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Ferring Pharmaceuticals Inc. v. Braintree Laboratories, Inc.

United States District Court, D. Massachusetts

October 25, 2016

FERRING PHARMACEUTICALS, INC., Plaintiff-Counterclaim Defendant,
v.
BRAINTREE LABORATORIES, INC., Defendant-Counterclaim Plaintiff.

          MEMORANDUM & ORDER

          Nathaniel M. Gorton United States District Judge

         This case concerns two pharmaceutical companies that have competing products used for bowel preparation before colonoscopies. Plaintiff/counterclaim-defendant Ferring Pharmaceuticals, Inc. (“Ferring”) claims that Defendant/counterclaim-plaintiff Braintree Laboratories, Inc. (“Braintree”) engaged in false advertising in violation of the Lanham Act and unfair trade practices in violation of the Massachusetts Consumer Protection Act, M.G.L. ch. 93A (“Chapter 93A”). Ferring also alleges that Braintree diluted Ferring's trademark in its product, Prepopik. Braintree counterclaims that Ferring has, itself, engaged in false advertising and unfair trade practices. In August, 2014, the Court dismissed Braintree's additional counterclaim that Ferring misappropriated trade secrets.

         I. Factual and Procedural Background

         Ferring, a Delaware corporation with its principal place of business in Switzerland, advertises and sells Prepopik, a colonoscopy preparation medication. Braintree, a Massachusetts corporation with its principal place of business in Braintree, Massachusetts, advertises and sells Suprep which is similarly used prior to colonoscopies.

         In October, 2013, Ferring filed a complaint against Braintree which, in turn, answered and counterclaimed. In August, 2014, this Court allowed Ferring's motion to dismiss Braintree's counterclaims that Ferring had misappropriated trade secrets and falsely advertised with respect to “flexible dosing” and “helps achieve success.” The Court denied Ferring's motions to dismiss Braintree's false advertising counterclaims relating to “superior cleansing efficacy” and “lowest volume.” The Court also denied Braintree's motion for summary judgment without prejudice.

         On April 22, 2016, Ferring filed motions for summary judgment on Braintree's counterclaims, its own Canadian Adverse Reaction Newsletter (“Canadian Newsletter”) and “What's NOT New About Prepopik” (“comparison detailer”) claims and Braintree's affirmative defenses. Braintree, in turn, filed its own motion for summary judgment on all of Ferring's claims. The motions for summary judgment are pending before the Court.

         II. Motions for Summary Judgment

         A. Legal Standard for Summary Judgment

         The role of summary judgment is “to pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial.” Mesnick v. Gen. Elec. Co., 950 F.2d 816, 822 (1st Cir. 1991). The burden is on the moving party to show, through the pleadings, discovery and affidavits, “that there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A fact is material if it “might affect the outcome of the suit under the governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A genuine issue of material fact exists where the evidence with respect to the material fact in dispute “is such that a reasonable jury could return a verdict for the nonmoving party.” Id.

         If the moving party has satisfied its burden, the burden shifts to the non-moving party to set forth specific facts showing that there is a genuine, triable issue. Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). The Court must view the entire record in the light most favorable to the non-moving party and indulge all reasonable inferences in that party's favor. O'Connor v. Steeves, 994 F.2d 905, 907 (1st Cir. 1993). Summary judgment is appropriate if, after viewing the record in the non-moving party's favor, the Court determines that no genuine issue of material fact exists and that the moving party is entitled to judgment as a matter of law.

         B. Motions for Summary Judgment on Ferring's Lanham Act and Chapter 93A Claims

         Both parties move for summary judgment on Ferring's claims that Braintree's use of the Canadian Newsletter and comparison detailer constituted false or misleading advertising under the Lanham Act and violated Chapter 93A. Braintree also moves for summary judgment on Ferring's “Clean Freak” claim.

         1. Legal Standard

         The Lanham Act prohibits “commercial advertising or promotion” that “misrepresents the nature, characteristics, [or] qualities” of a product. 15 U.S.C. § 1125(a)(1)(B). To prevail on a claim brought under that statute, a plaintiff must prove:

(1) the defendant made a false or misleading description of fact or representation of fact . . . in a commercial advertisement about [its] own or another's product; (2) the misrepresentation is material . . .; (3) the misrepresentation actually deceives or has the tendency to deceive a substantial segment of its audience; (4) the defendant placed the false or misleading statement in interstate commerce; and (5) the plaintiff has been or is likely to be injured as a result of the misrepresentation, either by direct diversion of sales or by a lessening of goodwill associated with its products.

Cashmere & Camel Hair Mfrs. Inst. v. Saks Fifth Ave., 284 F.3d 302, 310-11 (1st Cir. 2002), cert. denied, 537 U.S. 1001 (2002).

         There are two paths to success on a Lanham Act claim. A plaintiff can show that an advertisement is “literally false” in which case consumer deception is presumed. Clorox Co. Puerto Rico v. Proctor & Gamble Commercial Co., 228 F.3d 24, 33 (1st Cir. 2000). Consumer deception is also presumed if a plaintiff demonstrates an intentional attempt to confuse consumers. Cashmere, 284 F.3d. at 314, 16. Alternatively, a plaintiff may show that an advertisement is “literally true or ambiguous” but misleads consumers. Chlorox, 288 F.3d at 33. For misleading advertisements, a plaintiff must prove that consumers were actually misled which is commonly accomplished through consumer surveys. Id. at 36.

         An advertisement is considered material under the Lanham Act if it is “likely to influence the purchasing decision.” Cashmere, 284 F.3d. at 311. The materiality requirement is also met if the statement concerns one of the product's “inherent characteristic[s].” Id. at 312.

         To have standing to pursue a Lanham Act claim, a plaintiff must demonstrate that it is within the zone of interests protected by § 1125(a) by

alleg[ing] injury to a commercial interest in reputation or sales.

Lexmark Int'l, Inc. v. Static Control Components, Inc., 134 S.Ct. 1377, 1390 (2014). Furthermore, a plaintiff must show that the defendant's false or misleading promotion proximately caused financial or reputational damage. Id. at 1391.

         2. Canadian Adverse Reaction Newsletter

         a. Relevant Background

         In addition to Prepopik, Ferring produces a chemically-identical treatment called “Pico-Salax” which is sold in other countries. After the Food and Drug Administration (“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) . . . .

         Although Prepopik and Pico-Salax have the same chemical composition, there are several purported differences between the treatments. Prepopik must be prescribed but Pico-Salax is available over the counter. The Prepopik instructions direct users to consume approximately two liters of fluid, while the Pico-Salax instructions indicate that users should consume three to four liters of fluid. Furthermore, 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, Vol. 23, Issue 1. The Canadian Newsletter states

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.

         Ferring contends that, in violation of the Lanham Act and Chapter 93A, Braintree used the Canadian Newsletter to make false and misleading statements about Prepopik. ...


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