Intendis, Inc. v. River's Edge Pharmaceuticals, LLC et al

Filing 79

MEMORANDUM OPINION. Signed by Chief Judge Deborah K. Chasanow on 9/22/11. (sat, Chambers)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
INTENDIS, INC.
:
v.

:

Civil Action No. DKC 10-2419

:
RIVER’S EDGE PHARMACEUTICALS,
LLC, et al.

:

MEMORANDUM OPINION
Presently pending and ready for review in this Lanham Act
false

advertising

case

are

the

motion

for

a

temporary

restraining order and preliminary injunction filed by Plaintiff
Intendis, Inc. (ECF Nos. 2, 4, and 47), the motion for leave to
file a supplemental brief under seal filed by Defendants River’s
Edge Pharmaceuticals, LLC and Kylemore Pharmaceuticals, LLC (ECF
No. 54), the motion in limine to exclude certain categories of
evidence filed by Defendants (ECF No. 56), and the motion for
leave

to

file

deposition

designations

of

Defendants’

Rule

30(b)(6) witness under seal filed by Plaintiff (ECF No. 71).
The issues are fully briefed and a hearing was held on October
21 and 29, 2010.

The court now rules.

For the reasons that

follow, Plaintiff’s motions for a temporary restraining order
and preliminary injunction will be denied and Defendants’ motion
in limine will be denied.
seal will also be denied.

The motions for leave to file under

I.

Background
A.

Factual Background

This case is a dispute between two pharmaceutical companies
that

distribute

medications.
NeoBenz®

and

market

competing

prescription

acne

Plaintiff Intendis, Inc. (“Intendis”) markets the

Wash

Plus

Pack,

a

name-brand

drug,

and

Defendants

River’s Edge Pharmaceuticals, LLC (“River’s Edge) and Kylemore
Pharmaceuticals, LLC (“Kylemore”) market and distribute the BP
7% Wash External Kit (“BP Wash Kit”), a generic drug.
accuses

Defendants

of

making

false

or

misleading

Intendis
statements

about the BP wash on the product insert page, the package label,
and in marketing information distributed to national pharmacies
and pharmacy databases.

Intendis filed motions for a temporary

restraining order and preliminary injunction and seek an order
requiring Defendants to submit supplemental information to the
national pharmacy databases to correct or clarify the false or
misleading statements made in their prior submissions to these
databases and to post statements on their website.
1.

The Products

Intendis markets and distributes NeoBenz Wash Plus Pack, a
prescription drug package that contains NeoBenz Micro Wash, a 7%
benzoyl peroxide wash, and NeoBenz Micro SD, pre-filled sponge
applicators

with

a

5.5%

benzoyl
2

peroxide

cream.

The

two

products

are

designed

for

use

in

tandem

treatment of mild to moderate acne vulgaris.

for

the

topical

According to the

product insert included with every package of the NeoBenz Wash
Plus

Pack,

incorporated

the

active

into

ingredient,

patented

porous

benzoyl

peroxide,

microspheres

to

is

“provide

gradual release of active ingredient into the skin and absorb
natural skin oils.”
for NeoBenz).

(Pl.’s Hr’g Ex. 2, Intendis Package Insert

The specific release rate of active ingredient in

the NeoBenz wash is not disclosed in the product packaging or
marketing materials.
River’s Edge markets and distributes the BP Wash Kit, a
prescription drug package that contains a 7% benzoyl peroxide
wash (“BP wash”) and a 5.5% benzoyl peroxide cream (“BP cream”).1
The

BP

Wash

Kit

also

comes

with

sponge

applicators

intended as a topical treatment for acne.

and

is

According to the

product insert, the active ingredient in the product, benzoyl
peroxide,

is

“incorporated

into

a

series

of

microscopic

concentric vesicules of oil and water. . . . [that] results in
the

release

of

the

active

sustained period of time.”

1

ingredient

into

the

skin

over

a

(Pl.’s Hr’g Ex. 1, River’s Edge

Intendis alleges that Kylemore also distributes the BP
Wash Kit and is a division, close affiliate, or alter ego of
River’s Edge.
(ECF No. 30 ¶¶ 34-43).
No evidence regarding
Kylemore was presented at the hearing.
3

Package

Insert

microsponge

for

BPO).

delivery

The

system.

BP

wash

Instead,

does

it

not

use

contains

the

the
skin

conditioner Incroquat OSC, a self-emulsifier and polymeric drug
delivery

system

that

incorporates

the

benzoyl

peroxide

into

vesicules of oil and water.
The BP Wash Kit entered the market in July 2010.

Intendis

first learned of its introduction when it received an alert from
Wolters Kluwer, a national pharmaceutical database that lists
drugs

and

national

tracks

pharmacy

their

sales.

databases,

categories of information:

Wolters

classifies

Kluwer,
drugs

like

based

other

on

four

(1) the drug’s active ingredient,

(2) the route of administration, (3) the strength of the active
ingredient, and (4) the dosage of the active ingredient.
these

four

items,

the

databases

assign

product identifier code (“GPI” or “GCN”).

each

drug

a

Using
generic

Pharmacies rely on a

drug’s GPI code to make dispensing decisions and will substitute
lower priced generic drugs for name-brand drugs with the same
GPI unless otherwise prohibited by state law.
Intendis received an alert in July 2010 because the BP Wash
Kit had been given the same GPI code as the NeoBenz Wash Plus
Pack.

Pharmacies

began

to

substitute

the

BP

Wash

Kit

for

NeoBenz prescriptions because the acquisition price, i.e., the
price pharmacies paid for the drug, was significantly lower than
4

the price for NeoBenz.2

As a result, NeoBenz sales began to

decline.
2.

