G&W LABORATORIES, INC. v. LASER PHARMACEUTICALS, LLC et al
Filing
53
OPINION filed. Signed by Judge Brian R. Martinotti on 6/19/2018. (mmh)
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
____________________________________
:
:
:
Plaintiff,
:
v.
:
:
LASER PHARMACEUTICALS, LLC
:
and ADITYA LABS INC., N/K/A
:
INVADERM CORPORATION.,
:
:
Defendants.
:
____________________________________:
G&W LABORATORIES, INC.,
Civil Action No. 3:17-cv-3974-BRM-DEA
OPINION
MARTINOTTI, DISTRICT JUDGE
Before this Court are: (1) Defendant Aditya Labs Inc.’s 1 (“InvaDerm”) Motion to Dismiss
(ECF No. 29); and (2) Defendant Laser Pharmaceuticals, LLC’s (“Laser”) Motion to Dismiss (ECF
No. 30). Plaintiff G&W Laboratories, Inc. (“G&W”) opposes the motions. (ECF Nos. 33, 34.)
Pursuant to Federal Rule of Civil Procedure 78(a), the Court heard Oral Argument on April 11,
2018. For the reasons set forth below, the motions are GRANTED in part and DENIED in part.
I.
BACKGROUND
A. Factual Background
For the purposes of the motion to dismiss, the Court accepts the factual allegations in the
Complaint as true and draws all inferences in the light most favorable to Plaintiff. See Phillips v.
Cty. of Allegheny, 515 F.3d 224, 228 (3d Cir. 2008). Further, the Court considers any “document
integral to or explicitly relied upon in the complaint.” In re Burlington Coat Factory Sec. Litig.,
1
Aditya is now known as InvaDerm. Therefore, the Court will refer to Aditya as InvaDerm
throughout the Opinion.
114 F.3d 1410, 1426 (3d Cir. 1997). The central dispute in this matter is whether G&W’s allegation
that Laser falsely advertised Hemmorex is precluded by the Federal Food, Drug, and Cosmetic
Act (“FDCA”) and/or is within the Food and Drug Administration’s (“FDA”) primary jurisdiction.
1.
G&W and Anucort
G&W markets Anucort-HC™ Hydrocortisone Acetate Suppositories, 25 mg (“Anucort”),
a prescription drug sold to the public for use in treatment of hemorrhoids. (Am. Compl. (ECF No.
9) ¶¶ 8-9.) G&W “carefully formulates each Anucort suppository to deliver 25 mg of the active
ingredient hydrocortisone acetate USP.” (Id. ¶ 11.) G&W has also “validated through ‘dissolution’
testing that Anucort releases the labeled 25 mg dose in a reasonable amount of time.” 2 (Id. ¶ 12.)
Anucort is not FDA approved, and G&W has been “actively working” with the FDA to obtain an
approved New Drug Application (“NDA”) for Anucort. 3 (Id. at ¶ 14.) In support of Anucort’s
NDA, G&W submitted an Investigational New Drug (“IND”) application, 4 spending “millions of
dollars conducting clinical studies of the safety and efficacy of Anucort for treating symptomatic
internal hemorrhoids.” (Id.)
2
According to G&W, proper drug release for hydrocortisone acetate suppositories is crucial
because “a healthy person absorbs only about 26% of the hydrocortisone acetate a suppository
releases in the rectum.” (Id. ¶ 13.)
3
An NDA is the “vehicle through which drug sponsors formally propose that FDA approve a new
pharmaceutical for sale and marketing in the U.S.” See New Drug Application (NDA), U.S. Food
&
Drug
(last
updated
Mar.
29,
2016)
https://www.fda.gov/Drugs/DevelopmentApprovalProcess/HowDrugsareDevelopedandApprove
d/ApprovalApplications/NewDrugApplicationNDA/default.htm.
4
An IND application provides a means in advance of any drug approval for unapproved drugs to
be shipped to clinical investigators to be used in clinical trials to collect data and information from
human use. Data gathered during an IND application process becomes part of an NDA. See
Investigational New Drug (IND) Application, U.S. FOOD & DRUG (last updated Oct. 5, 2017)
https://www.fda.gov/Drugs/DevelopmentApprovalProcess/HowDrugsareDevelopedandApprove
d/ApprovalApplications/InvestigationalNewDrugINDApplication/default.htm (last updated Aug.
1, 2016).
2
Despite not being FDA approved, Anucort has been on the market for approximately thirty
years because, “[p]ending NDA approval, G&W markets Anucort pursuant to the government’s
enforcement discretion.” (Id. at ¶¶ 9, 14.) Enforcement discretion means the FDA weighs priorities
and resources and ultimately makes a discretionary decision about the enforcement actions it will
take against unapproved prescription drugs. CPG Sec. 440.100 Marketed New Drugs Without
Approved
NDAs
and
ANDAs,
Compliance
Policy
Guide,
https://www.fda.gov/iceci/compliancemanuals/compliancepolicyguidancemanual/ucm074382.ht
m (“CPG Sec. 440.100”). The FDA:
[r]ecognizing that [it is] unable to take action immediately against
all . . . illegally marketed products and that [it] need[s] to make the
best use of scarce Agency resources, [has] had to prioritize [its]
enforcement efforts and exercise enforcement discretion with regard
to products that remain on the market.
In general, in recent years, FDA has employed a risk-based
enforcement approach with respect to marketed unapproved drugs.
This approach includes efforts to identify illegally marketed drugs,
prioritization of those drugs according to potential public health
concerns or other impacts on the public health, and subsequent
regulatory follow-up. Some of the specific actions the Agency has
taken have been precipitated by evidence of safety or effectiveness
problems that has either come to our attention during inspections or
been brought to our attention by outside sources.
Id. Essentially, the FDA evaluates “on a case-by-case basis whether justification exists to exercise
enforcement discretion to allow continued marketing for some period of time after FDA
determines that a product is being marketed illegally.” (Id.) In determining whether to extend such
a grace period, the FDA considers the following factors:
(1) the effects on the public health of proceeding immediately to
remove the illegal products from the market (including whether
the product is medically necessary and, if so, the ability of
legally marketed products to meet the needs of patients taking
the drug); (2) the difficulty associated with conducting any
required studies, preparing and submitting applications, and
3
obtaining approval of an application; (3) the burden on affected
parties of immediately removing the products from the market;
(4) the Agency’s available enforcement resources; and (5) any
special circumstances relevant to the particular case under
consideration.
(Id.) Only unapproved drugs that were introduced in the market prior to September 19, 2011, can
apply for such grace period. (Id.)
Anucort has allegedly been “a leading prescription product for the treatment of hemorrhoid
conditions.” (ECF No. 9 ¶ 14.) Doctors and prescribers have chosen Anucort as part of their
patient’s treatment regime by prescribing hydrocortisone acetate 25 mg suppository. (Id. ¶ 15.)
Thereafter, these prescriptions are filled by pharmacists with Anucort. (Id.) Anucort has produced
sales of approximately one million units each year. (Id.)
2.
Laser’s False Advertising of Hemmorex
Laser is a privately held pharmaceutical company that “markets, promotes, advertises,
offers for sale, sells, and distributes a prescription hydrocortisone acetate suppository known as
Hemmorex-HC™ (“Hemmorex”). (Id. ¶ 4.) Laser contracted with InvaDerm to produce
Hemmorex for Laser. (Id. ¶ 19.) Laser advertises itself as offering “affordable, high quality
generic” drug products “to meet the diverse needs of patients.” (Id. ¶ 17.) G&W alleges Laser
began distributing, marketing, and selling Hemmorex by no later than April 2016. 5 (Id. ¶ 18.) “To
capture sales that G&W would otherwise enjoy, Laser labels and advertises Hemmorex as also
providing 25 mg of hydrocortisone acetate in suppository form.” (Id. ¶ 19.) The dosing information
included in Laser’s Hemmorex label and other promotional materials states that a patient using
Hemmorex will receive 25 mg of hydrocortisone acetate. (Id. ¶ 20.) However, G&W alleges
5
Laser admits, and FDA records reflect, Hemmorex has actually been marketed since November
2013. National Drug Code Directory, U.S. Food & Drug,
https://www.accessdata.fda.gov/scripts/cder/ndc/dsp_searchresult.cfm (search for “Anucort” in
the “Proprietary Name” field).
4
Hemmorex does not provide that amount of active ingredient. (Id. ¶ 21.) Instead, “[l]aboratory
testing shows that Hemmorex releases less than 20%—that is, less than 5 mg—of the 25 mg
labeled amount of hydrocortisone acetate active ingredient into a two-hour period.” (Id.)
Nevertheless, Laser markets Hemmorex to generic buyers at drug wholesalers and retailers,
as an “equivalent to and substitute for Anucort.” (Id. ¶ 25.) “Laser seeks to take sales away from
G&W by encouraging these customers to purchase and stock Hemmorex in place of Anucort, and
thereafter for pharmacists to dispense Hemmorex to customers when filling prescriptions for
Anucort.” (Id.) Laser represents Hemmorex provides the same active ingredient and in the identical
amounts as Anucort through advertising, such as labels, product inserts, and sell sheets. (Id. ¶ 26.)
Laser also uses drug databases as a marketing channel for advertising Hemmorex by submitting to
databases that Hemmorex is equivalent to Anucort and requesting that the databases link
Hemmorex to Anucort. (Id. ¶ 27.) Drug databases link equivalent products to one another, and the
link communicates to database subscribers that the products are equivalent and may be substituted
for each other. (Id.)
Many drug wholesalers, retailers, and pharmaceutical chains purchase, stock, and dispense,
only one brand of hydrocortisone acetate 25 mg suppository. (Id. ¶ 28.) In making their purchasing
and stocking decision, they choose a product from a database, relying on the linkage and other
advertising to conclude the products are equivalent. (Id.) Customers generally base their
purchasing decisions on price. (Id.)
