## Facts

- Ralston Purina was the long-standing market leader in puppy food with “Purina Puppy Chow.”
- ALPO entered the puppy food market in 1985 with “ALPO Puppy Food” in selected northeastern states.
- Ralston ran comparative advertising claiming Puppy Chow could reduce the severity of canine hip dysplasia (CHD); ALPO alleged the CHD claim lacked scientific support and was false or misleading.
- Ralston counterclaimed that ALPO falsely advertised that veterinarians preferred ALPO’s formula over the leading brand by a 2-to-1 margin.
- After a bench trial, the district court found both parties violated § 43(a) of the Lanham Act and entered injunctive relief.
- A prior appeal affirmed liability but rejected the district court’s earlier damages methodology and remanded for redetermination.
- On remand, the district court awarded ALPO $12,140,356: roughly $3.6 million for increased advertising to counter the CHD campaign, roughly $4.5 million for delayed national rollout and delayed “income stream,” plus a 50% enhancement for lost profits, market distortion, interest, and inflation; it also awarded Ralston $53,434 plus attorneys’ fees on the counterclaim.
- Ralston appealed the remand judgment, contesting the categories and calculation of ALPO’s monetary recovery under § 35(a).

## Issues

1. What evidentiary showing of causation and quantification is required for monetary relief under Lanham Act § 35(a) following a false-advertising violation under § 43(a)?
2. To what extent may a plaintiff recover increased advertising expenditures allegedly incurred to counter a competitor’s false advertising?
3. When, if ever, may a plaintiff recover damages for delayed market entry and a delayed “income stream,” and how must such losses be calculated?
4. Under what conditions may a court enhance a Lanham Act damages award, and what limits apply to percentage-based enhancements?
5. Whether the district court’s awards (including the counterclaim award and fees) were consistent with § 35(a)’s remedial and equitable limits.

## Decision

- The court affirmed in part, reversed in part, and remanded for the district court to redetermine elements of ALPO’s recovery.
- The court held that § 35(a) relief must be supported by record evidence of causation and a reasonable, non-speculative basis for measurement; the district court could not rely on undifferentiated assumptions.
- The court permitted recovery of some corrective advertising expenditures but required the district court to separate costs attributable to countering the CHD campaign from costs driven by ALPO’s independent marketing strategy.
- The court found the rollout-delay / delayed-income component insufficiently supported as calculated and directed a more rigorous analysis, including accounting for ALPO’s alternative use of funds and avoiding speculative projections.
- The court rejected or substantially limited the 50% enhancement, ruling that an enhancement cannot replace proof of compensable harm and cannot operate as a punitive add-on.
- The court largely left the counterclaim award and related relief intact, subject to the general requirement that monetary awards be grounded in evidence and consistent with § 35(a).

## Legal Principles

- Lanham Act monetary relief under § 35(a) requires a causal connection between the unlawful advertising and the claimed injury; damages are not presumed from liability.
- Courts may tolerate some imprecision in calculating damages, but the plaintiff must provide a reasonable evidentiary basis for quantifying loss and attributing it to the false advertising rather than other market factors.
- Corrective or responsive advertising costs can be recoverable as “damages sustained,” but only to the extent they are reasonably linked to countering the challenged campaign.
- Claims for lost profits or losses tied to delayed market entry must be supported by credible evidence and must account for offsetting benefits or alternative uses of resources; speculative “but-for” sales forecasts are insufficient.
- Enhancements under § 35(a) must serve compensatory and equitable purposes (and may support deterrence), but cannot be a substitute for proof of actual harm or function as punishment.

## Conclusion

The D.C. Circuit required that false-advertising damages under the Lanham Act be tied to proven causation and non-speculative quantification, vacating portions of ALPO’s award—especially the rollout-delay theory and the 50% enhancement—while allowing limited recovery for responsive advertising and remanding for recalculation consistent with § 35(a).


ALPO Petfoods, Inc. v. Ralston Purina Co., 997 F.2d 949 (D.C. Cir. 1993)