The Alleged False Statements

Intendis alleges that Defendants made false or misleading
statements about the BP Wash Kit on the product’s label, in its
package insert, and in deal sheets about the product that were
submitted to national pharmacy chains and pharmacy databases.
The allegedly offending statements are that:

(1) the BP wash is

a

Wash

7%

benzoyl

peroxide

wash;

(2)

the

BP

Kit

provides

sustained release of the active ingredient through the use of
microscopic vesicules; (3) the BP Wash Kit contains microscopic
vesicules; and (4) the BP Wash Kit has a shelf life of twentymonths.3

four

The

first

three

statements

are

found

on

the

product insert that is included in every package of the kit and
was

separately

submitted

to

the

national

pharmacy

along with the package label and a standard form.

databases

The twenty-

four-month shelf-life claim was made in the deal sheets that

2

In July 2010, the acquisition price for NeoBenz Wash Plus
Pack was listed in the Wolters Kluwer database at $122.19
compared to $96.47 for the BP Wash Kit.
(Pl.’s Hr’g Ex. 60,
at INTENDIS 001334).
3

Intendis’s amended complaint no longer asserts that the
statement regarding the sustained release of active ingredient
in the BP wash is false. In argument at the hearing, however,
counsel for Intendis continued to make the argument that this
statement is false or misleading.
5

River’s Edge submitted to national pharmacy chains and pharmacy
database organizations to announce the release of the product.
(See Pl.’s Hr’g Exs. 54-58).

None of these documents claim that

the BP wash is equivalent to or substitutable for the NeoBenz
wash.

There is no other evidence that any statements were made

by Defendants asserting that the BP Wash Kit was equivalent to
and/or a substitute for the NeoBenz Wash Plus Pack.
3.

Testing of Drugs

Both parties conducted or commissioned tests of the BP wash
products

to

support

strength

of

active

release

of

the

their

respective

ingredient,

active

its

claims

shelf

ingredient,

regarding

life,

and

the

the

rate

presence

its
of
of

microscopic vesicules.
a.
In
present

Active Ingredient Strength and Shelf Life
order

to

in

the

chromatography

test

the

percentage

medications,

analysis

(“HPLC”)

high
was

of

active

ingredient

performance

conducted.

HPLC

liquid
is

an

analytical separation technique used to quantitate how much of
an analyte is in a drug product.

In this case, it was used to

determine the amount of benzoyl peroxide present in samples of
the BP wash and BP cream.4

4

For gel and lotion formulations of benzoyl peroxide,
there is an industry standard monograph that provides parameters
6

Intendis commissioned Dow Pharmaceutical Sciences (“Dow”)
to conduct HPLC tests of the BP wash and BP cream.

The Dow HPLC

tests were conducted on two lots of the BP wash and two lots of
the BP cream.

Lot 6619 was tested a month after manufacture and

determined to have between 88.0% and 90.0% of the claimed BP
wash label strength of 7% benzoyl peroxide.

Lot 6298 was tested

fifteen months after manufacture and had between 80.1% and 80.5%
of

claimed

label

strength.

For

both

lots

of

the

BP

cream

tested, Dow’s results showed the percentage benzoyl peroxide to
be between 93.8% and 95% of the strength claimed on the label.
The margin of error for Dow’s test results was plus or minus 2%.
(Prelim. Inj. Hr’g Tr. 181, Oct. 21, 2010).
Defendants

rely

on

tests

conducted

by

manufacturer, Sonar Products, Inc. (“Sonar”).

the

product’s

Sonar conducts

HPLC tests routinely as part of the manufacturing process and
for

stability

reporting.

The

first

three

lots

of

any

new

product are stability tested as well as the first lot of any
subsequent year.

In addition, Sonar conducted new tests of the

lots that had been tested by Dow for comparison.

for label strength claims.
For gel formulations, a benzoyl
peroxide solution must contain between 90% and 110% of the
claimed label strength of active ingredient.
For lotion, the
monograph permits solutions where the benzoyl peroxide is
between 90% and 125% of the claimed label strength. For benzoyl
peroxide washes and creams, there is no industry standard
monograph.
7

In October 2010, Sonar conducted an HPLC test of Lot 6619
of the wash and the results showed it contained 98.6% of the
label strength of benzoyl peroxide.

Sonar had previously tested

Lot 6619 at the time of its manufacture in July 2010, and at
that time it had 101% of label strength.

In Sonar’s prior tests

of Lot 6298 of the BP wash, a sample kept at room temperature
had remained at 100% of label strength for twelve months, and a
sample subjected to accelerated aging had decreased to 98.6% of
label strength after three months.

In Sonar’s tests of the BP

cream, Lot 6495 started at 100% of label strength and remained
at 100% after three months of accelerated aging and six months
at room temperature.

For other lots of the BP wash and BP cream

not tested by Dow, Sonar’s HPLC results were all close, if not
equal, to 100% of label strength and well within the industry
standard monographs for gels and lotions.
Dow used the results from its HPLC tests to calculate the
shelf life of the BP wash and BP cream based on the rate of
degradation of benzoyl peroxide.
several assumptions:

Dow based its calculations on

(1) that the product was manufactured to

contain 100% of the label strength of active ingredient, (2)
that the active ingredient had a steady rate of degradation, and
(3) that the shelf life of the product corresponded to the time
when the active ingredient was at 90% or more of the label
8

strength.

With these parameters, Dow calculated that Lot 6619

of the BP wash had a shelf life of less than two months and Lot
6298 of the BP wash had a shelf life of eight months.

For the

BP creams, Dow calculated that Lot 6513 had a shelf life of nine
months and Lot 6495 had a shelf life of eleven months.
b.

Release Rates

In order to establish the release rates of the products,
both parties conducted Franz Cell tests.
used

to

measure

ingredients

in

the

in

vitro

solution.

The

The Franz Cell test is

permeation
test

rate

utilizes

a

of
Franz

active
Cell

apparatus that contains two distinct chambers separated by a
membrane designed to represent human skin.

The test solution is

placed into the top chamber and measurements are taken from the
bottom chamber at regular intervals to measure the amount of
active ingredient that has diffused through the membrane.
Defendants

commissioned

Dr.

