ALPO Petfoods, Inc. v. Ralston Purina Co.

In 1985, ALPO Petfoods, Inc. (ALPO) (plaintiff) entered the puppy-food market in select states. Ralston Purina Company (Ralston) (defendant), the leading seller of puppy food, launched an advertising campaign falsely claiming that its product reduced the risk of canine hip dysplasia (CHD). ALPO sued Ralston for false advertising under the Lanham Act. Ralston counterclaimed. The district court found that both parties violated the Lanham Act and ultimately awarded damages to both. The district court awarded ALPO $12 million, representing damages for three categories. First, the court awarded $3.6 million to compensate ALPO for advertising costs it incurred to combat Ralston’s CHD campaign. The pertinent ALPO advertisements did not specifically respond to Ralston’s CHD campaign. ALPO adduced evidence that its increased advertising was partially but not solely motivated by Ralston’s campaign. Ralston spent $2.2 million on its CHD campaign. Second, the court awarded ALPO $4.5 million for the delay in income stream caused by the delay in its national rollout. The court did not reduce that award to reflect ALPO’s alternative use of funds that it did not spend on a national rollout. Third, the court enhanced ALPO’s award by 50 percent to compensate for lost profits, market distortion, interest, and inflation. Ralston appealed to the District of Columbia Circuit.