Marlyn Decision Underscores Need for Support in Advertising

Marlyn Decision Underscores Need for Support in Advertising
by Paul M. Levine

A new enzyme product utilizing a 21st century systemic enzyme, producedwith enterically-coated enzymes, developed by leading enzyme researchers,vegetarian safe, without any animal derivatives, just as safe as thelargest selling enzyme product in the United States but works [three] timesfaster with much smaller doses, and is anti-inflammatory, anti-fibrotic,[an] immune system modulator, blood cleanser, circulatory system unclogger andconnective tissue strengthener, lowers cholesterol and greatly speeds healing.The product is endorsed by a Ph.D. and doctor who has utilized systemicenzymes in his practice for the past 15 years. With that background, why dida federal jury in Phoenix award Marlyn Nutraceuticals Inc., dba NaturallyVitamins, $5.3 million in its claims against World Nutrition and its productVitalzym? Because none of the claims World Nutrition was making were true.

Marlyn is the exclusive U.S. distributor of Wobenzym, which is manufacturedby Mucos Pharma in Germany.Wobenzym is one of the top selling enzyme products inthe United States and second to aspirin as the top selling over-the-counter(OTC) product in Germany. In June 2001, the principal owner of Mucos, Dr. Karl Ransburger, died. After his death, and continuing through January 2002, Marlyn was negotiatingwith Mucos to extend its exclusive U.S. distributorship agreement for Wobenzym.The negotiations resulted in a temporary (few months) shortage of Wobenzym inthe United States. At the same time, World Nutrition also tried to obtain therights to Wobenzym. After World Nutrition learned Marlyn would retain the rightsto Wobenzym and knowing of the Wobenzym shortage, World Nutrition introduced itsproduct, Vitalzym, to the market. With the endorsement of William Wongself-proclaimedDr. Wobenzym who represented himself to be a Ph.D. and doctorWorldNutrition claimed its product, Vitalzym, was three times faster than Wobenzym,with much smaller doses. As explained by World Nutrition and Wong, the key toVitalzym was that it contained serrapeptase, a 21st century systemic enzyme,instead of the chymotrypsin contained in Wobenzym.World Nutrition claimed thatserrapeptase does everything that chymo can do, but faster, stronger, betterand with even more beneficial physiological actions. At the same time, Wong told consumers that Wobenzym, imported from Germany,was quarantined by both the U.S. Food and Drug Administration (FDA) and the U.S.Department of Agriculture (USDA) because of the governments concern about madcow disease. All of this information was being directed at the Wobenzymconsumers and those consumers were offered what World Nutrition claimed was asafer, faster, stronger and better product than Wobenzym, and one that was safefrom the mad cow scare, because it was vegetarian based. Unbeknownst to theconsumer, none of the claims World Nutrition or Wong were making about Vitalzymwere true and there was no truth to the World Nutrition-endorsed Wong allegationthat Wobenzym had been quarantined.

In addition, World Nutrition used a confidential Marlyn customer list fordirect mailing when it first launched Vitalzym. World Nutrition admitted havingMarlyns customer list, but claimed it was not confidential. World Nutritionalso claimed that the list of Marlyn customers it used was not actually acustomer list, but only a list of prospective customers.

On April 5, 2002, Marlyn took legal action against World Nutrition andothers, claiming misappropriation and conversion of its customer list, unfaircompetition, false advertising and trade libel. In support of its claims aboutVitalzym, World Nutrition claimed that an enzyme in Vitalzym, serrapeptase, wasthe key to its effectiveness. World Nutrition admitted that for serrapeptase tobe effective in Vitalzym, it must be enterically coated, which would allow it topass through the stomach and be digested in and absorbed through the smallintestine. World Nutrition admitted that when serrapeptase was consumed in unprotectedtablets or capsules, it was destroyed by acid in the stomach. Marlyn argued thatthere is no validity to the World Nutrition claims that Vitalzym containsenterically-coated enzymes. At trial, World Nutrition failed to show thatserrapeptase, purportedly contained in the Vitalzym proprietary enzyme blend,was enterically coated.

Marlyn also showed there were no leading enzyme researchers involved in thedevelopment of Vitalzym and no basis for World Nutritions claims thatVitalzym worked three times faster than Wobenzym. In addition, Wong was notactually a doctor or physician and never graduated from any recognized medicalschool. In fact, the school where he obtained his diploma no longer exists. Wongnever had a medical practice, never used systemic enzymes in any practice, andadmitted he never saw or treated any patients in his life. Moreover, Wongsdoctorate was in martial arts.

In its defense, World Nutrition claimed that the product comparison claims ofVitalzym to Wobenzym were mere puffing and were not quantitativecomparisons of Vitalzym against Marlyns product, Wobenzym.However, when Wong,on behalf of World Nutrition, stated that Vitalzym was three times fasterthan Wobenzym, its argument that it was only puffing failed.

World Nutrition and Wong also alleged that the statements about Wobenzym andthe quarantine were true, because they were meant to be informative and because,in general, it is true that the government has a concern about mad cow disease.However, during the trial, Wong admitted that the basis for his statement aboutthe quarantine was a rumor and he could not identify the source of therumor. Marlyn also proved Wobenzym had never been quarantined and had never beenrejected by any governmental entity, including the FDA or the USDA.

After a seven day trial, the jury awarded Marlyn damages of $2.3 million andassessed punitive damages against World Nutrition in the sum of $3 million. Inaddition, the jury awarded Marlyn $500,000 each in punitive damages against Wongand Patrick Buehl, the vice president of sales and marketing at World Nutrition.Currently, the case is subject to post-trial motions and appeal.

In pursuing its claims against World Nutrition and others, Marlyn wasdefending the integrity of its own product and exposing the consumer to whatMarlyn believed to be the false claims that World Nutrition was making about itsproduct, Vitalzym.

The lesson to be learned is simple. If a company, including a manufacturer ordistributor of dietary supplements, is going to make claims about its product,those claims should be validated and supported by clinical studies or otherempirical data. Companies must also be very careful about making quantitative ornumerical comparisons of their products to other products. Any manufacturer ordistributor must carefully scrutinize statements it plans to make publicly aboutits product, purported health benefits and endorsements. In other words, if acompany is going to make product comparison claims of its product to anothercompanys product, the comparisons must be true. Any misrepresentation of factabout a product or a competitors product potentially exposes the manufactureror distributor to legal claims, including claims for unfair competition andfalse advertising.

Paul M. Levine is a partner with McCarthy, Holthus & Levine in Phoenix.At trial, he was assisted by Maria Salapska of Perkins, Coie, Brown & Bain.Levine can be contacted at (602) 230-8726 or [email protected].