Richard

Cummings,

Chair

of

Biochemistry at Emory University School of Medicine, to conduct
Franz Cell tests to compare the release rates of BP wash and
NeoBenz wash.

Dr. Cummings’s results showed that, on average,

the BP wash released at a rate that was 15% slower than the
NeoBenz wash.
Dow also conducted a Franz Cell test to compare the release
rates of the two washes.

The results of Dow’s Franz Cell test
9

were deemed inadmissible at the hearing because Intendis failed
to

provide

admission.

a

proper

foundation

for

their

authentication

and

Intendis has proffered that their results showed

that the products have different release profiles and that the
BP wash had a release rate 50% slower than the NeoBenz rate.
Despite this dispute about the specific release rate for
either

product,

both

products

release

the

active

ingredient

gradually over time.
c.

Presence of microscopic vesicules

As part of Dow’s testing, Dow was asked to do a microscopy
analysis of the BP wash and BP cream to ascertain the presence
of microscopic vesicules.

To that end, technicians at Dow were

asked to photograph the BP wash and BP cream at magnification
levels of 400x and 1000x.

Intendis attempted to introduce the

report and photographs as exhibits during the hearing, but no
evidence

was

photographs

or

presented
to

lay

to
a

confirm

the

foundation

for

substance
their

of

the

admission.

Intendis has proffered that the photographs do not reveal the
presence of concentric vesicules of oil and water.
Defendants

submitted

the

expert

testimony

of

Dr.

Thomas

Freund, the lab director and director of scientific affairs at
Sonar to refute this opinion.

Dr. Freund’s view is that the

photographs do not prove or disprove the existence of concentric
10

vesicules.

In his opinion, the pictures of the BP cream did

show vesicules and the pictures of the BP wash showed what could
be remnants of vesicules, but the photos’ exposure and lighting
conditions rendered them inconclusive.
explained

that

vesicules

in

one

the

BP

could
wash

infer
from

the
the

Dr. Freund separately
existence

fact

that

of
it

concentric
allows

for

extended release of the active ingredient and the fact that it
contains Incroquat OSC.
4.

Harm

Intendis

has

lost

sales

to

Defendants

from

pharmacies’

substitution of the BP Wash Kit for the NeoBenz Wash Plus Pack.
Although the exact amount of lost sales has not been provided,
Intendis’s Head of Sales, Gary Tighe, testified that it could be
determined
other

using

pharmacy

River’s

Edge

sales

data

databases.

products,

maintained
In

there

by

addition
is

now

a

to

Wolters
the

third

Kluwer

Intendis

or
and

pharmaceutical

company offering a topical acne wash treatment with the same GPI
code, Seton.

Seton’s product is priced lower than the NeoBenz

Wash Plus Pack and BP Wash Kit.

Seton’s introduction into the

marketplace makes predictions about the impact of granting an
injunction more complicated.

If the BP wash is no longer listed

in the same GPI code, its lost sales may be transferred to the
new Seton product instead of River’s Edge, making it difficult
11

to

quantify

the

loss

to

BP

wash

and

difficult

to

determine

whether any benefit would inure to Intendis.
B.

Procedural History

Intendis filed its initial complaint, along with a motion
for a temporary restraining order and preliminary injunction on
September 1, 2010.

(ECF Nos. 1-4).

The complaint alleged that

Defendants were disseminating false or misleading statements by
proclaiming

that

the

BP

wash

contained

benzoyl

peroxide

incorporated into microscopic vesicules, resulted in the release
of the active ingredient over a sustained period of time, and
was equivalent to and/or otherwise substitutable for Intendis’s
NeoBenz Wash Plus Pack.
and

Kylemore

temporary

filed

their

restraining

September 8, 2010.

(ECF No. 1).

Defendants River’s Edge

opposition

order

and

to

the

motion

preliminary

(ECF No. 21).

for

injunction

a
on

Shortly thereafter, counsel

for Defendants filed a motion to withdraw because of a potential
conflict arising from their firm’s representation of affiliates
of

Intendis’s

parent

corporation,

Bayer

AG.

(ECF

No.

31).

Defendant’s motion to withdraw was denied without prejudice at a
hearing on September 30, 2010.
Intendis

had

filed

an

(ECF No. 36).

amended

complaint

In the interim,

that

withdrew

its

request for a temporary restraining order and shifted the focus
of its allegations.

(ECF No. 30).
12

In the amended complaint,

Intendis added the allegation that BP wash does not contain
benzoyl peroxide at a concentration of 7% with a shelf life of
twenty-four months and omitted the statement alleging that the
BP

wash

did

not

provide

ingredient over time.

sustained

(Id. ¶ 2).

release

of

the

Defendants submitted their

answer to the amended complaint on October 12, 2010.
45).

active

(ECF No.

At the court’s request, Intendis submitted an amended

motion for preliminary injunction to correspond with the amended
complaint on October 13, 2010.

(ECF No. 47).

Prior to the

hearing, Defendants submitted their opposition to the amended
motion for preliminary injunction (ECF No. 51) and a motion in
limine to preclude Intendis from offering expert testimony on
certain topics and to exclude an FDA warning letter sent to
River’s Edge.

(ECF No. 56).

A hearing on Intendis’s motion for preliminary injunction
took

place

on

October

21

and

29,

2010.

testimony from the following witnesses:
Head

of

Sales;

Dr.

Analytical

Sciences

Chemistry;

Dr.

Dermatology;

Dr.

Simon

Yeh,

Department

James

Del

Elena

at

Intendis

Gary Tighe, Intendis’s

Assistant
Dow,

Rosso,

Serbinova,

presented

Director

Expert

in

Dermatologist,
Intendis’s

of

the

Analytical
Expert

in

Director

of

Regulatory Affairs and Compliance; and Brendan Murphy, President
of River’s Edge.
13

At the conclusion of Intendis’s evidence, Defendants moved
pursuant

to

Fed.R.Civ.P.

