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”, “produced with enterically-coated enzymes”, developed by “leading enzyme researchers”, vegetarian safe, without any “animal derivatives”, “just as safe” as the largest selling enzyme product in the United States but works “[three] times faster with much smaller doses”, and is “anti-inflammatory, anti-fibrotic, [an] immune system modulator, blood cleanser, circulatory system unclogger and connective tissue strengthener, lowers cholesterol and greatly speeds healing”. The product is endorsed by a Ph.D. and doctor who “has utilized systemic enzymes in his practice for the past 15 years.” With that background, why did a federal jury in Phoenix award Marlyn Nutraceuticals Inc., dba Naturally Vitamins, $5.3 million in its claims against World Nutrition and its product Vitalzym? Because none of the claims World Nutrition was making were true.

Marlyn is the exclusive U.S. distributor of Wobenzym, which is manufactured by Mucos Pharma in Germany.Wobenzym is one of the top selling enzyme products in the 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 negotiating with Mucos to extend its exclusive U.S. distributorship agreement for Wobenzym. The negotiations resulted in a temporary (few months) shortage of Wobenzym in the United States. At the same time, World Nutrition also tried to obtain the rights to Wobenzym. After World Nutrition learned Marlyn would retain the rights to Wobenzym and knowing of the Wobenzym shortage, World Nutrition introduced its product, Vitalzym, to the market. With the endorsement of William Wong—self-proclaimed “Dr. Wobenzym” who represented himself to be a Ph.D. and doctor—World Nutrition claimed its product, Vitalzym, was three times faster than Wobenzym, with much smaller doses. As explained by World Nutrition and Wong, the key to Vitalzym was that it contained serrapeptase, “a 21st century systemic enzyme”, instead of the chymotrypsin contained in Wobenzym.World Nutrition claimed that “serrapeptase does everything that chymo can do, but faster, stronger, better and 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 government’s concern about mad cow disease. All of this information was being directed at the Wobenzym consumers and those consumers were offered what World Nutrition claimed was a safer, faster, stronger and better product than Wobenzym, and one that was safe from the mad cow scare, because it was vegetarian based. Unbeknownst to the consumer, none of the claims World Nutrition or Wong were making about Vitalzym were true and there was no truth to the World Nutrition-endorsed Wong allegation that Wobenzym had been quarantined.

In addition, World Nutrition used a confidential Marlyn customer list for direct mailing when it first launched Vitalzym. World Nutrition admitted having Marlyn’s customer list, but claimed it was not confidential. World Nutrition also claimed that the list of Marlyn “customers” it used was not actually a customer list, but only a list of “prospective” customers.

On April 5, 2002, Marlyn took legal action against World Nutrition and others, claiming misappropriation and conversion of its customer list, unfair competition, false advertising and trade libel. In support of its claims about Vitalzym, World Nutrition claimed that an enzyme in Vitalzym, serrapeptase, was the key to its effectiveness. World Nutrition admitted that for serrapeptase to be effective in Vitalzym, it must be enterically coated, which would allow it to pass through the stomach and be digested in and absorbed through the small intestine. World Nutrition admitted that when serrapeptase was consumed in unprotected tablets or capsules, it was destroyed by acid in the stomach. Marlyn argued that there is no validity to the World Nutrition claims that Vitalzym contains enterically-coated enzymes. At trial, World Nutrition failed to show that serrapeptase, purportedly contained in the Vitalzym proprietary enzyme blend, was enterically coated.

Marlyn also showed there were no leading enzyme researchers involved in the development of Vitalzym and no basis for World Nutrition’s claims that Vitalzym worked three times faster than Wobenzym. In addition, Wong was not actually a doctor or physician and never graduated from any recognized medical school. In fact, the school where he obtained his diploma no longer exists. Wong never had a medical practice, never used systemic enzymes in any practice, and admitted he never saw or treated any patients in his life. Moreover, Wong’s doctorate was in martial arts.

In its defense, World Nutrition claimed that the product comparison claims of Vitalzym to Wobenzym were mere “puffing” and were not quantitative comparisons of Vitalzym against Marlyn’s product, Wobenzym.However, when Wong, on behalf of World Nutrition, stated that Vitalzym was “three times faster” than Wobenzym, its argument that it was only “puffing” failed.

World Nutrition and Wong also alleged that the statements about Wobenzym and the 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 about the quarantine was a “rumor” and he could not identify the source of the rumor. Marlyn also proved Wobenzym had never been quarantined and had never been rejected by any governmental entity, including the FDA or the USDA.

After a seven day trial, the jury awarded Marlyn damages of $2.3 million and assessed punitive damages against World Nutrition in the sum of $3 million. In addition, the jury awarded Marlyn $500,000 each in punitive damages against Wong and 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 was defending the integrity of its own product and exposing the consumer to what Marlyn believed to be the false claims that World Nutrition was making about its product, Vitalzym.

The lesson to be learned is simple. If a company, including a manufacturer or distributor of dietary supplements, is going to make claims about its product, those claims should be validated and supported by clinical studies or other empirical data. Companies must also be very careful about making quantitative or numerical comparisons of their products to other products. Any manufacturer or distributor must carefully scrutinize statements it plans to make publicly about its product, purported health benefits and endorsements. In other words, if a company is going to make product comparison claims of its product to another company’s product, the comparisons must be true. Any misrepresentation of fact about a product or a competitor’s product potentially exposes the manufacturer or distributor to legal claims, including claims for unfair competition and false advertising.