BPI Sports v. ThermoLife, decided June 16, 2025

Case Citation: BPI SPORTS, LLC v. THERMOLIFE INTERNATIONAL LLC, 2023-1068, 2023-1625, 2023-1112 (Fed. Cir. June 16, 2025). This disposition is nonprecedential.

Court: United States Court of Appeals for the Federal Circuit

Judges: REYNA, CUNNINGHAM, and STARK, Circuit Judges. Opinion by REYNA, Circuit Judge.

Decided: June 16, 2025

I. Executive Summary

The Federal Circuit Court of Appeals reversed a lower court's final judgment of false advertising under the Lanham Act and unfair competition under state law against ThermoLife International LLC, Ronald L. Kramer, and Muscle Beach Nutrition LLC (collectively, "Appellants" or "defendants"). The appellate court found that BPI Sports, LLC ("BPI" or "plaintiff") failed to prove the "literal falsity" element of its false advertising claim. However, the court affirmed the district court's sanctions order against the Appellants regarding attorneys' fees, stemming from Mr. Kramer's bad-faith creation of a backdated license agreement and subsequent discovery obstruction.

II. Parties Involved

• Plaintiff-Cross-Appellant: BPI Sports, LLC ("BPI"). Manufactures and sells dietary nutritional supplements, competing with ThermoLife's licensees.

• Defendants-Appellants:ThermoLife International LLC: Owns patents covering creatine nitrate, an amino-acid nitrate used in dietary supplements.

• Ronald L. Kramer: President, CEO, and sole owner of ThermoLife; CEO of Muscle Beach Nutrition (MBN).

• Muscle Beach Nutrition LLC (MBN): Licensed ThermoLife's patented creatine nitrate technology and sold a product called “CRTN-3” from 2017 to 2021. MBN was later added as a defendant and admitted to being an alter ego of ThermoLife.
  

III. Background of the Dispute

BPI sued ThermoLife and Mr. Kramer in February 2019 for false advertising under the Lanham Act and unfair competition under state law, specifically regarding MBN's product CRTN-3. The CRTN-3 label claimed the benefit of "increase[d] vasodilation."

A significant issue arose during discovery concerning an alleged license agreement between ThermoLife and MBN ("License Agreement"). BPI sought information on all ThermoLife patent licenses. On March 20, 2020, ThermoLife produced a License Agreement, effective March 16, 2017, but undated. It was later "undisputedly" revealed that Mr. Kramer created this License Agreement on March 9, 2020, in an "alleged attempt to memorialize a pre-existing ‘oral/implied’ license" and did not disclose the creation date initially. This led to discovery disputes, motions to compel, and eventually, a sanctions order.

MBN was added as a defendant to the suit in June 2020, and the defendants admitted MBN was an alter ego of ThermoLife.

IV. Key Rulings and Appeals

A. District Court's Decisions (Southern District of Florida):

1. Sanctions Order (July 14, 2021): The district court sanctioned the defendants (but not their attorney) for Mr. Kramer's bad faith in fabricating the License Agreement and obstructing discovery. The sanctions included:

2. Exclusion of the License Agreement from trial.

3. An adverse jury instruction concerning Mr. Kramer’s attempt to manufacture favorable evidence and its effect on his credibility.

4. Award of reasonable fees and costs to BPI incurred with its sanctions motion and two motions to compel discovery related to the License Agreement.

5. The district court found Mr. Kramer "acted in bad faith by knowingly fabricating the License Agreement and repeatedly obstructing discovery to conceal this fraud."

6. Jury Verdict (October 2021): The jury found for BPI on false advertising and unfair competition but awarded zero damages. The jury found for defendants on the false patent marking claim.

7. Post-Trial Motions:

8. The district court denied BPI's Rule 59 motion for a new trial (based on an alleged compromise verdict).

9. The district court denied Appellants' Rule 50 motion for judgment as a matter of law (JMOL), which argued BPI failed to meet its burden on false advertising and unfair competition.

10. The district court denied Appellants' Rule 60(b) motion for relief from judgment and the Sanctions Order as untimely.
    