G&W alleges prior to launching Hemmorex, neither Laser nor InvaDerm spent time or
resources to ensure it was “as effective and well-made” or “equivalent to Anucort.” (Id. ¶ 30.) “In
particular, neither Laser nor InvaDerm ensured that Hemmorex’s rate of drug release will provide
a patient with the labeled levels of hydrocortisone acetate from each dose.” (Id.) Because G&W’s
5
dissolution testing determined Hemmorex does not have the same performance characteristics as
Anucort in terms of the time it takes to release its labeled active ingredient to the patient, G&W
argues Hemmorex is not equivalent to or substitutable for Anucort, and Laser’s advertising of
Hemmorex as an equivalent or substitute is “literally false and misleading.” (Id. ¶¶ 33-34.)
Laser also advertises “that the FDA allows Hemmorex to be marketed and sold as a ‘DESI
drug’ – that is, a drug covered by an ongoing Drug Efficacy Study Implementation (‘DESI’)
program.” 6 (Id. ¶ 35.) However, G&W alleges Hemmorex is not a DESI drug. (Id. ¶ 37.) Laser
also promotes that it has submitted a Pre-IND application to the FDA for Hemmorex, and that it
is the only manufacture of a 25 mg hydrocortisone acetate suppository to have done so. (Id. ¶ 36.)
G&W asserts “Laser has not participated in a Pre-IND meeting with the FDA, nor has it submitted
an IND application to the FDA for Hemmorex, nor has it done any predicate clinical toxicology
or animal testing.” (Id. ¶ 38.) G&W is also currently working with the FDA to obtain NDA
approval and submitted an IND application. (Id. ¶ 39.)
6
In 1962, Congress amended the FDCA “to require that a new drug also be proven effective, as
well as safe, to obtain FDA approval.” CPG Sec. 440.100. The amendment further required the
FDA “to conduct a retrospective evaluation of the effectiveness of the drug products that FDA had
approved as safe between 1938 and 1962 through the new drug approval process.” Id. As such, the
FDA contracted with the National Academy of Science/National Research Council to evaluate the
effectiveness of over 3,400 products that were already approved only for safety between 1938 and
1962. Id. The FDA then reviewed and re-evaluated the findings produced, and the implementation
of those reports was called DESI. Id. “DESI covered the 3,400 products specifically reviewed by
[the National Academy of Science/National Research Council] as well as the even larger number
of [identical to, related to, or similar products (“IRS”)] that entered the market without FDA
approval.” Id. Therefore, even though those IRS products are not listed as DESI, they are covered
by the new drug applications reviewed. 21 C.F.R. § 310.6. A determination as to whether a drug
is IRS can be made by “an individual who is knowledgeable about drugs and their indications for
use.” Id. However, “[w]here the relationships are more subtle and not readily recognized, the
purchasing agent may request an opinion by writing to the [FDCA].” Id.
6
3.
InvaDerm
InvaDerm “is a manufacturer and distributor of over-the-counter and generic prescription
suppositories, creams, ointments, liquids and gels.” (Id. ¶ 4.) InvaDerm manufactures Hemmorex
for Laser. (Id. ¶ 19.) As Hemmorex’s manufacturer, G&W alleges InvaDerm “is well aware that
Laser advertises and promotes Hemmorex as providing 25 mg hydrocortisone acetate and that
Hemmorex is an equivalent to and substitute for Anucort.” (Id. ¶ 43.) InvaDerm is “aware that
these claims are false because it manufactured Hemmorex for Laser,” but “nevertheless supplied
these knock-offs to Laser.” (Id. ¶ 43.)
4.
Alleged Injuries
G&W contends Laser’s false advertisements have led
drug wholesalers, retailers, chains, distributors, mail order houses,
independent pharmacies, managed care organizations, hospitals,
government purchasing organizations, healthcare providers and/or
others in the District of New Jersey and across the country . . . [to]
purchase[] or will purchase [] Hemmorex and have ceased or will
cease to purchase [] Anucort.
(Id. ¶ 40.) Pharmacists, relying on Laser’s false and misleading advertising, have dispensed
Hemmorex instead of Anucort to patients. (Id. ¶ 42.) G&W has lost, and asserts it will continue to
lose, sales of Anucort, as a result of customers having discontinued Anucort in place of Hemmorex.
(Id. ¶ 45.)
G&W predicts further injuries because it “cannot control the safety, effectiveness, or
quality of [Hemmorex]. Thus, doctors and patients who suffer bad experiences with Hemmorex
that is purchased and used in place of Anucort are likely to think less of both G&W and Anucort.”
(Id. ¶ 44.)
7
B. Procedural History
On June 2, 2017, G&W filed a Complaint against InvaDerm and Laser. (Compl. (ECF No.
1).) On June 9, 2017, G&W filed an Amended Complaint against the same Defendants alleging
three counts: (1) false advertising pursuant to the Lanham Act § 43(a), 15 U.S.C. § 1125(a); (2)
unfair competition pursuant to the Lanham Act § 43(a), 15 U.S.C. § 1125(a); and (3) unfair
competition in violation of the New Jersey Fair Trade Act (“NJFTA”), N.J.S.A. § 56:4-1. (ECF
No. 9.) On July 19, 2017, InvaDerm filed a Motion to Dismiss. (ECF No. 29.) On July 20, 2017,
Laser filed a Motion to Dismiss. (ECF No. 30.) G&W opposes both motions. (ECF Nos. 33, 34.)
On April 18, 2018, Laser filed a Motion for Leave to File a Supplemental Letter Brief. (ECF No.
49.) On April 19, 2018, the Court granted the leave and allowed G&W to file an Opposition. (ECF
Nos. 51.) 7 The Motion was fully brief on April 25, 2018, including supplemental briefing. (ECF
No. 51.) Oral Argument was held on April 11, 2018. (ECF No. 52.)
II.
LEGAL STANDARD
In deciding a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), a
district court is “required to accept as true all factual allegations in the complaint and draw all
inferences in the facts alleged in the light most favorable to the [plaintiff].” Phillips, 515 F.3d at
228. “[A] complaint attacked by a . . . motion to dismiss does not need detailed factual allegations.”
Bell Atl. v. Twombly, 550 U.S. 544, 555 (2007). However, the Plaintiff’s “obligation to provide
the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels and conclusions, and a
formulaic recitation of the elements of a cause of action will not do.” Id. (citing Papasan v. Allain,
478 U.S. 265, 286 (1986)). A court is “not bound to accept as true a legal conclusion couched as a
7
The Court has reviewed Laser’s Supplemental Letter Brief. It did not present any novel arguments
or legal theories. Instead, it further argued G&W lacked standing to assert Lanham Act claims
because Anucort was an unapproved drug. (See ECF No. 49.)
8
factual allegation.” Papasan, 478 U.S. at 286. Instead, assuming the factual allegations in the
complaint are true, those “[f]actual allegations must be enough to raise a right to relief above the
speculative level.” Twombly, 550 U.S. at 555.
“To survive a motion to dismiss, a complaint must contain sufficient factual matter,
accepted as true, to ‘state a claim for relief that is plausible on its face.’” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). “A claim has facial plausibility when
the pleaded factual content allows the court to draw the reasonable inference that the defendant is
liable for misconduct alleged.” Id. This “plausibility standard” requires the complaint allege “more
than a sheer possibility that a defendant has acted unlawfully,” but it “is not akin to a ‘probability
requirement.’” Id. (quoting Twombly, 550 U.S. at 556). “Detailed factual allegations” are not
required, but “more than an unadorned, the defendant-harmed-me accusation” must be pled; it
must include “factual enhancements” and not just conclusory statements or a recitation of the
elements of a cause of action. Id. (citing Twombly, 550 U.S. at 555, 557).
“Determining whether a complaint states a plausible claim for relief [is] . . . a contextspecific task that requires the reviewing court to draw on its judicial experience and common
sense.” Iqbal, 556 U.S. at 679. “[W]here the well-pleaded facts do not permit the court to infer
more than the mere possibility of misconduct, the complaint has alleged—but it has not
‘show[n]’—‘that the pleader is entitled to relief.’” Id. at 679 (quoting Fed. R. Civ. P. 8(a)(2)).
While as a general rule, a court many not consider anything beyond the four corners of the
complaint on a motion to dismiss pursuant to 12(b)(6), the Third Circuit has held “a court may
consider certain narrowly defined types of material without converting the motion to dismiss [to
one for summary judgment pursuant under Rule 56].” In re Rockefeller Ctr. Props. Sec. Litig., 184
F.3d 280, 287 (3d Cir.1999). Specifically, courts may consider any “‘document integral to or
9
explicitly relied upon in the complaint.” In re Burlington Coat Factory Sec. Litig., 114 F.3d at
1426.
III.
DECISION
A. Laser’s Motion to Dismiss
Laser argues G&W’s claims should be dismissed because they are precluded by the FDCA,
are within the FDA’s primary jurisdiction, and impermissibly attempt to redress violations of the
FDCA, under which no private right of action exists. (See ECF No. 30-1 at 15-32.) G&W alleges
Laser’s advertising of Hemmorex is improper and seeks redress under the Lanham Act and the
NJFTA because: (1) Hemmorex does not provide 25 mg hydrocortisone acetate; (2) it is not
equivalent to or a substitute for Anucort; (3) it is not legally marketed as a DESI drug; and (4) it
is not the only 25 mg hydrocortisone acetate suppository subject to a pre-IND or IND application,
and seek redress by using the Lanham Act. (ECF No. 9 ¶ 48; see ECF No. 34.) Laser contends
G&W is attempting to use the Lanham Act to prevent it from selling Hemmorex, which is an
impermissible end run around the FDCA.
