Monday, October 31, 2016

Study's co-author disclaiming its use creates material issue on falsity

Ferring Pharmaceuticals, Inc. v. Braintree Laboratories, Inc., 2016 WL 6275156, No. 13-12553 (D. Mass. Oct. 25, 2016)

Previous opinion discussed here. The parties compete in the market for products used for bowel preparation before colonoscopies. Ferring alleged false advertising in violation of federal and state law and dilution of its mark, Prepopik. Braintree counterclaimed for false advertising and unfair trade practices.  The court denied summary judgment on the false advertising claims.

First: In addition to Prepopik, Ferring produces a chemically-identical treatment called “Pico-Salax” which is sold in other countries. After the FDA approved Prepopik, Ferring issued a press release stating that “Ferring has a long history in the international gastroenterology market, where PREPOPIK is available in Canada (marketed under the name PICO-SALAX).”  However, there are several differences: Pico-Salax is OTC, while Prepopik is prescription; the instructions direct users to consume different amounts of fluid; and Prepopik is only approved for adult colonoscopy preparation, whereas Pico-Salax is approved for children and adults in preparation for x-rays, surgeries and colonoscopies.  The Canadian government published an article about Pico-Salax in January, 2013, in the Canadian Adverse Reaction Newsletter, stating that “The diarrhea produced by [Pico-Salax] can lead to dehydration and loss of electrolytes, particularly sodium which may result in hyponatremia and convulsions .... As of June 30, 2012, Health Canada received 11 reports of convulsions suspected of being associated with Pico-Salax.”

The court found that there was a genuine issue of material fact about whether Braintree’s use of the Canadian Newsletter to raise safety concerns was literally false or misleading because the letter concerned a different treatment and didn’t indicate that Pico-Salax was dangerous.  (There was conflicting evidence about whether the letter was used to “highlight potential safety concerns” or to support misleading claims that Prepopik was “deadly” and “kills people.”)  Braintree pointed out that Ferring’s own statements equated Prepopik and Pico-Salax, but the court found conflicting evidence about whether the two were equivalent.

Braintree also distributed an FDA-approved comparison detailer, “What’s NOT New About Prepopik?” It listed the formula, the acceptability of use for patients with severely reduced renal function and the effect of antibiotics on efficacy. The flyer also compared the price of Prepopik with other treatments, including Braintree’s.  Ferring argued that efficacy percentages associated with the detailer were unreliable establishment claims, but only found two instances of percentage claims: 1) a handwritten annotation on a flyer that stated percentages and 2) a sales log entry did the same. These were inadequate to show “commercial advertising or promotion” of percentage claims.  Ferring didn’t claim literal falsity for the detailer itself, but rather omission of material information as to Suprep’s safety and lack of fair balance.  Ferring argued that Braintree’s own study showed that the detailer was misleading about safety, but this was contested.

Ferring also challenged an ad, “Clean Freak,” which claimed that Braintree’s product “achieved ‘excellent’ bowel cleansing in patients based on investigator grading ... Significantly more patients had ‘excellent’ preps with SUPREP Bowel Prep Kit compared to MoviPrep[.]”  Braintree won summary judgment because Ferring wasn’t within the protected zone of interests.  The ad compared Suprep to a third party’s treatment.  Though Braintree employees referred to the ad in five instances in sales conversations that also addressed Prepopik’s efficacy, those were insufficient to show “any financial or reputational harm as a direct result of Braintree’s advertising.” Thus, Ferring lacked standing; and independently, five isolated instances weren’t commercial advertising or promotion.

State dilution: MGL, Chapter 110H provides a claim for “[l]ikelihood of injury to business reputation or of dilution of the distinctive quality of a mark ....” This requires the plaintiff to show distinctiveness and that “the defendant’s use of a similar mark creates a possibility of dilution.” The court doesn’t explicitly disavow its earlier weird trademark argument; in fact, it rejects the dilution claim on a ground that doesn’t deal with the total senselessness of the claim.  Ferring argued that Braintree diluted its trademark “by comparing Prepopik to another Ferring product, Pico-Salax.”  Of course, this can’t possibly be “the defendant’s use of a similar mark” as required for Massachusetts dilution, but the court instead granted summary judgment because Ferring itself equated the two products, and even combined their names on its website. 

The court also denied summary judgment on Braintree’s unclean hands defense because Ferring’s own equation of the two products, allegedly false claim of superior cleansing efficacy, and alleged off-label promotion created a genuine issue of material fact about whether the equitable relations of the parties were affected by Ferring’s own misconduct.

Braintree’s counterclaims fared basically the same. Braintree challenged Ferring’s statement that Prepopik has the “lowest volume of active ingredient.” There was a genuine issue about literal falsity—a fact finder could interpret this claim as involving a comparison to the entire market of bowel preparation treatments, including tablets which have a lower volume than Prepopik. Moreover, emails from Ferring employees, internal Ferring documents and Ferring’s own expert all acknowledged that additional hydration was needed, including hydration with liquids containing electrolytes, in order for Prepopik to work effectively. Thus, a fact finder could find the claim to be literally false.  This was also material because it was an essential characteristic and because Ferring “aggressively marketed Prepopik as being low volume.”

Likewise, summary judgment was denied on Braintree’s challenge to Ferring’s “Superior Cleansing Efficacy” claim because the study on which Ferring based the claim might or might not be reliable, based on a declaration from one of the study’s co-authors that said that the study and the article he co-authored about it “do not reliably support a marketing claim of Prepopik’s superior cleansing ....”

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