52(c)

for

a

judgment

on

partial

findings denying Intendis’s request for preliminary injunction.
Defendants’ motion was denied (ECF No. 72), and they proceeded
to present additional evidence.

Defendants presented testimony

from

Brendan

the

following

witnesses:

Murphy,

President

of

River’s Edge; Dr. Thomas Freund, Sonar’s Director of Scientific
Affairs, Expert in High Performance Liquid Chromatography (by
video deposition); Dr. Richard Cummings, Chair of Biochemistry
at Emory University School of Medicine, Expert in Biochemistry
and

Molecular

Structure;

and

Gary

Sales (by video deposition).

Tighe,

Intendis’s

Head

of

In rebuttal, Intendis called Dr.

Gareth Winckle from Dow as an Expert in Pharmaceutical Sciences.
II.

Motion in Limine and Other Evidentiary Issues
Prior to the evidentiary hearing, Defendants filed a motion

in

limine

seeking

to

preclude

Intendis

from

introducing

testimony from Doctors Del Rosso and Yeh at the hearing and an
FDA

warning

beginning

of

letter
the

as

an

hearing

exhibit.
on

(ECF No.

October

21,

56).

2010,

At
the

the

court

explained that rather than ruling on the motion in limine at the
start,

evidentiary

issues

throughout the proceedings.

would

be

taken

up

as

they

arose

Where appropriate, objections to

the introduction of evidence were sustained, but Doctors Del
14

Rosso and Yeh were not precluded from testifying entirely.
the

extent

Defendants

qualifications

or

raised

relevant

questions

knowledge,

regarding

appropriate

To

their

weight

was

given to the credibility and relevance of their opinions when
assessing the facts.

With respect to the FDA warning letter,

Intendis was permitted to introduce it as Plaintiff’s Exhibit 4,
(See ECF No. 73), but it has not affected the court’s ruling.
To the extent it was not explicit at the hearing, Defendants’
motion in limine will be denied.
III. Preliminary Injunction
A.

Standard of Review

Intendis has moved for a preliminary injunction pursuant to
Federal

Rule

of

(ECF No. 47).
issue

a

Civil

Procedure

65

and

the

Lanham

Act.

Under Fed.R.Civ.P. 65, the decision whether to

preliminary

injunction

discretion of the trial court.
extraordinary remedy.”

is

committed

to

the

sound

“A preliminary injunction is an

Real Truth About Obama, Inc. v. FEC, 575

F.3d 342, 345 (4th Cir. 2009), vacated on other grounds by 130
S.Ct. 2371 (2010) and reissued in part, 607 F.3d 355 (4th Cir.
2010).

To obtain a preliminary injunction, a plaintiff must

establish four elements:

“[1] that he is likely to succeed on

the merits, [2] that he is likely to suffer irreparable harm in
the

absence

of

preliminary

relief,
15

[3]

that

the

balance

of

equities tips in his favor, and [4] that an injunction is in the
public interest.”
Def.

Council,

Id. at 364 (quoting Winter v. Natural Res.

Inc.,

129

S.Ct.

requirements must be satisfied.
B.

365,

374

(2008)).

All

four

Id.

Analysis

Intendis argues that it has demonstrated a likely violation
of

the

Lanham

Act

and

the

court

should

issue

a

preliminary

injunction requiring Defendants to halt, alter, or correct their
promotional statements.

(ECF No. 48, at 3).

Intendis further

contends that it has shown it is likely to suffer irreparable
harm absent preliminary relief, that the balance of equities tip
in its favor, and that an injunction would be in the public
interest.
its

case

Defendants counter that Intendis has failed to make
for

any

of

the

requirements

to

obtain

preliminary

injunctive relief.
1.

Likelihood of Success

Intendis’s amended complaint asserts one count of deceptive
advertising and unfair trade in violation of Section 43(a) of
the Lanham Act, 15 U.S.C. § 1125(a).
Defendants

have

made

false

statements

Intendis asserts that
or

omissions

of

fact,

including establishment and “tests prove” claims in violation of
the Lanham Act.
Section 43(a) of the Lanham Act provides the following:
16

(1) Any person who, on or in connection with
any goods or services, or any container for
goods, uses in commerce any word, term,
name, symbol, or device, or any combination
thereof, or any false designation of origin,
false or misleading description of fact, or
false or misleading representation of fact,
which(A) is likely to cause confusion, or to
cause mistake, or to deceive as to the
affiliation, connection, or association of
such person with another person, or as to
the origin, sponsorship, or approval of his
or
her
goods,
services,
or
commercial
activities by another person, or
(B) in commercial advertising or promotion,
misrepresents the nature, characteristics,
qualities, or geographic origin of his or
her or another person's goods, services, or
commercial activities,
shall be liable in a civil action by any
person who believes that he or she is or is
likely to be damaged by such act.
15 U.S.C. § 1125(a).
A plaintiff asserting a false advertising claim under the
Lanham Act must establish that:
(1) the defendant made a false or misleading
description of fact or representation of
fact in a commercial advertisement about his
own or another’s product;
(2) the misrepresentation is material, in
that
it
is
likely
to
influence
the
purchasing decision;
(3) the misrepresentation actually deceives
or has the tendency to deceive a substantial
segment of its audience;
17

(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.
Scotts Co. v. United Indus. Corp., 315 F.3d 264, 272 (4th Cir.
2002) (citing 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)).
For

liability

provisions

of

the

to

arise

Lanham

under

Act,

the

“the

false

contested

advertising
statement

or

representation must be either false on its face or, although
literally true, likely to mislead and to confuse consumers given
the

merchandising

context.”

C.B.

Fleet

Co.

v.

SmithKline

Beecham Consumer Healthcare, L.P., 131 F.3d 430, 434 (4th Cir.
1997)

(internal

quotation

marks

omitted).

