De Simone v. VSL Pharmaceuticals, Inc. et al
Filing
674
MEMORANDUM OPINION Signed by Judge Theodore D. Chuang on 9/24/2018. (cags, Deputy Clerk)
UNITED STATES DISTRICT COURT
DISTRICT OF MARYLAND
CLAUDIO DE SIMONE and
EXEGI PHARMA, LLC,
Plaintiffs/Counterclaim
Defendants,
v.
VSL PHARMACEUTICALS, INC.,
LEADIANT BIOSCIENCES, INC. and
ALF ASIGMA USA, INC.,
Defendants/Counterclaim
Civil Action No. TDC-15-1356
Plaintiffs,
v.
DANISCO USA, INC.,
Counterclaim Defendant.
MEMORANDUM OPINION
Counterclaim Plaintiffs VSL Pharmaceuticals,
("Alfasigma")
Inc. ("VSL") and Alfasigma USA, Inc.
(collectively, "the VSL Parties") have filed a Third Motion for a Preliminary
Injunction seeking an order from this Court barring Plaintiffs Claudio De Simone and ExeGi
Pharma, LLC ("ExeGi") (collectively, "the De Simone Parties") from certain activities that, they
assert, constitute false advertising actionable under the Lanham Act, 15 U.S.C.
S
1125(a)(I)(B)
(2012). Having reviewed the submitted materials, the Court finds no hearing necessary.
Md. Local R. 105.6.
Injunction is DENIED.
See D.
For the reasons set forth below, the Third Motion for a Preliminary
BACKGROUND
The relevant factual background of this case is set forth in the Court's September 23,
2015 Memorandum Opinion on the First Motion for a Preliminary Injunction, De Simone v. VSL
Pharm., Inc., 133 F. Supp. 3d 776, 780-88 (D. Md. 2015), and June 20, 2016 Memorandum
Opinion on the Second Motion for a Preliminary Injunction, De Simone v. VSL Pharm., Inc., No.
TDC-15-1356,
2016 WL 3466033 at *1-12 (D. Md. June 20, 2016).
Additional facts and
procedural history are provided below as necessary.
On January 16, 2018, De Simone published an abstract entitled "P884 No shared
mechanisms
among 'old'
and 'new'
VSL#3: Implication for claims and guidelines,"
("the
Abstract") in the Journal of Crohn 's and Colitis. That volume of the Journal of Crohn's and
Colitis compiled abstracts and presentations selected for the 2018 European Crohn's and Colitis
Organization ("ECCO") Congress.
The ECCO is a non-profit medical association focused on
advancing research into and treatment of inflammatory bowel disease ("IBD") and describes
itself as the largest association for IBD specialists in the world.
Submissions for the 2018
Congress were reviewed by ECCO's Scientific Committee. Guidelines for submissions included
that authors (1) accept responsibility for the scientific accuracy of the abstract, (2) disclose any
financial interest in products or processes described in the abstract, (3) acknowledge
that
abstracts stating "data will be presented," rather than providing supporting data, would likely be
rejected, and (4) acknowledge that acceptance of the abstract obligated them to present their
work at the Congress.
Guidelines for Abstract Submission at 1-2, Opp'n Mot. Prelim. Inj.
("Opp'n") Ex. 6, ECF No. 588-7. Abstracts were limited to 2750 characters, including spaces
but excluding the title and author names, and were to be divided into four sections: Background,
Methods, Results, and Conclusions.
Approximately
2
77 percent of abstracts submitted by
scientists were accepted to the Congress. As part of his submission, De Simone disclosed that he
owned one share of stock in VSL. He did not disclose his interest in ExeGi or Visbiome.
In the Abstract, De Simone asserts that the current probiotic branded as VSL#3,
manufactured in Italy and which he dubs the "new" VSL#3, is "completely different" from the
"old" VSL#3, manufactured in the United States. Abstract at 1-2, Mot. Prelim. Inj. Ex. A, ECF
No. 573-3.
