Internet Trademark Case Summaries

Standard Process, Inc. v. Total Health Discount, Inc.

559 F. Supp. 2d 932 (E.D. Wis. 2008)

Plaintiff Standard Process sold dietary supplements to health-care providers that were contractually restricted from reselling the products to other businesses, on the Internet, or in any retail setting other a medical clinic or pharmacy. Defendant Total Health operated a website at which it sold over 350 brands of vitamins and dietary supplements, including Standard Process products it acquired from Standard Process accountholders. Standard Process objected and terminated its accountholders that were also Total Health consultants, asserting that such Internet sales violated its resale policy and created a false impression that Total Health was affiliated with Standard Process. In response, Total Health removed all Standard Process logos and pictures from its website, placed a non-affiliation disclaimer on web pages offering Standard Process products for sale, and continued advertising using the Standard Process name in a plain typeface only. Standard Process sued for trademark infringement and false designation of origin, among other claims. Total Health moved for summary judgment, arguing that the first sale doctrine and the nominative fair use doctrine protected its sales of Standard Process products. The court denied Total Health’s motion on the infringement and false designation of origin claims. Although the first sale doctrine protects the reselling of goods under the original producer’s trademark, the reseller can not “use [the] other entities’ trademarks to give the impression that they are favored or authorized dealers for a product when in fact they are not.” Standard Process submitted evidence “indicating that Total Health made statements suggesting that it was affiliated with Standard Process.” These included references by Total Health to Standard Process” 75th anniversary and describing its accomplishments using first-person pronouns such as “we” or “our” to refer to Standard Process. Also, Total Health had purchased “standard process” as a Google keyword, causing the Total Health website to appear prominently as a paid advertiser on “standard process” search result pages. Accordingly, despite Total Health’s disclaimer, the court ruled that these acts “could give consumers the impression that [Total Health] is a favored or authorized Standard Process dealer when in fact it is not.” The court also rejected Total Health’s nominative fair use defense, which requires, in part, that the user “do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder.” The same evidence that caused the court to deny summary judgment based on the first sale doctrine also caused it to deny summary judgment on the nominative fair use doctrine.