1.
Primary Jurisdiction
As a preliminary matter, the Court notes this is not a case of preemption. “In pre-emption
cases, the question is whether state law is pre-empted by a federal statute, or in some instances, a
federal agency action.” POM Wonderful LLC v. Coca-Cola Co., 134 S. Ct. 2228, 2236 (2014).
This case, much like POM Wonderful, “concerns the alleged preclusion of a cause of action under
one federal statute by the provisions of another federal statute.” Id.
In support of its contention that this is a case of primary jurisdiction Laser argues that:
while the FDCA does not preclude all Lanham Act claims as a
general proposition, FDCA preclusion does apply, for example,
where a Lanham Act claim would require a court to make
10
determinations about the safety, legality, and classification of new
drugs that are more properly within the exclusive purview of FDA.
(ECF No. 30-1 at 15-16.) The doctrine of primary jurisdiction applies where a claim is originally
cognizable in the courts but “enforcement of the claim requires the resolution of issues which,
under a regulatory scheme, have been placed within the special competence of an administrative
body.” United States v. W. Pac. R.R. Co., 352 U.S. 59, 64 (1956); MCI Telecomms. Corp. v.
Teleconcepts, Inc., 71 F.3d 1086, 1103 (3d Cir. 1995) (stating primary jurisdiction “applies where
a claim . . . requires resolution of issues which . . . have been placed within the special competence
of an administrative body”). “[I]n such a case the judicial process is suspended pending referral of
such issues to the administrative body for its views.” W. Pac. R.R. Co., 352 U.S. at 64. “No fixed
formula exists for applying the doctrine,” id., but courts have previously focused their analysis on
four factors:
(1) Whether the question at issue is within the conventional
experience of judges or whether it involves technical or policy
considerations within the agency’s particular field of expertise; (2)
Whether the question at issue is particularly within the agency’s
discretion; (3) Whether there exists a substantial danger of
inconsistent rulings; and (4) Whether a prior application to the
agency has been made.
Baykeeper v. NL Indus., Inc., 660 F.3d 686, 691 (3d Cir. 2011). It is “not appropriate for a court
in a Lanham Act case to determine preemptively how a federal administrative agency will interpret
and enforce its own regulations.” Sandoz Pharm. Corp. v. Richardson–Vicks, Inc., 902 F.2d 222,
231 (3d Cir. 1990).
2.
Lanham Act and FDCA
The Lanham Act creates a cause of action against any person who “uses in commerce any
. . . false or misleading description of fact, or false or misleading representation of fact, which . . .
misrepresents the nature, characteristics [or] qualities . . . of his or her or another person’s goods,
11
services, or commercial activities.” 15 U.S.C. § 1125(a)(1). The purpose of the Lanham Act is “to
protect persons engaged in such commerce against unfair competition” and “to prevent fraud and
deception.” 15 U.S.C. § 1127.
The FDCA, 21 U.S.C. §§ 301–399f, is intended “primarily to protect the health and safety
of the public at large.” POM Wonderful, 134 S. Ct. at 2234. Although the FDCA also regulates the
labeling and advertising of drugs, see 21 U.S.C. § 352, enforcement is not through a private cause
of action, but almost exclusively through the actions of the FDA. The FDCA provides that “all
such proceedings for the enforcement, or to restrain violations of [the FDCA] shall be by and in
the name of the United States.” 21 U.S.C. § 337(a). Apart from a few situations in which states
may initiate enforcement actions, “all such proceedings for the enforcement, or to restrain
violations, of this chapter shall be by and in the name of the United States.” 21 U.S.C. § 337.
As such, the Lanham Act and the FDCA are two discrete statutory authorities that regulate
the advertising, marketing, and labeling of drugs. “The FDCA and the Lanham Act overlap to the
extent that both regulate drug products in the marketplace.” Axcan Scandipharm Inc. v. Ethex
Corp., 585 F. Supp. 2d 1067, 1074 (D. Minn. 2007). Courts have recognized the prospective
conflict between the two Acts and have struggled to define the proper scope of each law. Id.
However, “[c]ourts have come to the general conclusion that the FDA’s enforcement of the FDCA
is primarily concerned with the safety and efficacy of new drugs, while the Lanham Act is focused
on the truth or falsity of advertising claims.” Id.; see, e.g., Sandoz, 902 F.2d at 230. Therefore,
where a claim requires interpretation of a matter that is exclusively within the jurisdiction and
expertise of the FDA and FDCA, plaintiffs cannot use the Lanham Act as a run around to private
enforcement. Sandoz, 902 F.2d at 231; Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1139 (4th Cir.
12
1993). However, the Supreme Court has found neither precludes the other. POM Wonderful, 134
S. Ct. at 2241.
In POM Wonderful, the Supreme Court held that “the FDCA and the Lanham Act
complement each other” and “Congress did not intend the FDCA to preclude Lanham Act suits.”
134 S. Ct. at 2241. The Court stated, “[e]nforcement of the FDCA and the detailed prescriptions
of its implementing regulations is largely committed to the FDA,” however, that agency “does not
have the same perspective or expertise in assessing market dynamics that day-to-day competitors
possess.” Id. at 2238. Therefore, “the two statutes serve different functions and draw on different
areas of expertise.” JHP Pharm., LLC v. Hospira, Inc., 52 F. Supp. 3d 992, 998 (C.D. Cal. 2014).
However, the POM Wonderful Court did, in passing, reserve the possibility that some Lanham Act
cases might be precluded by the FDCA:
Unlike other types of labels regulated by the FDA, such as drug
labels, it would appear the FDA does not preapprove food and
beverage labels under its regulations and instead relies on
enforcement actions, warning letters, and other measures.
134 S. Ct. at 2239 (citation omitted). This suggests the Supreme Court “might find a Lanham Act
claim precluded by the FDCA where it turns on the content of a drug label, especially if that drug
label was previously preapproved by the FDA.” JHP Pharm., LLC, 52 F. Supp. 3d at 998.
Section 43(a) of the Lanham Act provides, in part:
(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
13
(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 likely to be damaged by such an act.
15 U.S.C. § 1125(a).
To prove a claim of false advertising under the Lanham Act, a plaintiff must establish the
following elements:
1) that the defendant has made false or misleading statements as to
his own product [or another’s]; 2) that there is actual deception or at
least a tendency to deceive a substantial portion of the intended
audience; 3) that the deception is material in that it is likely to
influence purchasing decisions; 4) that the advertised goods traveled
in interstate commerce; and 5) that there is a likelihood of injury to
the plaintiff in terms of declining sales, loss of good will, etc.
Groupe SEB USA, Inc. v. Euro-Pro Operating LLC, 774 F.3d 192, 198 (3d Cir. 2014). With respect
to the first requirement, “[t]he plaintiff must prove that the commercial message is either literally
false or, if not literally false, literally true or ambiguous with the tendency to deceive consumers.”
Santana Prod., Inc. v. Bobrick Washroom Equip., Inc., 401 F.3d 123, 136 (3d Cir. 2005). When
the statements of fact at issue are literally false, the plaintiff is not required to demonstrate the
consumer was misled. Id. However, if the statements are misleading, literally true or ambiguous
with the tendency to deceive consumers, there is no such presumption, and the plaintiff must
present evidence of actual consumer deception or “at least a tendency to deceive a substantial
portion of the intended audience.” Id.
14
3.
Unfair Competition in Violation of the NJFTA, N.J.S.A. § 56:4-1
G&W argues all three of its Counts in the Complaint, including its state law claim, can be
analyzed together because unfair competition claims under New Jersey statutory and common law
parallel those under the Lanham Act. (ECF No. 30-1 at 18 n.12.)
Indeed, the elements of unfair competition under N.J.S.A. § 56:4-1 and New Jersey
common law are the same as those required under the Lanham Act. Cancer Genetics, Inc. v.
Hartmayer, No. 07-5463, 2008 WL 323738, at *9 (D.N.J. Feb. 5, 2008). “Consequently, the Court
need only undertake a single analysis to determine whether Plaintiff’s claims survive Defendant’s
motion to dismiss.” Id. The Third Circuit has stated, “We previously have held that the ‘federal
law of unfair competition under § 43(a) is not significantly different from the New Jersey
[common] law of unfair competition’ and have applied the identical test to both claims.” Am. Tel.
& Tel. Co. v. Winback & Conserve Program, Inc., 42 F.3d 1421, 1433 (3d Cir. 1994) (alteration
in original); see also Buying For The Home, LLC v. Humble Abode, LLC, 459 F. Supp. 2d 310,
317–318 (D.N.J. 2006) (“Because the elements of a claim of unfair competition under the Lanham
Act are the same as for claims of unfair competition and trademark infringement under New Jersey
statutory and common law, the Court’s analysis below extends to Plaintiff’s state law claims as
well.”). Therefore, the Court will analyze all Counts jointly.
a.
Hemmorex is Equivalent to or Substitutable for Anucort
Laser argues G&W’s equivalency allegation is precluded by the FDCA because “it is not
appropriate for a court in a Lanham Act case to determine preemptively how a federal
administrative agency will interpret and enforce its own regulations.” (ECF No. 30-1 at 18, 21
(citation omitted).) Specifically, Laser contents “G&W’s Anucort drug is unapproved, subject to
a pending NDA, and not yet a reference or pioneer drug against which Hemmorex can be
15
compared; thus no equivalency claim can validly be asserted against Laser.” (Id. at 19.) It further
argues that “the variety of very specific data-driven and medical-scientific determinations
attendant to demonstrating ‘equivalence,’ means that this claim should be committed to FDA’s
primary jurisdiction.” (Id. at 20.) G&W argues “false claims of a drug’s equivalency give rise to
Lanham Act liability without intruding on the FDA’s jurisdiction,” whether or not the FDA
approved the product at issue. (ECF No. 34 at 20-21.) Laser’s motion primarily addresses only the
first element of a claim for false advertising under the Lanham Act—whether Laser has made
literally or implicitly false or misleading statements of fact about Hemmorex, and specifically,
whether Laser has made false or misleading statements that Hemmorex is equivalent to Anucort.
