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Case 2:08-cv-02632-JAM-GGH Document 223 Filed 09/06/12 Page 1 of 29



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CYTOSPORT, INC., a California
corporation,


Plaintiff,

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v.

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VITAL PHARMACEUTICALS, INC. a
Florida corporation,


Defendant.


UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA



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Case No. 2:08-CV-02632-JAM-GGH

ORDER DENYING PLAINTIFF’S
MOTION FOR SUMMARY JUDGMENT ON
ITS CLAIMS, GRANTING
PLAINTIFF’S MOTION FOR SUMMARY
JUDGMENT ON DEFENDANT’S
COUNTER-CLAIMS, AND DENYING
DEFENDANT’S MOTION FOR
EMERGENCY STAY

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This matter is before the Court on two motions for summary

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judgment filed by Plaintiff CytoSport, Inc. (“CytoSport”) against

Defendant Vital Pharmaceuticals, Inc. (“VPX”). The first motion is

for judgment on counter-claims raised by VPX in its Amended Answer,

Affirmative Defenses, and Counterclaim (Doc. # 115-1). VPX opposes

the motion (Doc. # 199). The second motion is for judgment on

CytoSport’s fifth through eighth causes of action in its Third

Amended Complaint (“TAC”) (Doc. # 195). VPX also opposes this

motion (Doc. # 201). VPX also filed a motion seeking an emergency

stay of these proceedings pending final agency action by the Food

and Drug Administration (“FDA”) (Doc. # 203), which CytoSport




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opposes (Doc. # 207).

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I.

BACKGROUND

This case originated in 2008 when VPX released a product

called Muscle Power, a ready-to-drink protein shake. CytoSport

already marketed a competing product, Muscle Milk. Muscle Power

used the same base packaging and similar graphics including layout

and font in the label design for its product. CytoSport sued VPX

claiming that the Muscle Power product infringed on its trademark

and trade dress for Muscle Milk. CytoSport also claims that VPX

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created comparative advertisements that constitute false

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advertising.1

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Muscle Power and Muscle Milk are both marketed in octagonal

tetra-packs, one of the few available FDA approved packages

available for ready to drink protein drinks. The drinks retail

from $3-$5 in the same retail establishments, and are targeted

toward people with active lifestyles like athletes and

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bodybuilders.

During the short time that Muscle Milk and Muscle Power were

both on the market and in direct competition, VPX ran ads that are

relevant to the parties’ claims. First, Muscle Power ran an ad

that depicted a woman nursing a child with the caption, “MILK IS

FOR BABIES, MUSCLE POWER IS FOR MEN!” prominently displayed across

the ad. VPX also ran ads that claimed Muscle Power contained 600%

less sugar and 183% less fat than Muscle Milk.


1 A more comprehensive discussion of the factual background in this
case is available in the Order Granting CytoSport’s Motion for
Preliminary Injunction (Doc. # 72). To avoid duplication, the
factual summary in this order is brief.

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This case was previously assigned to Judge Damrell who issued

a preliminary injunction in CytoSport’s favor on May 6, 2009 (Doc.

# 72), finding that CytoSport was likely to prevail on the merits

of its infringement claims. VPX subsequently withdrew Muscle Power

from the market and introduced a new product that did not resemble

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Muscle Milk.

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The parties submitted expert reports and testimony to support

their respective positions. VPX submitted a survey conducted by

Robert Klein that shows, under the circumstances of his survey,

that 4.1% of consumer respondents mistake Muscle Power for Muscle

Milk or as a product produced by CytoSport. CytoSport submitted a

survey conducted by Hal Poret that shows, under the circumstances

of his survey, that 25.4% of consumer respondents conflate Muscle

Power and CytoSport products. There is also evidence in the record

consisting of CytoSport employee declarations that CytoSport

customers were confused as to the source of the Muscle Milk

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product.

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On December 7, 2009, VPX filed counter-claims against

CytoSport (Doc. 115). VPX claims that the use of the word “milk”

on Muscle Milk, a product that contains no liquid dairy milk, is

deceptive. VPX submitted a survey conducted by Gabriel Gelb that

shows a mistaken belief amongst consumers, under the conditions of

that survey, as to whether or not Muscle Milk contains milk. VPX

also relies heavily on an FDA warning letter dated June 29, 2011

wherein the FDA preliminarily determined that the mark “Muscle

Milk” as used by CytoSport is deceptive because CytoSport’s product

contains no milk. This warning letter, along with other documents,

was submitted by VPX in a Request for Judicial Notice (Doc. # 199-




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2). The theory underlying VPX’s counter-claim is also central to

its defense on CytoSport’s claims because VPX seeks to invalidate

CytoSport’s mark, thereby making it unenforceable. As of the date

of this order, the FDA has not followed up on its 2011 warning

letter with a final determination about CytoSport’s compliance with

applicable FDA regulations.

