Obesity Research Inst., LLC v. Fiber Research Int'l, LLC (310 F. Supp. 3d 1089, 2018)

United States District Court for the Southern District of California 2018-02-21

Commerce and Trade Food and Drugs Public Printing and Documents

Citations

Full opinion text

(1) GRANTING IN PART AND DENYING IN PART FIBER RESEARCH INTERNATIONAL, LLC'S MOTION FOR PARTIAL SUMMARY JUDGMENT (ECF No. 339)

AND

(2) GRANTING IN PART AND DENYING IN PART OBESITY RESEARCH INSTITUTE, LLC'S CROSS MOTION FOR SUMMARY JUDGMENT (ECF No. 345)

Hon. Cynthia Bashant, United States District Judge

Presently before the Court is Defendant/Counterclaimant Fiber Research International, LLC's ("FRI") motion for partial summary judgment (ECF No. 339) and Plaintiff/Counterdefendant Obesity Research Institute, LLC's ("ORI") cross motion for summary judgment (ECF No.

345). Both parties also submit related requests for judicial notice and evidentiary objections.

The Court finds these motions suitable for determination on the papers submitted and without oral argument. See Civ. L. R. 7.1 (d)(1). For the following reasons, the Court GRANTS IN PART AND DENIES IN PART FRI's motion for partial summary judgment (ECF No. 339) and GRANTS IN PART AND DENIES IN PART ORI's motion for cross summary judgment (ECF No. 345).

I. BACKGROUND

1. Factual Background

a. Introduction

Both ORI and FRI sell, or seek to sell, glucomannan dietary supplements. According to both parties, glucomannan is a soluble-viscous fiber derived from the Konjac plant root. (JSUMF ¶ 4; FACC ¶ 24; ECF No. 345 at 2.) Glucomannan is used to manufacture fiber-based weight loss supplements. (See JSUMF ¶ 1; see also FACC ¶ 24; FAC ¶ 10.) Both parties also represent that numerous studies have shown that at least some types of glucomannan are effective for losing weight. (See JSUMF ¶¶ 5-7; see also FACC ¶ 24; FAC ¶ 10). One of the main disputes between the parties is whether different types, grades, places of origin, processing procedures, and/or characteristics, including viscosity, of the specific glucomannan products alter its effectiveness on weight loss. (ECF No. 339 at 7-11, 13-15; ECF No. 345 at 3-5, 6-9.)

b. ORI and Lipozene

"In 2002, Fiber Thin, LLC entered into an agreement with its contract manufacturer, Natural Alternatives, Inc. ('NAI'), to manufacture a fiber-based weight loss supplement also called FiberThin." (FACC ¶ 1.) "At the time of the 2002 agreement between Fiber Thin, LLC and NAI, NAI had an agreement to source all glucomannan from Shimizu [Chemical Corporation ('Shimizu') ]." (Id. ¶ 2.) According to ORI, in 2003, Fiber Thin, LLC's contractual rights to sell glucomannan were assigned to ORI, who eventually sold glucomannan as a supplement under the product names of "Propolene" and "Lipozene." (ECF No. 345 at 4 (citing to Ex. 22 ); JSUMF ¶ 1.) For the Fiber Thin and Propolene products, ORI contracted with NAI to manufacture these products, and NAI sourced its glucomannan from Shimizu. (JSUMF ¶ 8.)

In sum, ORI's former glucomannan products were branded as Fiber Thin and Propolene, sourcing glucomannan from Shimizu through NAI. Currently, ORI sells its glucomannan supplements branded as Lipozene, which is not manufactured with Shimizu's glucomannan.

c. Relevant Clinical Testing

"In 2003, ORI and NAI agreed to jointly fund a clinical study [ (the "Kaats Study") ] and NAI hired Dr. Gilbert Kaats and his clinical research organization, Health & Medical Research Foundation." (JSUMF ¶ 5.) "When comparing those in the placebo group to those in the treatment group Dr. Kaats found 'a highly significant reduction in scale weight ... % body fat ... and fat mass ... without a loss of fat-free mass or bone density.' " (Id. ¶ 6.) "The difference in mean weight lost was 4.93 pounds, and in fat lost was 3.86 pounds; thus, Dr. Kaats found that 78% of weight lost was attributable to fat." (Id. ¶ 7.) ORI's references in its Lipozene advertising to clinical findings of "78% fat loss" and its "holiday study" relate to the Kaats Study. (Id. ¶¶ 15-16.) "The Kaats Study was neither developed nor paid for by either Shimizu or FRI." (Id. ¶ 25.) An additional glucomannan study referenced by the parties is a 1984 study completed by Dr. David Walsh (the "Walsh Study"). (Ex. 118.) Yoshi Shimizu, the Chief Executive Officer of Shimizu, represents that Shimizu supplied the glucomannan studied in the Kaats Study (Propol KW) and Walsh Study (Propol A). (ECF No. 360-15 ("Shimizu Opp. Decl.") ¶¶ 4-9.)

When advertising Lipozene, ORI makes several claims about its effectiveness and composition, and uses the Kaats Study to support some of these claims. (JSUMF ¶¶ 10-15.) For example, Lipozene's packaging advertises that it "Helps Reduce Body Fat." (Id. ¶ 10.) More specifically, Lipozene's advertising references the Kaats Study as showing that seventy-eight percent of the weight lost while taking Lipozene was fat. (Id. ¶ 15; see also Exs. 2-4, 99 (showing the difference in the mean weight lost was 4.93 of which 3.86 pounds were fat).) Lipozene also states in its commercials that the study's participants "were asked not to change their diet or exercise." Lipozene also characterizes the study as "major university double blind study." (JSUMF ¶ 11.) Additionally, Lipozene's packaging stated that there are "[n]o known allergens in this product." (Id. ¶ 13.)

d. FRI and Shimizu

FRI is a Nevada limited liability corporation that was formed on December 22, 2014. (JSUMF ¶ 20.) Shimizu and FRI entered into a Distribution and Claims Assignment Agreement on February 21, 2015 ("February 2015 Agreement"). (Ex. 94.) Under Section I, titled "Assignment of Legal Claims," the agreement states "Shimizu hereby assigns to Fiber Research all rights title and interest it has to any legal claim related to the false advertising claims relying on Shimizu's studies for the products with improper Glucomannan ingredients against Obesity Research Group (Lipozene)." (Id. § I(a).) The assignment section also states that "[t]his assignment of legal claims, which is incidental to the distribution rights under Section II [Assignment of Distribution Rights in the United States], shall have a term of Three (3) years." (Id. § I(d).) Section II, titled "Assignment of Distribution Rights in the United States," states "Shimizu hereby grants to Fiber Research the right to distribute its propriety Glucomannan product in the United States in retail, on the internet and to end users." (Id. § II(a).) Further, the agreement states "[a]s to this Section II only, this assignment of distribution rights in the United States shall have a terms of Three (3) years." (Id. § II(c).) This section also includes an exclusivity provision that states "Fiber Research agrees only to sell, handle or use only Shimizu provided Glucomannan powder, Konjac powder, Yam flour or any other Glucomannan product." (Id. § II(d).)

