Friday, August 1, 2014

Merck's Triple Damages Win Affirmed -- Against Gnosis -- In Second Circuit Folate Wars

A month ago, we reported on a small folate "no patent" win -- in favor of Merck -- against Gnosis SpA. Now, Gnosis has lost its appeal -- in the Second Circuit.

Here's a bit from some specialty law firm authors at Ackerman LLP -- published in Lexology (an ACCA publication) -- do go read it all -- quite excellent analysis, and reporting:

. . . .On July 29, 2014, the Second Circuit decided a Lanham Act false advertising case that clarified the circuit’s jurisprudence on demonstrating consumer confusion and competitive injury. [T]he Court held that when literal falsity and deliberate deception have been demonstrated, it is appropriate for courts to apply a presumption of consumer confusion and a presumption of injury to the plaintiff, at least where the parties operate in the context of a two-player market or the economic equivalent.

Since 2002, Merck has sold a nutritional supplement under the name Metafolin. Metafolin is comprised of a naturally occurring version of folate and is considered to be a "pure isomer product." In 2006, Gnosis S.P.A. began to sell a competing product called "Extrafolate." Gnosis' product was composed of a chemically mixed form of folate that was not naturally occurring. Because the Gnosis' product was a mixed product, it sold for significantly less than Metafolin. . . . In 2007, Merck sued Gnosis for false advertising based on Gnosis' use of the pure isomer product chemical name and properties in its marketing materials for Extrafolate. . . . The [Second Circuit panel] affirmed the damages award, as well as the other relief granted by the district court. The Court held that when the parties are direct competitors and where literal falsity and willful deception have been proven, the presumptions of injury and consumer confusion can be used for the purposes of awarding injunctive relief as well as monetary damages to a successful plaintiff. . . .

Smallish good news for Whitehouse Station. I doubt Gnosis will appeall to the Supremes -- and even if it does, the Supremes are very unlikely to hear the matter. Not much new law to be made, there -- in my opinion. Have a great weekend, one and all!

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