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  • Shelly Albaum

Elysium Answers Amended Complaint in New York


Elysium this week filed its answer to ChromaDex's First Amended Complaint in New York. You can read Elysium's Answer and Counterclaims here:

Elysium's Answer & Counterclaims to FAC

I don't normally spend too much time on Answers, because they mostly consist of endless denials.

But this answer is different, because Elysium has, without mentioning it, AMENDED their counterclaims.

I don't know why a First Amended Complaint is not met with a First Amended Counterclaims, but that is what we have.

Copyright

The only thing significantly new in this filing is Elysium's new Copyright Infringement claims, one based on a video, the other based on an ad.

I will rate the copyright infringement claim on the video laughable. The standard for copyright infringement is that you can copy the idea, but not the expression of the idea. There are only so many ways to say, "NR increases NAD to give energy to your cells," and only so many ways you can visually depict that, and I find the proposal that in this instance ChromaDex borrowed the expression, rather than the idea, farfetched.

By contrast, it really does appear that ChromaDex borrowed an image from an Elysium ad (a light bulb held by two fingers with chemical compounds as the filament). Not sure how that happened. Not sure how big a deal it is. My guess is that somebody needs to say "sorry," and maybe help pay for the image, since it probably represents a microscopic fraction of either party's ad inventory.

The Rest

The bulk of the other counterclaims are the same as we have seen. They seem kind of overstated to me, or deceptively framed, which is particularly ironic, but also surprising. After all, Elysium has had enough time to buff out the inaccuracies in their first effort.

I already listed most of Elysium's gripes in this article from last October.

For example, Elysium says it's deceptive to characterize Dr. Brenner as the discoverer of NR, instead of characterizing Dr. Brenner as the discoverer of what NR does. Dr. Brenner did not discover its existence; only its crucial properties. Elysium asserts that this distinction is material to customers, but I can't imagine why it would be.

Elysium says it is deceptive to recommend a dose of 250mg, and then show a graphic demonstrating NR's effect at 1,000mg, even if the chart discloses the 1,000 mg dose. But the statements on the chart strike me as true statements, not false statements, and I would be surprised to learn that an accurate and disclosed assertion was legally deceptive.

Although part of me would be really glad if it were illegal, because the level of permitted deception in American advertising is obscene.

Anyone who has ever ordered fast food or cooked a frozen dinner knows that the end-result never resembles the visual depictions on the billboards or the packaging. But since there is no literally false assertion, this kind of depiction is commonplace in commercial communications.

I hear Elysium's outrage, but I don't hear the false assertion.

I hope McDonald's and Burger King are next on Elysium's target list:

In real life, those burgers don't really look like that.

And the odds that I will be "lovin'" McDonalds are vanishingly small.

But the legal standards for commercial speech are such that judges do not have to nitpick a billion different billboards, flyers, and TV ads for flaws, even if Elysium and LocalBurger wish it were otherwise.

The actual elements of a Lanham Act claim are NOT that (1) Elysium can imagine a way that someone might be confused.

The actual elements of a Lanham Act claim are that the advertisement be (1) False or misleading, (2) actually or likely deceptive; (3) material in its effect on buying decisions; and (4) actually or likely injurious.

By my lights, the burger photos above satisfy all four elements. But I bet if I tried my luck in federal court I'd get laughed out.

That's how I feel about Elysium's claim that Brenner didn't discover NR, but only discovered the reason why NR matters.

Same for Elysium's claim that Basis isn't "counterfeit." Okay. So what is it called when you don't have a patent, and someone else does, and you stop licensing the patent, start producing it anyway without a license, try to invalidate the patent, and fail. What's the word that ChromaDex should have used instead?

Same for Elysium's complaint that ChromaDex can't criticize Elysium's misuse of Nobel advisors when ChromaDex has its own Nobel Advisors. Elysium is whistling past the graveyard of ChromaDex's specific allegations that it was not the existence of the Nobel advisors, but the WAY in which they were used, that matters.

And so on.

I am a little MORE disappointed that Elysium didn't bother to correct the assertions in its counterclaims regarding my blog that are not well-grounded in fact or law, after I went to great detail here to explain why it is that ChromaDex does not in fact place ads on my blog. I place them myself.

Nor does Elysium mention that the language they object to in my blog was buried in the seventh paragraph of a disclaimer, and thus might not be read by many people besides Elysium and its lawyers, which would cut VERY hard against materiality.

Elysium didn't mention that my language was clarified before their first counterclaims were filed, let alone before their second counterclaims were filed. Instead, their new counterclaims just casually slip into past tense.

They didn't mention that even in the original version I was careful to refer to the research, not the product. They didn't mention that it is literally true that I am not regulated by the FDA, because it is the FTC that polices false advertising claims, and I did not say I was above the law or above all regulation, or even that I intended to violate the law.

Instead, they skip past all these inconvenient truths to inaccurately accuse me of reprehensible and unlawful conduct.

And I REALLY don't get their continued insistence that "by taking the affirmative intentional step of placing its advertising on the blog, ChromaDex impliedly endorses the claims made by the blogger."

As I have explained multiple times and Elysium has ignored, ChromaDex does not take the affirmative intentional step of placing its advertising on my blog.

And even if ChromaDex had done that, I don't see how that becomes an implied endorsement of the claims made by the blogger.

Does the presence of the ad that I placed -- ChromaDex allows it, but did not place it -- mean that ChromaDex endorses these statements on my blog?

I would be surprised to learn that ChromaDex agrees with those assertions, just as I would be surprised to learn that every Super Bowl advertiser impliedly endorses everything that the football announcers say during the game.

I am also am amazon affiliate, and I would be equally surprised to learn that amazon.com, or any of the individual sellers whose products I feature, endorsed everything I say on my blog, simply because they allow me to advertise their products if I want.

Nearly all news and analysis media in the US, including CNN, New York Times, and Washington Post, are ad-supported. The presence of ads does not even constitute an endorsement of the website's content, let alone make ChromaDex "as responsible for the content of the blogger's statements as if it made them directly."

Really? That's the law? Nearly every page of my website says right near the top, "Right of Assembly is my personal blog. All opinions are my own." (emphasis added)

Elysium conveniently forgot to mention that in their counterclaims, too.

My guess is that the Court will be rather more interested the truth, the whole truth, and nothing but the truth, than in the innuendo that is on offer.

We await ChromaDex's answer.

#ChromaDex #ElysiumHealth #Litigation #CDXC

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