Shimizu and FRI subsequently amended the February 2015 Agreement, making changes to the scope and duration of the legal claims assignment provision. On August 18, 2017, Shimizu and FRI amended Section I(a) to state "Shimizu hereby assigns to Fiber Research all rights title and interest it has to any legal claim related to violation of the Lahnam [sic] Act or similar law claim, false advertising, fraud, trademark, copyright, intentional interference, or any other similar claim, including, without limitation, relying on Shimizu's studies and any trademark claim, against Obesity Research Group (Lipozene)." (Ex. 93 at 1.) To be effective February 1, 2017, the parties replaced Section I(d) with the following: "Permanent Assignment of Legal Claims. The assignment of Legal Claims in Section I a. of the [February 2015] Agreement, as amended, shall be permanent and without limitation, unless agreed by the Parties in writing." (Ex. 95 at 1.)

On March 10, 2015, FRI sent a letter to ORI's general counsel regarding Lipozene and its advertising. (Ex. 107.) The letter stated, among other things, that ORI's Lipozene contains "adulterations," "is not an equivalent glucomannan product," and "has less viscosity [than Shimizu's products]." (Id. ) In the letter, FRI also accused ORI of "falsely and fraudulently market[ing] and promot[ing] Lipozene® using three clinical studies on pure, unadulterated glucomannan," taking the position that ORI's reliance on "the glucomannan studies is not scientifically valid." (Id. ) The letter also contains accusations that ORI caused "significant damages" to FRI and that ORI "[stole] ... research on the more expensive, pure product." (Id. ) And finally, FRI concluded its letter by stating that this "commercial injury gives rise to a suit for a claim under the Lanham Act." (Id. )

2. Procedural Background

On March 16, 2015, ORI filed a Complaint for Declaratory Judgment against FRI asking the Court to declare that ORI has no liability under either the Lanham Act, 15 U.S.C. §§ 1125 et seq. , or the Federal Food, Drug, and Cosmetic Act ("FFDCA"), 21 U.S.C. §§ 301 et seq. (ECF No. 1.) On April 13, 2015, FRI filed an Answer, in which it asserts the affirmative defense of unclean hands, and related counterclaims. (ECF No. 16.) FRI amended its counterclaims, and filed the FACC on May 28, 2015. (ECF No. 41.) The FACC alleges a violation of the Lanham Act (false advertising, unfair competition, and false designation in violation of section 1125(a)(1) ), a violation of California's unfair competition law ("UCL"), Cal. Bus. & Prof. Code §§ 17200 et seq. , and a violation of California's false advertising law ("FAL"), Cal. Bus. & Prof. Code §§ 17500 et seq. (Id. ) ORI filed a Motion to Dismiss (ECF No. 43), and the Court denied in part and granted in part the motion. (ECF No. 120.)

Following the Court's Order on the Motion to Dismiss, ORI amended its Complaint to add Shimizu as a defendant. (ECF No. 139.) Shimizu moved to dismiss for lack of subject matter jurisdiction (ECF No. 207), and the Court granted Shimizu's motion. (ECF No. 335.) The parties now bring the present motion for partial summary judgment (ECF No. 339) and cross motion for summary judgment (ECF No. 345).

II. STANDARD

1. Motion for Summary Judgment

Summary judgment is appropriate under Rule 56(c) where the moving party demonstrates the absence of a genuine issue of material fact and entitlement to judgment as a matter of law. See Fed. R. Civ. P. 56(c) ; Celotex Corp. v. Catrett , 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A fact is material when, under the governing substantive law, it could affect the outcome of the case. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A dispute about a material fact is genuine if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id.

A party seeking summary judgment always bears the initial burden of establishing the absence of a genuine issue of material fact. Celotex , 477 U.S. at 323, 106 S.Ct. 2548. The moving party can satisfy this burden in two ways: (1) by presenting evidence that negates an essential element of the nonmoving party's case; or (2) by demonstrating that the nonmoving party failed to make a showing sufficient to establish an element essential to that party's case on which that party will bear the burden of proof at trial. Id. at 322-23, 106 S.Ct. 2548. "Disputes over irrelevant or unnecessary facts will not preclude a grant of summary judgment." T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n , 809 F.2d 626, 630 (9th Cir. 1987). "The purpose of partial summary judgment 'is to isolate and dispose of factually unsupported claims or defenses.' " Regents of Univ. of Cal. v. Micro Therapeutics, Inc. , 507 F.Supp.2d 1074, 1077 (N.D. Cal. 2007) (quoting Celotex , 477 U.S. at 323-24, 106 S.Ct. 2548 ).

If the moving party fails to discharge this initial burden, summary judgment must be denied, and the court need not consider the nonmoving party's evidence. Adickes v. S.H. Kress & Co. , 398 U.S. 144, 159-60, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). If the moving party meets this initial burden, however, the nonmoving party cannot defeat summary judgment merely by demonstrating "that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) ; Triton Energy Corp. v. Square D Co. , 68 F.3d 1216, 1221 (9th Cir. 1995) ("The mere existence of a scintilla of evidence in support of the non-moving party's position is not sufficient." (citing Anderson , 477 U.S. at 242, 252, 106 S.Ct. 2505 ) ). Rather, the nonmoving party must "go beyond the pleadings" and by "the depositions, answers to interrogatories, and admissions on file," designate "specific facts showing that there is a genuine issue for trial." Celotex , 477 U.S. at 324, 106 S.Ct. 2548 (quoting Fed. R. Civ. P. 56(e) ). Such admissions may be presented in testimony of a party's own witnesses through declarations. See Fed. R. Civ. Pro. 56(c)(4) ("An affidavit or declaration used to support or oppose a motion must be made on personal knowledge, set out facts that would be admissible in evidence, and show that the affiant or declarant is competent to testify on the matters stated."); see also Clark v. County of Tulare , 755 F.Supp.2d 1075, 1082-83 (E.D. Cal 2010). Additionally, declarations that contain only conclusory statements, instead of specific facts, are insufficient unless accompanied by other evidence to corroborate the statements. See Hansen v. U.S. , 7 F.3d 137, 138 (9th Cir. 1993) (finding no genuine issue of whether an IRS form was sent when the supporting declaration only contained a conclusory statement that the form was never received).

When making this determination, the court must view all inferences drawn from the underlying facts in the light most favorable to the nonmoving party. See Matsushita , 475 U.S. at 587, 106 S.Ct. 1348. "Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge, [when] he [or she] is ruling on a motion for summary judgment." Anderson , 477 U.S. at 255, 106 S.Ct. 2505.

"[T]he district court may limit its review to the documents submitted for the purposes of summary judgment and those parts of the record specifically referenced therein." Carmen v. S.F. Unified Sch. Dist. , 237 F.3d 1026, 1030 (9th Cir. 2001). The court is not obligated "to scour the record in search of a genuine issue of triable fact." Keenan v. Allan , 91 F.3d 1275, 1279 (9th Cir. 1996) (citing Richards v. Combined Ins. Co. of Am. , 55 F.3d 247, 251 (7th Cir. 1995) ).