CystoSport seeks entry of judgment on five claims in its

complaint: Claim Five, Trademark Infringement, Violation of 15

U.S.C. § 1114(a); Claim Six, Trademark Infringement, Violation of

Cal. Bus. & Prof. Code § 14245; Claim Seven, False Advertising,

Violation of 15 U.S.C. § 1125(a) and Cal. Bus. & Prof. Code §§

17200, 17500; and Claim Eight, Cancellation of U.S. Trademark Reg.

Nos. 3,551,076 and 3,547,541 Pursuant to 15 U.S.C. § 1119.

CytoSport does not move for judgment on its first through fourth

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claims.

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CytoSport also seeks entry of judgment in its favor on the

five counter-claims raised by VPX in its Answer to the TAC: 1)

False Advertising, Violation of 15 U.S.C. § 1125(a); 2) False

Advertising, Violation of Cal. Bus. & Prof. Code § 17500; 3)

Unlawful Trade Practice, Violation of Cal. Bus. & Prof. Code §

17200; 4) Cancellation of Trademark Registrations Pursuant to 15

U.S.C. § 1119 for Violation of 15 U.S.C. § 1052(a); and 5)

Declaratory Judgment Pursuant to 28 U.S.C. § 2201.

A hearing on these matters was held on August 8, 2012. At

that hearing, the Court ordered additional briefing on two issues:

1) the effect of a recent Ninth Circuit decision, Pom Wonderful LLC

v. Coca-Cola Co., 679 F.3d 1170, 1176 (9th Cir. 2012), on VPX’s FDA

warning letter based counter claims, and 2) the potential impact of




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a final FDA decision determining that CytoSport’s use of the Muscle

Milk mark on a product that contains no milk is deceptive. The

Court also granted CytoSport’s motion to exclude the Gelb survey

and denied the motion to exclude the Klein survey for the reasons

discussed below in this order.

In sum, the following motions have been presented to the Court

for decision and are discussed below: 1) CytoSport’s Motion for

Summary Judgment on Claims Five, Six, Seven and Eight; 2)

CytoSport’s Motion for Summary Judgment on VPX’s Counter-Claims; 3)

CytoSport’s Motions to Exclude the Expert Testimony of Gelb and

Klein; 4) VPX’s Request for Judicial Notice; and 5) VPX’s Emergency

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Motion to Stay.

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A. Evidentiary Motions

II. OPINION

CytoSport filed two motions to exclude VPX’s expert witnesses.

The first motion is to exclude the testimony of Robert L. Klein

(Doc. # 196) who conducted a survey about customer confusion

between the Muscle Power and Muscle Milk marks. The second is to

exclude the testimony of Gabriel M. Gelb (Doc. # 194) who conducted

a survey about consumer confusion created by the use of the Muscle

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Milk mark on a product that contains no milk.

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Under Federal Rule of Evidence 702, the district court is the

“gatekeeper” in order to “ensur[e] that an expert’s testimony both

rests on a reliable foundation and is relevant to the task at

hand.” Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 597

(1993). A district court must exclude evidence that is either not

“relevant,” or not conducted according to accepted principles.




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Wendt v. Host Int'l, Inc., 125 F.3d 806, 814 (9th Cir. 1997)

(citing E. & J. Gallo Winery v. Gallo Cattle Co., 967 F.2d 1280,

1292 (9th Cir. 1992)). In the Ninth Circuit, surveys are to be

admitted in trademark cases so long as they are conducted according

to accepted principles. Gallo, 967 F.2d at 1292. “Technical

unreliability goes to the weight accorded a survey, not its

admissibility.” Prudential Ins. Co. of Am. v. Gibraltar Fin. Corp.

of Cal., 694 F.2d 1150, 1156 (9th Cir. 1982).



Under Federal Rule of Evidence 403, relevant and

otherwise admissible evidence may be excluded when the danger of

unfair prejudice substantially outweighs its probative value.

1. Gelb Survey

At the August 8, 2012 hearing, the Court granted CytoSport’s

motion to exclude evidence of a survey conducted by Gabriel Gelb

which was done to test confusion created by the Muscle Milk mark,

i.e., the use of Muscle Milk on a product that contains no milk

causes consumers to mistakenly believe that the product contains

milk. The basis for the Court’s decision is as follows.

The Gelb survey was a series of three questions where

respondents were presented three brand names without accompanying

trade dress or images of the products: Muscle Milk, ProMan-X, and

Lean Body. They were then asked if each product contained a lot,

some, or no protein, creatine, and milk. Consumers did not have an

“I don’t know” option or another means to indicate lack of

knowledge. Lean Body and Muscle Milk are protein drinks, ProMan-X

is a herbal male enhancement supplement. The respondent’s answers

indicate that a high level of guessing occurred. For instance, for

ProMan-X, 98% said it contains protein, 92% creatine, and 68% milk.




