Antitrust Law Daily Wrap Up, ADVERTISING—3d Cir.: Preliminary injunction properly denied for failure to show irreparable harm, (Aug 26, 2014)

By Linda O’Brien, J.D., LL.M.

A pharmaceutical company, seeking a preliminary injunction against another pharmaceutical company for making comparative false and misleading statements in violation of the Lanham Act, was not entitled to a presumption of irreparable harm, the U.S. Court of Appeals in Philadelphia has ruled. The district court’s denial of the pharmaceutical company’s motion for a preliminary injunction for failure to show the likelihood of irreparable harm was affirmed (Ferring Pharmaceuticals, Inc. v. Watson Pharmaceuticals, Inc., August 22, 2014, Chagares, M.).

Ferring and Watson are pharmaceutical companies that market competing prescription progesterone products used by patients during assisted reproductive technology (ART) procedures. In September 2012, Watson hosted two presentations for healthcare professionals that were designed to promote Watson’s progesterone product, Crinone. During the presentations, Watson’s paid presenter made statements: (1) referencing a “black box” warning on the package insert on Ferring’s product Endometrin; (2) discussing a patient preference survey comparing Crinone and Endometrin; and (3) characterizing the results of certain studies of Endometrin’s effectiveness.

Ferring filed suit against Watson, alleging that the statements were false and misleading, in violation of the Lanham Act and New Jersey Consumer Fraud Act. Ferring moved for a preliminary injunction to enjoin Watson from making further false statements and for corrective advertising. The district court denied Ferring’s motion and Ferring appealed.

Presumption of irreparable harm. The appellate court stated that it has never recognized that a plaintiff seeking a preliminary injunction pursuant to a Lanham Act false advertising claim was entitled to a presumption of irreparable harm. A plaintiff seeking a preliminary injunction must establish that (1) he is likely to succeed on the merits; (2) he is likely to suffer irreparable harm in the absence of preliminary relief; (3) the balance of equities is in his favor; and (4) an injunction is in the public interest. The U.S. Supreme Court in eBay, Inc. v. MercExchange, LLC, 547 U.S. 388 (2006), revisited the analytical framework for governing injunctions and held that a patent infringement plaintiff must fulfill the traditional requirements for a permanent injunction. The appellate court noted that, although the eBay case arose in the patent context, the rationale was equally applicable to claims under the Lanham Act.

Ferring’s argument that eBay was decided in a patent context, which raised unique concerns not present in the Lanham Act context, was rejected. The court noted that the decision whether to grant or deny injunctive relief rests within the equitable discretion of the district courts and such discretion must be exercised consistent with traditional principles of equity, in patent disputes as well as other cases governed by such standards. Because a presumption of irreparable harm deviates from the traditional principles of equity, which require a demonstration of irreparable harm, there is no presumption of irreparable harm afforded to plaintiffs seeking injunctive relief in Lanham Act cases, the court determined.

Failure to demonstrate irreparable harm. Additionally, the district court did not err in finding that Ferring failed to demonstrate a likelihood of irreparable harm without the presumption, according to the appellate court. In evaluating whether Ferring would suffer irreparable harm in the absence of an injunction, the district court noted that Watson’s paid presenter certified that he would not make such statements about the “black box” warning in the future and he would only make specified statements about the efficacy of Endometrin in accordance with the package insert. There was also no showing that Watson’s presentations were still available online to be accessed by consumers. Moreover, Ferring’s evidence of a physician’s declaration that the challenged statements may influence her decision as to which drugs to prescribe was speculative. Thus, the district court finding that Ferring failed to demonstrate irreparable harm was not clear error.

The case is No. 13-2290.

Attorneys: Arne M. Olson (Olson & Cepuritis) for Ferring Pharmaceuticals, Inc. David W. Phillips (LeClairRyan) for Watson Pharmaceuticals, Inc.

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