Antitrust Law Daily Wrap Up, ADVERTISING—D. Mass.: Competitors may both be liable for comparative advertising, (Aug 5, 2014)

By Jody Coultas, J.D.

Pharmaceutical companies Ferring Pharmaceuticals Inc. and Braintree Laboratories, Inc. stated, in part, Lanham Act false advertising claims against each other based on efficacy and superiority claims (Ferring Pharmaceuticals Inc. v. Braintree Laboratories, Inc., August 4, 2014, Gorton, N.).

The companies both sell bowel preparation drugs that are administered prior to colonoscopies, and filed Lanham Act false advertising claims against each other. Ferring also alleged that Braintree diluted its trademark in the preparation drug, while Braintree counterclaimed for misappropriation of trade secrets.

False advertising. Braintree stated a Lanham Act false advertising claim against Ferring for misrepresenting the relative efficacy of the companies’ products, according to the court. Ferring allegedly falsely advertised in Gastroenterology & Endoscopy News that its product had “superior cleansing efficacy ... with the lowest volume of active prep solution” contrary to an existing head-to-head study and other reports comparing Ferring’s and Braintree’s products. Consumers would reasonably rely on such statements.

Ferring has repeatedly made representations that Prepopik uses the “lowest volume of active prep solution,” Braintree has properly pled that the “lowest volume” claim is literally false, although the court noted that it was unlikely a reasonable physician or gastrointestinal specialist would find the “lowest volume” claim to be false or misleading. The statements were literally false because there are tablet-only bowel preparation products that require no solution at all.

Braintree failed to show that Ferring’s advertisement concerning flexible dosing was false or misleading, according to the court. The advertisement stated that Ferrin’s Prepopik offered flexible dosing. The “flexible dosing” claim was not false or misleading because it did not mean that there were no restrictions on when and how the product was administered. “Flexible” is ambiguous, and no reasonable person reading the advertisement would fail to understand that “flexible dosing” referred to “either a split dose or day-before regimen.”

Genuine issues of material fact precluded summary judgment of Ferring’s Lanham Act claim that Braintree misrepresented that Ferring’s product was dangerous, according to the court. An agency of the Canadian government had release a statement that “diarrhea produced by [Pico-Salax] can lead to dehydration and loss of electrolytes, particularly sodium which may result in hyponatremia and convulsions.” Ferring’s drug Prepopik and Pico-Salax were chemically identical, but different in other respects. Ferring alleged Braintree used the agency’s statement to falsely promote that the Prepopik drug was unsafe. There were disputed issues of fact concerning what conclusions should be drawn from the information provided by the agency’s statement.

There was also a genuine dispute as to whether Braintree falsely advertised its own product, according to the court. Ferring alleged that Braintree’s advertising violated the Lanham Act by misrepresenting the efficacy and superiority of its product. The reliability of the head-to-head study Braintree used to support the advertising claims was a dispute to be resolved by a factfinder.

Misappropriation of trade secrets. Braintree failed to state a claim for misappropriation of trade secrets, according to the court. The claim based upon Braintree’s training materials did not identify with adequate specificity any trade secrets in materials. Also, the pages did not contain protectable trade secrets because the information was publicly available.

The case is No. 13-12553-NMG.

Attorneys: Alissa A. Digman (Olson & Cepuritis, Ltd.) for Ferring Pharmaceuticals Inc. Barry S. Pollack (Pollock Solomon Duffy LLP) for Braintree Laboratories, Inc.

Companies: Ferring Pharmaceuticals Inc.; Braintree Laboratories, Inc.

Cases: Advertising MassachusettsNews