2. Article III Standing

"A federal court is presumed to lack jurisdiction in a particular case unless the contrary affirmatively appears." Stock West, Inc. v. Confederated Tribes , 873 F.2d 1221, 1225 (9th Cir. 1989) (citation omitted). "Article III of the Constitution confines the federal courts to adjudication of actual 'Cases' and 'Controversies.' " Lujan v. Defenders of Wildlife , 504 U.S. 555, 590, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). "[T]he core component of standing is an essential and unchanging part of the case-or-controversy requirement of Article III." Id. at 560, 112 S.Ct. 2130 (citation omitted). The "irreducible constitutional minimum" of Article III standing is comprised of three elements: (1) "the plaintiff must have suffered an 'injury in fact' ... which is (a) concrete and particularized; and (b) 'actual or imminent,' not 'conjectural' or 'hypothetical' "; (2) "there must be a causal connection between the injury and the conduct complained of" such that the injury is "fairly ... trace[able] to the challenged action of the defendant, and not ... th[e] result [of] the independent action of some third party not before the court"; and (3) "it must be 'likely,' as opposed to merely 'speculative,' that the injury will be 'redressed by a favorable decision.' " Lujan , 504 U.S. at 560-61, 112 S.Ct. 2130 (citations omitted). "The party invoking federal jurisdiction bears the burden of establishing these elements." Id. at 561, 112 S.Ct. 2130.

Consequently, a case that lacks Article III standing must be dismissed for lack of subject matter jurisdiction. See Maya v. Centex Corp. , 658 F.3d 1060, 1067 (9th Cir. 2011).

3. Standing under the Lanham Act

The Lanham Act "authorizes suit by 'any person who believes that he or she is likely to be damaged' by a defendant's false advertising." Lexmark Int'l, Inc. v. Static Control Components, Inc. , 572 U.S. 118, 134 S.Ct. 1377, 1388, 188 L.Ed.2d 392 (2014) (quoting 15 U.S.C. § 1125(a)(1) ). The Supreme Court has determined that a statutory cause of action under the Act extends only to plaintiffs "whose interests 'fall within the zone of interests protected by the law invoked,' " id. (quoting Allen v. Wright , 468 U.S. 737, 751, 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984) ), and "whose injuries are proximately caused by violations of the statute," id. at 1390. Therefore, to allege statutory standing under the Lanham Act, a party must first meet the "zone of interest" test. Id. Second, a party must sufficiently allege that the injuries were proximately caused by a violation of the statute. Id.

The "zone of interest" test is not a particularly demanding one, and the benefit of the doubt goes to the one alleging the cause of action. Lexmark , 134 S.Ct. at 1389 (citing Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians v. Patchak , 567 U.S. 209, 225, 132 S.Ct. 2199, 183 L.Ed.2d 211 (2012) ("[W]e have always conspicuously included the word 'arguably'

in the test to indicate that the benefit of any doubt goes to the plaintiff.") ). "[T]he test forecloses suit only when a plaintiff's interests are so marginally related to or inconsistent with the purposes implicit in the statute that it cannot reasonably be assumed that Congress authorized the plaintiff to sue." Id. (citation and quotations omitted). In the false advertising context, Congress' goal was to protect persons engaged in commerce against unfair competition. Id. Thus, "to come within the zone of interests in a suit for false advertising under § 1125(a)," a plaintiff must show an injury to a commercial interest in reputation or sales. See id. at 1390.

To establish proximate cause under section 1125(a), a plaintiff "ordinarily must show economic or reputational injury flowing directly from the deception wrought by the defendant's advertising; and that that occurs when deception of consumers causes them to withhold trade from the plaintiff." Lexmark , 134 S.Ct. at 1391. "That showing is generally not made when the deception produces injuries to a fellow commercial actor that in turn affect the plaintiff." Id. Although it may be more difficult to establish proximate causation when the parties do not directly compete, there need not be an allegation that the parties are in direct competition with each other. Id. at 1392 ; see also Luxul Tech. Inc. v. Nectarlux, LLC , 78 F.Supp.3d 1156, 1170 (N.D. Cal. 2015) (finding proximate cause when defendants were marketing consultants (and not direct competitors) who misbranded the plaintiff's product); Merck Eprova AG v. Brookstone Pharm., LLC , 920 F.Supp.2d 404, 416 (S.D.N.Y. 2013) (finding standing even though parties were not direct competitors "as [plaintiff] does not produce finished consumer products, [but because the parties] both produce competing sources of folate for use in dietary supplements").

III. Evidence for Summary Judgment

The Court first addresses the parties' requests regarding the evidence supporting the motions for partial summary judgment and cross summary judgment. These requests fall into two categories: requests for judicial notice and evidentiary objections to the evidence cited by the parties.

1. Request for Judicial Notice

Federal Rule of Evidence 201 allows a court to take judicial notice of certain evidence and facts that are not subject to reasonable dispute if they are (1) "generally known within the trial court's territorial jurisdiction" or (2) "can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned." Fed. R. Evid. 201(b). For example, a court may take judicial notice of "matters of public record." Id. ; Mack v. South Bay Beer Distrib. , 798 F.2d 1279, 1282 (9th Cir. 1986). But a court may not take judicial notice of a fact that is "subject to reasonable dispute." Fed. R. Evid. 201(b). Therefore, while the court may take notice of the existence of documents in some cases, it does not necessarily take notice of the facts within those documents. See Rezentes v. Sears, Roebuck & Co. , 729 F.Supp.2d 1197, 1206 (D. Haw. 2010).

The parties each submit requests for judicial notice of various documents, including books, journal articles, regulations, and many others. The parties also opposed each other's requests for judicial notice, showing that many of these document are disputed and that their accuracy can be reasonably questioned. The Court does not need to address each request in turn, but rather declines to take judicial notice of any documents for the purposes of these summary judgment motions. Not only do many questions of material fact remain, but many of the documents are not appropriate for judicial notice. The Court will, however, take judicial notice of the Federal Drug Administration ("FDA") regulation under 21 C.F.R. § 101.100 because the Court must judicially notice federal regulations and the contents of the Federal Register. See 44 U.S.C. § 1507 ; see also Bayview Hunters Point Cmty. Advocates v. Metro. Transp. Comm'n, 366 F.3d 692, 702 n. 5 (9th Cir. 2004) ; Adams v. United States , No. 03-0049-E-BLW, 2009 WL 2590205, at *2 (D. Idaho Aug. 16, 2009).