The U.S.-produced
version of the probiotic is sold under the brand name
"Visbiome," but that brand name does not appear anywhere in the Abstract.
the Abstract
states that the old and new VSL#3s
were studied
As to "Methods,"
using "proteonomics,
metabolomics and lipidomics," but provides no additional detail. Id. at 2. The "Results" state
that "(c]ertain metabolic pathways and molecular mechanisms present in the 'original'
VSL#3
are clearly no more present in the 'new' Italy-made VSL#3." Id. The "Results" section includes
a complex diagram divided into five sections, labeled "Purine Metabolism,"
"Protein Fate," "Arninoacyl tRNA Biosynthesis," and "Ribosome."
"Glycolysis,"
Id. The "Conclusion" ofthe
Abstract is that the study data "confirm the need for clinical trials in IBD patients with the Italymade formulation to establish the efficacy and safety of the 'new' VSL#3."
Id. The Abstract
also encourages the ECCO to revise its IBD treatment guidelines as to the "new" VSL#3.
Id.
The Abstract cites to what appear to be three peer-reviewed scientific articles.
In February 2018, De Simone attended the ECCO Congress, where he displayed the
Abstract, formatted as a poster, in booth P884. De Simone's booth was situated next to booth
P883, which also displayed a poster containing the text of an abstract.
Dr. Rodolphe Barrangou, an expert in microbiology retained by the VSL Parties, asserts
in a Declaration that the Abstract is merely a summary of a conference presentation, not a
published article, and therefore does not constitute a peer-reviewed publication.
3
Dr. Barrangou
criticizes the Abstract for failing to provide data relating to the two VSL#3 formulations, data
sufficient to support De Simone's broad conclusions, a legend on the diagram that would allow
for interpretation of its significance, and a full accounting of the data and methods used that
would allow for replication of the results.
Consequently, he states that the Abstract does not
provide enough information to allow for an assessment and interpretation of the study. He also
theorizes that De Simone had a biased motive that caused him to select certain methodologies
and criticizes the lack of any statement of how the research was funded or a disclaimer about
conflicts of interest.
Dr. Barrangou also contends that several of De Simone's conclusions are "scientifically
impossible."
Barrangou Decl. ~~ 12-13, 17, Mot. Prelim. Inj. Ex. 18, ECF No. 573-18.
In
support of this broad claim, he asserts, "Bacteria being unable to grow without glycolysis (to
generate energy from carbohydrates) or purines (building blocks of DNA), it is scientifically
impossible that these pathways are 'no longer present'
in the 'new'
Italy-made VSL#3."
Barrangou Decl. ~ 13. Dr. Barrangou also asserts that the Abstract's statements that "certain
metabolic pathways are not present" and are "no more present in the new Italy-made VSL#3" are
"fundamentally
incorrect, and actually scientifically impossible" because according to various
unnamed, peer-reviewed manuscripts, glycolysis is a pathway that is present in all strains of
VSL#3, and his own research shows that purine pathways are universally occurring in all
bacteria.
Id. ~ 17.
Dr. Barrangou further asserts that the statement that the two versions of
VSL#3 "do not have similar underlying core mechanisms" is "technically impossible" because
other studies have found the bacteria in the two versions to be genetically equivalent.
Id. ~18.
Dr. Barrangou also criticizes De Simone's failure "to mention or discuss widely accepted and
state ofthe art genetics and genomics studies." Id. ~ 20.
4
On February 8, 2018, Susan Linke, a dietician, sent a copy of the Abstract to several
internet discussion boards or listservs for dieticians, specifically GastroRDs@ yahoogroups.com,
DIFM _Listserv@yahoogroups.com,
and NEDpg@yahoogroups.com.
According
to Linke,
membership in various dietician professional organizations often comes with membership in one
of these listservs.
By her estimation, the discussions boards of which she is a part have
anywhere from 10,000 to 15,000 members.
Prior to November 2016, Linke had made positive
posts about VSL#3 on the listservs of which she was a member, but had stopped those posts after
she became "confused about the formulation change" and was no longer sure VSL#3 "was the
same product." Linke Decl. ~~ 8-9, Opp'n Ex. 3, ECF No. 573-5.
