Standard Process Lawsuit & Its Business Model

Standard Process, Inc. is a manufacturer of whole-food nutritional supplements and related products. It sells its products not directly to all consumers but rather through a network of authorized health-care professionals and approved resellers. For example: Standard Process requires its customers (resellers) to agree not to sell its products via the Internet, not to sell to other businesses, and not to sell directly to the general public other than licensed pharmacies or health-clinics.

Over the years, Standard Process has pursued litigation against various unauthorized resellers—companies that purchased Standard Process products (sometimes via third parties) and then offered them for sale online (e.g., through Amazon, independent websites) in violation of Standard Process’s resale policy. Key defendants have included Total Health Discount, Inc., KDealz Ltd. Co., and AVC Infinite, LLC and others.

The company’s claims typically include trademark infringement, false designation of origin/false advertising under the Lanham Act (15 U.S.C. §§ 1114, 1125), unfair competition, and tortious interference with contractual or business relations. For example, in Standard Process, Inc. v. Total Health Discount, Inc. the complaint alleged unauthorized sales of Standard Process products via internet retail, use of the company’s trademarks/logos, false designation that the reseller was “authorized,” and interference with Standard Process’s contractual distribution arrangements.

Key Lawsuits & Legal Issues

1. Standard Process Inc. v. Total Health Discount, Inc. (2008)

In this case, Plaintiff alleged that Total Health Discount, Inc. sold Standard Process products online without authorization, used the Standard Process trademarks/logos on its website, and misrepresented that it purchased the products from “authorized third parties.” The complaint included claims under the Lanham Act (false designation of origin/false advertising) and state-law claims (fraudulent representation under Wis. Stat. § 100.18, unfair competition, tortious interference).

The court examined defendants’ motion for summary judgment. One key issue was whether Standard Process suffered actual harm (i.e., lost goodwill or customer confusion) and whether the purported resale policy constituted a binding contract so that tortious interference could apply. The court found genuine issues of material fact existed regarding the trademark/false advertising claims, thus denying summary judgment.

2. Standard Process Inc. v. KDealz Ltd. Co. (2018)

Another case involved KDealz, an online reseller operating an Amazon storefront that allegedly purchased Standard Process products (despite not being authorized) and sold them online. Standard Process sued for trademark infringement, false advertising, unfair competition, deceptive trade practices and interference. In KDealz, one of the threshold questions was personal jurisdiction: whether the Wisconsin court could exert jurisdiction over KDealz (based in Kentucky) given the online sales and product shipments into Wisconsin. The court held that Standard Process made a prima facie showing of specific personal jurisdiction and denied the motion to dismiss for lack of jurisdiction.

3. Standard Process Inc. v. AVC Infinite, LLC (2020–2021)

In this matter, Standard Process obtained default judgment and a permanent injunction against AVC Infinite and associated defendants who sold Standard Process products via Amazon. The court found that Standard Process’s exclusive authorised-reseller model, and its monitoring and quality control measures, were sufficiently pleaded such that unauthorized internet sales undermined the company’s quality control and confused consumers.

Legal Doctrines & Themes

Several legal doctrines are at play in these Standard Process lawsuits:

• Trademark Infringement / False Designation of Origin (Lanham Act) – Standard Process asserts that unauthorized resale undermines its quality control and/or creates confusion among consumers (for example, whether the reseller is authorized, whether consultation is required, whether the product is properly stored/handled). In Standard Process v. Banks, the court discussed that to maintain its trademark rights in a selective-distribution network, the trademark holder must show legitimate, substantial, non-pretextual quality-control procedures and that deviations may dilute the mark.
• First Sale Doctrine vs Authorized Reseller Restraints – Defendants argue that once a product is purchased legitimately, resale is permitted under the “first sale” doctrine. Standard Process counters that its authorised-reseller program and quality-control requirements create conditions limiting resale to authorised parties. The tension between product control/distribution agreements and antitrust/first-sale rights is a recurring theme.
• Personal Jurisdiction in Internet Sales – In KDealz, the court’s discussion of minimum contacts with Wisconsin based on sale/shipment of products via Amazon to Wisconsin customers provides a blueprint for jurisdiction issues in e-commerce distribution cases.
• Unfair competition / tortious interference – Standard Process has asserted that unauthorized resellers not only infringe trademarks but also interfere with Standard Process’s contractual relationships with authorised resellers. The success of these claims often hinges on whether Standard Process’s resale policy qualifies as a contract and whether harm is shown.

Implications for Manufacturers, Resellers & Consumers

For Manufacturers

Manufacturers who use selective distribution networks (requiring authorised resellers, quality-control standards, limiting online sales) must ensure their policies are clearly documented, enforced and non-pretextual. To maintain trademark rights and restrain unauthorized resale, they must show legitimate control procedures and that deviations harm the brand. Monitoring and prompt enforcement letters can support their position.

For Resellers / Online Sellers

Resellers should evaluate whether they are “authorised” distributors and whether their source of the product complies with the manufacturer’s policy. Unauthorized sales may expose them to litigation under the Lanham Act and state law. Resellers should expect that manufacturers with selective distribution models may pursue injunctive relief. Moreover, interstate sales into states where the manufacturer is based may trigger jurisdiction.

For Consumers

Consumers buying products online from unauthorized sellers face potential risks: loss of the manufacturer’s warranty, improper storage/handling, and reduced oversight of product authenticity. Of course, from a legal enforcement perspective, such transactions tend to draw manufacturer enforcement actions.

Why These Lawsuits Matter

The Standard Process cases illustrate significant themes in modern distribution and e-commerce law:

• The struggle between control of distribution networks by brand-owners and the open market ethos of the internet.
• How online marketplaces (Amazon, etc.) blur geography and create jurisdictional issues.
• The use of trademark law (Lanham Act) in distribution-control contexts—not just classic counterfeiting but “unauthorized resale/parallel import” scenarios.
• The balancing act between legitimate resale doctrine (first sale) and brand owners’ desire for quality-control and selective distribution.

Conclusion

The litigation surrounding Standard Process presents a clear example of how a brand-owner with a selective distribution model can—and will—litigate to enforce distribution restrictions, defend trademarks, and maintain control over its authorized network and brand reputation. For manufacturers considering similar models, the Standard Process litigation offers a cautionary but instructive roadmap: document your policies, monitor compliance, and be ready to enforce. For resellers and e-commerce actors, it underscores the legal risks of unauthorized online sales even when the products themselves are genuine.