(See ECF No. 30-1 at 18-23.) However, it also argues G&W’s Amended Complaint fails under
Rule 8’s pleading standard because it only makes conclusory allegations that Laser advertised its
product as being equivalent to Anucort. (Id. at 32-33.)
The Court agrees with G&W. The issue here is not whether the FDA should deem Laser’s
product to be a “generic” version of G&W’s product; instead, the issue is whether, by advertising
and marketing Hemmorex as “equivalent to or substitutable” for Anucort when the drugs allegedly
do not contain the same active ingredients, Laser’s advertising is literally or implicitly false.
“There is a distinction . . . between respecting the FDA’s primary jurisdiction to determine . . .
whether a drug is lawfully marketed ‘generic,’ ‘bioequivalent,’ ‘therapeutically equivalent,’
‘pharmaceutically equivalent,’” and a Lanham Act claim “that a false statement has been made
about a product.” Healthpoint, Ltd. v. Stratus Pharm., Inc., 273 F. Supp. 2d 769, 792 (W.D. Tex.
2001).
Determining whether a defendant has violated the Lanham Act by making false statements
about a product is within this Court’s purview, regardless of whether plaintiff’s drug has been
16
approved or unapproved by the FDA. 8 In fact, cases similar to this case have determined a plaintiff
can pursue a claim under the Lanham Act, based on false statements of equivalence, regardless of
whether or not their drug was approved or unapproved by the FDA. In Mission Pharmacal Co. v.
Virtus Pharm., LLC, 23 F. Supp. 3d 748, 768-69 (W.D. Tex. 2014), the court considered whether
Virtus made literally or implicitly false or misleading statements of fact about the Virtus Products,
and specifically, whether Virtus made false or misleading statements that the Virtus Products were
generic equivalents to the Mission Products. Neither Mission nor Virtus’s products were approved
by the FDA. Id. at 761. In that case, Mission alleged Virtus marketed its products as “generic
equivalents to and substitutes for” Mission’s products and had its products linked to the Mission
products in online databases, even though Virtus’s products were not bioequivalents of Mission’s
products. Id. at 752-53. As such, Mission asserted:
Virtus’s advertisements and promotional claim about the Virtus
Products are literally and/or impliedly false and misleading because
the Virtus Products are not generic, equivalent or substitutable for
the Mission products unless they have been demonstrated to deliver
their active ingredients to patients at the same rate and in the same
amount as the Mission Products.
Id. at 753.
The Mission Pharmacal court, quoting Healthpoint v. Stratus Pharmaceuticals, stated:
[T]he question of whether two products are generic is best left to the
FDA, but “a drug manufacturer making a claim that a non-approved
drug is ‘generic’ to or a ‘generic equivalent of’ another nonapproved drug must use the FDA’s definition of ‘generic’ and, when
such a representation is challenged, as here, through a Lanham Act
false advertising claim with specific allegations that the use of the
terms is false and unsubstantiated, must defend and be prepared to
demonstrate why it stated that its drug is a ‘generic equivalent,’ that
8
At Oral Argument, Laser argued G&W does not have standing or a “protectable commercial
interest” to bring its Lanham Act claims because Anucort is an unapproved drug. They contend
the FDA has “exclusive responsibility over the regulation of unapproved drugs.” (Oral Arg. Draft
Tr. (13:15-17).) Laser further contended courts have only accepted Lanham Act claims when the
plaintiff’s drug was approved by the FDA. (Tr. 8:19-25.)
17
is, is ‘identical or bioequivalent to a brand name drug in dosage
form, safety, strength, route of administration, quality, performance
characteristics and intended use.’”
Id. at 769. Based on the foregoing, the court found Mission had presented competent evidence to
demonstrate Virtus had made allegedly false or misleading statements about the equivalency of its
products and the Mission products and denied Virtus’s motion for summary judgment. Id. at 77374.
In Healthpoint, Ltd. v. Allen Pharm., LLC, No. 07-CA-0526, 2008 WL 728333, at *6 (W.D.
Tex. Mar. 18, 2008), the plaintiffs “alleged a specific false or misleading representation in
Defendant’s commercial advertising—that Allan states and implies AllanDerm is a generic
equivalent to XenaDerm, when in fact it is not.” Notably, neither drug was approved by the FDA.
Nonetheless, the court held:
There is a distinction between respecting the FDA’s primary
jurisdiction to determine in the first instance whether a drug is
lawfully marketed . . . and, on the other hand, a Lanham Act claim
that a false statement has been made about a product. Even though
the FDA has not required [defendant] to demonstrate the
equivalence of [its drug to plaintiff’s] . . . [defendant] is not free to
make false or misleading statements about its product.
2008 WL 728333, at *10 (internal quotations omitted).
Axcan Scandipharm Inc. addressed pancreatic enzyme supplements, which “like any other
drug,” are “subject to FDA regulation.” 585 F. Supp. 2d at 1074. “In 1995 the FDA declared that
all pancreatic enzyme drugs would require NDA or ANDA approval, but permitted such drugs to
remain on the market while the FDA fleshed out the approval process.” Id. Therefore, neither of
the drugs in Axcan had “been tested, approved, compared or otherwise passed on by the FDA, and
neither [was] listed in the Orange Book.” Id.
In Axcan, Ethex argued that
18
by challenging their marketing of Pangestyme and Lipram as
“generic equivalents to” or “substitutes for” Ultrase, Axcan has
necessarily asserted that the Defendants are improperly representing
their drugs as “equivalent” to Ultrase in the FDA’s sense of that
term—in other words, the Defendants understand Axcan’s claims to
mean that the Defendants are improperly suggesting that
Pangestyme and Lipram are pharmaceutically equivalent and
bioequivalent to Ultrase . . . [and that] whether their drugs are
“equivalent” to Ultrase in such fashions can only be determined by
the FDA.
Id. at 1075.
The Court concluded, however, that the defendants “misapprehend[ed] the nature of
Axcan’s claims” and stated that:
Axcan does not allege that the Defendants have falsely implied that
their drugs are “equivalent” in the FDA sense—that is,
bioequivalent and pharmaceutically equivalent to Ultrase. Rather,
Axcan asserts that, by advertising their drugs as “generic equivalents
to” or “substitutes for” Ultrase, the Defendants have engaged in
false advertising based on “the proper market definition[s]” of these
terms.
Id. In other words, “Axcan seeks to proffer evidence of the generally understood meanings of the
terms ‘generic equivalence’ and ‘substitute,’ and not the FDA’s definition of ‘equivalence,’ in
order to establish the falsity of the Defendants’ advertisements,” which the court found in no way
infringes on the FDA’s right to determine whether two drugs are “equivalent.” Id. The court went
on to state:
This is not to say that Axcan cannot use the FDA’s definitions of
bioequivalence or pharmaceutical equivalence when seeking to
prove its claims. The FDA’s “primary jurisdiction” does not prohibit
a plaintiff from relying on the FDA’s definitions merely to establish
the standard [that the] defendants allegedly failed to meet.
Id. at 1075 n.9 (citations omitted). The Court reasoned that the issue in that case was not “whether
the FDA should deem the Defendants’ products to be ‘generic’ versions of Ultrase,” instead, the
issue was whether, “by advertising and marketing those products as ‘generic equivalents to’ or
19
‘substitutes for’ Ultrase when they do not contain the same ingredients, the Defendants’
advertising is literally or implicitly false, based on common understood meanings of ‘equivalent’
and ‘substitute.’” Id. at 1076. Further, the court found the plaintiffs’ claims could be maintained
“without infringing on the FDA’s right to determine whether the Defendant's drugs are ‘generic’
versions of Ultrase under its own definition of ‘equivalence.’” Id. at 1077.
In Solvay Pharmaceuticals, Inc. v. Global Pharmaceuticals, 298 F. Supp. 2d 880 (D. Minn.
2004), Solvay alleged the defendant was falsely marketing Lipram as a substitute for its pancreatic
enzyme supplement Creon. Specifically, Solvay contended the defendants were “marketing their
Lipram products either expressly or by implication as ‘generic’ versions of Creon, even though
Lipram is not, in fact, equivalent to Creon.” Id. at 882. Neither Creon nor Lipram were approved
by the FDA. Id. The defendants moved to dismiss the suit as precluded by the FDCA. Id. at 88283. That court, finding Mylan to be instructive, concluded that Solvay’s claims “are not related to
FDA approval, or lack thereof,” but were claims “based upon Defendants’ allegedly false
marketing assertions that the Lipram supplements are ‘generic,’ ‘comparable,’ ‘substitutable’ or
‘equivalent’ to Solvay’s Creon line.” Id. The court noted that, “[w]ithout any claims or factual
assertions that tie Solvay’s claims to FDA approval, Solvay has not attempted to privately enforce
the provisions of the FDCA.” Id. at 885. Therefore, the Court found it was not encroaching upon
FDA jurisdiction because Solvay’s claims did not “relate to or allege false assertions of FDA
approval.” Id.
In Midlothian Laboratories, L.L.C. v. Pamlab, L.L.C., 509 F. Supp. 2d 1065 (M.D. Ala.