Depending

on

the

nature of the alleged false statements, different standards of
proof apply.
violation
deception.”
plaintiff’s

“Where the advertisement is literally false, a

may

be

established

Scotts
theory

of

Co.,

without

315

recovery

F.3d
is

at

evidence
273.

premised

upon

of

consumer

“But
a

if

‘a

claim

of

implied falsehood, a plaintiff must demonstrate, by extrinsic
evidence, that the challenged [advertisements] tend to mislead
18

or confuse consumers.’”

Id. (quoting Johnson & Johnson * Merck

Consumer Pharm. Co. v. Smithkline Beecham Corp., 960 F.2d 294,
297 (2d Cir. 1992)).

For example, in SmithKline Beecham Consumer

Healthcare, L.P. v. Johnson & Johnson-Merck Consumer Pharm. Co.,
906 F.Supp.178 (S.D.N.Y. 1995), the defendants included a bar
chart in advertisements showing that doctors had prescribed the
drug Tagamet 200 million times more than Pepcid.

However, in

small print at the bottom, the ad revealed that Tagamet had been
prescribed since 1977 whereas Pepcid had only been prescribed
since 1986.

The court held that while the statement in the bar

chart was literally true, it conveyed or implied a meaning that
was false—that doctors had prescribed Tagamet over Pepcid in a
head-to-head battle.

Id. at 186.

Establishment or “tests prove” claims are a subset of false
advertising

claims

where

the

alleged

false

or

misleading

statements either explicitly or implicitly indicate that there
is

test

data

in

support

of

the

claims

made.

In

these

situations, a plaintiff need only show either (i) that the tests
were

not

sufficiently

reliable

to

permit

the

conclusion

for

which they are cited, or (ii) that the tests, even if reliable,
do

not

establish

the

proposition

asserted

by

the

defendant.

Castrol, Inc. v. Quaker State Corp., 977 F.2d 57, 63 (2d Cir.
1992); see also McNeil-P.C.C., Inc. v. Bristol-Myers Squibb Co.,
19

938

F.2d

1544,

statements

are

1549

(2d

classified

Cir.
as

1991).

“tests

If

prove”

the
or

Defendants’

“establishment

claims,” then Intendis does not have to prove that they are
actually false, only that Defendants’ tests did not support the
conclusions Defendants have made about the product at issue.
See Osmose, Inc. v. Viance, LLC, 612 F.3d 1298, 1310 (11th Cir.
2010).

The statement need not explicitly reference tests in

order be classified as an establishment claim.

It is sufficient

if the statement(s) “necessarily implied that it was validated
by some clinical test.”

C.B. Fleet Co., 131 F.3d at 436.

Intendis asserts that it has a likelihood of success for
four independent reasons:
regarding

the

Defendants’

BP

package

Wash

(1) Defendants have made statements
Kit

contains

that

are

literally

establishment

false;

claims

that

(2)
imply

that Defendants have reliable tests to support the statements,
but

for

which

Defendants

have

not

conducted

tests;

(3)

Defendants deliberately made false statements with the intent
and effect of causing pharmacies to treat its BP wash as a
substitute for NeoBenz, and (4) Defendants made a false claim
that BP wash could be substituted for NeoBenz.
at 5-10).

5

In
temporary

(ECF No. 48,

The evidence does not support Intendis’s claims.5

their opposition to Intendis’s initial motion for
restraining
order
and
preliminary
injunction,
20

Intendis alleges that four statements made by Defendants in
the

package

false:

inserts

or

promotional

materials

are

literally

(1) that the BP wash is a 7% benzoyl peroxide wash; (2)

that the BP Wash Kit provides sustained release of the active
ingredient through the use of microscopic vesicules; (3) that
the BP Wash Kit contains microscopic vesicules; and (4) that the
BP Wash Kit has a shelf life of twenty-four months.

Beginning

with the first statement, Intendis has only identified one lot
of the BP Wash Kit with less than 90% of the claimed label
strength when considering the margin of error of Dow’s test.
The other lot tested by Intendis and those tested by Defendants
all had at least 90% of the claimed label strength of benzoyl
peroxide.

Based on this evidence, the court is not prepared to

say that Intendis is likely to prove that the claimed label

Defendants argued that the statements made in the product insert
do not constitute “advertising” or “promotion” as referenced in
the Lanham Act and on that basis all of Intendis’s arguments
failed. (ECF No. 21, at 10-13). Defendants pointed to a number
of cases holding that product inserts do not constitute
advertising, including a prior opinion from this court holding
that “point-of-purchase materials that merely restate the
language approved for the label cannot fairly be characterized
as advertising.”
Sanderson Farms, Inc. v. Tyson Foods, Inc.,
549 F.Supp.2d 708, 717 (D.Md. 2008)
Subsequent evidence,
however, made explicit that the product inserts were submitted
to the national pharmaceutical databases, along with datasheets,
as a way to advertise the BP Wash Kit, and Defendants did not
pursue this argument at the hearing.
21

strength

is

false;

to

the

contrary,

the

evidence

to

date

supports the veracity of Defendants’ claimed label strength.
The next two statements can be considered together.

There

is no real dispute that the BP wash provided sustained release;
Intendis challenges only the rate of release and whether it is
accomplished

with

the

use

of

the

microscopic

vesicules.

Defendants make no claim to a specific rate of release or that
the BP wash has an identical rate of release to the NeoBenz
wash.

As

a

result,

literally false.
Plaintiff’s

the

second

identified

statement

is

not

With respect to the presence of vesicules,

primary

evidence

that

the

statement

is

false

is

photographs alleged to show few or no vesicules in samples of
the BP wash.

These photographs were deemed inadmissible, but

even if they had been admitted, they would not prove Intendis’s
point.

The lighting and exposure in the photographs makes it

difficult

to

discern

their

contents,

contain at least some vesicules.

but

they

do

appear

to

In addition, Defendants have

further refuted Intendis’s argument with the testimony of Dr.
Freund who stated that one could infer that the BP wash has
microscopic

vesicules

because

it

uses

Incroquat

OSC

as

an

emulsifier and from the simple fact that the product has delayed
release.