In November 2016, Linke met Conrad Shepard, a Visbiome sales representative.
From
November 2016 to January 2017, Linke exchanged a series of emails with Shepard and with
Marc Tewey, ExeGi's Chief Executive Officer, about Linke posting to listservs certain studies
on the efficacy of the De Simone Formulation in treating various conditions.
In a November 4,
2016 email to Tewey and Shepard, Linke offered to "start posting those research studies on a
regular basis to increase [Visbiome's] name familiarity."
11/4/16 Email at 1, Mot. Prelim. Inj.
Ex. F, ECF No. 573-8. Linke's posts appear to have been part of a broader conversation in the
listservs about the differences between VSL#3 and Visbiome.
In a November 13, 2016 email,
Linke forwarded a listserv post from a VSL#3 representative to another dietician addressing that
issue.
Linke advised Shepard to schedule a call with that dietician, explaining that she was
someone who was well-respected by her peers and that, "[r]ight now she's only hearing the
VSL#3 side of things." 11/13/16 Email at 1, Mot. Prelim. Inj. Ex. K, ECF No. 573-13. Based on
her posts, Linke received correspondence
from at least one other dietician who planned to
present the forwarded studies to doctors with whom she worked.
5
At no point was Linke paid to post any messages about Visbiome to any listserv.
According to Linke, in February 2018 she found the Abstract on the internet on her own and
posted it on the various listservs without direction from, or communication with, ExeGi. Linke
was subsequently retained by the De Simone Parties as an expert witness in this litigation.
DISCUSSION
The VSL Parties assert that the Abstract contains false and misleading statements of fact
and thus that its dissemination
by Linke on various dietician listservs is actionable false
advertising under the Lanham Act.
They further assert that they are presently
suffering
irreparable harm from that alleged false advertising and so ask this Court to enjoin the De
Simone Parties and their associates from circulating the Abstract and to require De Simone to
retract the Abstract from the Journal of Crohn 's and Colitis and all other places where it was
published.
I.
Legal Standard
To obtain a preliminary injunction, moving parties must establish that (1) they are likely
to succeed on the merits, (2) they are likely to suffer irreparable harm in the absence of
preliminary relief, (3) the balance of equities tips in their favor, and (4) an injunction is in the
public interest.
Winter v. Natural Res. Defense Council, Inc., 555 U.S. 7, 20 (2008); see
Dewhurst v. Century Aluminum Co., 649 F.3d 287, 290 (4th Cir. 2011). A moving party must
satisfy each requirement as articulated. Real Truth About Obama, Inc. v. Fed. Election Comm 'n,
575 F.3d 342, 347 (4th Cir. 2009), judgment vacated on other grounds, 559 U.S. 1089 (2010).
To obtain a preliminary injunction, the moving parties must "clearly demonstrate" that they "will
likely succeed on the merits," rather than present a mere "grave or serious question for
litigation."
Id. at 346-347.
Because a preliminary injunction is "an extraordinary remedy," it
6
"may only be awarded upon a clear showing that the plaintiff is entitled to such relief."
Winter,
555 U.S. at 22.
II.
Likelihood of Success on the Merits
Under the Lanham Act, a cause of action for false advertising arises when "[a]ny person
who, on or in connection with any goods or services . . . uses in commerce any . . . false or
misleading
representation
of fact which
. . . 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."
15 U.S.C.
S
1125(a)(1)(B).
To prevail on a claim of false advertising relating to the Abstract, the VSL Parties must
establish that:
(1)
(2)
(3)
(4)
(5)
The De Simone Parties made a false or misleading description of fact or
representation of fact in a commercial advertisement about VSL#3;
The misrepresentation is material, in that it is likely to influence the
purchasing decision;
The misrepresentation actually deceives or has the tendency to deceive a
substantial segment of its audience;
The De Simone Parties placed the false or misleading statement in
interstate commerce; and
The VSL Parties have been or are likely to be injured as a result of the
misrepresentation, either by direct diversion of sales or by a lessening of
goodwill associated with their product.