2007), the court quoting Solvay (a case involving unapproved drugs) stated:
Courts have held that a false-advertising claim based on a
representation of product equivalency-marketing a product as a
“generic” version of a branded product-may be maintained when
“the truth or falsity of the statements in question can be resolved
20
through reference to standards other than those of the FDA,” but not
“where a claim requires interpretation of a matter that is exclusively
within the jurisdiction and expertise of the FDA and FDCA.”
Id. at 1085 (quoting Solvay, 2004 WL 742033 at *3). Thus, the court concluded, the plaintiff’s
claim that [defendant’s] assertion of “generic equivalence” is false
advertising is not preempted by the FDA to the extent that [plaintiff]
seeks to prove its claim with evidence that pharmacists understand
“generic equivalence” to imply therapeutic equivalent (or some
other standard of equivalence), rather than with evidence that FDA
regulations require therapeutic equivalence (a matter that only the
FDA can decide).
Id. at 1087.
The Fourth Circuit has also determined that a plaintiff pursuing a claim under the Lanham
Act, based on false statements of bioequivalence of an approved drug, could survive a motion to
dismiss. Mylan Labs., Inc., 7 F.3d 1130. In Mylan Labs, the Fourth Circuit explained:
Given th[e] ultimate standard [at the motion to dismiss stage] and
construing the complaint in a light most favorable to Mylan, we
conclude that Count 3 alleges sufficient falsity to survive early
dismissal under Rule 12(b)(6). The complaint repeatedly alleges,
inter alia, that a defendant “falsely represented” that its product was
“bioequivalent to its innovator counterpart and other approved
generic equivalents;” that the product was “entitled to an AB rating”
from the FDA; or that the product was the “generic alternative” to
the innovator drug. In support of those claims, Mylan has alleged
that approval of the defendants’ ANDAs had been obtained through
“fraud” and ultimately was withdrawn and that the data for the
ANDAs or bioequivalence studies had been “falsified” or was
seriously “unreliable.” In one instance Mylan even has alleged that
bioequivalence studies either had not been performed or had been
performed on a drug manufactured differently from the one
advertised. In short, Mylan has set forth in the complaint sufficiently
particularized allegations of false or misleading representations to
sustain, for now, Count 3. Put in other terms, we cannot say, when
fairly reading the pleadings, that Mylan has failed to state a set of
facts which, if proven, would entitle it to relief.
Id. at 1138.
21
This District is in line with the above cases and has determined that “whether [] statements
are false and misleading to relevant consumers is not a matter reserved for the FDA, but a matter
that falls within the jurisdiction of this Court.” Mut. Pharm. Co. v. Watson Pharm., Inc., No. 095421, 2010 WL 446132, at *5 (D.N.J. Feb. 8, 2010). In Mutual Pharmaceutical, the defendants
argued the plaintiffs’ claims should be dismissed because they were within the FDA’s primary
jurisdiction, and because plaintiffs impermissibly attempted to redress violations of the FDCA. Id.
at 4. The plaintiffs alleged the defendants affirmatively misrepresented the FDA approved their
product and made false and misleading representations on their product inserts and labels. Id. at 5.
The Court stated, “The resolution of plaintiffs’ Lanham Act claims do not depend on any rule or
regulation of the FDA, but rather whether defendants’ products misleadingly imply FDA
approval.” Id. Whether the defendants’ product required FDA approval was irrelevant to the
plaintiffs’ claims, since the complaint solely focused on defendants’ misrepresentations that their
products were FDA approved. Id. at 4-5. Therefore, the Court was not encroaching upon FDA
jurisdiction. Notably, in this Mutual Pharmaceutical, the plaintiffs’ drug was approved, while the
defendants drug was allegedly unapproved. However, the Court did not conclude plaintiffs, whose
drugs were unapproved by the FDA, lacked standing to bring Lanham Act claims. In fact, as
demonstrated above, courts have applied the same logic to cases where the plaintiff’s drug was
unapproved.
In support of its argument that G&W’s false claims of generic equivalence are precluded,
Laser cites to Ethex Corp. v. First Horizon Pharm. Corp., 228 F. Supp. 2d 1048 (E.D. Mo. 2002)
and Healthpoint, Ltd. v. Ethex Corp., 273 F. Supp. 2d 817 (W.D. Tex. 2001). In Ethex Corp., First
Horizon alleged, in a counterclaim, that Ethex had violated the Lanham Act by marketing its
prenatal vitamins as a generic version of First Horizon’s prescription prenatal vitamins. 228 F.
22
Supp. 2d at 1051. First, Horizon asserted that such a representation implied the vitamins were
equivalent under the FDA standards. Id. Similar to the facts in this case, neither of the parties’
prenatal vitamins were approved by the FDA. Id. at 1052. The Missouri court, in dismissing First
Horizon’s counterclaim, noted that “the touchstone of [First Horizon’s] argument focuses on the
fact that the word ‘generic’ implies FDA endorsement and certain FDA-defined concepts.” Id. at
1055. As such, the court dismissed the counterclaim because “the express language of [the]
counterclaim” invoked FDA standards, and establishing those standards would therefore be
impossible without FDA involvement. Id.
The Court finds the facts in Ethex Corp. distinguishable. Unlike First Horizon’s
counterclaim, G&W “is not relying on either explicit or implicit FDA enforcement or terms that
only the FDA can define.” Solvay Pharm., Inc. v. Ethex Corp., No. Civ. 03-2836, 2004 WL
742033, at *4 (D. Minn. Mar. 30, 2004). Instead, G&W alleges Laser’s advertisements and
representations that Hemmorex is equivalent to Anucort is literally false. G&W’s claims here do
not allege Laser falsely asserted FDA approval. Therefore, the Court does not run the risk of
encroaching upon FDA jurisdiction.
In Healthpoint, Ltd. v. Ethex Corp., the court also considered the FDA’s primary
jurisdiction over a claim that Ethex falsely advertised its product as an alternative to Healthpoint’s
product. 273 F. Supp. 2d at 824. Specifically, Healthpoint argued Ethex had made false and
misleading statements that its ointment was “a generic form of, the same as, a substitute for, an
alternative to, a therapeutic equivalent to or substitute for” Healthpoint’s ointment. Id. at 830.
Neither of the products were approved by the FDA. Id. at 840. Therefore, Ethex argued,
“Healthpoint [was] not entitled to any relief from the [c]ourt because it ha[d] not shown that
Accuzyme is legally marketed.” Id. at 852. The court noted this “argument is not without
23
problems” because “Ethex has readily argued that it is ‘in the same position as Accuzyme’ and is
relying on most, if not all, of the same arguments Accuzyme to show Ethezyme is being marketed
legally.” Id. The court concluded that if it:
were to dismiss all of Healthpoint’s claims because it cannot
establish Accuzyme’s lawful presence on the market without
affirmative action from the FDA, as Ethex alternatively requests,
then so long as the [c]ourt continued to defer to the FDA to decide
if Accuzyme or Ethezyme should be removed from the market, there
would be no recourse in District Court for Lanham Act and other
causes of action over which the FDA has no jurisdiction even[]
though both drugs were still on the market.
Id. at 852 n.197.
Therefore, the court found that the underlying question of whether Ethezyme is “generic”
to Accuzyme is an issue “committed to the FDA” that a district court should decline to address.
Id. at 841-42. However, the court held that claims based on allegedly false statements that the
products were the “same” or that one was a “high quality alternative” were properly before the
court. Id. at 846 nn.140-41. As such, Ethex Corp. v. First Horizon Pharm. Corp. and Healthpoint,
Ltd. v. Ethex Corp. support G&W’s argument that its claim for false statement that Hemmorex is
equivalent to Anucort is properly before the Court, regardless of its unapproved status.
At Oral Argument, in support of its argument that G&W’s lacks a commercial interest to
bring this case because it is an unapproved drug, Laser cited to Lexmark Int’l, Inc. v. Static Control
Components, Inc., 134 S. Ct. 1377 (2014). In Lexmark, the Supreme Court set forth a two-part test
to determine whether a plaintiff had standing to sue under § 1125(a) of the Lanham Act. The Court
held that the crucial inquiry in the standing analysis is “[w]hether [the plaintiff] falls within the
class of plaintiffs whom Congress has authorized to sue under § 1125(a). In other words, we ask
whether [a plaintiff] has a cause of action under the statute.” Lexmark, 134 S. Ct. at 1387. First, a
plaintiff’s interests must “fall within the zone of interests protected by the law invoked.” Id. at
24
1388. In the context of a § 1125(a) false advertising claim, this means that “a plaintiff must allege
an injury to a commercial interest in reputation or sales.” Id. at 1390. Second, a plaintiff must
demonstrate that its alleged harm was proximately caused by the false advertising. Id. The Court
noted, however, that “the intervening step of consumer deception” does not necessarily break the
chain of proximate causation. Id. at 1391. A plaintiff “ordinarily must show economic or
reputational injury flowing directly from the deception wrought by the defendant's advertising;
and that occurs when deception of consumers causes them to withhold trade from the plaintiff.”
Id. Furthermore, “[t]hat showing is generally not made when the deception produced injuries to a
fellow commercial actor that in turn affect the plaintiff.” Id.
The Lexmark Court ultimately held Static Control sufficiently alleged that it had standing
to bring a Lanham Act false advertising claim. Id. at 1395. The Court concluded Static Control fell
within the statutory “zone of interests” because its “alleged injuries—lost sales and damage to its
business reputation—are injuries to precisely the sorts of commercial interests the Act protects.”
Id. at 1393. The Court also found Static Control’s allegations of proximate causation passed muster
because, among other reasons, it “alleg[ed] that it designed, manufactured, and sold microchips”
required in and used solely for the remanufacture of Lexmark cartridges. Id. at 1394. The Court
stated, therefore, that “any false advertising that reduced the remanufacturers’ business necessarily
injured Static Control as well” and in this case, “there is likely to be something very close to a 1:1
relationship between the number of refurbished Prebate cartridges sold (or not sold) by the
remanufacturers and the number of Prebate microchips sold (or not sold) by Static Control.” Id.