2. Evidentiary Objections

For a motion for summary judgment, "a party does not necessarily have to produce evidence in a form that would be admissible at trial." See Block v. City of Los Angeles, 253 F.3d 410, 418-19 (9th Cir. 2001). " Rule 56 [ (c) ] requires only that evidence 'would be admissible', not that it presently be admissible." Burch v. Regents of Univ. of Cal. , 433 F.Supp.2d 1110, 1120 (E.D. Cal. 2006) ; see also Comite de Jornaleros de Redondo Beach v. City of Redondo Beach , 657 F.3d 936, 964 n.7 (9th Cir. 2011) (" Rule 56 is precisely worded to exclude evidence only if it's clear that it cannot be presented in an admissible form at trial.") Thus, "[t]he focus is on the admissibility of the evidence's contents, not its form." Estate of Hernandez-Rojas ex rel. Hernandez v. United States , 62 F.Supp.3d 1169, 1174 (S.D. Cal. 2014) (citing Fonseca v. Sysco Food Servs. of Ariz., Inc. , 374 F.3d 840, 846 (9th Cir. 2004) ). And while a court will consider a party's evidentiary objections to a motion for summary judgment, "[o]bjections such as lack of foundation, speculation, hearsay and relevance are duplicative of the summary judgment standard itself." All Star Seed v. Nationwide Agribusiness Ins. Co. , No. 12CV146 L BLM, 2014 WL 1286561, at *16-17 (S.D. Cal. Mar. 31, 2014) (citing Burch v. Regents of the Univ. of Cal. , 433 F.Supp.2d 1110, 1119-20 (E.D. Cal. 2006) ); see also Comite de Jornaleros de Redondo Beach , 657 F.3d at 964 n.7 ("[ Rule] 56(c)(2) permits a party to 'object that the material cited to support or dispute a fact cannot be presented in a form that would be admissible in evidence' " (quoting Fed. R. Civ. Pro. 56 ) ).

The number of evidentiary objections in this case are in the hundreds, which is overwhelmingly due to ORI. The Court declines to address each objection, and will rather grant or deny an objection as needed for this order. Additionally, if addressed individually, the majority of ORI's objections would be dismissed as baseless because ORI misapplies the standard for evidence at summary judgment. ORI argues that the form of the evidence at summary judgment must be admissible at trial. That is squarely wrong. Additionally, ORI's objections are largely "boilerplate recitations of evidentiary principles or blanket objections without analysis applied to specific items of evidence," which should be rejected. Stonefire Grill, Inc. v. FGF Brands, Inc. , 987 F.Supp.2d 1023, 1033 (C.D. Cal. 2013) (quoting Doe v. Starbucks, Inc. , 2009 WL 5183773, at *1 (C.D. Cal. Dec. 18, 2009) ). Though ORI submitted amended objections in an attempt to resolve this issue (ECF No. 399), the sheer volume of objections remains superfluous, repetitive, and wasteful, especially given ORI continues to use the incorrect standard for evidence at summary judgment.

Thus, the Court will address any specific objections as needed for its ruling on these summary judgment motions. Otherwise, the evidentiary objections are denied as moot.

IV. ANALYSIS

1. Standing

a. FRI's Standing to Bring Representative Claims for Shimizu

ORI moves for summary judgment arguing that FRI lacks Article III standing and statutory standing under the Lanham Act to bring representative claims for Shimizu. First, the Court will analyze whether Shimizu's assignment of its legal claims is enforceable under Nevada law. Second, the Court will address whether Shimizu has a "case or controversy" and will discuss its previous order, which ORI argues determined that Shimizu lacked Article III standing. Lastly, the Court will address whether FRI lacks statutory standing under the Lanham Act to bring Shimizu's claims.

i. Assignment of Shimizu's Claims

ORI challenges whether Shimizu's assignment of its legal claims to FRI was valid. ORI argues that Nevada law prohibits the assignment of tort and fraud legal claims. Additionally, ORI argues that, if legal claims were assigned, Shimizu assigned "bare" claims to FRI because the assignment was unaccompanied by an interest in Shimizu's underlying intellectual property. ORI further contends that if FRI did receive an interest, FRI received no more than a non-exclusive license. FRI objects to these characterizations of its agreement with Shimizu, and instead contends FRI was validly assigned Shimizu's legal claims along with an exclusive interest to sell Shimizu's products.

For the foregoing reasons, the Court finds that, through the February 2015 Agreement, Shimizu assigned FRI the legal claims asserted in this case. To the extent it is relevant, Shimizu also assigned FRI a non-exclusive license to distribute Shimizu's products in the United States.

A. Distribution and Assignment Agreement

As an initial matter, for standing purposes, a court must evaluate the positions of the parties at the time the pending lawsuit is filed and throughout the proceedings. See Davis v. Fed. Election Comm'n , 554 U.S. 724, 734, 128 S.Ct. 2759, 171 L.Ed.2d 737 (2008) ("[T]he standing inquiry remains focused on whether the party invoking jurisdiction had the requisite stake in the outcome when the suit was filed."). Shimizu and FRI entered into a "Distribution and Claims Assignment Agreement" on February 21, 2015 (Ex. 94 (mistakenly dated as "February 21, 2014") ), then subsequently amended the agreement on August 18, 2015 (Ex. 93 (amending the "Assignment of Legal Claims" section) ) and February 1, 2017 (Ex. 95 (creating a "Permanent Assignment of Legal Claims") ). (See ECF No. 339 at 23 ("On February 21, 2015, Shimizu and Fiber Research entered into a Distribution and Claim Assignment Agreement, amended August 18, 2015, and again as of February 1, 2017 to make the assignment permanent and unlimited....").) ORI initially filed its Complaint on March 16, 2015 (ECF No. 1), and FRI subsequently filed its counterclaims on behalf of itself and Shimizu on April 13, 2015 (ECF No. 16), which it amended on May 28, 2015 (ECF No. 41). Therefore, the Court will evaluate the unamended February 2015 Agreement for standing purposes because FRI must establish it had standing when it filed its counterclaim, and both amendments occurred after that date.

B. Validity of Assignment

Turning to the legal claims at issue, FRI only asserts claims under the Lanham Act on behalf of Shimizu. The Court must determine whether the February 2015 Agreement encompassed the Lanham Act claim and whether the assignment of those claims were valid under Nevada law.

First, the parties do not dispute that the Lanham Act false advertising claims would fall under the language of the assignment. The Court agrees. Turning to the language of the February 2015 Agreement, the assignment provision states "Shimizu hereby assigns to Fiber Research all rights title and interest it has to any legal claim related to the false advertising claims relying on Shimizu's studies for the products with improper Glucomannan ingredients against Obesity Research Group (Lipozene)." (Ex. 94 § I(a).) This provision is clear and unambiguous, and, though it is limited in scope, the Court finds that it encompasses the Lanham Act false advertising claim. Am. First Fed. Credit Union v. Soro , 359 P.3d 105, 106 (Nev. 2015) ("[The] court initially determines whether the 'language of the contract is clear and unambiguous; if it is, the contract will be enforced as written.' ") (quoting Davis v. Beling , 128 Nev. 301, 278 P.3d 501, 515 (2012) ). Here, the Lanham Act claim asserted by FRI on behalf of Shimizu is (1) against ORI, (2) is a legal claim, and (3) is based on ORI's allegedly false advertising statement for its glucomannan product that uses the Kaats Study, which studied Shimizu's Propol-branded glucomannan.