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ProMan-X does not contain any of these ingredients. For Muscle

Milk, 80% responded that it contained milk. Gelb admitted in his

deposition that respondents were guessing. Gelb Dep. 221:14-18.

CytoSport cites two cases to support its contention that the

Gelb survey was not conducted according to accepted principles.

Pharmacia Corp. v. GlaxoSmithKline Consumer Healthcare, L.P., 292

F. Supp. 2d 594, 603 (D.N.J. 2003) (discrediting a survey that does

not control for respondents’ preexisting beliefs); Procter & Gamble

Co. v. Ultreo, Inc., 574 F. Supp. 2d 339, 351 (S.D.N.Y. 2008)

(same). VPX responds with general arguments about the adequacy of

the survey, but cites no authority that shows that the methods used

by Gelb are generally acceptable. VPX bears the burden of showing

the admissibility of its survey, Keith v. Volpe, 858 F.2d 467, 480

(9th Cir. 1988), and it has not met its burden. Accordingly, the

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Gelb survey is excluded.

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2. Klein Survey

CytoSport’s motion to exclude a survey conducted by VPX’s

expert, Robert Klein was denied by the Court at the August 8, 2012

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hearing for the following reasons.

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The Klein survey was conducted under the guidelines

established by Union Carbide Corp. v. Ever-Ready Inc., 531 F.2d 366

(7th Cir. 1976) (superseded on other grounds). Klein asked

respondents to examine a container of Muscle Power and determine

who made the product. 4.1% of respondents, a number that tends not

to show consumer confusion, indicated that CytoSport or Muscle Milk

made the product. CytoSport argues that Klein’s survey failed to

replicate market conditions, failed to determine whether or not

respondents were aware of CytoSport or Muscle Milk before asking




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them questions, and failed to distinguish respondents who believed

that the Muscle Power product was actually Muscle Milk.

All of CytoSport’s arguments go to the technical reliability

of Klein’s survey. CytoSport does cite case law that finds that

Ever-Ready surveys are to be accorded diminished weight under

similar circumstances, but that is not an issue related to the

initial admissibility of the survey. Further, the Court is bound

by the Gallo decision, and CytoSport only cites district court

cases from other circuits to support excluding the survey.

CytoSport does not dispute that the Ever-Ready format is a proper

format under some circumstances, and the survey should be admitted

because it is relevant to the task at hand and was conducted

according to accepted principles. Gallo, 967 F.2d at 1292.

CytoSport’s technical reliability arguments are meritorious, but

they go to the issue of weight rather than admissibility.

CytoSport’s argument under Rule 403 also fails because the

danger of unfair prejudice does not substantially outweigh the

probative value of the survey. While CytoSport’s arguments about

the technical reliability of the survey are persuasive, there is

little danger of unfair prejudice because CytoSport can attack the

survey at trial and convince the jury that the survey is to be

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accorded little weight.

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3. VPX’s Request for Judicial Notice

The Court also considered and granted, in part, VPX’s Request

for Judicial Notice at the August 8, 2012 hearing. The documents

consist of preliminary findings of governmental entities, previous

filings of the parties, and a document from the National

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Advertising Division.




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Generally, the Court may not consider material beyond the

pleadings in ruling on a motion to dismiss for failure to state a

claim. The exceptions are material attached to, or relied on by,

the complaint so long as authenticity is not disputed, or matters

of public record, provided that they are not subject to reasonable

dispute. E.g., Sherman v. Stryker Corp., 2009 WL 2241664 at *2

(C.D. Cal. Mar. 30, 2009) (citing Lee v. City of Los Angeles, 250

F.3d 668, 688 (9th Cir. 2001) and Fed. R. Evid. 201).

The documents submitted from governmental entities are subject

to judicial notice for the fact that they exist. No party disputes

that the governmental entities issued the documents, nor could

they. The legal conclusions and other findings in the documents,

however, are subject to dispute and the Court does not take

judicial notice of the contents of the materials. The same goes

for the other documents submitted. The Court may take notice that

the documents exist, but not attribute any weight to their contents

so long as they are disputed by either party. VPX’s motion is

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therefore granted in part and denied in part.

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B. Legal Standard for Summary Judgment

Summary judgment is proper “if the pleadings, depositions,

answers to interrogatories, and admissions on file, together with

affidavits, if any, show that there is no genuine issue of material

fact and that the moving party is entitled to judgment as a matter

of law.” Fed. R. Civ. P. 56(c). The purpose of summary judgment

“is to isolate and dispose of factually unsupported claims or

defenses.” Celotex v. Catrett, 477 U.S. 317, 323-324 (1986).

