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Law360 (May 13, 2020, 3:54 PM EDT) -- A digital health care startup called Healthvana is suing the company behind the "As Seen On TV" slogan for selling "over-priced" hand sanitizer under the same name during the COVID-19 pandemic.
In a lawsuit filed Tuesday, Healthvana Inc. accused Telebrands Corp. of violating federal trademark law by using the Healthvana name on $15 bottles of sanitizer, saying it had sparked a wave of backlash against the company from angry consumers.
"This action for trademark infringement and false advertising demonstrates how a crisis brings out the best in some companies and the worst in others," Healthvana wrote.
"The trust and relationships that Healthvana worked so hard for years to build suddenly came into question as investors, partners, and customers saw television ads of its distinctive 'Healthvana' name attached to an over-priced hand sanitizer," the company wrote.
The complaint cited supposed examples of actual confusion by consumers — a key piece of evidence in a trademark case. Healthvana said one consumer accused the company on social media of "taking advantage of people during a crisis by jacking up prices."
"[For weeks] angry customers who had been charged high prices but who had not received delivery of their hand sanitizer targeted the real Healthvana with their complaints and anger," the lawsuit said. "Because defendants used Healthvana's registered 'Healthvana' trademark to sell their hand sanitizer, the backlash was directed not at defendants, but at Healthvana."
Healthvana isn't the only company using trademark law to combat alleged price-gouging during the pandemic. 3M has filed a series of lawsuits around the country against companies reselling its N95 masks.
Launched in 2014, Healthvana is a digital portal that allows health care providers to communicate with patients. As the pandemic has unfolded, the company has focused on offering coronavirus testing and tracing services.
Telebrands, based in New Jersey, is a marketing firm that claims to have created the "As Seen On TV" slogan in the 1980s. The company did not immediately return a request for comment on Wednesday.
According to the lawsuit, Telebrands began running national television advertisements for the "Healthvana" hand sanitizer on March 18. After being contacted by Healthvana on March 20, the company rebranded the product in April to "Handvana," but the complaint says the damage was done.
"Healthvana was accused on social media of being 'Liars!,' and consumers called for the federal government to investigate Healthvana," the company wrote in its complaint. "A credit card fraud department contacted Healthvana about charges for hand sanitizer products that raised red flags. Messages submitted through the Healthvana website were filled with expletives and accused Healthvana of 'price gouging' and being a 'bunch of crooks.'"
"As a result, Healthvana was forced to take valuable time and effort from its COVID-19 testing efforts to defend its name, explain to hundreds of upset people that it was a trusted source for COVID-19 test results, not a hand sanitizer retailer," the company added.
Healthvana is represented by Holly Pranger of Pranger Law PC.
Counsel information for Telebrands was not yet available on Wednesday.
The case is Healthvana Inc. v. Telebrands Corp. et al., case number 2:20-cv-04305, in the U.S. District Court for the Central District of California.
--Editing by Adam LoBelia.
For a reprint of this article, please contact reprints@law360.com.
