Many businesses acquire commercial liability insurance coverage to protect against “advertising injury” resulting from their marketing practices. But while the term “advertising injury” on its face may sound comprehensive, its definition in the insurance policy may be narrower than you think. As a result, some businesses have received a rude awakening after learning: (1) they are being sued for false advertising; and (2) their insurance company is not going to pay for it.
Vitamin Health faced this exact situation after it was sued by Bausch & Lomb based on advertising that promoted the health benefits of its Viteyes® supplements for eye health. Vitamin Health’s ad campaign promoted the supplements as “AREDS 2-Compliant,” which means they contained a combination of vitamins recommended by the National Eye Institute’s Age-Related Eye Disease Study (AREDS). Bausch & Lomb filed suit against Vitamin Health for patent infringement, but later amended its complaint to add a false advertising claim after Vitamin Health “change[d] the formulation” of its eye supplement so that it was no longer AREDS-2 Compliant. According to Bausch & Lomb, Vitamin Health reduced the level of zinc in Viteyes® from the AREDS-recommended 80 mg to 25 mg, rendering the product no longer compliant with AREDS 2.