, if any, is the dietary supplement manufacturer using ThermoLife’s ingredients. If 17 that manufacturer never licensed ThermoLife’s ingredients, the injury alleged would not 18 have materialized. Bridge v. Phoenix Bond & Indem. Co., 553 U.S, 639, 658 (2008). 19 Even further, ThermoLife also implausibly alleges “there is likely to be something 20 very close to a 1:1 relationship between the number of [ThermoLife ingredients] sold (or 21 not sold) by [ThermoLife] and the number of [products containing ThermoLife’s 22 ingredients] sold (or not sold) by [miscellaneous dietary supplements using ThermoLife 23 technology].” Lexmark, 572 U.S. at 139. In other words, just because a consumer buys a 24 product containing VASO6 does not plausibly mean ThermoLife necessarily lost an 25 ingredient sale. Like the case within any market, product differentiation allows companies 26 to diversify product offerings in an effort to attract different consumer segments. Because 27 of this practical reality, ThermoLife’s alleged proximate cause theory that every 28 MusclePharm sale harmed it because each sale would have instead been one by a 1 ThermoLife licensee, and thus, “obviously” a sale by ThermoLife, is implausible. Iqbal, 2 556 U.S. at 678 3 Therefore, even if ThermoLife’s injury was allegedly within the Lanham Act’s zone 4 of interests, it would still fail under Rule 12(b)(6) because it is inadequately alleged to have 5 been proximately caused by MusclePharm’s conduct. Lexmark, 572 U.S. at 140. 6 2. Common Law Unfair Competition 7 “In the Ninth Circuit, claims of unfair competition and false advertising under . . . 8 common law are ‘substantially congruent’ to claims made under the Lanham Act.” Walker 9 & Zanger, Inc. v. Paragon Indus., Inc., 549 F.Supp.2d 1168, 1182 (N.D. Cal. 2007) (citing 10 Cleary v. News Corp., 30 F.3d 1255 (9th Cir. 1994)). ThermoLife does not specifically 11 respond to MusclePharm’s motion as it concerns this claim. Nonetheless, its common law 12 unfair competition claim fails under Rule 12(b)(6) for the same reasons as the false 13 advertising one under the Lanham Act. See id. 14 3. False Marking Under 35 U.S.C. § 292 15 Section 292(a) prohibits “mark[ing] upon . . . in connection with any unpatented 16 article, the word ‘patent’ or any word or number importing that the same is patented, for 17 the purpose of deceiving the public.” 35 U.S.C. § 292(a). This section authorizes suit to 18 any “person who has suffered a competitive injury as a result of a violation of this section.” 19 35 U.S.C. § 292(b) (emphasis added). Thus, without a “competitive injury,” a plaintiff 20 cannot bring a false marking claim. See Sukumar v. Nautilus, Inc. 785 F.3d 1396, 1399- 21 1402 (Fed. Cir. 2015). A “competitive injury” is “[a] wrongful economic loss caused by a 22 commercial rival, such as the loss of sales due to unfair competition; a disadvantage in a 23 plaintiff’s ability to compete with a defendant, caused by the defendant’s unfair 24 competition.” Id. at 1400 (citation omitted). Additionally, a plaintiff’s “competitive injury” 25 must necessarily be caused by the defendant’s violation of section 292(a). Id. at 1400 n.3. 26 While plaintiffs like MusclePharm must allege other elements to bring a false 27 28 1 marking claim,4 the one challenged here is whether a competitive injury is alleged.5 As 2 thoroughly reasoned above, ThermoLife’s injury is implausibly attributed to its attenuated 3 “competitive” relationship with MusclePharm that runs through its licensees. The absence 4 of any competitive injury proximately caused by MusclePharm’s conduct is fatal to 5 ThermoLife’s false marking claim. Sukumar, 785 F.3d at 1402 (“[Section] 292 limits 6 standing to entities that have ‘suffered a competitive injury as a result of a violation of 7 [section 292(a)].”). 8 IV. LEAVE TO AMEND 9 ThermoLife requests leave to amend over MusclePharm’s assertion that the 10 amended complaint should be dismissed without it. ThermoLife’s request ignores Federal 11 Rule of Civil Procedure 15 and Local Rule of Civil Procedure 15.1. It also fails to explain 12 what it hopes to add in another amended complaint and does not include the proposed text 13 of the second amended complaint as required by Local Rule 15.1. 14 Nevertheless, and in accordance with the well-settled law in this Circuit, because “it 15 is not ‘absolutely clear’ that [ThermoLife] could not cure [the amended complaint’s] 16 deficiencies by amendment,” the Court will give it an opportunity to do so. See Jackson v. 17 Barnes, 749 F.3d 755, 767 (9th Cir. 2014) (citations omitted); Fed. R. Civ. P. 15(a)(2) 18 (“leave to amend should be “freely” given “when justice so requires[]”). ThermoLife’s 19 amended complaint must address the deficiencies identified above and follow the form 20 detailed in Local Rule 7.1. 21 Within thirty (30) days from the date of entry of this Order, ThermoLife may submit 22 an amended complaint, which must be clearly designated that it is the “Second Amended 23 Complaint.” If ThermoLife decides to file an amended complaint, it is reminded that an 24 amended complaint supersedes the original complaint, see Lacey v. Maricopa Cty., 693 25 F.3d 896 (9th Cir. 2012), and it must be complete in itself and “not incorporate by reference

26 4 For instance, a section 292 plaintiff must also allege (1) the existence of an unpatented article claiming to be patented and (2) a purpose to deceive the public. See Juniper 27 Networks, Inc. v. Shipley, 643 F.3d 1346, 1350 (Fed. Cir. 2011). 5 False marking claims must also satisfy Rule 9(b)’s heightened pleading standard. See In 28 re BP Lubricants USA Inc., 637 F.3d 1307, 1309 (Fed. Cir. 2011) (“This court holds that Rule 9(b)’s particularity requirement applies to false marking claims[.]”). || any part of the preceding pleading, including exhibits,” LRCiv 15.1. 2 V. CONCLUSION 3 The Court dismisses ThermoLife’s amended complaint in its entirety under Rule 4|| 12(b)(6) for the numerous shortcomings explained above. ThermoLife has thirty (30) days || to amend its complaint or this case will be terminated with prejudice. 6 Accordingly, 7 IT IS ORDERED GRANTING MusclePharm Corporation’s Motion to Dismiss 8] Plaintiff's Amended Complaint and Memorandum of Points and Authorities in Support of Motion, (Doc. 23). 10 IT IS FURTHER ORDERED that ThermoLife may file a Second Amended 11 || Complaint within 30 days of the date of this Order. If a Second Amended Complaint is not filed within 30 days of the date of this Order, the Clerk of Court shall enter a judgment of 13 || dismissal with prejudice for the reasons stated herein. 14 Dated this 16th day of July, 2020. 15 16 Le = “ > oO fonorable Susan M. Brnovich = 18 United States District Judge 19 20 21 22 23 24 25 26 27 28

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