B. Federal Circuit Court of Appeals Decisions (June 16, 2025):

1. Reversal of False Advertising and Unfair Competition Judgment:

2. The court reviewed the denial of JMOL de novo under Eleventh Circuit law, viewing evidence in the light most favorable to the nonmoving party.

3. Crucial Holding on Falsity: The court reversed the judgment, finding "no reasonable jury could have found in favor of BPI under the falsity element of a false advertising claim, i.e., that CRTN-3 label’s statement of 'increase vasodilation' was literally false."

4. The court clarified that only "literal falsity" was at issue, as the jury had not reached whether the statement was misleading, and BPI did not properly preserve an argument for misleadingness on appeal.

5. The court reasoned: "BPI’s own evidence shows that the dosage disclosed in CRTN-3’s label would “cause vasodilation” for people weighing 113 pounds or less." Thus, BPI's "own expert admits that it is not literally false that CRTN-3 'increase[s] vasodilation.'"

6. BPI's argument that the statement was literally false because it didn't apply to the "average adult in the U.S. weighing 177 pounds" was rejected, as the label "merely stated that it will 'increase vasodilation.'"

7. Since the false advertising claim failed, the dependent unfair competition claim also failed.
   

8. Affirmation of Sanctions Order (Attorneys' Fees Portion):

9. The court largely found Appellants' challenge to the Sanctions Order moot due to the reversal of the judgment (e.g., adverse jury instruction and evidentiary issues were no longer relevant).

10. However, the award of attorneys' fees remained "ripe for review."

11. The court affirmed the district court's exercise of its "inherent authority" to sanction.

12. The court rejected Appellants' argument that Purchasing Power required a finding that bad faith was the "only" explanation for the conduct. It clarified that bad faith can be shown if conduct "is so egregious that it could only be committed in bad faith."

13. The court found sufficient evidence to support the bad faith determination: Appellants "(1) withheld information surrounding the circumstances of the License Agreement until compelled to release this information and (2) attempted to prevent discovery of the circumstances surrounding the creation of the License Agreement."

14. The court concluded, "These findings are not clearly erroneous and are sufficient to support a bad faith determination."
    

15. Dismissal of Cross-Appeal and Mooted Appeals:

16. BPI's cross-appeal (denial of Rule 59 motion for a new trial) was dismissed as moot.

17. Appellants' appeal of the denial of its Rule 60(b) motion was also dismissed as moot due to the reversal of the main judgment.

18. The finding on the false patent marking claim was left undisturbed as BPI did not appeal it.
    

V. Most Important Ideas/Facts

• False Advertising Standard: To prove a false advertising claim under the Lanham Act, a plaintiff must establish five elements, including a "false or misleading advertisement." The failure to establish any one element is fatal.

• Literal Falsity (Crucial to Reversal): The appellate court focused only on "literal falsity," finding that BPI's own expert testimony established that CRTN-3's label statement "increase vasodilation" was not literally false, as it would cause vasodilation in individuals weighing 113 pounds or less. The label did not specify "average adult."

• Judicial Sanctions for Bad Faith: District courts possess inherent authority to sanction parties who act in bad faith. This power can be exercised when a "fraud has been practiced upon [the court], or that the very temple of justice has been defiled."

• Fabricated Evidence and Discovery Obstruction: Mr. Kramer's undisputed act of creating a backdated license agreement and the defendants' subsequent efforts to conceal its creation and obstruct discovery were key factors in the affirmation of the sanctions order. The court found that "Mr. Kramer acted in bad faith by knowingly fabricating the License Agreement and repeatedly obstructing discovery to conceal this fraud."

• Scope of Sanctions: While the main judgment was reversed, rendering many aspects of the sanctions (like jury instructions) moot, the award of attorneys' fees, a direct compensatory measure for the discovery misconduct, remained valid and was affirmed.

• Nonprecedential Disposition: It is important to note that this disposition is marked as "nonprecedential," meaning it does not establish binding precedent for future cases.