The moving party bears the initial burden of demonstrating the

absence of a genuine issue of material fact for trial. Anderson v.




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Liberty Lobby, Inc., 477 U.S. 242, 248-49 (1986). If the moving

party meets its burden, the burden of production then shifts so

that “the non-moving party must set forth, by affidavit or as

otherwise provided in Rule 56, ‘specific facts showing that there

is a genuine issue for trial.’” T.W. Electrical Services, Inc. v.

Pacific Electric Contractors Ass’n, 809 F.2d 626, 630 (9th Cir.

1987) (quoting Fed. R. Civ. P. 56(e)). The Court must view the

facts and draw inferences in the manner most favorable to the non-

moving party. United States v. Diebold, Inc., 369 U.S. 654, 655

(1962). “[M]ere disagreement or bald assertion that a genuine

issue of material fact exists will not preclude the grant of

summary judgment”. Harper v. Wallingford, 877 F. 2d 728, 731 (9th

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Cir. 1987).

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The mere existence of a scintilla of evidence in support of

the non-moving party’s position is insufficient: “There must be

evidence on which the jury could reasonably find for [the non-

moving party].” Anderson, 477 U.S. at 252. This Court thus

applies to either a defendant’s or plaintiff’s motion for summary

judgment the same standard as for a motion for directed verdict,

which is “whether the evidence presents a sufficient disagreement

to require submission to a jury or whether it is so one-sided that

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one party must prevail as a matter of law.” Id.

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Federal Rule of Civil Procedure 56(d) permits a court, upon a

sufficient showing of specific reasons why a nonmovant cannot

present facts essential to its opposition, to defer consideration

of or deny a pending motion for summary judgment.

C. VPX’s Counter-claims

1. Claims Barred By Deference to the FDA




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VPX’s first and fourth counter-claims are for alleged

violations of the Lanham Act by CytoSport. VPX claims that

CytoSport’s use of the term “Milk” to refer to a product that

contains no milk, as defined by FDA regulations, is deceptive. VPX

therefore contends that CytoSport’s trademark “Muscle Milk” is

invalid because it violates 15 U.S.C. § 1125(a)’s proscription of

deceptive marks and should therefore be cancelled. VPX points

primarily to the warning letter sent from the FDA to CytoSport

describing the FDA’s position that CytoSport’s use of “Muscle Milk”

violates 21 U.S.C. § 343(a)(1) because it is false or misleading,

and asks the Court to accept the FDA’s analysis. VPX RJN Ex. 1.

Preliminary, the Court must consider whether or not VPX’s

Lanham Act claims are barred. Under the Food, Drug, and Cosmetics

Act (“FDCA”), 21 U.S.C. § 301 et seq., the FDA regulates and

enforces food labeling requirements. 21 U.S.C. § 343. The FDA

regulates the definition of certain foods, including milk. 21 CFR

§ 131.110. When the FDA extensively regulates a certain area and

does not act to enforce its regulations, the Lanham Act may not be

used by a private party to “usurp, preempt, or undermine FDA

authority.” Pom Wonderful LLC v. Coca-Cola Co., 679 F.3d 1170,

1176 (9th Cir. 2012). Whether or not a Lanham Act claim is barred

by FDA authority is dependent on the facts of a particular case.

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In Pom, Pom sought to challenge Coca-Cola’s use of the term

“Pomegranate Blueberry Flavored Blend of 5 Juices” under the Lanham

act contending that the name misled consumers. Id. at 1172-73. Pom

argued that since the Coke product only contained .3% pomegranate

juice and .2% blueberry juice, it was misleading for the product to




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prominently display pomegranate and blueberry on its label when it

primarily consisted of other cheaper juices. The Pom court held

that the Lanham Act claim was barred because the labeling did not

obviously violate FDA regulations. Id. at 1178. The Pom court

did not hold that the label conformed to FDA regulations or that it

was not misleading, but instead deferred to the FDA’s ability to

act against Coca-Cola if and when it determined that the Coke label

violated FDA regulations. Id.

This case is nearly indistinguishable from the situation

presented in Pom. Here, the FDA regulates the use of the term

“milk” on food labels. The FDA is aware of CytoSport’s labeling

and has not acted. If the FDA determines that CytoSport’s use of

the term “Muscle Milk” is misleading to consumers, despite the

“Contains No Milk” disclaimer on the label, it will act to enforce

the labeling requirement. The fact that the FDA sent a warning

letter to CytoSport concerning its labeling does not require a

different finding. FDA warning letters are informal and advisory,

and do not amount to an FDA action. Summit Tech., Inc. v. High-

Line Med. Instruments Co., 922 F. Supp. 299, 306 (C.D. Cal. 1996)

(holding that FDA warning letters do not amount to an FDA position

on a matter because the FDA can change its final determination

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based on further investigation).