22

The final alleged literal falsehood is the claim that the
BP wash has a twenty-four-month shelf life.

Intendis disputes

the accuracy of this claim and offers as evidence extrapolations
of the data from its HPLC testing done on several samples of the
BP wash and BP cream demonstrating that samples of the BP wash
it tested had shelf lives of two and eight months and the BP
cream

samples

had

shelf

lives

of

nine

and

eleven

months.

Defendants counter with testimony from Dr. Freund that Sonar
follows the USP guidelines for testing product stability and
that Sonar’s benzoyl peroxide products do not show significant
degradation for two years.
29, 2010).

(Prelim. Inj. Hr’g Tr. 150-57, Oct.

Dr. Freund also testified about Sonar’s stability

test results conducted on samples of the BP wash after twelve
months

where

the

product

continued

to

show

100%

of

label

strength and a sample of the BP cream after eighteen months that
tested at 100% of label strength.

(Id. at 182-84).

Dow’s methodology is unreliable because it was based on
very

limited

data

unsubstantiated.

and

incorporated

assumptions

that

were

In contrast, the FDA’s preferred methodology

involves a trend analysis where one takes data over a period of
time, takes the log of that activity, and then extrapolates over
a two-year time period.
showing

a

The data from the manufacturer, Sonar,

twenty-four-month

shelf
23

life

is

entitled

to

more

weight given that it incorporates data over a long term and was
ascertained using an FDA-approved method.
presented

on

this

issue

to

date

Thus, the evidence

supports

the

veracity

of

Defendants’ claimed shelf life and there is little support for
Intendis’s assertion that the claim is false.
In

addition

to

its

claims

that

Defendants

have

made

literally false statements, Intendis argues that Defendants have
failed to produce test results to substantiate the claims about
the BP Wash Kit made on the product insert and in promotional
materials.

Intendis argues that the facts of this case align

with

of

those

Novartis

Consumer

Health,

Inc.

v.

Johnson

&

Johnson-Merck Consumer Pharm. Co., 290 F.3d 578, 590 (3d Cir.
2002), where the United States Court of Appeals for the Third
Circuit deemed “Mylanta Night Time Strength” a false statement
because the manufacturers came forward with no evidence to show
that their product was specifically formulated for night time
relief or was more effective than other products at providing
night time relief for heartburn.

Intendis argues that, as in

Novartis, Defendants had a burden to provide evidence of tests
or analyses to confirm its claimed label strength and shelf life
and they have failed to meet that burden.

(ECF No. 48, at 8-9).

Defendants argue that the statements made on the product
label and product insert do not refer to tests or imply that
24

tests were conducted.
that

where

the

(ECF No. 51, at 19).

advertisement

does

not

Defendants argue

contain

an

express

assertion or language implying that a test was conducted, the
establishment claim standard of proof does not apply.

C.B.

Fleet Co. v. SmithKline Beecham Consumer Healthcare, L.P., 131
F.3d 430, 436 (4th Cir. 1997).

In addition, Defendants also

argue that, to the extent statements made about BP wash imply
that tests were conducted, the reference is only meaningful if a
single test can prove whether the statement is true.
51, at 19).
were

done

(ECF No.

Defendants argue that if it is not clear what tests
or

what

tests

could

be

done

to

validate

the

statements, the advertisements are not making an establishment
claim.

(Id.).

Intendis’s
general flaws.
law,

this

establishment

claim

theory

suffers

from

two

First, although not always explicit in the case

theory

is

typically

argued

or

applied

where

comparative statements have been made indicating one product’s
superiority or specific suitability for a given purpose.
e.g.,

C.B.

Fleet

Co.,

131

F.3d

at

433,

435-36

See

(considering

whether establishment claim analysis applied to advertisement
stating “Massengill cleanses better than Summer’s Eve”); Osmose,
612 F.3d at 1310 (affirming district court’s classification of
statements referring to findings about the safety and efficacy
25

of

a

competing

category

of

products

as

“tests

prove”

or

“establishment” claims); Johnson & Johnson Vision Care, Inc. v.
1-800 Contacts, Inc., 299 F.3d 1242, 1248 (11th Cir. 2002) (“As
the

common

law

of

false

advertising

has

developed,

several

circuits have determined that the nature of a plaintiff’s burden
in proving an advertisement to be literally false should depend
on whether the defendant’s advertisement cites consumer testing.
. . .

If an advertisement cites such testing, the advertisement

is labeled as an ‘establishment’ claim.”) (citing C.B. Fleet
Co., 131 F.3d at 435); EFCO Corp. v. Symons Corp., 219 F.3d 734,
739-40 (8th Cir. 2000) (noting that test prove claims fall under
the

umbrella

of

comparative

at 59,

63

(applying

F.2d

advertising);

Castrol,

establishment

claim

Inc.,

977

analysis

to

advertisement stating “tests prove Quaker State 10W-30 protects
better than any other leading 10W-30 motor oil”); McNeil-P.C.C.,
Inc. v. Bristol-Myers Squibb Co., 938 F.2d 1544, 1546 (2d Cir.
1991)

(upholding

defendant

had

district

produced

advertisements’

claims

studies

[AF]

headache

.

.

.

relief”

and

court’s

factual

inadequate
that

“in

Excedrin
“AF

test
doctor

was

Excedrin

shown

determination

results

to

supervised
to

‘works

provide
better’

that

back

up

clinical
greater
than

ES

Tylenol”); Proctor & Gamble Co. v. Chesebrough-Pond’s Inc., 747
F.2d 114, 115, 119 (2d Cir. 1984) (applying establishment claim
26

analysis

to

statements

such

as

“dermatologists

proved

it

in

clinical tests, New Wondra improves the condition of rough dry
skin better” and “it relieves dry skin better than any leading
lotion”); see also Rhone-Poulenc Rorer Pharm., Inc. v. Marion
Merrell Dow, Inc., 93 F.3d 511, 514-15 (8th Cir. 1996).