The Court noted that because of “the intervening link of injury to the remanufacturers,”
there was an indirect connection between Static Control’s alleged harm and the deception of
consumers. Id. It also noted that if it applied “the general tendency not to stretch proximate
25
causation beyond the first step,” Static Control’s allegations may not support a finding of standing;
however, there is typically a disconnect “between the injury to the direct victim and the injury to
the indirect victim, so that the latter is not surely attributable to the former (and thus also to the
defendant's conduct), but might instead have resulted from any number of [other] reasons[—t]hat
is not the case here.” Id. Nowhere in Lexmark did the Court state or infer a plaintiff’s drug must
be approved by the FDA in order to have a commercial interest.
Here, G&W’s alleged injuries—lost sales and damage to its reputation—are injuries to
precisely the sort of commercial interests the Lanham Act seeks to protect and Lexmark held are
protected. G&W is suing not a deceived consumer, “but as a person engaged in commerce within
the control of Congress whose position in the marketplace has been damaged by . . . false
advertising.” Id. at 1393. G&W has also sufficiently alleged that its injuries were proximately
caused by Laser’s misrepresentations. This case presents the “classic Lanham Act false-advertising
claim in which one competitor[r] directly injur[es] another by making false statements about his
own goods [or the competitor’s goods] and thus inducing customers to switch.” Id. (citations
omitted). Therefore, G&W has standing to bring this claim.
The Court finds G&W’s claim that Laser’s advertising that Hemmorex is equivalent to
Anucort does not require FDA action and is within this Court’s purview. The issue here is not
whether the FDA should deem Laser’s product to be a “generic” version of G&W’s product;
instead, the issue is whether, by advertising and marketing Hemmorex as “equivalent to or
substitutable” for Anucort when the drugs allegedly do not contain the same active ingredients,
Laser’s advertising is literally or implicitly false. Determining whether a false statement has been
made about a product is within this Court’s purview. Therefore, G&W can pursue a claim under
the Lanham Act, based on false statements of equivalence.
26
The Court further finds G&W has sufficiently plead a false advertising under the Lanham
Act. To prove a claim of false advertising under the Lanham Act, a plaintiff must establish the
following elements:
1) that the defendant has made false or misleading statements as to
his own product [or another’s]; 2) that there is actual deception or at
least a tendency to deceive a substantial portion of the intended
audience; 3) that the deception is material in that it is likely to
influence purchasing decisions; 4) that the advertised goods traveled
in interstate commerce; and 5) that there is a likelihood of injury to
the plaintiff in terms of declining sales, loss of good will, etc.
Groupe SEB USA, Inc., 774 F.3d at 198. G&W’s Amended Complaint alleges Laser advertises
itself as offering “affordable, high quality generic” drug products “to meet the diverse needs of
patients.” (Id. ¶ 17.) G&W also alleges that Laser markets Hemmorex to generic buyers at drug
wholesalers and retailers, as an “equivalent to and substitute for Anucort.” (Id. ¶ 25.) According
to G&W, “Laser seeks to take sales away from G&W by encouraging these customers to purchase
and stock Hemmorex in place of Anucort, and thereafter for pharmacists to dispense Hemmorex
to customers when filling prescriptions for Anucort.” (Id.) Laser represents Hemmorex provides
the same active ingredient and in the identical amounts as Anucort through advertising such as,
labels, product inserts, and sell sheets. (Id. ¶ 26.) Laser also uses drug databases as a marketing
channel for advertising Hemmorex by submitting to databases that Hemmorex is equivalent to
Anucort, and requesting that the databases link Hemmorex to Anucort. (Id. ¶ 27.) Prior to
launching Hemmorex, neither Laser nor InvaDerm spent time or resources to ensure it was “as
effective and well-made” or equivalent to Anucort.” (Id. ¶ 30.) “In particular, neither Laser nor
InvaDerm ensured that Hemmorex’s rate of drug release will provide a patient with the labeled
levels of hydrocortisone acetate from each dose.” (Id.) Because G&W’s dissolution testing
determined Hemmorex does not have the same performance characteristics as Anucort—in terms
27
of the time it takes to release its labeled active ingredient to the patient—G&W argues Hemmorex
is not equivalent to or substitutable for Anucort and that Laser’s advertising of Hemmorex as an
equivalent or substitute is “literally false and misleading.” (Id. ¶¶ 33-34.)
Furthermore, G&W also asserts Laser’s false advertisements have led “drug wholesalers,
retailers, chains, distributors, mail order houses, independent pharmacies, managed care
organizations, hospitals, government purchasing organizations, healthcare providers and/or others
in the District of New Jersey and across the country” to purchase Hemmorex and cease to purchase
Anucort. (Id. ¶ 40.) Pharmacists, relying on Laser’s false and misleading advertising, have
dispensed Hemmorex instead of Anucort to patients. (Id. ¶ 42.) G&W has lost and asserts it will
continue to lose sales of Anucort, as a result of customers having discontinued Anucort in place of
Hemmorex. (Id. ¶ 45.) G&W also predicts further injuries because it “cannot control the safety,
effectiveness, or quality of [Hemmorex]. Thus, doctors and patients who suffer bad experiences
with Hemmorex that is purchased and used in place of Anucort are likely to think less of both
G&W and Anucort.” (Id. ¶ 44.) Such allegations are clearly sufficient to sustain a false advertising
under the Lanham Act at this stage of the litigation.
While much of G&W’s Amended Complaint is based on information and belief, a plaintiff
is not prevented from pleading facts alleged on information and belief “when the facts at issue are
peculiarly within the defendant’s possession, or where the belief is based on factual information
that makes the inference of culpability plausible.” Zimmer v. N.J. Div. of Child Prot. &
Permanency, No. 152524, 2016 WL 234844, at *8 (D.N.J. Jan. 20, 2016) (internal citations
omitted). Here, G&W has properly alleged in its Amended Complaint that:
[m]uch of the marketing of a generic drug occurs “under the radar”
in targeted communications with drug wholesalers, retailers and
others, who are encouraged to “link” equivalent products in their
own databases. Like the rest of the consuming public, [G&W] is not
28
privy to those communications; however, as is typical of most
marketing campaigns, for every publicly available statement or
piece of information there are many unseen and unheard sales
pitches and additional pieces of evidence that will only come to light
through discovery.
(Id. ¶ 26 n.2.) Accordingly, Laser’s Motion to Dismiss G&W’s equivalency claim is DENIED.
b.
Hemmorex provides 25 mg Hydrocortisone Acetate
Laser also argues its label (stating it contains 25 mg of hydrocortisone acetate) is not
literally false. (ECF No. 30-1 at 27-31.) Specifically, Laser argues:
What, if anything, should be required in terms of a 25 mg
hydrocortisone suppository’s effectiveness or provision of active
ingredient to a patient, involves technical analysis within FDA’s
expertise and discretion. Because this very question is pending
before FDA and FDA has not, to date, approved any 25 mg
suppository, litigating this issue in this case presents a real issue of
a premature determination inconsistent with what FDA may
ultimately determine as it reviews the labeling and status of
prescription hydrocortisone suppositories like Anucort.
(Id. at 28.) G&W claims Hemmorex’s false labeling is actionable under the Lanham Act, because
Hemmorex releases less than 20% of its active ingredient in two hours, whereas Anucort releases
90% in the same time period. (ECF No. 34 at 15-16.)
The Court finds this issue is a matter that is better left for the FDA’s expertise. The Third
Circuit’s decision in Sandoz Pharmaceuticals, which also involved a labeling claim, is instructive.
In that case, a cough syrup manufacturer was sued concerning its representations about its product,
Pediatric 44, that it “begin[s] to work as soon as it is swallowed.” Sandoz Pharm. Corp., 902 F.2d
at 230. The cough syrup manufacturer also listed demulcents, the ingredient that “theoretically
effectuate the immediate [cough] relief [after being swallowed],” as an “inactive” ingredient on its
label. Id. The plaintiff argued that FDA standards concerning when an ingredient is an “active
ingredient” required that the cough syrup manufacturer label claim demulcents as an “active”
29
ingredient. Id. (citing 21 C.F.R. § 210.3(b)(7) (noting that an ingredient is considered “active” if
it “is intended to furnish . . . direct effect in the . . . mitigation [or] treatment . . . of disease”)). The
court found that, at this peculiar procedural posture of the case, the FDA had yet to determine
whether or not demulcents were active ingredients, and such a finding would require the court to
“determine preemptively how a federal agency will interpret and enforce its own regulations.” Id.
at 231. The court explained:
Sandoz cannot prevail on its labeling claim because it has not proved
that Vicks’s labeling is false. Sandoz’s counsel argued to the district
court that “[i]f [the demulcents] relieve coughs they’re active. That’s
true as a matter of common sense and normal English.” Such an
interpretation of FDA regulations, absent direct guidance from the
promulgating agency, is not as simple as Sandoz proposes.
Id. at 230. In making this statement, it is clear the Third Circuit would have viewed the matter
differently if the plaintiff provided evidence that the FDA had determined demulcents were
required to be listed as “active” ingredients.
This is precisely G&W’s claim in this case. G&W is not asking the Court to interpret and
then apply existing FDA standards governing the labeling of drugs to determine the accuracy of
Laser’s label. Instead, G&W argues the label is false because it does not produce the 25 mg of
hydrocortisone acetate within the first two hours. To determine whether Hemmorex’s label is false
or misleading, the Court would need to create an applicable FDA standard, where none exists.
