Merck also won a false advertising claim against Gnosis (and
in this case, there were “egregious discovery violations”). In this opinion, the court settled on an
attorneys’ fee award and discussed the appropriate corrective advertising
already ordered. The award was over $1.9
million, and nearly $300,000 in costs.
Gnosis argued that this sum far exceeded their sales of the product at
issue, $175,664.71, as well as the damages awarded by the court, $526,994.13. But the actual stakes in the case were the
market share of one of Merck’s flagship products, and Merck’s lawyers got a
significant victory (including an injunction), making the fee reasonable.
Merck proposed tha the corrective advertising campaign (1)
disclose that the campaign is court-ordered; (2) explain that Gnosis’s misrepresentations
were found to be willful; (3) provide a link to the opinion hosted on Merck’s
lawyers’ website; (4) run on Gnosis’s homepage; (5) run on third-party industry
websites; and (6) run in trade magazines where Gnosis’s offending products were
advertised. Gnosis argued that the first
two were punitive and unrelated to curing market confusion; that providing a
link to the opinion was unnecessary and provided free advertising for the
lawyers, given that the opinion is available free online; that the ads should
only run on pages where the products are sold, not Gnosis’s homepage; and that
the ads shouldn’t run on third-party websites or trade magazines because Gnosis
itself didn’t advertise there.
Corrective advertising must be reasonable and causally related
to the false advertising. Some of
Merck’s requests went beyond addressing consumer confusion. So, the ads would have to disclose that the
campaign is court-ordered to provide consumers with context for Gnosis’s
clarification, but need not disclose that its misrepresentations were
willful. The ads had to provide a link
to the opinion, but it need not be hosted on Alston & Bird’s website. The ads had to be on Gnosis’s homepage as
well as product sale pages “to ensure sufficient market dissemination,” but
need only run elsewhere “where the offending products were or are presently
advertised by Gnosis.”
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