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VPX’s first and fourth counter-claims require a finding that

CytoSport’s Muscle Milk label is deceptive or misleading under the

FDCA and the associated regulations. The Court finds that the

claims are barred by the holding in Pom as the FDA is the entity

that must make that determination in the first instance. Pom, 679

F.3d at 1178 (“[W]e must keep in mind that we lack the FDA’s




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expertise in guarding against deception in the context of . . .

beverage labeling.”). VPX argues that the Court should defer

granting judgment until the FDA issues a final decision on

CytoSport’s use of “Muscle Milk,” but the FDA’s eventual decision

may support CytoSport, VPX, or fall somewhere in the middle.

Deferring consideration of the present motion based on what the FDA

may or may not do is inappropriate for two reasons. First, as

discussed below CytoSport is entitled to judgment on the merits of

VPX’s counter-claims for other reasons. Second, the Pom holding is

clear that the claims are barred until the FDA issues its decision,

not that they are stayed or deferred. CytoSport is accordingly

entitled to judgment as a matter of law on VPX’s first and fourth

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counter-claims.

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VPX also brings two state law claims which reference the FDA

regulations to show that CytoSport’s use of the term “Milk” is

inconsistent with FDA regulations. These claims are not barred by

the ruling in Pom because the FDA specifically permits states to

create labeling requirements that are identical to the FDA’s and

establish independent causes of actions for those claims. Delacruz

v. Cytosport, Inc., No. C 11–3532 CW, 2012 WL 2563857, 7, Slip Copy

(N.D. Cal. June 28, 2012) (citing 21 U.S.C. § 343–1).

2. Statute of Limitations

CytoSport argues that VPX’s state law claims for False

Advertising and Unfair Competition are barred by their statutes of

limitations. VPX brings both its False Advertising Law (“FAL”) and

UCL claims under the UCL, which has a four year statute of

limitations. Cal. Bus. & Prof. Code § 17208; Yumul v. Smart

Balance, Inc., 733 F. Supp. 2d 1117, 1130 (C.D. Cal. 2010). To




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have standing to sue under the UCL, “a plaintiff must . . . have

suffered injury and lost money or property.” Anunziato v.

eMachines, Inc., 402 F. Supp. 2d 1133, 1136 (C.D. Cal. 2005).

In this case, VPX did not have standing to pursue its FAL and

UCL claims against CytoSport until it suffered an injury. Since

VPX did introduce its competing Muscle Power product, its cause of

action only accrued at that time because it could not previously

show that it suffered an injury and lost money or property due to

CytoSport’s practices. VPX’s 2009 FAL and UCL counter-claims were

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therefore filed well within the four year statute of limitations.2

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3. CytoSport’s Arguments Regarding the Remaining State Law

Claims

CytoSport also argues that it is entitled to summary judgment

on all of VPX’s counter-claims, including the remaining FAL and UCL

state law claims, because VPX failed to produce sufficient evidence

to support its claims. VPX responds by citing the FDA warning

letter discussed above as well as preliminary actions taken by

other federal agencies, non-governmental organizations, and

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Canadian intellectual property authorities.

In order to survive summary judgment on a Lanham Act false



2 CytoSport raises a similar argument based on laches with respect
to VPX’s federal claims, arguing that they too are time barred.
Although these claims are barred by the Pom holding, they are not
barred by laches for the same reasons that VPX’s state law counter-
claims were filed within the statute of limitations. See Barrus v.
Sylvania, 55 F.3d 468, 470 (9th Cir. 1995) (citing Halicki v.
United Artists Communications, Inc., 812 F.2d 1213, 1214 (9th
Cir.1987)) (holding that a party has standing under the Lanham act
when it suffers a “commercial injury based upon a misrepresentation
about a product, and also that the injury was ‘competitive,’ i.e.,
harmful to the plaintiff's ability to compete with the
defendant.”).

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advertising claim, a claimant must show:

(1) Defendants made a false or misleading statement of
fact in commercial advertising or promotion about
their own or another's goods or services;

(2) that the statement actually deceives or is likely
to deceive a substantial segment of the intended
audience;

(3) that the deception is material in that it is

likely to influence purchasing decisions;

(4) that Defendant caused the statement to enter

interstate commerce; and

(5) that the statement results in actual or probable

injury to Plaintiff.