PhotoMedex, Inc. v. Irwin, 601 F.3d 919 (9th Cir. 2010) (finding “a private action brought under
the Lanham Act may not be pursued when, as here, the claim would require litigation of the alleged
underlying FDCA violation in a circumstance where the FDA has not itself concluded that there
was such a violation”); Wyeth v. Sun Pharm. Indus., Ltd., No. 09-11726, 2010 WL 746394, at *6
(E.D. Mich. Mar. 2, 2010) (finding that “in order to adjudicate Plaintiff’s claim, the Court would
be required to interpret FDA regulations regarding the equivalency of polymorphs and predict the
30
FDA’s ruling on the issue”). It would have to determine when and how much of a suppository’s
active ingredient must be released to have its intended effect. As such, the Court would have to
anticipate the FDA’s rulings and usurp the FDA’s role in policing false drug labels. Indeed, as
contended by G&W, this very question is pending before the FDA. Had G&W alleged Hemmorex
did not produce or contain 25 mg of hydrocortisone acetate at all, this would certainly be within
this Court’s purview, assuming science could determine such an answer.
In addition, the Supreme Court in POM Wonderful Court, in dicta, noted the possibility
that drug label cases brought under the Lanham Act might be precluded by the FDCA:
Unlike other types of labels regulated by the FDA, such as drug
labels, it would appear the FDA does not preapprove food and
beverage labels under its regulations and instead relies on
enforcement actions, warning letters, and other measures.
134 S. Ct. at 2239 (citation omitted) (emphasis added). Because G&W admits Hemmorex is an
FDA-regulated drug (ECF No. 34 at 16), and the FDA has yet to determine an applicable standard
for suppositories, whether or not Laser’s label is literally false or misleading is better left to the
FDA. Accordingly, Laser’s Motion to Dismiss is GRANTED without prejudice as to G&W’s
labeling claim.
c.
Hemmorex is Legally Marketed as a DESI Drug
Laser argues whether Hemmorex is a DESI drug is a question precluded by the FDCA.
(ECF No. 30-1 at 24.) G&W argues that Laser’s affirmative misrepresentation about Hemmorex’s
regulatory status—that it is a DESI drug—constitutes actionable false advertising because
“Hemmorex is not a DESI drug.” (ECF No. 24 at 27, 31.) Specifically, G&W argues no special
FDA determination is needed to decide whether Laser’s advertising is false because Hemmorex
was not the specific drug reviewed by the National Academy of Science/National Research
Council, and because Hemmorex is not “similar” or “related to” a DESI-reviewed drug. (ECF No.
31
34 at 30.) G&W contends because this Court, in a separate case, has already decided Anucort was
a “new drug” and not a DESI drug, Laser cannot assert it is a DESI drug. (Id. at 30-32.) See United
States v. Undetermined Quantities of an Article of Drug . . . (Anucort HC Suppositories), 709 F.
Supp. 511, 520 (D.N.J. 1987), aff’d sub nom., 857 F.2d 1464 (3d Cir. 1988), and aff’d sub nom.,
United States v. Undetermined Quantities of a Drug, Anucort HC Suppositories Containing
Hydrocortisone Acetate, 857 F.2d 1466 (3d Cir. 1988).
Because the Lanham Act requires a false statement for a claim of false advertising, and
because a finding of falsity here would require the Court to determine whether Hemmorex is
similar to a drug listed in a drug efficacy notice without permitting the FDA to do so first, this
portion of G&W’s claim is precluded. Mutual Pharm. Co., 459 F. Supp. 2d at 934 (“[C]ourts have
refused to allow a Lanham Act claim to proceed where, in order to determine the falsity or
misleading nature of the representation at issue, the court would be required to interpret and then
apply FDCA statutory or regulatory provisions. Application of this rule invariably occurs when
the FDA has failed to take a position on the particular issue that is the subject of the alleged false
representation comprising the Lanham Act claim.”); Concordia Pharm. Inc., S.À.R.L. v. Winder
Labs., LLC, No. 16-00004, 2017 WL 1001533, at *4 (N.D. Ga. Mar. 15, 2017) (finding that “since
a finding of falsity here would require the Court to interpret [a] 1975 DESI notice without
permitting the FDA to do so first,” the plaintiff’s claim was precluded). Because the FDA leaves
it to a manufacturer, in the first instance, to determine whether it is DESI approved as being
“similar” to a product that was specifically reviewed, Laser could plausibly claim its product was,
in fact, approved, at least until the FDA determines otherwise, and that of course, would be entirely
within the agency’s purview. See Catheter Connections, Inc. v. Ivera Med. Corp., No. 14-70, 2014
WL 3536573, *1, *6 (D. Utah July 17, 2014) (stating “where the FDA permits Defendants to
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determine whether their [product] was covered by clearance previously given to a similar device
and to market their device without an affirmative statement of approval by the FDA . . ., we
conclude that the [Lanham Act] claim . . . may not proceed”) (citation omitted). A determination
as to whether a drug is identical, related, or similar can be made by “an individual who is
knowledgeable about drugs and their indications for use.” 21 C.F.R. § 310.6. However, “[w]here
the relationships are more subtle and not readily recognized, the purchasing agent may request an
opinion by writing to the [FDCA].” Id.
The fact that it has been decided that Anucort is not exempt from any “new drug”
requirements is inapposite, especially considering G&W argues Hemmorex is not equivalent to
Anucort. Indeed, in Undetermined Quantities of an Article of Drug . . . (Anucort HC
Suppositories), the Court stated that whether or not “suppositories are not ‘topically applied
preparations’ . . . is a matter of law, and the court must defer to FDA’s reasonable interpretation
of its own regulation.” 709 F. Supp. at 516. Accordingly, Laser’s Motion to Dismiss is GRANTED
with prejudice as to G&W’s DESI false advertising claim.
d.
Hemmorex is the Only 25 mg Hydrocortisone Acetate
Suppository Subject to a Pre-IND or IND Application
To convince consumers to purchase Hemmorex, Laser allegedly “tells consumers that it
has submitted a Pre-IND application to the FDA for Hemmorex, and that it is the only
manufacturer of 25 mg hydrocortisone acetate suppositories to have done so.” (ECF No. 9 ¶ 36.)
G&W asserts that is a lie; “upon information and belief, Laser has not participated in a Pre-IND
meeting with the FDA, nor has it submitted an IND application to the FDA for Hemmorex.” (Id.
¶ 38.) In addition, G&W contends, “[o]n information and belief, [Laser] ha[s] performed no human
testing on Hemmorex to determine their product’s safety or efficacy.” (Id.) Lastly, G&W asserts
it has submitted an IND application, which was accepted by the FDA. (Id. ¶ 39.) Laser argues that
33
because IND’s relationship with the FDA are confidential in nature, “any reasonable purchaser
would understand a representation of a drug’s IND status to be naturally limited to the speaker’s
knowledge and perhaps suspect—and it therefore would likely not affect their purchasing decision
in any way.” (ECF No. 30-1 at 31-32.)
To prove a claim of false advertising under the Lanham Act, a plaintiff must first establish
“the defendant has made false or misleading statements as to his own product.” Groupe SEB USA,
Inc., 774 F.3d at 198. With respect to this requirement, a plaintiff “must prove that the commercial
message is either literally false or, if not literally false, literally true or ambiguous with the
tendency to deceive consumers.” Santana Prod., Inc., 401 F.3d at 136. “If the plaintiff proves
literal falsity, there is no need to show that the buying public was misled.” Id. However, if the
statements are misleading, literally true or ambiguous with the tendency to deceive consumers,
there is no such presumption, and the plaintiff must present evidence of actual consumer deception
or “at least a tendency to deceive a substantial portion of the intended audience.” Id.
G&W’s false advertising claim is premised on literal falsity. (ECF No. 34 at 35 and ECF
No. 9 ¶¶ 38-39.) As such, this Court need not determined whether G&W has pled facts sufficient
to demonstrate Laser’s misrepresentation was actually deceptive or has a tendency to deceive the
intended consumer. G&W’s false advertising claim as to Laser’s IND application is two-fold.
G&W asserts Laser “tells consumers that it has submitted a Pre-IND application to the FDA for
Hemmorex,” when it has not, and that Laser tells consumers it is the only “manufacturer of 25 mg
hydrocortisone acetate suppositories” that has submitted an IND application. Because G&W’s
Amended Complaint asserts it too applied for an IND application, it has properly pled Laser’s
statement about it being the “only manufacturer of 25 mg hydrocortisone acetate suppositories to
have done so” is literally false. Accordingly, Laser’s Motion to Dismiss G&W’s claim as to Laser
34
being the only manufacture to have applied for an IND application for a suppository drug is
DENIED.
However, G&W has failed to sufficiently plead Laser’s advertising “that it has submitted
a Pre-IND application to the FDA for Hemmorex” is literally false. G&W’s allegation is
conclusory and not supported by facts. G&W fails to plead why it believes Laser “has not
participated in a Pre-IND meeting with the FDA, nor has it submitted an IND application, nor has
it done any predicate clinical toxicology or animal testing,” particularly considering IND
applications are confidential. G&W has not plead facts demonstrating its “belief is based on factual
information that makes the inference of culpability plausible.” Zimmer, 2016 WL 234844, at *8
(internal citations omitted); Ashcroft, 556 U.S. at 678 (stating a complaint must include “factual
enhancements” and not just conclusory statements or a recitation of the elements of a cause of
action (citing Twombly, 550 U.S. at 555, 557)). Accordingly, Laser’s Motion to Dismiss G&W’s
claim as to Laser advertising “it has submitted a Pre-IND application to the FDA for Hemmorex”
is GRANTED without prejudice.
e.