Second, the Court finds that Shimizu and FRI's assignment agreement is valid under Nevada law. Though ORI contends that Nevada law prohibits the assignment of tort claims, Nevada law only prohibits the assignment of personal injury tort claims. See, e.g., Edward J. Achrem v. Expressway Plaza Ltd. P'ship , 112 Nev. 737, 740, 917 P.2d 447 (1996) (prohibiting assignment of personal injury claim); Platinum Unit-Owners' Ass'n v. Residential Constructors, LLC , No. 2:14-CV-01076-GMN-GW, 2015 WL 1186530, at *5 (D. Nev. Mar. 16, 2015) ("Though the Nevada Supreme has never expressly held that property damage claims may be assigned, the policy reasons for prohibiting the assignment of personal injury claims are premised upon the personal nature of the claims themselves and a desire to limit unscrupulous people trafficking in pain and suffering." (internal citations and quotations omitted) ). This prohibition of assigning personal tort claims makes sense given the personalization of the injuries and damages that creates a need for the actually injured party to be a part of the case. See id. ; Waterton Global Mining Co. LLC v. Cummins Rocky Mountain , No. 14-cv-0405-RCJ-VPCLLC, 2015 WL 714485, at *4 (D. Nev. February 18, 2015) ("It appears that a significant policy reason for precluding the assignment of the tort action in these cases is premised on the personal nature of the claim itself."). These policy concerns against assignment are absent when the injury is not personal in nature. See id.

Similarly, Nevada law prevents the assignment of fraud claims when a party is personally defrauded (ECF No. 345 at 16 (citing to Prosky v. Clark , 32 Nev. 441, 109 P. 793 (1910), which finds a personal fraud claim unassignable because such claims "are personal to the one defrauded") ), but this assignment is not at issue here. Unlike the UCL or FAL claims that require a plaintiff to be defrauded, the Lanham Act has no such requirement. See 15 U.S.C. § 1125(a) (including no requirement of scienter); Island Insteel Sys., Inc. v. Waters , 296 F.3d 200, 213 (3d Cir. 2002) ("[T]he scienter requirement for common law fraud is absent from § 43(a)."); Johnson & Johnson v. Carter-Wallace, Inc. , 631 F.2d 186, 189 (2d Cir. 1980) ("[Section 43(a) ] does not require proof of intent to deceive."); SKEDKO, Inc. v. ARC Prod., LLC , No. 3:13-CV-00696-HA, 2014 WL 585379, at *2 (D. Or. Feb. 13, 2014) ("[P]laintiff proceeds under Section 43 of the Lanham Act, which does not require plaintiff to prove fraud as an element."); see also Waterton , 2015 WL 714485, at *4 (declining to extend prohibition on assignments where the underlying policy is not served in the current case). Further, the Court is not convinced that Nevada state law prevents the assignment of federal false advertising claims like Lanham Act claims. C.f. Silvers v. Sony Pictures Entm't, Inc. , 402 F.3d 881, 906 (9th Cir. 2005) ("[C]ourts have upheld restrictions on assignment of certain federal claims where assignment of such claims would result in nuisance suit.") Though ORI states "[t]here is no authority to support the contention that federal false advertising claims are assignable under Nevada contract law," it does not cite to any law to the contrary. (ECF No. 347 at 17.)

Thus, though Nevada's law and public policy prevents the assignment of personal injury tort claims and fraud claims where a party is personally defrauded, neither of those claims are at issue here. The Court finds that the assignment is valid.

C. Commercial Interest Conveyed

For the purposes of this motion, the Court finds FRI held a non-exclusive license to distribute Shimizu in the United States when it filed its counterclaims. First, FRI and Shimizu's agreement is, by definition, not exclusive. See Black's Law Dictionary (10th ed. 2014) (defining an "exclusive right to sell" as a "right to sell a principal's products ... to the exclusion of all others, including the owner."). Mr. Shimizu's declaration states "Shimizu negotiated an exclusive distribution agreement with FRI, in which we transferred distribution rights with the United States to Propol® ... (with the exception of a few existing customers )." (Shimizu Opp. Decl. ¶ 22 (emphasis added).) Despite FRI characterizing the agreement as "exclusive," it is not. Though it may be true that FRI has the majority of the rights to distribute Shimizu's products in the United States, FRI is not the only customer permitted to do so. The only "exclusive" interest granted by the February 2015 Agreement belongs to Shimizu. (Ex. 94 § II(c) (binding only FRI to distribute Shimizu's products exclusively and is silent as to Shimizu's obligations).) Second, the agreement amounts to a license because FRI received a shared right to use and sell Shimizu's product. Black's Law Dictionary (10th ed. 2014) (defining a "nonexclusive license" as a "license of intellectual-property rights that gives the licensee a right to use, make, or sell the licensed item on a shared basis with the licensor and possibly other licensees").

ii. Shimizu's Article III Standing

The "irreducible constitutional minimum" of Article III standing is comprised of three elements: (1) "the plaintiff must have suffered an 'injury in fact' ... which is (a) concrete and particularized; and (b) 'actual or imminent,' not 'conjectural' or 'hypothetical' "; (2) "there must be a causal connection between the injury and the conduct complained of" such that the injury is "fairly ... trace[able] to the challenged action of the defendant, and not ... th[e] result [of] the independent action of some third party not before the court"; and (3) "it must be 'likely,' as opposed to merely 'speculative,' that the injury will be 'redressed by a favorable decision.' " Lujan , 504 U.S. at 560-61, 112 S.Ct. 2130 (citations omitted). In order to award declaratory relief, the Court must first determine whether there is "a case of actual controversy." 28 U.S.C. § 2201(a) ; see also Wickland Oil Terminals v. Asarco, Inc. , 792 F.2d 887, 893 (9th Cir. 1986). This requirement is "identical to the Article III's constitutional case or controversy requirement." Am. States Ins. Co. v. Kearns , 15 F.3d 142, 143 (9th Cir. 1994) (citing Societe de Conditionnement en Aluminium v. Hunter Eng'g Co. , 655 F.2d 938, 942 (9th Cir. 1981) ).

Solely relying on the Court's previous Order (ECF No. 335)-which addressed ORI's argument that Shimizu had Article III standing-ORI concludes that FRI lacks Article III standing to bring Shimizu's claims. ORI argues that the Court made this determination in its Order. ORI skips several analytical steps. In its previous Order, the Court determined that "ORI failed to carry its burden of demonstrating that it has standing to pursue a declaratory-judgment claim against Shimizu." (ECF No. 335 at 10.) Specifically, ORI "fail[ed] to present facts, either alleged in the FAC or provided in evidence, that there is a 'substantial controversy' between itself and Shimizu 'of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.' " (Id. ) This decision was based largely on the lack of evidence and allegations presented by ORI that Shimizu's claim was " 'actual' or 'imminent.' " (Id. at 8 ("In fact, ORI wholly neglects an essential component of demonstrating standing in its opposition-immediacy.").) Shimizu previously stated that it had no intention of bringing any legal claims against ORI on behalf of itself because Shimizu believed it had assigned its relevant legal rights to FRI. (Id. at 6-7.) ORI had failed to provide evidence or allegations that stated otherwise. (Id. at 8.)