The

establishment claim or tests prove cases do not stand for the
proposition that a defendant must provide reliable test data for
every factual statement in an advertisement to defend against
allegations of false advertising.

Here, there are no alleged

statements from Defendants that explicitly reference testing or
make

claims

of

comparative

superiority.

Intendis

did

not

specifically identify the statements that it contends imply the
existence of supporting test data other than to refer generally
in the complaint to “statements about function, contents, and
other measurable qualities of the BP[] Wash”
(citing ECF No. 1 ¶¶ 47-48).

(ECF No. 48, at 8)

On these facts, the establishment

or tests prove claim analysis is not applicable.
The second general flaw is that the establishment claim
analysis

fails

on

its

merits.

Defendants

have

produced

documents from the manufacturer of the BP Wash Kit providing
confirmation of the products’ percentage of active ingredient
and shelf life.

The mere fact that Intendis conducted similar

27

tests

and

reached

different

results

is

not

sufficient

to

challenge the methodology and results provided by Defendants.
There is a similar lack of evidence for Intendis’s final
two

theories:

(1)

that

Defendants

deliberately

made

false

statements with the intent and effect of causing pharmacies to
treat its BP wash as a substitute for NeoBenz, and (2) that
Defendants made a false claim that BP wash could be substituted
for NeoBenz.

Intendis has no evidence that Defendants have ever

claimed that BP wash is a substitute for NeoBenz.

While a

representative

goal

of

River’s

Edge

testified

that

its

in

creating the BP wash was to create a product that was as close
as possible to the NeoBenz wash, (Prelim. Inj. Hr’g Tr. 13-14,
Oct. 29, 2010), as discussed above, it does not appear that any
of the statements on the package insert or promotional materials
are false.

Moreover, the data sheets sent to national buyers

and retail chains include the disclaimer that “River’s Edge does
not claim bioequivalence of its product(s) to other brand(s)
unless explicitly noted,” (ECF No. 51, at 11) (citing Ex. D-53),
and

Intendis’s

Head

of

Sales

admitted

that

the

pharmacy

databases do not list the products as equivalents (Id. at 12)
(citing Tighe Dep. at 125-26).

It is not actionable to seek to

obtain market share by manufacturing a comparable product that
costs less if no false statements are made.
28

One additional theory was fully explicated by Intendis at
the preliminary injunction hearing.
counsel

argued

that

Defendants

At that time, Intendis’s

were

telling

half-truths

and

omitting key information that was the equivalent of a false
statement.

When

pressed,

Intendis’s

counsel

identified

the

half-truth as the statement on the package insert that the BP
Wash

Kit

product

“provided

continuous

release

through

delivery system of vesicules of oil and water.”

the

Counsel then

backtracked and agreed that Intendis’s argument was that the
claim of vesicules was literally false and the implied falsehood
was

the

implication

Defendants’ claims.
2010).

that

scientific

data

backed

up

all

of

(Prelim. Inj. Hr’g Tr. 274-84, Oct. 29,

Without a consistent and coherent explanation of the

contours of Intendis’s argument, it would indeed be difficult to
find that it has an ultimate likelihood of success.
Overall,

Intendis

has

failed

to

produce

evidence

to

establish with the requisite level of certainty that Defendants
made false or misleading descriptions of fact or representations
of fact in a commercial advertisement.
2.

Irreparable Harm

Intendis

argues

that

because

River’s

Edge

is

a

direct

competitor, any false advertising by River’s Edge is likely to
cause irreparable harm.

(ECF 48, at 11).
29

Intendis relies on

case law holding that where a plaintiff shows a likelihood of
literal

falsity,

irreparable harm.

the

court

may

presume

the

existence

of

(Id. at 12) (citing JTH Tax, Inc. v. H&R

Block E. Tax Servs., Inc., 128 F.Supp.2d 926, 947-48 (E.D.Va.
2001), vacated in part on other grounds, 28 F.App’x. 207 (4th
Cir. 2002) and Schick Mfg., Inc. v. Gillete Co., 372 F.Supp.2d
273, 287 (D.Conn. 2005)).

These cases predate the more recent

Supreme Court opinion in Winter, however, which emphasized that
parties

seeking

preliminary

injunctions

must

show

that

irreparable harm is “likely in the absence of an injunction” and
not

merely

standard.

possible,

as

some

courts

had

been

applying

the

129 S.Ct. at 375; see also Salinger v. Colting, 607

F.3d 68, 78 (2d Cir. 2010) (abandoning presumption of irreparable
harm when considering preliminary injunctions in the context of
copyright infringement).
Defendants

argue

that

Intendis

has

not

established

irreparable harm and that because sales of pharmaceuticals are
carefully tracked it would be easy to calculate the extent of
Intendis’s monetary damages.
Defendants

argue

that

(ECF No. 21, at 23).

because

Intendis’s

Head

In addition,
of

Sales

has

admitted that another lower cost competitor, Seton, has entered
the market, this competitor would likely obtain any sales that
Defendants

would

lose

if

an
30

injunction

is

in

place

and

Intendis’s market position would not change.

(ECF No. 52, at 3-

4).
In any event, Intendis cannot rely on the presumption of
irreparable harm cases of literal falsity because it has not
established that the statements were literally false.
Intendis

produced

separate

evidence

of

Nor has

irreparable

harm.

Intendis’s Head of Sales testified that it would be possible to
determine the sales that Intendis lost to River’s Edge and the
profits on those lost sales from the information maintained by
the national pharmacy databases.
Oct. 21, 2010).

(Prelim. Inj. Hr’g Tr. 44,

Generally, “irreparable injury is suffered when

monetary damages are difficult to ascertain or are inadequate.”
Multi-Channel

TV

Cable

Co.

v.

Charlottesville

Operating Co., 22 F.3d 546, 551 (4th Cir. 1994).