Unclean Hands
Laser argues “the fact that Anucort is currently unapproved and is pending approval with
FDA is of central importance.” (ECF No. 30-1 at 21 n.13.) It contends “the Lanham Act should
not be a sword that G&W can wield to challenge the market presence of a competing unapproved
drug product.” (Id. at 21-22 n.13.) G&W argues courts reject an “unclean hands” argument “that
would strip a pharmaceutical company of its rights under the Lanham Act based on the defendant’s
challenge to the regulatory status of the drug at issue.” (ECF No. 34 at 32.) Laser replies by stating
“G&W misconstrues Laser’s argument to assert that G&W’s Anucort is an ‘illegal drug’ and that
G&W has unclean hands, for the purposes of disproving the same.” (ECF No. 38 at 14.) Instead,
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Laser argues it is not stating Anucort is an illegal drug, but that it is on the market illegally, by
virtue of its unapproved drug status. (Id.)
Courts in this District and the Third Circuit have explicitly acknowledged “[t]he defense
of unclean hands is applicable to all claims brought under the Lanham Act.” Katiroll Co. v. Kati
Roll & Platters, Inc., No. 10-3620, 2011 WL 2294260, at *2 (D.N.J. June 8, 2011) (citing
Highmark, Inc. v. UPMC Health Plan, 276 F.3d 160, 174 (3d Cir. 2001)); see also Pharmacia
Corp. v. GlaxoSmithKline Consumer Healthcare, L.P., 292 F. Supp. 2d 594, 610 (D.N.J. 2003)
(observing that the “doctrine [of unclean hands] is applicable in Lanham Act cases.”). The
Supreme Court has long recognized “the equitable maxim that he who comes into equity must
come with clean hands.” Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806,
815 (1945). The doctrine “closes the doors of a court of equity to one tainted with inequitableness
or bad faith relative to the matter in which he seeks relief, however improper may have been the
behavior of the defendant.” Id. Although the doctrine “does not demand that its suitors shall have
led blameless lives . . . it does require that they shall have acted fairly and without fraud or deceit
as to the controversy in issue.” Id. at 814–15 (internal citations omitted).
A defendant asserting an unclean hands defense must introduce “clear, convincing
evidence of ‘egregious’ misconduct.” Citizens Fin. Grp., Inc. v. Citizens Nat’l Bank, 383 F.3d 110,
129 (3d Cir. 2004). “Egregious misconduct” can take the form of “fraud, unconscionability, or bad
faith on the part of the plaintiff.” S & R Corp. v. Jiffy Lube Int’l, Inc., 968 F.2d 371, 377 n.7 (3d
Cir. 1992). The Third Circuit requires there to be a close, identifiable nexus between a plaintiff’s
alleged misconduct and a defendant’s conduct that is at issue in the case. Id. Finally, to establish a
defense of unclean hands, the defendant must allege that the defendant was injured “as a result of
the misconduct.” Pharmacia Corp., 292 F. Supp. 2d at 610.
36
Equity denies relief “where the plaintiff is misrepresenting to the public the nature of his
product either by the trademark itself or by his label.” Morton Salt Co. v. G.S. Suppiger Co., 314
U.S. 488, 494 (1942) (petition for injunctive relief dismissed because patentee was using patent to
restrain competition); Strey v. Devine’s, 217 F.2d 187, 190 (7th Cir. 1954) (dismissing cause of
action because plaintiff was not licensed doctor as misrepresented on product label and that
plaintiff did not properly list all ingredients as required by FDA). As the Supreme Court stated in
Clinton E. Worden & Co. v. California Fig Syrup Co., 187 U.S. 516, 528 (1903):
[W]hen the owner of a trade-mark applies for an injunction to
restrain the defendant from injuring his property by making false
representations to the public, it is essential that the plaintiff should
not in his trade-mark, or in his advertisements and business, be
himself guilty of any false or misleading representation; that if the
plaintiff makes any material false statement in connection with the
property which he seeks to protect, he loses his right to claim the
assistance of a court of equity; that where any symbol or label
claimed as a trade-mark is so constructed or worded as to make or
contain a distinct assertion which is false, no property can be
claimed on it, or, in other words, the right to the exclusive use of it
cannot be maintained.
“The unclean hands doctrine should not bar Lanham Act claims when the doctrine is premised on
allegations of non-compliance with the FDCA because such a use of the doctrine would essentially
permit a private enforcement action—a power reserved for the FDA.” Healthpoint, Ltd., 273 F.
Supp. 2d at 849.
Laser argues Anucort is on the market illegally, by virtue of its unapproved drug status,
and therefore G&W is barred from bringing its claims against Laser. (Id.) Whether Anucort is on
the market illegally is “premised on allegations of non-compliance with the FDCA,” and therefore
the Court will not intrude. Healthpoint, Ltd., 273 F. Supp. 2d at 849. Moreover, Laser has failed
to allege or demonstrate how it was injured “as a result of [G&W’s] misconduct.” Pharmacia
Corp., 292 F. Supp. 2d at 610. Accordingly, Laser’s “unclean hands” defense is precluded.
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B. InvaDerm’s Motion to Dismiss
InvaDerm raises three arguments in its brief, only the first of which warrants discussion.
InvaDerm argues: (1) aiding and abetting is not recognized as a basis for Lanham Act liability, and
thus it should be dismissed as a party; (2) Anucort may not legally be distributed in commerce;
and (3) Anucort lacks efficacy and is ineffective to treat the conditions for which it is marketed.
(ECF No. 29-1.) At Oral Argument, InvaDerm adopted Laser’s arguments and concentrated on its
argument that aiding and abetting is not recognized as a basis for Lanham Act liability. (Tr. 18:924.)
As to InvaDerm’s first argument—whether or not aiding and abetting is a basis for Lanham
Act—the parties have not cited, nor has research disclosed, any case imposing aiding and abetting
liability under the Lanham Act. See Elec. Lab. Supply Co. v. Cullen, 977 F.2d 798, 807 (3d Cir.
1992). However, a party can be liable under a theory of contributory infringement. “[L]iability for
trademark infringement can extend beyond those who actually mislabel goods with the mark of
another.” Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 853 (1982); see Transdermal
Products, Inc. v. Performance Contract Packaging, Inc., 943 F. Supp. 551, 552–53 (E.D. Pa.
1996) (stating that the Lanham Act does not limit liability to the direct infringer) (quoting Inwood
Labs., Inc., 456 U.S. at 854). To establish contributory infringement, a plaintiff must prove: (1)
supply of a product, and (2) knowledge of direct infringement. Am. Tel. & Tel. Co., 42 F.3d at
1432.
G&W’s Amended Complaint alleges InvaDerm “is also liable and contributorily liable for
false advertising under the Lanham Act because it knew or had reason to know of and/or assisted
Laser’s false and misleading advertising of Hemmorex, and aided and abetted Laser’s conduct by
supplying Hemmorex to Laser.” (ECF No. 9 ¶ 50.) Because an aiding and abetting claim cannot
38
be imposed under the Latham Act, InvaDerm’s Motion to Dismiss G&W’s this claim is
GRANTED.
However, G&W’s contributory infringement claim may proceed. InvaDerm has
sufficiently alleged facts demonstrating InvaDerm supplied Hemmorex to Laser, who in turn
supplied it to the public. Moreover, G&W has sufficiently plead InvaDerm had knowledge that
Hemmorex was not equivalent to Anucort because never conducted tests to determine equivalency.
(Id. ¶ 30.) Accordingly, InvaDerm’s Motion to Dismiss as to G&W’s contributory infringement
claim is DENIED.
To the extent InvaDerm’s second argument—that Anucort may not legally be distributed
in commerce—is an “unclean hands” defense, that argument fails for the reasons articulated above.
Whether Anucort is on the market illegally is “premised on allegations of non-compliance with
the FDCA,” and therefore the Court will not intrude. Healthpoint, Ltd., 273 F. Supp. 2d at 849.
Moreover, InvaDerm has failed to allege or demonstrate how it was injured “as a result of
[G&W’s] misconduct.” Pharmacia Corp., 292 F. Supp. 2d at 610. Accordingly, InvaDerm’s
“unclean hands” defense is precluded.
InvaDerm’s third argument—Anucort lacks efficacy and is ineffective to treat the
conditions for which it is marketed—lacks merit. InvaDerm fails to set forth an argument as to
why Anucort’s efficacy matters in the context of this Motion. According, InvaDerm’s argument is
DENIED.
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IV. CONCLUSION
For the reasons set forth above, Laser’s Motion to Dismiss G&W’s: (1) equivalency claim
is DENIED; (2) labeling claim is GRANTED without prejudice; (3) DESI false advertising
claim is GRANTED with prejudice; (4) claim alleging Laser was the only manufacture to have
applied for an IND application for a suppository drug is DENIED; (5) claim as to Laser advertising
“it has submitted a Pre-IND application to the FDA for Hemmorex” is GRANTED without
prejudice; and (6) Amended Complaint pursuant to “unclean hands” is DENIED. InvaDerm’s
Motion to Dismiss G&W’s aiding and abetting claim is GRANTED. However, InvaDerm’s
Motion to Dismiss G&W’s contributory infringement claim is DENIED. Because the elements of
unfair competition under N.J.S.A. § 56:4 and New Jersey common law are the same as those
required under the Lanham Act, the Court’s dismissals of the specific Lanham Act claims also
extend to Plaintiff’s state law claims. Cancer Genetics, Inc., 2008 WL 323738, at *9; Buying For
The Home, LLC, 459 F. Supp. 2d at 317–318.
Date: June 19, 2018
/s/ Brian R. Martinotti___________
HON. BRIAN R. MARTINOTTI
UNITED STATES DISTRICT JUDGE
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