Contrary to what ORI infers, this Court's Order included no determination regarding the "claim" Shimizu may have against ORI or the validity of the assignment agreement between Shimizu and FRI. (See ECF No. 345 at 11 (arguing that "the Court has already determined that, even if Shimizu never assigned anything to FRI and instead maintained all claims, no case or controversy exists to adjudicate ORI's alleged false advertising.") (emphasis in original).) ORI misinterprets the Court's previous reasoning. (ECF No. 335 at 7 ("Even if the Court assumes, for the sake of argument, all of ORI's points as true, ORI ultimately fails to carry its burden of demonstrating that it has standing to pursue a declaratory-judgment action against Shimizu.").) To be clear, the Court granted Shimizu's Motion to Dismiss in part because ORI failed to carry its burden of showing Article III standing existed. The Court rejects ORI's attempt to use the result of its earlier "neglect" to now dismiss claims against it.

Instead, for the first time, the Court analyzes whether FRI has Article III standing to bring Shimizu's claims, and finds that it does. The first prong of standing is satisfied because FRI provides support to show that Shimizu was injured in fact by losing opportunities to expand into the weight loss supplement market through its distributors and failing to realize gains from its research and development investments. (See Shimizu Opp. Decl. ¶¶ 16-17, 22-23); see also Lujan , 504 U.S. at 560-61, 112 S.Ct. 2130. Even though ORI did not directly injure FRI for these claims, Shimizu assigned its injuries and related legal claims to FRI. See Sprint Commc'ns Co., L.P. v. APCC Servs., Inc. , 554 U.S. 269, 286, 128 S.Ct. 2531, 171 L.Ed.2d 424 (2008) ("[W]ithin the past decade we have expressly held that an assignee can sue based on his assignor's injuries."). Second, FRI has met its burden to show that Shimizu's injuries were caused by ORI's actions flowing directly from the allegedly false advertisements relating to the Kaats and Walsh studies. Lastly, FRI has shown that the injury is likely redressed by a favorable decision as FRI seeks monetary and injunctive relief for Shimizu's damages.

iii. Shimizu's Standing for Claims Under the Lanham Act

ORI also argues that FRI lacks statutory standing to bring claims on behalf of Shimizu under the Lanham Act. ORI reasons that FRI-as an assignee-is not the real party in interest because FRI was not assigned the requisite interest in the underlying intellectual property. For the foregoing reasons, the Court disagrees with ORI, and finds FRI has statutory standing under the Lanham Act to bring claims on behalf of Shimizu.

In making its argument that FRI lacks statutory standing, ORI misapplies the relevant standing standard. ORI argues that, for false advertising claims under section 43(a) of the Lanham Act, "an interest in the asset allegedly harmed" is required. (ECF No. 345 at 11.) However, that standing requirement applies to Lanham Act copyright and trademark infringement claims, which are not at issue here. See Adidas Am., Inc. v. Athletic Propulsion Labs, LLC , No. 16-cv-415-HZ, 2016 WL 3896826, at *3 (D. Or. July 18, 2016) (rejecting defendant's argument who "relies on cases and principles of patent law and fails to address § 43(a) of the Lanham Act, which permits a broader class of plaintiffs standing than § 32(a)"). ORI supports its interpretation by citing cases that almost exclusively analyze the wrong Lanham Act claims. Compare Dastar Corp. v. Twentieth Century Fox Film Corp. , 539 U.S. 23, 28-29, 123 S.Ct. 2041, 156 L.Ed.2d 18 (2003) ("While much of the Lanham Act addresses the registration, use, and infringement of trademarks and related marks, § 43(a), 15 U.S.C. § 1125(a)

is one of the few provisions that goes beyond trademark protection."); Sybersound Records, Inc. v. UAV Corp. , 517 F.3d 1137, 1143 (9th Cir. 2008) (explaining that section 43(a) " 'goes beyond trademark protection' and addresses unfair competition") (quoting Dastar , 539 U.S. at 29, 123 S.Ct. 2041 ). In fact, nowhere does ORI cite to case law on point. Also within this line of faulty reasoning, ORI directly distorts the law, which is not well taken.

Different standards of standing apply under the Lanham Act, which InlandJoseph Fruit Co. addresses:

The sources of the relevant standing rules in Lanham Act actions are sections 32(1) [Trademark Infringement] and 43(a) [False Advertising] of the Act. Section 32 of the Lanham Act grants standing to assert a claim of trademark infringement to the 'registrant' of the mark.... Where a licensing agreement does not grant the licensee a property interest in the mark or otherwise assign to the licensee the registrant-licensor's ownership rights, the licensee, even if exclusive, cannot enforce the mark under § 32 ... [However, u]nlike § 32(1), which grants a right of action solely to the registrant of a trademark, § 43(a) permits 'any person who believes that he or she is likely to be damaged' by the proscribed conduct to bring a civil action. Where a plaintiff might lack standing under § 32, a plaintiff may yet have standing to bring an action under § 43(a).

361 F.Supp.2d at 1255-56 (internal citations omitted); see also Lexmark , 134 S.Ct. at 1390 ("We thus hold that to come within the zone of interests in a suit for false advertising under § 1125(a), a plaintiff must allege an injury to a commercial interest in reputation or sales."); Fed. Treasury Enter. Sojuzplodoimport v. SPI Spirits Ltd. , 726 F.3d 62, 84 (2d Cir. 2013) (similarly contrasting the standing requirements under sections 32 and 43 of the Lanham Act). In short, though the ownership of the underlying intellectual property is required for infringement claims under the Lanham Act, it is not an issue here. See Murphy , 756 F.Supp. at 86 ("[T]he question of ownership is immaterial to standing under § 43(a), since standing may lie with mere users of trademarks.").

Thus, FRI is not required to own or otherwise have an interest in the underlying intellectual property at issue to bring a claim on behalf of Shimizu. Instead, the Court analyzes FRI and Shimizu's assignment as a regular assignment of legal claims. Because a valid assignment allows for FRI to stand in the shoes of Shimizu for its claims, the Court must determine whether Shimizu had standing to bring a claim under the Lanham Act. See 6A C.J.S. Assignments § 110 ("[A]n assignee of a contract occupies the same legal position under a contract as did the original contracting party, he or she can acquire through the assignment no more and no fewer rights than the assignor had, and cannot recover under the assignment any more than the assignor could recover." (emphasis added) ).

As this Court has discussed, "[t]he 'zone of interest' test is not a particularly demanding one, and the benefit of the doubt goes to the one alleging the cause of action." Lexmark , 134 S.Ct. at 1389 ; see also TrafficSchool.com, Inc. v. Edriver Inc. , 653 F.3d 820 (9th Cir. 2011) (stating that, for standing purposes, "a false advertising plaintiff need only believe that he is likely to be injured in order to bring a Lanham Act claim" (emphasis in original) ). "To come within the zone of interest in a suit for false advertising under § 1125(a), a plaintiff must allege an injury to a commercial interest in reputation or sales." Lexmark , 134 S.Ct. at 1390.

