Ferring Pharmaceuticals, Inc. v. Braintree Laboratories, Inc.
Docket: Civil Action No. 13-12553-NMG
Court: District Court, D. Massachusetts; October 25, 2016; Federal District Court
Ferring Pharmaceuticals, Inc. (Ferring) alleges that Braintree Laboratories, Inc. (Braintree) engaged in false advertising and unfair trade practices, violating the Lanham Act and the Massachusetts Consumer Protection Act. Ferring claims Braintree diluted its trademark associated with Prepopik, a colonoscopy preparation medication. In response, Braintree counterclaims that Ferring has committed similar acts of false advertising and unfair practices. The Court previously dismissed Braintree’s counterclaim regarding trade secrets and certain advertising claims while allowing others to proceed.
Ferring filed motions for summary judgment on Braintree’s counterclaims and specific advertising claims, while Braintree also sought summary judgment on all of Ferring’s claims. The legal standard for summary judgment requires the moving party to demonstrate no genuine dispute exists regarding material facts. If this burden is met, the non-moving party must provide specific facts to show a triable issue. The Court will view the evidence favorably for the non-moving party. Both parties are now seeking summary judgment on Ferring’s claims regarding Braintree’s alleged false or misleading advertising and related claims.
The Lanham Act prohibits false or misleading representations in commercial advertising that misrepresent a product's characteristics. To succeed in a claim under this statute, a plaintiff must establish five elements: 1) a false or misleading description of fact in a commercial advertisement; 2) materiality of the misrepresentation; 3) actual deception or tendency to deceive a substantial audience; 4) placement of the misleading statement in interstate commerce; and 5) injury to the plaintiff resulting from the misrepresentation. There are two avenues for proving a claim: demonstrating that an advertisement is "literally false," which presumes consumer deception, or showing that a "literally true or ambiguous" advertisement misleads consumers, typically evidenced by consumer surveys. Materiality is defined as influencing purchasing decisions or concerning a product’s inherent characteristics. To have standing, a plaintiff must demonstrate injury to a commercial interest and establish that the defendant's actions proximately caused financial or reputational harm.
In the case at hand, Ferring produces a treatment called "Pico-Salax," which is chemically identical to "Prepopik," albeit with significant differences in prescription status and usage instructions. A Canadian government newsletter highlighted adverse reactions associated with Pico-Salax, prompting Ferring to claim that Braintree made false statements about Prepopik based on the newsletter's content, in violation of the Lanham Act and Chapter 93A. Both parties are seeking summary judgment on this claim.
Ferring's motion for summary judgment regarding Braintree's use of the Canadian Newsletter is challenged by a genuine issue of material fact concerning whether Braintree's claims about safety were false or misleading. Ferring argues that the newsletter inaccurately raises safety concerns about Prepopik by referencing Pico-Salax, a different treatment, without indicating any danger associated with Pico-Salax. In contrast, Braintree provides evidence that Ferring's statements linked Prepopik to Pico-Salax and suggests that hydration recommendations for both treatments are nearly identical. This conflicting evidence creates a genuine issue of material fact about the equivalence of Prepopik and Pico-Salax, impacting the presumption of consumer deception.
Similarly, Braintree's summary judgment motion is undermined by conflicting evidence regarding whether the Canadian Newsletter was used to communicate safety concerns or to make misleading claims, such as labeling Prepopik as 'deadly.' As a result, the Court denies both parties’ motions for summary judgment concerning the Lanham Act claim related to the Canadian Newsletter. Since claims under the Lanham Act and Chapter 93A are interrelated, the Court also denies both motions regarding the Chapter 93A claim.
Regarding the comparison detailer, which is an FDA-approved flyer distributed by Braintree, Ferring's motion for summary judgment fails due to genuine issues of material fact about its potential misleading nature. Ferring contends that the efficacy percentages stated in the detailer are establishment claims lacking reliable supporting studies. To prove an establishment claim is literally false, a plaintiff must demonstrate that the relevant study is either unsupported or unreliable. Ferring found only two instances linking the detailer to efficacy percentages, including a handwritten note indicating a comparison of 74% efficacy for Prepopik against 98% for Suprep, and a sales log noting that only 84% of Prepopik patients achieved successful cleanouts compared to 98% for Suprep.
