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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