FRI provides evidence that shows that Shimizu invested millions of dollars into developing its products and sought to expand its product distribution, including within the United States. (Shimizu Opp. Decl. ¶¶ 16-17, 22-23.) The evidence further shows that Shimizu created a relationship with FRI to serve as its newest U.S. distributor, largely because FRI was in a stronger position to "launch direct-to-consumer" products that Shimizu, given its location in Japan. (Id. ¶¶ 22-23.) Lastly, while it is not a direct competitor with Lipozene, Shimizu also distributes glucomannan, which is the main ingredient in Lipozene, and supplies glucomannan to FRI, who seeks to compete with Lipozene in the glucomannan supplement market. (Id. ¶¶ 16-17, 22-23; see also ECF No. 360-12 ("Alkire Opp. Decl.") ¶¶ 2-9, 19-21. ) The likelihood of injury is also heightened here because ORI advertises Lipozene-which no longer contains Shimizu's Propol-banded glucomannan-using a clinical study that analyzed Propol. Shimizu claims that ORI cannot make these advertising claims anymore because the study's results are unique to Shimizu's glucomannan. (Shimizu Opp. Decl. ¶¶ 3-14, 21 (stating in part that Lipozene contains a "cheap[ly]" made glucomannan that is "chemically very different" from Shimizu's product.) ) The Court finds that FRI met its burden to show that Shimizu likely suffered an injury to a commercial interest in reputation or sales.

Additionally, FRI has provided enough evidence to support its allegations that ORI proximately caused Shimizu's injuries by using a clinical study analyzing Propol to sell an allegedly inferior glucomannan product. (Shimizu Opp. Decl. ¶¶ 16-17, 22-23) (stating, among other things, that Shimizu invested millions of dollars to study and develop Propol with the intent to sell Propol to customers and that Lipozene contains a cheap "knockoff" product); see also Obesity Research Institute, LLC v. Fiber Research Int'l, LLC , 165 F.Supp.3d 937, 945-47 (S.D. Cal. 2016) ("We thus hold that a plaintiff suing under § 1125(a) ordinarily must show economic or reputational injury flowing directly from the deception wrought by the defendant's advertising; and that that occurs when deception of consumers causes them to withhold trade from the plaintiff.").

Because a valid assignment allows for an assignee to "stand in the shoes" of the assignor, the Court finds FRI has standing to proceed with Shimizu's Lanham Act claim.

b. FRI's Statutory Standing Under the Lanham Act

ORI's last standing argument is that FRI lacks statutory standing to sue on its own behalf under the Lanham Act. The Court addressed this issue at the motion to dismiss stage, and found that FRI met its burden at that time. ORI now disputes that FRI has the evidentiary support to maintain this finding. ORI states that FRI failed to provide any evidence to support its allegations in the FACC. (ECF No. 345 at 5.) ORI cites to and discusses the statements made in two declarations from FRI's Chief Executive Officer, John Alkire, and Mr. Shimizu, as well as the February 2015 Agreement. (Id. ) The Court finds that ORI has failed to meet its burden to show that FRI lacks standing to sue under the Lanham Act. Additionally, even if ORI met its burden, FRI has provided enough evidence to rebut ORI's arguments and show that it has likely suffered an economic or reputational injury proximately caused by ORI's false advertisements.

As discussed above, the standard for standing under the Lanham Act is not a difficult one. Lexmark , 134 S.Ct. at 1389. "[A] typical false-advertising case will implicate only the Act's goal of 'protect[ing] persons engaged in [commerce within the control of Congress] against unfair competition.' " Lexmark Int'l, Inc. , 134 S.Ct. at 1389 (quoting 15 U.S.C. § 1125(a)(1) ). "[T]he test forecloses suit only when a plaintiff's interests are so marginally related to or inconsistent with the purposes implicit in the statute that it cannot reasonably be assumed that Congress authorized the plaintiff to sue." Id. (citation and quotations omitted).

The Court may consider sworn affidavits for summary judgment. See Fed. R. Civ. Pro. 56(c)(4) ("An affidavit or declaration used to support or oppose a motion must be made on personal knowledge, set out facts that would be admissible in evidence, and show that the affiant or declarant is competent to testify on the matters stated."); Clark v. County of Tulare , 755 F.Supp.2d 1075, 1082-83 (E.D. Cal 2010) ("A party may present testimony of its own witnesses by declarations [at summary judgment]."). Declarations must contain more than conclusory statements, such as specific facts, unless the declarations are corroborated by other evidence. C.f. Hansen v. U.S. , 7 F.3d 137, 138 (9th Cir. 1993) (finding no genuine issue of material fact whether an IRS form was sent when the supporting declaration only contained a conclusory statement that the form was never received). The Court is also prohibited from assessing the credibility of these declarations, and rather must draw any inferences in favor of the non-moving party. See Anderson , 477 U.S. at 255, 106 S.Ct. 2505 ("Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge, [when] he [or she] is ruling on a motion for summary judgment.").

Unlike ORI contends, FRI's declarations are not conclusory, and instead lay out particular details of when and what steps FRI took to enter the market of glucomannan supplements and compete with ORI, as well as the economic or reputational injury it incurred due to ORI. (See Alkire Opp. Decl. ¶¶ 2-9, 19-21; Shimizu Opp. Decl. ¶¶ 22-23.) And, though FRI and ORI are not required to be direct competitors, FRI's declarations accuse ORI of using clinical studies using Shimizu's products (which FRI is authorized to distribute and uses exclusively) to falsely advertise Lipozene to FRI's detriment. (See Alkire Opp. Decl. ¶¶ 2-9, 19-21.) ("As a direct result of ORI's use of claims derived from the Propol® studies to sell an inferior product, FRI has been unable to make inroads into the direct to consumer glucomannan supplement marketplace."). Additionally, the February 2015 Agreement and March 10, 2015 demand letter corroborate some of the statements in FRI's declarations that FRI sought to distribute Shimizu's products and compete with ORI's Lipozene. (Exs. 94, 107); see Matsushita , 475 U.S. at 587, 106 S.Ct. 1348.

Additionally, though ORI emphasizes that FRI did not have a sale at the time FRI filed its counterclaims, having a sale is not the sole mechanism for standing under the Lanham Act. See Lexmark , 134 S.Ct. at 1389-90. The law is clear that a party does not need to show a loss of sales. See Harper House, Inc. v. Thomas Nelson, Inc. , 889 F.2d 197, 210 (9th Cir. 1989) ("Of course, because of the possibility that a competitor may suffer future injury ... a competitor need not prove [past] injury when suing to enjoin conduct that violates section 43(a)."); see also Oreck Direct v. Dyson, Inc. , 544 F.Supp.2d 502, 516 (E.D. La. 2008) ("A plaintiff need not demonstrate that it has, in fact, lost sales because of the defendant's advertisements, to establish that it has suffered injury for standing purposes, so long as a reasonable basis exists for the belief that an advertising claim will cause the plaintiff injury." (internal quotation marks and citation omitted) ). Moreover, a lack of sales is consistent with FRI's alleged economic injury that it was shut out of the glucomannan supplement market because of ORI's false advertisements. (See ECF No. 394 at 5 (describing FRI's attempts to compete with ORI, including sending ORI a demand letter to which ORI responded to with this lawsuit).) Based on the evidence presented, a reasonable juror could find that FRI sought to enter the glucomannan supplement market, but found it was blocked from doing so in part by ORI utilizing a clinical study on its exclusive source of glucomannan. See Merck Eprova AG v. Brookstone Pharm., LLC , 920 F.Supp.2d 404, 416 (S.D.N.Y. 2013) (finding standing when both parties produce competing sources of ingredients for use in dietary supplements); see also U.S. v. 1 Parcel of Real Property, Lot 4, Block 5 of Eaton Acres , 904 F.2d 487, 492, 492 n.3 (9th Cir. 1990) ("Although the evidence in Apodaca's affidavit is hardly overwhelming, we believe that a rational trier of fact could find it to be credible."). Additionally, though the Court does not consider FRI's activities since filing its counterclaims for standing purposes, these later market activities are consistent with FRI's claims. (Alkire Opp. Decl. ¶ 6 (stating that FRI, among other things, has since registered a website, launched a direct to consumer Propol, and made a sale).)

