NAI Accuses DNP of False and Misleading Statements

WILMINGTON, Del.Natural Alternatives International Inc. (NAI), San Marcos, CA, reasserted its claims that DNP International Co. Inc., Santa Fe Springs, CA, has repeatedly attempted to unfairly compete" with its CarnoSyn® beta-alanine product; further, NAI said DNP released a false and misleading press release that said patent claims filed by NAI against DNP were dismissed.

INSIDERs inquiry for comments from DNP has not been answered.

On Aug. 3, 2011, NAI amended its complaint originally filed in August 2009 against DNP, which said DNP made knowingly false and misleading statements" to boost sales of it imported beta alanine product. In support of its asserted claims, NAI alleged that a DNP-issued a press release (sent on July 19, 2011) regarding the status of the action originally filed by NAI was false and misleading.  The DNP press release stated that claims filed by NAI against DNP were dismissed.  This statement by DNP was knowingly false," according to a press release from NAI.

NAI said the court's June 22 ruling on pending motions was not based on the court's earlier claim construction order, as DNPs press release stated.  DNP's press release also suggested that the court had affirmatively ruled that certain NAI beta alanine patent claims were invalid; however NAI said the Court did not rule that its patents were invalid, and any suggestion by DNP otherwise was false and misleading."  NAI and Compound Solutions Inc. (CSI), which licenses CarnoSyn from NAI, further alleged in the amended complaint that DNP issued the July 19 press release after it "tried to improperly coerce NAI and CSI into entering into a settlement agreement with DNP." 

The complaint also alleged that, contrary to DNP's July 25, 2011, advertising and sales statements distributed to actual and potential purchasers of beta-alanine, DNP is not the number one importer of beta-alanine.  The complaint further alleged that DNP falsely advertised in 2009 that it was the only source for Japanese beta-alanine in the United States and that it had an exclusive manufacturing facility. 

NAI reached a settlement with the other defendant to the litigation, pending before the U.S. District Court for the District of Delaware, Vital Pharmaceutical Inc. (VPX).  As part of the settlement, NAI granted VPX a limited and restricted covenant not to sue on certain claims of NAI's asserted beta-alanine patents, and VPX agreed to dismiss its claims of invalidity and to cease certain business activities.  Other terms of the confidential settlement were not disclosed.

Contemporaneous with the filing of its amended complaint and acceptance of VPX settlement, NAI chose not to reassert patent claims against DNP previously dismissed by the court.

Trial in the case against DNP is currently scheduled for May 2012.

"NAI continues to invest in strengthening and broadening its worldwide intellectual property portfolio directed to beta-alanine," said Mark A. LeDoux, NAI's CEO and chairman of the board. All of NAI's issued patents remain valid, and NAI remains committed to continue to develop, license and enforce its beta-alanine intellectual property rights.  Given the significant investment by our company in its intellectual property portfolio related to beta-alanine and the importance of this business, both to NAI and our business partner, CSI, we will aggressively address false and misleading statements made by market competitors.  NAI will not stand by and allow third-parties to intentionally mislead current and future customers of CarnoSyn® beta-alanine licensed by NAI and confuse the general marketplace regarding NAI's intellectual property. "