San Jose Office Achieves Defense Verdict In Lanham Act Case

June 1, 2017

San Jose Office Achieves Defense Verdict In Lanham Act Case

            In June of 2017, the San Jose office and the team of Sharon L. Hightower and Nathaniel Lucey, received a transfer of the case of Strategic Partners, Inc. v. Vestagen Protective Technologies, Inc. The lawsuit involved claims for false and misleading advertising in violation of the Lanham Act codified as 15 U.S.C. §1125(a) as well as California Business & Professions Code sections 17200 and 17500. Vestagen, through separate counsel, filed a cross-claim against Strategic with similar claims for misleading and false advertising, breach of contract, and misappropriation of trade secrets. The matter was scheduled for trial in the Central District, Western Division, of the United States District Court on September 5, 2017.   

            Strategic Partners, Inc. was and remains a large corporation and a major manufacturer and distributor of scrubs for the healthcare industry. In 2010, Vestagen Protective Technologies, Inc., a small startup corporation, created scrubs that contained a fluid barrier and an antimicrobial agent to help prevent the spread of bacteria in hospitals. The inside part of the scrubs also has a moisture-wicking feature to make the garment more comfortable for its wearers. The fabric, called Vestex, was designed for use as a physical barrier to bodily fluids, splatters, spills, etc. (fluid barrier) and to also inhibit the growth of bacteria on the fabric itself (antimicrobial), in an effort to prevent the spread of infectious diseases in the hospital setting.    In 2014, Strategic placed competitive products on the market called Certainty and Certainty Plus with the claims that the treated scrubs provided odor control and rendered bacteria ineffective immediately.  

            Strategic claimed that Vestagen provided false and misleading advertising of the Vestex product with improper citations to a peer reviewed and published study commissioned by Vestagen and improper references to its standing with the Food and Drug Administration. It claimed that it had been injured by the advertising and that the public would likely be misled as well. Strategic was seeking restitution, disgorgement of profits, attorney fees and costs in addition to an injunction against further advertising by Vestagen. In its cross-claim, Vestagen claimed that Strategic was falsely advertising the immediate ineffectiveness of bacteria and that Strategic had deceived Vestagen by the promise of a partnership or investment with Vestagen while using their strategies and marketing plans to control the market. Vestagen was seeking restitution of their damages and disgorgement of the profits gained by Strategic due to their conduct. 

            The trial, continued twice due to unforeseen circumstances, commenced on September 19, 2017 and concluded on September 22, 2017 before a jury of eight. Each side was limited by the court to seven hours of testimony and presentation of evidence. Testimony was presented by the principals of each entity as well as by experts on the scientific studies, surveys, and economic claims. On the morning of September 22, the court dismissed the cross-claim of Vestagen with its determination that the evidence was insufficient to present the issue to the jury. Thereafter, after closing arguments by Strategic and Vestagen in the afternoon, the matter was submitted to the jury for deliberations. An hour and a half later, the jury returned a unanimous verdict in favor of Vestagen.             .