Colorado Biolabs v. Three Arrows Nutra — Lanham Act False Advertising Claim Narrowed to One Literally False “All Heme” Statement

Background

Colorado Biolabs, Inc. (CBL) makes and sells Proferrin heme iron supplements. Heme iron is derived from animal sources and, as the court has previously explained, has a much higher absorption rate than non-heme iron. Competitor Three Arrows Nutra, LLC sold “IronRepair” products that it had labeled as containing 20 mg of heme iron. Testing by CBL beginning in 2021 found heme iron was not detectable in them, and CBL sued in the Eastern District of Texas for false advertising and unfair competition. The parties settled: Three Arrows agreed to pay $400,000, to re-label and re-brand by September 1, 2024, not to represent expressly or by implication that its products contain any heme iron, and not to disparage CBL. CBL released claims about past marketing.

In March 2025 CBL sued again, alleging that Three Arrows still represented or implied that its products contain heme iron on its website, Amazon storefront and in Facebook group posts by its owner, Krystal Moore, and that a brand ambassador acted as a surrogate to disparage CBL. CBL asserted breach of the settlement agreement, Lanham Act false advertising and unfair competition, and common-law unfair competition. Three Arrows moved for partial summary judgment and to exclude CBL’s experts.

The Court’s Holding

The court granted in part and denied in part the summary judgment motion, and denied without prejudice the motions to exclude experts.

Lanham Act false advertising and unfair competition. The court treated the Lanham Act and Texas common-law unfair competition claims together. For the “Marketing Statements” Three Arrows made in the Facebook group, such as that its iron is 100% derived from bovine spleen, CBL offered no evidence they were literally false. Where statements are ambiguous or true but misleading, a plaintiff must show actual consumer deception (for damages) or a tendency to deceive (for an injunction). Consumer comments thanking Moore for a “clarification” did not reveal what the commenters understood about heme iron content, and did not relate to the other statements, so summary judgment was granted on those statements.

One statement survived. A reasonable jury could find literally false Moore’s “yes” response to a question whether the iron’s bovine-spleen source meant the product is “indeed all heme,” based on internal testing showing heme iron made up only about 3.7% of one product’s label (less than 1 mg) and 1.7% of another’s (0.34 mg). When a statement is literally false, materiality is presumed. But the court granted summary judgment on CBL’s request for damages because CBL produced no evidence of injury or that Three Arrows’ profits resulted from the false statement. Under Fifth Circuit law, a plaintiff cannot recover a defendant’s profits under 15 U.S.C. § 1117(a) without evidence that the defendant benefitted from the false advertising, and gross sales alone were not enough. CBL’s claim for injunctive relief on that one statement survives, because it showed it competes directly with Three Arrows in the heme iron market and could be found likely to be injured.

Website statements. Because the parties agreed the settlement release does not cover post-settlement conduct, and CBL did not pursue pre-settlement website statements, the court granted summary judgment on that ground; claims based on later website statements remain for trial.

Breach of the settlement agreement. A jury could find that Moore’s comments implied that the products contain heme iron, in breach of the No-Misrepresentation Obligation, and whether they fall within the agreement’s “educational” carve-out is a fact question. Substantial performance is also generally a jury question. On non-disparagement, a jury could find that the brand ambassador was a person “acting, or purporting to act” on Three Arrows’ behalf, given evidence that Moore told her “I think what you’ve said is fine” after explaining the settlement terms. The court declined to speculate about contract damages.

Key Takeaways

• For statements that are not literally false, a Lanham Act plaintiff seeking damages needs evidence of actual consumer deception, not just comments that are ambiguous.
• A literally false statement gets a presumption of materiality, but the plaintiff still must show injury or a link between the false advertising and the defendant’s profits to recover damages or disgorgement in the Fifth Circuit.
• A direct competitor can show likely injury enough to pursue an injunction against a literally false claim.
• Settlement agreements that bar implied claims can be breached by statements that suggest a prohibited meaning, and whether a carve-out applies can be a jury question.

Why It Matters

The ruling illustrates how a false advertising case can narrow sharply at summary judgment: a plaintiff may lose most of its Lanham Act theories for lack of consumer-deception evidence and damages proof while keeping a targeted injunction claim and its contract claims. For companies that settle advertising disputes, it also shows that implied-representation clauses can be enforced against social media and customer-service statements, and that a company can be answerable for the statements of promotional partners if they act on its behalf.

The decision comes before trial, and the court deferred its ruling on the expert challenges until the pretrial conference or trial objections.