Scotts Co. v. United Indus. Corp., 315 F.3d 264, 272 (4th Cir. 2002). The contested statement
may either be "false on its face" or "although literally true, likely to mislead and to confuse
consumers given the merchandising
context."
Id.
(quoting c.B. Fleet Co. v. SmithKline
Beecham Consumer Healthcare L.P., 131 F.3d 430, 434 (4th Cir. 1997)). If an advertisement is
literally false, a party can succeed on a false advertising claim without evidence of any consumer
deception.
Scotts Co., 315 F.3d at 273 (internal citation omitted).
However, "if a [party's]
theory of recovery is premised upon a claim of implied falsehood, [that party] must demonstrate,
7
by extrinsic evidence, that the challenged advertisements tend to mislead or confuse consumers."
Id.
A.
Statements of Scientific Research
As an initial matter, the De Simone Parties, relying on ONY, Inc. v. Cornerstone
Therapeutics, Inc., 720 F.3d 490 (2d Cir. 2013), argue that the Abstract cannot constitute false
advertising under the Lanham Act because it is the results of a scientific study, not advertising.
In ONY, the United States Court of Appeals for the Second Circuit held that a Lanham Act claim
cannot be based on alleged false statements "on subjects about which there is legitimate ongoing
scientific disagreement," as long as the statements at issue are based on non-fraudulent data and
accurately describe the nature of the data and the methodologies used to produce or analyze it.
Id. at 498.
ONY involved two companies selling competing versions of a product used to treat
infants with lung conditions. Id. at 493. The defendant company financed a study, the results of
which suggested that the defendant's
product had a 20 percent lower mortality rate than
competing products and reduced the length of infants' hospital stays by 15 percent.
Id.
Physicians hired by the defendant company presented these results at multiple conferences and
published an article about the findings, which was later distributed by the company with
promotional materials. Id. at 493-94.
Although that article appeared in a peer-reviewed journal,
the plaintiffs asserted that there were incorrect statements in the article and irregularities in the
review process, including that one of the physicians hired by the defendant company was an
editor of the journal and another was on the journal's editorial board. Id. at 494. In dismissing a
Lanham Act claim based on statements in the article, the court held that statements on subjects
about which there is "legitimate ongoing scientific disagreement" cannot support a Lanham Act
claim, provided that the statement was based on non-fraudulent data and accurate descriptions of
8
the data and methodology underlying the conclusions.
Id. at 498.
The court reasoned that
conclusions based on scientific research, while theoretically subject to objective verification,
"are more closely akin to matters of opinion, and are so understood by the relevant scientific
communities."
Id. at 497. Although ONY is not controlling authority for this Court, the Court
finds its reasoning persuasive.
As in ONY, De Simone's conclusions in the Abstract are based on scientific analysis on
an issue about which there is ongoing disagreement.
Although VSL challenges the conclusions
of the Abstract and criticizes the lack of presentation of the underlying data, it offers no basis to
conclude that the data used in the study was fraudulent.
Notably, in ONY, the facts that the
article in question was funded by a product manufacturer, was conducted by researchers hired by
that company, reached conclusions favorable to its product, was published in a jo.urnal with
which there were arguable conflicts of interest, and was later disseminated to the consumer
public did not prevent the court from finding that no Lanham Act claim was available. See id. at
493-95.
Thus, the fact that De Simone conducted and funded the study himself, and plainly did
so to bolster his commercial
product, Visbiome,
does not render the reasoning
of ONY
inapplicable to the statements in the Abstract.
The VSL Parties' citation of Semco, Inc. v. Amcast, Inc., 52 F.3d 108 (6th Cir. 1995), is
unpersuasive.
In Semco, the Lanham Act claim related to an article in a trade journal about
manufacturing plunger tips that generally praised one company's products, without any claim
that the article constituted, or was even based upon, a scientific study published in a scientific
journal. Id. at 110-11. Likewise, Eastman Chemical Company v. Plastipure, Inc., 775 F.3d 230
(5th Cir. 2014), also relied on by the VSL Parties, involved a commercial brochure disparaging a
9
competitor's product as having a scientifically harmful condition and specifically acknowledged
that the publication was in a different category from the scientific paper in ONY. Id. at 236.
