Thursday, June 27, 2013

Disputed scientific conclusions not actionable under Lanham Act

Whether this is a blockbuster, as my title should suggest, or is limited in future cases to claims made to specialized audiences (as some language in the opinion suggests), remains to be seen. 

Ony, Inc. v. Cornerstone Therapeutics, Inc., --- F.3d ----, 2013 WL 3198153 (2d Cir.)

District court opinion discussed here.  Intro, nicely summing things up:

This case asks us to decide when a statement in a scientific article reporting research results can give rise to claims of false advertising under the Lanham Act, deceptive practices under New York General Business Law § 349, and the common-law torts of injurious falsehood and interference with prospective economic advantage. We conclude that, as a matter of law, statements of scientific conclusions about unsettled matters of scientific debate cannot give rise to liability for damages sounding in defamation. We further conclude that the secondary distribution of excerpts of such an article cannot give rise to liability, so long as the excerpts do not mislead a reader about the conclusions of the article.

This represents a potentially powerful incursion into the ordinary Lanham Act standard for establishment claims; many defendants will likely be citing this case at least as often as they contest standing.

Plaintiff ONY and defendant Chiesi are two of the biggest producers of surfactants, biological substances that are critical to lung function.  Premature infants often have inadequate surfactant levels, putting them at higher risk of death.  Nonhuman surfactants produced by the parties, among others, are the primary treatment for this respiratory distress syndrome (RDS). The FDA has approved three surfactants for treating RDS in newborns.  ONY produces a bovine surfactant, Infasurf.  Chiesi produces a porcine surfactant, Curosurf.  Cornerstone distributes Curosurf in the US.

The parties “vigorously contest the relative effectiveness of their products—in the marketplace, in the scientific literature, and in the instant lawsuit.”  They agreed that mortality rate and length of stay in the hospital for treatment were particularly relevant variables, though not independent of each other (length of stay may be shortened by death, or may be shortened because an infant’s case is less serious).

Chiesi hired defendant Premier to build a database and conduct a study of the relative effectiveness of the different surfactants.  The doctor defendants were hired to present findings based on Premier’s database at various medical conferences.  They presented findings (1) that Curosurf was associated with a 20% lower mortality rate than either Infasurf or another competitor, Survanta and (2) that Curosurf was associated with a 15% shorter length of stay than either Infasurf or Survanta, based on Premier’s database.  They (along with a Premier employee) eventually decided to publish their findings in a peer-reviewed journal.  The Journal of Perinatology, the leading journal in the field of neonatology, published their article after peer review.

ONY argued that the article contained incorrect statements of fact that Infasurf was “associated with a significantly greater likelihood of death” than Curosurf, “even after adjusting for patient characteristics such as gestational age and [birth weight], and after accounting for hospital characteristics and center effects.”  ONY also argued that the publication was suspect: one of the authors was an associate editor of the journal, and another was a member of the editorial board.  ONY alleged that one of the two peer reviewers objected to the publication, but that the editor-in-chief broke the tie between the reviewers.  ONY didn’t allege, though, that this tiebreaking was a departure from customary or accepted practice.  The article was published as “open access,” free to the public, and the publication fees were paid by Chiesi and Cornerstone.

The authors did note that their findings may “most likely ... be due to different surfactant doses administered to the infants included in the database,” because Curosurf was, on average, prescribed in higher doses than its competitors. And they disclosed that the study was sponsored by Chiesi, that one author was an employee of Premier, that Chiesi hired Premier to conduct the study, and that all three physician defendants had served as consultants to Chiesi.

ONY’s primary objection to the methodology was that the authors omitted any mention of length of stay data.  This was allegedly done to mask the fact that Curosurf-treated infants had a greater ex ante chance of survival than those treated with Infasurf.  In addition, the authors failed to cite articles that concluded differently, though they knew of such articles, and they used retrospective data, which allegedly rendered the data subject to selective distortion.

After the article was published, Chiesi and Cornerstone issued a press release touting its conclusions and distributed promotional materials that cited the article's findings. ONY’s corporate officers, also pediatricians, wrote letters to the journal rebutting the article's conclusions, objecting to its methods, and asking that it be retracted. The court took judicial notice that several (two?) of the letters were eventually published, as were responses.