Brosnan v. Tradeline Solutions, Inc., 681 F. Supp. 2d 1094, 1099

(N.D. Cal. 2010). “In the Ninth Circuit, claims of unfair

competition and false advertising under [the FAL and UCL] are

substantially congruent to claims made under the Lanham Act[,]” and

the analyses of VPX’s federal and state law claims are consolidated

for the purposes of this order. Walker & Zanger, Inc. v. Paragon

Indus., Inc., 549 F. Supp. 2d 1168, 1182 (N.D. Cal. 2007) (internal

quotations omitted).

a. False or Misleading Statement of Fact

In order to survive summary judgment, VPX must produce

evidence that CytoSport’s use of the Muscle Milk mark was either

literally false or actually misled a substantial segment of the

intended audience. William H. Morris Co. v. Group W, Inc., 66 F.3d

255, 258 (9th Cir. 1995). In order to show that a statement is

literally false, it must be unambiguously false. Novartis Consumer

Health, Inc. v. Johnson & Johnson-Merck Consumer Pharm. Co., 290

F.3d 578, 586–87 (3d Cir. 2002).



Here, VPX contends that the following evidence shows that

CytoSport’s use of the mark “Muscle Milk” is false:




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1.

The FDA Warning Letter;

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CytoSport’s decision to add the disclaimer “Contains No

Milk” to its Muscle Milk labels;

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The US Patent and Trademark Offices’s Initial Rejection

of CytoSport’s attempt to register the mark “MUSCLE MILK ACTIVE;”

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CytoSport’s registration of “MUSCLE MILK CONTAINS NO

MILK;”

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The National Advertising Division’s (“NAD”) decision to

refer CytoSport to the FDA and FTC after CytoSport failed to

participate in proceedings with Nestle USA related to the accuracy

of the “MUSCLE MILK” mark; and

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A challenge to CytoSport’s mark in Canada.

First, as discussed above, the FDA warning letter is not a

final decision by the FDA and its position may change after further

investigation. Thus, there is no evidence in the record that the

FDA has determined or will determine that CytoSport’s mark is

deceptive. Likewise, the material submitted by VPX from the USPTO

is a preliminary review of CytoSport’s application for “MUSCLE MILK

ACTIVE” wherein the USPTO requests more information, but does not

come to any conclusion concerning the use the term “MILK.” The

NAD’s decision to refer CytoSport to the FTC and FDA does not

constitute a decision by either agency that CytoSport’s product is

deceptively mislabeled. Canada’s pending decision on CytoSport’s

mark in Canada is also a pending decision and does not constitute

evidence that the mark is deceptive.

VPX next argues that CytoSport’s decision to add a disclaimer,

“Contains No Milk” to the front of it its Muscle Milk labels




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constitutes an admission that its previous label, which did not

display the disclaimer, was deceptive. VPX does not cite any

authority to support this conclusion, however, and one of the cases

it does cite indicates that a disclaimer may be sufficient to cure

a misleading label. Novartis, 290 F.3d at 599.

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In any event, none of the proffered evidence shows that the

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use of the term “Muscle Milk” along with the other content on the

label, including the accurate ingredient list, is unambiguously

false. In the alternative, VPX attempts to rely on evidence that a

substantial segment of the intended audience was deceived by

CytoSport. On this point, both parties produced expert opinions

based on consumer surveys to support their contentions/positions.

Since the Court excluded VPX’s expert report, the Gelb Survey,

CytoSport’s expert report by Kent D. Van Liere (Doc. # 193-7), Ex.

A, is uncontradicted. The Van Liere report tends to show that

consumers were no more confused by the Muscle Milk label then by a

generic control bottle label. Accordingly, VPX is left without

evidence to support its position, and no material dispute exists

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with regard to this element.

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b. The Statement Deceived or is Likely to Deceive

For the same reasons discussed in the preceding section,

CytoSport establishes that no material dispute exists as to this

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element.

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c. The Deception Was Material

CytoSport argues that there is a complete lack of evidence to

support this element. VPX does not respond to the substance of

CytoSport’s argument, instead contending that the preliminary

injunction issued previously in this case gives VPX standing to




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bring this claim because it was damaged when Muscle Power was

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ordered off the market.

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“In order to withstand a summary judgment motion, there must

also be evidence that the injury was ‘competitive’ i.e., that the

plaintiff's ability to compete with the defendant was actually

harmed.” Brosnan v. Tradeline Solutions, Inc., 681 F. Supp. 2d

1094, 1099 (N.D. Cal. 2010) (citing Halicki v. United Artists

Communications Inc., 812 F.2d 1213 (9th Cir.1987)). A deception is

material if it is likely to influence purchasing decisions. Id.

The evidence before the Court, at best, only has a tendency to

show that consumers will believe that Muscle Milk contains liquid

dairy milk. The pending FDA decision on the use of the Muscle Milk

mark, if it does end up supporting VPX’s position, will only stand

for the proposition that the mark causes consumers to believe that

Muscle Milk contains milk. There is no evidence that such a

mistaken belief actually causes consumers to choose Muscle Milk

over a competing product such as VPX’s protein shakes, or that the

presence of milk in a protein shake matters to consumers at all.