There are, however, several distinguishing factors relating to the Abstract.
Unlike the
study in ONY, the Abstract, while reviewed by the Scientific Committee of ECCO, was not a
formal, peer-reviewed study. The information contained in the Abstract is so sparse-limited
ECCO guidelines to 2750 characters including spaces-that
by
one cannot fairly assess the quality
of the data or the analysis. Further, while the sponsoring company's interest in the study in ONY
was fully disclosed, De Simone, having cleverly framed the Abstract as a comparison of "old"
and "new" VSL#3, disclosed only his affiliation with VSL, not his ownership of the competing
product, Visbiome.
Although the ONY court did not expressly limit its holding to statements
made in peer-reviewed journals with fully disclosed data, its rationale was based in part on the
importance of the peer review process and the presentation of sufficient information for other
scientists to attempt to replicate the research, so that the scientific community, rather than a
court, could resolve the dispute.
Id. at 497. It also relied in part on the fact that the authors
"readily disclosed the potential shortcomings of their methodology and their potential conflicts
of interest." Id. at 498.
The Abstract appears to fall short of these standards to a sufficient degree that the Court
will not conclude, on the present record, that it qualifies as a scientific statement protected from a
Lanham Act claim as a matter of law. See Eastman Chern. Co., 775 F.3d at 236 (distinguishing a
commercial publication from the study in ONY because it was not made in a peer-reviewed
journal
with a description
Nevertheless,
of the data, methodology,
and potential conflicts of interest).
the Court finds that based on the standard of ONYand
the evidence that the
statements in the Abstract are conclusions made in a scientific publication, reviewed by the
10
ECCO Scientific Committee, and drawn on subjects about which there is "legitimate ongoing
scientific disagreement," id. at 498, the VSL Parties have not clearly demonstrated that they are
likely to succeed on the merits of their Lanham Act claim.
B.
Falsity
In addition, the Court finds that even if the Abstract were found to be so lacking in
scientific rigor that it could serve as the basis of a Lanham Act false advertising claim, the VSL
Parties have failed to make a showing that they are likely to succeed on that claim because they
have not provided sufficient basis to conclude that the Abstract contains false statements.
The
VSL Parties do not plainly state whether they are contending that the Abstract is literally false or
likely to mislead.
However, as noted above, a claim of false advertising based on implied
falsehood requires a showing "by extrinsic evidence, that the challenged advertisements tend to
mislead or confuse consumers." Scotts Co., 315 F. 3d at 273. The VSL Parties have provided no
evidence of consumer confusion and so cannot succeed on a theory of implied falsehood.
The
Court therefore assumes that they proceed under a theory of literal falsity.
As to literal falsity:
In analyzing whether an advertisement is literally false, a court must determine,
first, the unambiguous claims made by the advertisement, and second, whether
those claims are false. A literally false message may be either explicit or
conveyed by necessary implication when, considering the advertisement in its
entirety, the audience would recognize the claim as readily as if it had been
explicitly stated.
Id. at 274 (citations omitted).
Many of the claims in the Abstract are equivocal, such as the statement that the "change
of the processing or product formulation may lead to a different outcome in terms of efficacy and
safety" and the conclusion that additional studies are needed to establish the efficacy and safety
ofthe new VSL#3. Abstract at 1-2. The more specific statements identified by the VSL Parties
11
as false include the "Result" that "[ c]ertain metabolic pathways and molecular mechanisms
present in the 'original' VSL#3 are clearly no more present in the 'new' Italy-made VSL#3" and
the "Conclusion" that "[r]ecent data have shown that the 'new' Italy-made VSL#3 is different
from the 'original' formulation. The proteomics, metabolomics and lipidomics confirm that the
two formulations do not have similar underlying core mechanisms."
Id. at 2.
In asserting that these statements are false, the VSL Parties offer no contrary, peerreviewed studies that specifically establish that old and new VSL#3 are the same and that the
Abstract's claims of differences are false. Rather, the VSL Parties' only evidence on the falsity
of these statements is the Declaration of Dr. Barrangou.
