Thursday, May 7, 2026
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Ninth Circuit:
Only Observable Statements Support False Advertising Claims
Opinion Says California Company’s Assertion That Igloo Falsely Touted Its Biodegradable Cooler as ‘First to Market’ Despite Plaintiff’s Earlier Release Is Not Cognizable for Latham Act, Related State-Law Claims, Drawing Dissent
By Kimber Cooley, associate editor
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Depicted above is Darrell Jobe holding a biodegradable cooler developed by the California company he founded, Vericool Inc., and related entities. Yesterday, the Ninth U.S. Circuit Court of Appeals held that Vericool’s false advertising claims against Igloo Products Corporation over statements boasting that a purportedly later-to-market eco-friendly ice chest was the first of its kind fail as a matter of law. |
A divided Ninth U.S. Circuit Court of Appeals held yesterday that Igloo Products Corporation was rightly granted summary judgment in a lawsuit filed by a California start-up, run by an ex-convict-turned-entrepreneur who sought to tap into the environmentally-friendly market, accusing the outdoor giant of false advertising in violation of federal and state law relating to statements promoting a biodegradable disposable ice chest as the “first” of its kind.
Saying that the plaintiff’s claims fail as a matter of law, Circuit Judge Ryan D. Nelson, writing for the court, declared that alleged misrepresentations about the nature of characteristic of goods must concern “an observable aspect” of a tangible product to be cognizable under a provision of the Lanham Act, found at 15 U.S.C. §1125(a)(1)(B), as well as for related claims under California’s Unfair Competition Law.
Sec. 1125(a)(1)(B) provides for a civil cause of action against “[a]ny person who, on or in connection with any goods…, uses…any…false or misleading description of fact, or false or misleading representation of fact, which” “misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods” by “any person who believes that he or she is or is likely to be damaged by such an act.”
Noting that “[w]e have never considered whether the date on which a product first reaches the market may count as a nature, characteristic, or quality under the Lanham Act,” Nelson declared:
“Vericool World LLC…claims Igloo Products Corporation said something uncool— wrongfully taking credit as the first to market a biodegradable cooler. We must decide whether Igloo’s statements are unlawful under the Lanham Act.”
He continued:
“The ‘characteristic’ must be an observable aspect of the ‘tangible product’ rather than the ‘ideas or communications that [the products] embody or contain.’…Because Vericool’s claim concerns the origin of an idea embodied in its coolers—rather than the characteristics of the product itself—we conclude it is not cognizable….”
Senior Circuit Judge David F. Hamilton of the Seventh U.S. Circuit Court of Appeals, sitting by designation, joined in the decision. Dissenting, Circuit Judge Patrick J. Bumatay wrote:
“The question of what is the ‘nature’ of a thing has vexed philosophers, physicists, and poets for millennia…. Thankfully, we don’t need to settle this age-old question here. Instead, our job is simply to answer whether the ‘nature,’ ‘characteristics,’ or ‘qualities’ of a thing includes its intangible nature, characteristics, or qualities. Under the plain meaning of those words, the answer is of course ‘yes.’ ”
Complaint Filed
The dispute arose after Vericool filed a complaint against Igloo in April 2022, asserting:
“Vericool is a small, Black-owned business founded by Darrell Jobe, an ex-felon turned environmentally and socially conscious entrepreneur. Using Jobe’s design, in 2017, Vericool successfully manufactured a fully functional, 100% recyclable and biodegradable cooler [made from plant-pulp fiber]. Vericool’s product, named ‘Vericooler III,’ was groundbreaking in that it provided a much-needed eco-friendly…alternative to harmful packaging materials made from plastic that have plagued our planet for decades.”
Pointing to another version of the product, the “Ohana Cooler,” that was offered for sale directly to consumers in 2018, Vericool claimed:
“Already facing prejudices as a Black man driving environmental innovations, Igloo’s misleading statements reinforced skepticism that Jobe has faced throughput his career. The Ohana Cooler was perceived as an alternative in the market, rather than credited as the pioneering product that it is. Igloo’s false claims also depressed the public and press response connected with the retail launch of the Ohana Cooler. On information and belief, this was a direct and proximate result of Igloo’s misleading portrayal of [its product, ‘Recool,’ released to major retailers in 2019] as the first biodegradable cooler to be produced.”