The court first evaluated claims arising out of the article’s publication.  The Lanham Act “proscribes conduct that, but for its false or misleading character, would be protected by the First Amendment,” so “free speech principles inform our interpretation of the Act.” This is especially so for academic works, because academic freedom is “a special concern of the First Amendment.”

ONY argued that the article’s scientific claims purported to be statements of fact, thus falsifiable, thus defamatory/false advertising if known to be false when made.  Scientific discourse does pose problems for the fact/opinion divide.  “Most conclusions contained in a scientific journal article are, in principle, ‘capable of verification or refutation by means of objective proof.’”  That is, in fact, what science claims to be for.  “At the same time, however, it is the essence of the scientific method that the conclusions of empirical research are tentative and subject to revision, because they represent inferences about the nature of reality based on the results of experimentation and observation.”  The court emphasized that scientific publications are directed to the “relevant scientific community, ideally in peer-reviewed academic journals that warrant that research approved for publication demonstrates at least some degree of basic scientific competence.”  Their conclusions are then available to other scientists, “who may respond by attempting to replicate the described experiments, conducting their own experiments, or analyzing or refuting the soundness of the experimental design or the validity of the inferences drawn from the results.”  When the area is novel, “facts” in the research “may be highly controversial and subject to rigorous debate by qualified experts. Needless to say, courts are ill-equipped to undertake to referee such controversies.”

(As a side note, compare the line of cases about blogs and hyperbole, where what looks like “factual” claims are dismissed as nonfactual because of their lowly presentation.  Apparently there is emerging the idea that there is a sweet spot for things that can be falsifiable; aim above or below and you aren’t making a “factual” claim for First Amendment purposes.  Whether this is a good idea or not I leave to readers.)

Courts have been reluctant to allow causes of action “grounded on statements of fact that are best evaluated by an informed reader.”  The fact/opinion divide was unhelpful in evaluating a statement “made as part of an ongoing scientific discourse about which there is considerable disagreement.”  While in theory scientific assertions are in principle verifiable, “for purposes of the First Amendment and the laws relating to fair competition and defamation, they are more closely akin to matters of opinion, and are so understood by the relevant scientific communities.”  (I bet the FDA is going to be super, super surprised by this.  Or are FDA requirements not about “fair competition”?  As a side note, is it now an unconstitutional condition to approve a new drug as long as the manufacturer only makes certain claims about it on labeling?)

Here, it was relevant that ONY didn’t allege that the data in the article were fabricated or fraudulently created.  “If the data were falsified, the fraud would not be easily detectable by even the most informed members of the relevant scientific community.” Instead, ONY alleged that the inferences drawn from that data were wrong, and that competent scientists would have used available variables that defendant authors didn’t.  “But when the conclusions reached by experiments are presented alongside an accurate description of the data taken into account and the methods used, the validity of the authors' conclusions may be assessed on their face by other members of the relevant discipline or specialty.”

Thus, the rule: “to the extent a speaker or author draws conclusions from non-fraudulent data, based on accurate descriptions of the data and methodology underlying those conclusions, on subjects about which there is legitimate ongoing scientific disagreement, those statements are not grounds for a claim of false advertising under the Lanham Act.”  ONY’s allegations weren’t that the data were incorrect, but that they were presented in a misleading way.  Even if that were actionable, that’s a weak claim where the authors disclosed the potential shortcomings of their methodology and their potential conflicts of interest.

Given this result, the article’s contents weren’t actionable under NY law either.

The court considered Chiesi and Cornerstone’s use of the article’s findings separately.  ONY alleged that this dissemination tortiously interfered with ONY’s prospective economic advantage in contracting with hospitals and other health-care providers. But ONY didn’t allege that the promotional materials misstated the article’s conclusions. This made the case much easier.  On the alleged facts, there was no error in dismissing the tortious interference claim because (a) the article itself was not actionable and (b) the tortious interference claim did not separately allege any additional misleading statements.


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