Although Dr. Barrangou is certainly an
accomplished scientist, he offers few facts to support his broad assertions that these statements in
the Abstract are "scientifically impossible."
Barrangou Decl. ~ 12.
Taking issue with the
statement that "[c]ertain metabolic pathways and molecular mechanisms present in the 'original'
VSL#3 are clearly no more present in the 'new'
Italy-made VSL#3," Abstract at 2, Dr.
Barrangou generally states that "[b]acteria being unable to grow without glycolysis (to generate
energy from carbohydrates) or purines (building blocks of DNA), it is scientifically impossible
that these pathways are 'no longer "present" in the "new" Italy-made VSL#3." Barrangou Decl.
~ 13. He further asserts, citing unnamed peer-reviewed manuscripts, that the glycolysis pathway
is present in all bacterial strains of VSL#3, and that the purine pathway is present in all bacteria
in general. Dr. Barrangou's assertions fail to establish falsity because nowhere in the Abstract is
there a statement that either the glycolysis pathway or the purine pathway is not present.
Although the Abstract's
diagram references "Glycolysis" and "Purine Metabolism,"
it is not
readily discernible from the diagram that the Abstract is claiming that those particular pathways
do not exist.
Indeed, Dr. Barrangou asserts in his Declaration that the diagram cannot be
12
interpreted because there is no legend and no explanation of the colors used. Thus, while the
Abstract's assertions that "certain metabolic pathways" are no longer present in the new VSL#3
are admittedly vague and not clearly supported by data contained in the Abstract, the VSL
Parties have not offered evidence that convincingly refutes them and exposes them as false.
Likewise, as support for his claim that the statement that old and new VSL#3 "do not
have similar underlying core mechanisms" is false, Dr. Barrangou generally references studies
showing that the bacteria in new VSL#3 and old VSL#3 are "genomically
equivalent" and that they share core mechanisms "such as glycolysis."
Once again, Dr. Barrangou's
and genetically
Barrangou Decl. ,-r 18.
purported evidence of falsity lacks specificity and consists of
assertions about genetic equivalence
and the presence of glycolysis that do not actually
contradict any statements in the Abstract.
Dr. Barrangou's
remaining
critiques of the Abstract address the lack of data or
information about De Simone's methodology and thus do not establish that the statements in the
Abstract are literally false, only that they are inadequately supported.
To be sure, Dr. Barrangou
points to tangible deficiencies in the Abstract that may cast doubt on the reliability of its
conclusions. But "the test for literal falsity is simpler; if a defendant's claim is untrue, it must be
deemed literally false." Castrol, Inc. v. Pennzoil Co., 987 F.2d 939, 944 (3rd Cir. 1993).
That
the Abstract contains only limited information about the data set and testing methodologies of
the underlying study does not render the results of that study untrue, particularly where, as here,
that brevity was required by ECCO's parameters for Abstract submissions.
With nothing more than Dr. Barrangou's
Declaration to establish that the Abstract,
reviewed by the Scientific Committee of a multi-national
organization
of lBD specialists,
presented at a scientific conference, and published in a scientific journal, is untrue, the VSL
13
Parties have failed to persuasively establish that the Abstract is literally false. Scotts Co., 315
F.3d at 272; Castrol, 987 F.2d at 943-44 (relying on a record "replete with Castrol's affirmative
evidence proving the literal falsity of Pennzoil' s claims").
They have thus failed to clearly
demonstrate they are likely to succeed on their false advertising claim. The Court therefore need
not address whether the later dissemination of the Abstract by Linke constituted advertising
within the meaning of the Lanham Act.
Because the VSL Parties have failed to clearly demonstrate a likelihood of success on this
claim, there is no need to address the remaining Winter factors.
See Winter, 555 U.S. at 20. The
Third Motion for a Preliminary Injunction will therefore be denied.
CONCLUSION
For the foregoing reasons, the VSL Parties' Third Motion for a Preliminary Injunction is
DENIED.
Date:
A separate Order shall issue.
September 24, 2018
~€C
~
CHliA
THEODORE D.
United States District Judge
14
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