Jarrow Formulas, Inc. v. Nutrition Now, Inc.

Since 1985, Nutrition Now, Inc. (defendant) had made three central marketing statements about PB8, a popular probiotic nutritional supplement it distributed. For example, Nutrition Now stated on its products and in magazine ads that PB8 contained billions of “good” bacteria per capsule. Jarrow Formulas, Inc. (Jarrow) (plaintiff) made a competing probiotic supplement. In 1993, Jarrow saw Nutrition Now’s advertisements at an industry trade show and complained that the ads were false and misleading. Jarrow asserted that its manufacturer Rosell had verified that the marketing statements about PB8 were false. Despite Jarrow’s threat of litigation, Nutrition Now maintained its product label unchanged and continuously used the three marketing statements in advertisements. In August 2000, Jarrow sued Nutrition Now in California district court alleging Lanham Act violations based on Nutrition Now’s false and misleading advertisements. Jarrow sought a permanent injunction to stop Nutrition Now’s presentation of PB8. The statute of limitations for a fraud action in California was three years. Nutrition Now moved for summary judgment on the ground that laches barred Jarrow’s suit. Jarrow argued that it delayed in filing suit because it was waiting for a laboratory analysis of PB8 from Rosell. The district court granted Nutrition Now’s motion and dismissed the suit based on laches. Jarrow appealed.