In viewing all inferences in the light most favorable to FRI, the Court finds that FRI has standing to proceed with its Lanham Act claims.

2. FRI's False Claims Under the Lanham Act

FRI requests this Court to find that, as a matter of law, ORI is liable for false advertising under the Lanham Act. FRI

bases its claim on six of ORI's allegedly false advertising statements. Along with these false statements, ORI argues that there is no genuine issue of material fact as to the elements of a Lanham Act claim. Additionally, FRI states it is entitled to injunctive relief and monetary damages in the form of ORI's profits. ORI moves for cross summary judgment.

Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), prohibits the use of false designations of origin, false descriptions, and false representations in the advertising and sale of goods and services. See Cleary v. News Corp. , 30 F.3d 1255, 1259 (9th Cir. 1994) ; 15 U.S.C. § 1125(a). To establish a false advertising claim under the Lanham Act, a plaintiff must allege:

(1) a false statement of fact by the defendant in a commercial advertisement about its own or another's product; (2) the statement actually deceived or has the tendency to deceive a substantial segment of its audience; (3) the deception is material, in that it is likely to influence the purchasing decision; (4) the defendant caused its false statement to enter interstate commerce; and (5) the plaintiff has been or is likely to be injured as a result of the false statement, either by direct diversion of sales from itself to defendant or by a lessening of the goodwill associated with its products.

Southland Sod Farms v. Stover Seed Co. , 108 F.3d 1134, 1139 (9th Cir. 1997) ; see also Newcal Indus., Inc. v. Ikon Office Solution , 513 F.3d 1038, 1052 (9th Cir. 2008). "To demonstrate falsity within the meaning of the Lanham Act, a plaintiff may show that the statement was literally false, either on its face or by necessary implication, or that the statement was literally true but likely to mislead or confuse consumers." Southland Sod Farms , 108 F.3d at 1139.

The Court will analyze each element of FRI's false advertising claims in turn.

a. Falsity

FRI argues that ORI makes six distinct false advertising statements: (1) the weight lost while taking Lipozene is "78% fat"; (2) Lipozene is "clinically studied"; (3) the clinical study results on Lipozene are from a "major university study"; (4) the test subjects in the Kaats Study were given a "no lifestyle change" instruction; (5) Lipozene is made of "pure glucomannan"; and (6) Lipozene has "no known allergens." (ECF No. 339 at 17-20.)

These false advertising statements fall into two categories. The first four statements relate to the clinical studies at issue here: the Kaats Study and the Walsh Study. These claims either depend on whether the studies actually analyzed Lipozene (the first two statements) or depend on the specifics of the Kaats Study (the third and fourth statements). The last two statements relate to Lipozene's product composition.

i. Whether the Studies Apply to Lipozene

The crux of FRI's claim is that the Kaats and Walsh Studies did not analyze Lipozene, and thus ORI cannot use these studies to support its advertisements for Lipozene. FRI claims that, instead of studying Lipozene, the Kaats and Walsh Studies evaluated Shimizu's Propol-branded glucomannan, which is a distinct, superior product. For example, FRI states that "[o]nly Shimizu Propol glucomannan has been clinically proven to effect weight loss, while the non-Shimizu glucomannan in the studies on which Obesity Research relies have shown no effect." (ECF No. 339 at 2.) ORI disagrees and states that the Kaats Study (which ORI designed and sponsored) and related Walsh Study apply to Lipozene because Lipozene is same glucomannan supplement in those studies. Specifically for the Kaats Study, ORI represents that Lipozene is simply a rebranded and updated version of Fiber Thin, which Dr. Kaats used. (ECF No. 345 at 4.) Additionally, in creating the version of the product that Lipozene is today, ORI used the specifications from the Kaats Study as a guide and "floor" for the ingredients they ultimately chose. (Id. at 3.) Thus, ORI argues that Lipozene is as effective, or more effective, than the specific earlier version of the product studied in the Kaats Study, as well as the Walsh Study. (Id. )

In addressing these arguments, both FRI and ORI cite to various studies, deposition testimony, and expert reports. (See, e.g. , Ex. 28 (Dr. Kaats deposition transcript) ("Kaats Dep. Tr."); Ex. 31 (Wolever expert report); Ex. 45 (Brian Salerno deposition transcript); Exs. 71-78 (testing regarding Lipozene's product); Ex. 67 (testing on Shimizu Propol blend); Ex. 98 (Lerner expert report); Ex. 99 (Kaats Study); Exs. 27, 101-02 (Henny den Uijl deposition transcript); Exs. 26, 103 (Jim Ayres deposition transcript); Ex. 110-11 (John Alkire deposition transcript).) Each side highlight different aspects of the glucomannan root, including its production conditions, testing methods, and viscosity results. Additionally, the parties engage in various arguments regarding why their evidence should be accepted and the other side's discredited. These arguments are best saved for a jury. See Anderson , 477 U.S. at 255, 106 S.Ct. 2505 ; see also In re Apple Computer Securities Litigation, 886 F.2d 1109, 1116 (9th Cir. 1989) (citing Bieghler v. Kleppe, 633 F.2d 531, 534 (9th Cir. 1980) ) ("As a general rule, summary judgment is inappropriate where an expert's testimony supports the nonmoving party's case."). It is clear to the Court that a genuine issue of material fact exists as to whether the Kaats Study or the Walsh Study, or both, studied Lipozene under the parties' competing theories of what that statement means.

Thus, the Court denies the parties' requests for summary judgment on the element of falsity of the "78% fat lost" claim and the "clinically studied" claim.

ii. "Major University" Study Claim

ORI claims in its advertisements that the Kaats Study is a "major university study." FRI argues that this claim is false because the Kaats Study was conducted by Dr. Kaats's then-private clinical research organization, Health and Medical Research Foundation, and is not considered a "major university" study. ORI disputes that this statement is false by arguing that the Kaats Study's design was approved by Texas Women's University and because two of the named reviewers of the Kaats Study are affiliated with two major universities-Georgetown University and the University of Texas.

The Court finds that FRI meets its initial burden of showing that there is no genuine issue of material fact that this claim is false. First, though the parties did not jointly submit to the Court that ORI is referencing the Kaats Study when it makes this claim, the parties concede this. (ECF No.