After dueling motions for summary judgment were filed, District Court Judge Haywood S. Gilliam Jr. of the Northern District of California ruled in favor of the defendant in December 2023, saying that the Lanham Act does not support claims based on a defendant’s false claims of “inventorship” and the California causes of action were derivative of the federal claims.
Fuzzy Boundaries
Saying that “we are guided by a line of cases tracing the fuzzy boundaries between the laws of unfair competition and intellectual property,” Nelson pointed to the 2023 U.S. Supreme Court decision in Dastar Corporation v. Twentieth Century Fox Film Corporation, which addressed, under a different subdivision of § 1125, a party’s assertion that the defendant sold videos that it produced without giving “proper credit” to the plaintiff.
In that case, the high court distinguished between the Lanham Act and intellectual property law, saying that courts must avoid interpretations of the Lanham Act that extend “trademark and related protections into areas traditionally occupied by patent or copyright.”
Based on the Dastar decision and related Ninth Circuit jurisprudence, Nelson concluded:
“A misrepresentation about attributes embodied in a physical product is actionable under the Lanham Act if it misleads a consumer about the quality of a good itself or misrepresents the physical producer of a good in a manner that would be actionable under traditional claims for unfair competition. If, however, the misrepresentation regards ‘matters that are typically of no consequence to purchasers,’ such as the source of the idea, design, or innovation embodied in the product, then plaintiffs must bring an intellectual property claim and cannot proceed under the Lanham Act.”
End Run
Applying those principles, the jurist remarked:
“Vericool applied for a patent on its biodegradable cooler. The U.S. Patent and Trademark Office (PTO) rejected many claims in the application. The PTO found a prior 1923 patent application for a ‘thermally insulating packaging comprising a solid compostable or recyclable shell that is formed primarily of a plant fiber.’…Vericool now attempts to use the Lanham Act as an end run around the PTO’s decision.”
He continued:
“Vericool’s ‘first to the market’ claim is fundamentally a claim about origins of a design rather than the tangible characteristics of the cooler itself. Such claims improperly circumvent the limits Congress placed on patent protection. Thus, Vericool’s Lanham Act claim fails as a matter of law.”
Addressing the plaintiff’s “new theory,” raised for the first time on appeal, that “Igloo’s ‘first to the market’ claim caused confusion about whether the Ohana was biodegradable,” he opined that such a cause of action “might be cognizable” but said that it failed due to Vericool’s failure to provide factual support for the argument.
Nelson declared:
“Being first to the market carries some economic value. Congress chose to protect the value of being first through the Patent Act. But Vericool’s claim is not cognizable under the Lanham Act.”
Bumatay’s View
Accusing the majority of “[f]ighting [the] plaint-text reading” of §1125(a)(1)(B), Bumatay argued:
“[T]he majority offers a novel interpretation categorically limiting [the law] to apply only to misrepresentations about observable ‘nature, characteristics, [or] qualities.’ Based on a misreading of precedent, the majority declares, for the first time, that….misrepresentations about non-observable…characteristics ‘are typically of no consequence to purchasers,’ [and] holds that lies about ‘the source of the idea, design, or innovation’ of a product can’t be sanctioned….So, to the majority, companies are free to mislead the public so long as the misrepresentation goes to intangible characteristics….”
Saying that “there’s at least three problems with the majority’s analysis,” he opined:
“First, it can’t be squared with the Lanham Act’s plain text. Neither ‘tangible’ nor ‘observable’ appear in [the section]….And the majority’s carveout for misrepresentations about a product’s ‘ideas or design concepts’ is made from whole cloth.”
He continued:
“Second, the majority’s newfangled ‘dichotomy’ between misrepresentations about a product’s ‘ideas or design concepts’ and a product’s tangible characteristics will confuse and wreak havoc in district courts….And finally, even accepting the majority’s novel test, Vericool’s allegation that Igloo’s misrepresentations imply that its product is a ‘knockoff’ is tangible enough to survive summary judgment.”
The case is Vericool World LLC v. Igloo Products Corporation, 24-192.
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