The Lanham Act applies only to advertisements directed at the consuming public, as established in relevant case law. In the case at hand, Braintree's association of its comparison detailer with efficacy percentages does not demonstrate that those percentages were publicly distributed, undermining Ferring’s claim that the detailer constitutes an establishment claim. Ferring's assertion that the detailer is misleading due to the omission of safety information is insufficient without evidence of intent to mislead or actual consumer deception. Ferring's reliance on a study by Braintree’s expert to argue that the detailer implied Prepopik's unsafety is contested, leading to a genuine issue of material fact that prevents summary judgment in favor of Ferring.
Braintree's motion for summary judgment regarding the 'Clean Freak' advertisement claim is also addressed. The advertisement claims that the Suprep Bowel Prep Kit achieved excellent results compared to MoviPrep, based on two studies conducted by Braintree. However, the claim does not fall within the protective zone of the Lanham Act, as it does not mention Prepopik and does not demonstrate that Ferring suffered financial or reputational harm due to the advertisement. The lack of direct connection between the advertisement and the alleged injury to Ferring complicates the standing for the claim, leading to Braintree’s entitlement to summary judgment on this issue.
Ferring has not demonstrated a direct injury from the Clean Freak promotion, resulting in a lack of standing to pursue its claim. Even if standing were assumed, the mention of the Clean Freak advertisement by Braintree employees is too limited to establish that the promotion was publicly distributed as an advertisement. Therefore, Braintree is entitled to judgment on the Clean Freak claim and is also granted summary judgment regarding Ferring’s Chapter 93A claims related to the same advertisement.
Regarding Ferring's state trademark dilution claim under Massachusetts General Laws, Chapter 110H, the plaintiff must prove the distinctiveness of its mark and that the defendant’s similar mark could cause dilution. Ferring argues that Braintree diluted its trademark by comparing Prepopik to Pico-Salax, but Braintree counters that Ferring has itself made this comparison. Ferring has publicly equated Prepopik to Pico-Salax in a press release and its website, undermining the distinctiveness of Prepopik. Thus, Braintree is entitled to summary judgment on this trademark dilution claim.
Ferring also seeks summary judgment on Braintree's affirmative defenses, particularly the unclean hands defense. Ferring argues that Braintree has not provided evidence of any unconscionable conduct or bad faith on Ferring’s part. However, when considering the facts favorably for Braintree, Ferring's actions—such as equating its products and making claims about superior efficacy—raise genuine issues regarding the equitable relations between the parties, thus precluding summary judgment for Ferring on this defense.
Ferring asserts that there are no material facts in dispute regarding Braintree's 18 affirmative defenses, claiming a lack of supporting evidence and a failure of Braintree’s Rule 30(b)(6) witness to address them. However, Braintree correctly notes that such witnesses are not obligated to testify about affirmative defenses. Ferring fails to provide additional evidence to warrant summary judgment on these defenses, leading the Court to deny Ferring’s motion for summary judgment.
Regarding Braintree’s counterclaims under the Lanham Act and Chapter 93A, Ferring seeks summary judgment on two points: the 'lowest volume' claim and the 'superior cleansing efficacy' claim. For the 'lowest volume' counterclaim, Braintree contends Ferring's advertisement claiming Prepopik has the 'lowest volume of active ingredient' is false or misleading. Ferring argues that the claim is true and that Braintree lacks standing, but genuine issues of material fact remain about the claim's literal falsity, particularly concerning market comparisons and the necessity for additional hydration for Prepopik's effectiveness. Braintree has established the materiality of the claim and its potential financial impact, thus precluding summary judgment.
On the 'superior cleansing efficacy' claim, Ferring argues that Braintree has not shown this claim to be false or misleading, asserting it is an establishment claim based on the SEE CLEAR I study. To succeed, Braintree must demonstrate that this study does not support the claim or is otherwise unreliable. Ferring's characterization of the claim as an establishment claim is accepted, but the determination of its truthfulness remains contingent upon further factual examination.
A genuine dispute exists regarding the reliability of the SEE CLEAR I study, as indicated by Dr. Douglas Rex’s declaration, a co-author of the study. He states that the study does not reliably support claims of Prepopik’s superior cleansing efficacy and raises questions about the applicability of the presumption of consumer deception related to literal falsity. Consequently, Ferring's motions for summary judgment concerning the Lanham Act and Chapter 93A counterclaims related to superior cleansing efficacy are denied. Conversely, Braintree's motion for summary judgment is partially granted concerning Ferring’s claims based on the Clean Freak advertisement and trademark dilution but denied in other respects. Additionally, the Superior Cleansing Efficacy advertisement references the SEE CLEAR II study, which found that Prepopik was non-inferior.