Even if the Gelb study were admissible, that report only speaks to

the likelihood of consumer confusion, not that the confusion was

material to purchasing decisions. The lack of evidence on this

element is fatal to VPX’s counter-claims, accordingly, there is no

genuine dispute as to this element, and VPX fails to meet its

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burden.

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d. CytoSport Caused the Statement to Enter Interstate

Commerce

It is undisputed that CytoSport caused the statement to enter

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interstate commerce.




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e. The Statement Resulted in Actual or Probably Injury

to VPX

For the same reason that the third element is not in genuine

dispute, this element is also not genuinely disputed. VPX has not

produced evidence that customers will be induced to purchase

CytoSport’s product over its own if they mistakenly believe that

Muscle Milk contains liquid dairy milk.

f. Summary of VPX’s Counter-claims

Because VPX failed to support its counter-claims with

admissible evidence, there is no genuine dispute of material fact.

CytoSport is entitled to judgment as a matter of law because VPX

has not shown that consumers are likely to be confused by

CytoSport’s use of the Muscle Milk mark and that, if they are

actually confused, that they will be more likely to purchase Muscle

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Milk as a result.3 There is simply no evidence, viewing the entire

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record in a light favorable to VPX, from which a reasonable jury

could find in VPX’s favor. VPX’s counter-claims for Unlawful Trade

Practice and Cancellation of Trademark are dependent on VPX’s

counter-claims for false advertising and a finding that CytoSport’s

use of the Muscle Milk mark is deceptive. Since VPX’s false

advertising counter-claims fail, so do VPX’s remaining counter-

claims. Accordingly, CytoSport’s motion for summary judgment on

VPX’s five counter-claims is granted in its entirety.4


3 The analysis applies equally to VPX’s Lanham Act, UCL, and FAL
counter-claims. Thus, CytoSport would be entitled to judgment on
VPX’s Lanham Act Claims even if they were not barred by the Pom
holding.
4 CytoSport is also entitled to judgment on VPX’s fifth counter-
claim for Declaratory Judgment. That claim, which is based on the
other counter-claims, fails because there is no genuine dispute as





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D. CytoSport’s Motion for Summary Judgment on the Third Amended

Complaint

1. CytoSport’s Infringement and Cancellation Claims

CytoSport moves for judgment on its federal and state

trademark infringement and cancellation claims (Claims Five, Six

and Eight). To prevail on a claim of trademark infringement under

15 U.S.C. § 1114, CytoSport must establish that: 1) the Muscle Milk

mark is valid, 2) CytoSport is the senior mark holder, and 3) VPX’s

use of the Muscle Power mark is likely to cause confusion in the

marketplace. Conversive, Inc. v. Conversagent, Inc., 433 F. Supp.

2d 1079, 1087 (C.D. Cal. 2006) (citing Brookfield Commc'ns, Inc. v.

W. Coast Entm't Corp., 174 F.3d 1036, 1046 (9th Cir. 1999)).

Generally, “trial courts disfavor deciding trademark cases in

summary judgments because the ultimate issue is so inherently

factual . . . . Additionally, the question of likelihood of

confusion is routinely submitted for jury determination as a

question of fact.” Clicks Billiards, Inc. v. Sixshooters, Inc.,

251 F.3d 1252, 1265 (9th Cir. 2001). CytoSport seeks cancellation

of VPX’s mark because it infringes on the Muscle Milk mark, meaning

that CytoSport is only entitled to judgment on its cancellation

claim if it is entitled to judgment on its infringement claims.

a. Validity of Muscle Milk Mark & CytoSport is

Senior Holder

VPX contests the validity of CytoSport’s Muscle Milk mark on

the same grounds raised in its counter-claims, raising the validity

of the mark as a defense rather than affirmative claim.


to the materiality of CytoSport’s alleged misrepresentations.

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A valid defense to a claim of infringement is that the mark is

invalid. Pursuant to 15 U.S.C. § 1065, a mark becomes

“incontestable” after five years of continuous post-registration

use. Once a mark is incontestable, the only grounds upon which it

can be canceled are found in 15 U.S.C. §§ 1064(3) and 1064(5).

Further, a party may raise the defenses listed in 15 U.S.C. 1115(b)

to an infringement claim. 15 U.S.C. § 1064(3) in turn indicates

that any mark obtained in violation of 15 U.S.C. 1052 may be

cancelled after it becomes incontestable. 15 U.S.C. § 1052(a)

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prohibits registration of a deceptive mark.