Quality

Cable

That does not

appear to be case here because any sales Intendis has lost or
will

lose

to

River’s

Edge

can

be

calculated

accurately.

Intendis did not submit evidence of any less tangible forms of
harm, and indeed, Intendis’s Head of Sales testified that he did
not believe Intendis’s reputation was or would be harmed if
pharmacists gave consumers the River’s Edge product instead of
NeoBenz.

(Prelim. Inj. Hr’g Tr. 231, Oct. 29, 2010).

31

3.

Balance of Equities

Intendis argues that the balance of equities tips in its
favor because Defendants cannot have a legitimate interest in
continuing to disseminate false and misleading statements about
the BP Wash Kit.

(ECF No. 48, at 12).

Defendants counter that

Intendis has applied the wrong test and argue that the proper
way to assess potential harm to Defendants is to calculate the
harm that would result from an improperly granted injunction.
See, e.g., Scotts Co., 315 F.3d at 284 (“If self-made harm is
given substantially less weight . . . then the balance of the
harms will almost always favor the plaintiff.”).

Defendants

argue that an injunction of BP wash sales would be particularly
detrimental

because

most

pharmacies

carry

only

one

or

two

versions of a product and, thus, anyone who buys from a third
party while BP wash is enjoined, such as the new market entrant
Seton, is likely to continue buying from that third party even
if

BP

wash

is

later

available.

(ECF

No.

21,

at

24-25).

Additionally, Defendants argue that a loss of market share is
harder to calculate and to compensate for with monetary damages
than a loss of sales.

(Id.).

The balance of equities does not favor Intendis at this
juncture.

Intendis

has

not

32

established

the

falsity

of

Defendants’ claims, and there is no public interest in censoring
true statements.
4.

Public Interest

Intendis
ensuring

argues

that

purchase.”

that

consumers

the
are

public
not

interest

deceived

(ECF No. 48, at 12).

by

is

served

products

“by
they

Defendants counter that the

public also has an interest in free and vigorous competition
that leads to lower price alternatives.
Both

positions

Intendis

has

argument

is

are

provided
not

theoretically
no

strong

persuasive.

(ECF No. 21, at 26).

defensible,

evidence

Preliminary

of

but

because

deception,

injunctions

are

its
an

extraordinary remedy and in the absence of strong evidentiary
support the public interest is better served by maintaining the
status quo.
IV.

Motions to Seal
There are two pending motions to seal:

one from Defendants

regarding their supplemental brief in opposition to Intendis’s
amended

motion

accompanying

for

exhibits

preliminary
(ECF

No.

injunction
54),

and

along

one

from

with

the

Intendis

regarding deposition designations from Defendants’ Rule 30(b)(6)
witness, Brendan Murphy (ECF No. 71).

A motion to seal must

comply with Local Rule 105.11, which provides:
Any motion seeking the sealing of pleadings,
motions, exhibits or other papers to be
33

filed in the Court record shall include (a)
proposed
reasons
supported
by
specific
factual
representations
to
justify
the
sealing
and
(b)
an
explanation
why
alternatives to sealing would not provide
sufficient protections.
The Court will not
rule upon the motion until at least 14 days
after it is entered on the public docket to
permit
the
filing
of
objections
by
interested parties.
Materials that are the
subject
of
the
motion
shall
remain
temporarily sealed pending a ruling by the
Court. If the motion is denied, the party
making
the
filing
will
be
given
an
opportunity to withdraw the materials.
This rule endeavors to protect the common law right to inspect
and

copy

judicial

records

and

documents,

Nixon

v.

Warner

Commc’ns, Inc., 435 U.S. 589, 597 (1978), while recognizing that
competing

interests

sometimes

outweigh

the

public’s

right

of

access, In re Knight Publ’g Co., 743 F.2d 231, 235 (4th Cir.
1984).
Before sealing any documents, the court must provide the
non-moving

party

with

notice

opportunity to object.
satisfied

by

either

of

Id.

the

request

to

seal

and

an

This notice requirement may be

notifying

the

persons

present

in

the

courtroom or by docketing the motion “reasonably in advance of
deciding the issue.”

Id. at 234.

Finally, the court should

consider less drastic alternatives to sealing, such as filing
redacted versions of the documents.
sealing

is

appropriate,

it

should
34

If the court decides that
also

provide

reasons,

supported by specific factual findings, for its decision to seal
and for rejecting alternatives.

Id. at 235.

Defendants’ motion to seal argues that their supplemental
memorandum and the accompanying exhibits, including deposition
transcripts from Dr. Freund, Brendan Murphy, Dr. Del Rosso, Dr.
Elena Serbinova, and Gary Tighe, as well as other documents
exchanged

during

discovery

contain

factual

information

designated as “confidential” or “highly confidential-attorneys’
eyes only” pursuant to the parties’ stipulated protective order.
(ECF No. 54, at 1).

Intendis argues with respect to its motion

to

deposition

seal

that

designated
states

as

that

the

attorneys’
it

believes

eyes

designations
only

at

issue

Defendants.

designation

the

by

is

were

Intendis

improper

and

overbroad, but that it was filing under seal given the expedited
schedule and out of an abundance of caution.

(ECF No. 71, at 1-

2).
The parties' motions to seal do not offer either a proposed
reason supported by specific factual representations to justify
the sealing or an explanation as to why alternatives to sealing,
such

as

redaction,

would

not

provide

sufficient

protections.

The court will deny the motions because they do not comply with
Rule 105.11.

The parties will have fifteen days to renew their

motions with memoranda that comply with Rule 105.11.
35

In the

meantime, the papers will remain temporarily under seal.

If the

parties do not renew their motions, the papers will be unsealed.
V.

Conclusion
For

the

foregoing

reasons,

Defendants’

motion

in

limine

will be denied, Plaintiff’s motions for a temporary restraining
order

and

preliminary

injunction

will

be

denied,

and

parties’ motions to seal will be denied.

/s/
DEBORAH K. CHASANOW
United States District Judge

36

both