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Based on the applicable statutes, VPX may raise the

deceptiveness of the Muscle Milk mark as a defense. See KP

Permanent Make-Up, Inc. v. Lasting Impression I, Inc., 408 F.3d

596, 603 (9th Cir. 2005) (“An incontestable registration is still

subject to certain defenses or defects . . . .”). This finding is

also supported by general principles of equity that limit the

enforceability of trademarks that deceptively describe the product

being sold. Fuddruckers, Inc. v. Doc's B.R. Others, Inc., 826 F.2d

837, 847 (9th Cir. 1987); Clinton E. Worden & Co. v. Cal. Fig Syrup

Co., 187 U.S. 516, 539-540 (1903) (holding that a mark for a

product “Syrup of Figs” that did not contain figs was unenforceable

because it was fraudulent). Even though VPX cannot maintain its

counter-claims because it lacks sufficient evidence, it may raise

its arguments as a defense to CytoSport’s affirmative claims. A

material dispute therefore exists with regard to this element,

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making summary judgment inappropriate.

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b. Likelihood of Confusion

CytoSport moves for judgment on this element arguing that the

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legal factors used to evaluate the likelihood of confusion weigh in

favor of CytoSport’s position. VPX does not address the majority

of the factors, but does argue that material disputes exist with

regard to the similarity of the marks, the likelihood of confusion

between the marks, and VPX’s intent in selecting its Muscle Power

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mark.

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Courts use eight factors to determine whether or not an

allegedly infringing mark is likely to cause consumer confusion in

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the marketplace:

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(1) strength of the allegedly infringed mark;

(2) proximity or relatedness of the goods;

(3) similarity of the sight, sound, and meaning of the marks;

(4) evidence of actual confusion;

(5) degree to which the marketing channels converge;

(6) type of the goods and degree of care consumers are likely

to exercise in purchasing them;

(7) intent of the defendant in selecting the allegedly

infringing mark; and

(8) likelihood that the parties will expand their product

lines.

E. & J. Gallo Winery v. Gallo Cattle Co., 967 F.2d 1280, 1290 (9th

Cir. 1992) (citing AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 348–

54 (9th Cir. 1979)). “This list of factors, while perhaps

exhausting, is neither exhaustive nor exclusive. Rather, the

factors are intended to guide the court in assessing the basic

question of likelihood of confusion.” Id. (internal citations

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VPX opposes CytoSport’s motion with regard to 1) the




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similarity of the marks; 2) evidence of actual confusion; and 3)

the intent of VPX in selecting its Muscle Power mark, and those

factors are analyzed below. For the purposes of this motion,

CytoSport’s arguments with respect to the other five Sleekcraft

factors are unopposed and those factors therefore favor granting

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judgment.

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i.

Similarity of the Sight, Sound, and Meaning of

the Marks

CytoSport contends that the marks are similar and that this

factor weighs in its favor. VPX responds that the marks are two

distinct marks with little similarity. VPX points out that there

are many products on the market that contain the word “muscle,”

particularly within the protein supplement market. VPX also relies

on the USPTO’s determination that the registered “Muscle Power”

mark is not likely to cause confusion with another mark.

“In analyzing the similarity of the marks, the court is to

view the marks as a whole, as they appear in the marketplace.”

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In this case, the evidence shows that Muscle Power and Muscle

Milk appeared on nearly identical products in the same stores.

Muscle Power used the same font that Muscle Milk used, the

packaging was identical, and the placement of the marks was also

identical. Further, the determination by the USPTO was not

dispositive because it did not have all of the available evidence

in front of it, such as how the products were presented in the

marketplace. Carter-Wallace, Inc. v. Procter & Gamble Co., 434

F.2d 794, 801–802 (9th Cir. 1970) (finding that the USPTO

determination is inconclusive because it is made at the lowest




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administrative level and without all of the available evidence).

VPX’s argument, however, is sufficient to raise a genuine

dispute. VPX’s CEO testified that many products in the nutrition

supplement and protein shake milieu contain the word muscle.

Further, VPX argues that the marks are dissimilar enough for a

reasonable jury to conclude that the marks are not similar because

they consist of different secondary words, power and muscle. See

Thane Int'l, Inc. v. Trek Bicycle Corp., 305 F.3d 894, 903 (9th

Cir. 2002) (overruled by statute on other grounds) (finding that a

reasonable jury could determine that “TREK” and “ObiTrek” are not

similar marks). Additionally, CytoSport’s argument rests at least

partially on the trade dress of both parties’ products, and

CytoSport does not seek judgment on its trade dress claims. While

trade dress is relevant to this element insofar as trade dress

creates the context for comparison, what confusion stems from the

similarity of the marks and what confusion stems from trade dress

is primarily a question for a jury to answer. Accordingly, this

factor cannot be resolved through the present motion because it

requires the determination of disputed factual issues.



ii.

Evidence of Actual Confusion

CytoSport submits evidence of actual confusion consisting of

declarations made by its employees describing customers who were

confused by Muscle Power and Muscle Milk during the short time that

the two products were on the market. VPX contends that this

evidence is inadmissible and should therefore not be considered and

that it is insufficient to show actual confusion. CytoSport also