The opinion of the court was delivered by: LOWE
This is a case under the Lanham Act, 15 U.S.C. § 1125(a) and New York Law. The Court directed that plaintiff's motion for a preliminary injunction be combined with a full trial on the merits pursuant to Fed. R. Civ. P. 65(a)(2). A three day trial was held beginning on November 25, 1985. This opinion constitutes the Court's decision on the case, including findings of fact and conclusions of law.
The story of the instant dispute is a case study of what happens when an aggressive competitor enters a market dominated by a single supplier. Thompson Medical Co. Inc. ("Thompson") markets various over-the-counter (non-prescription) ("OTC") appetite suppressants under trade names which are generally some variation of the name "Dexatrim" (e.g., "Extra-strength Dexatrim" and "Dexatrim-15; collectively, all of Thompson's products will be referred to hereinafter as "Dexatrim").
The defendant, CIBA-GEIGY Corp. ("Ciba") is a relative newcomer to the OTC appetite suppressant market. Ciba makes a variety of products under the tradename "Acutrim". Both Acutrim and Dexatrim contain identical amounts of the same active ingredient--75 mg. of Phenylpropanolamine HCl ("PPA").
The difference between the products is the way in which they release the PPA over time.
PPA is permitted to be marketed as "safe and effective" as an OTC appetite suppressant by the Food and Drug Administration ("FDA"). The FDA allows daily dosages up to 75 mg. per/day in any of a variety of dosing regimens--e.g. 25 mg. three times a day; 75 mg. once a day, etc. Given this FDA approval, one would assume that there has been extensive well-controlled testing of the safety and effectiveness of PPA and its dosages. Surprisingly, this is not the case. The evidence presented at trial indicates that when the FDA was given control over OTC drugs, PPA was marketed in 75 mg. per day dosages. The FDA set-up a panel which made dosage recommendations, but the FDA chose not to follow the recommendations, instead it chose to "freeze the marketplace at the dosage limits that were available at that time. That was 75 milligrams maximum per day." (Halperin direct Tr. 123-24). Thus, all PPA products have a maximum daily dosage of 75 mg.
As noted, the only difference between Acutrim and Dexatrim is their respective time-release systems. Dexatrim used a conventional time-capsule release system. The time release system used in Acutrim, by comparison, is a rather sophisticated so-called "osmotic pump." In the Acutrim system, the PPA is surrounded by a semipermeable membrane which contains a small laser-drilled hole. As the shell absorbs fluid from the gastrointestinal tract, the PPA core dissolves and exits the shell through the hole. This "osmotic pump" delivers the PPA to the body at a far more consistent rate than the Dexatrim system. Studies of PPA bioavailability (the "BA")
indicate that the blood levels of PPA produced by Dexatrim tend to rise sharply after ingestion and then sharply drop-off, whereas the PPA levels induced by Acutrim are more constant and even.
Armed with these BA studies, Ciba engaged in an aggressive comparative advertising campaign which prominently utilized a graphic representation of the bioavailability data. In response, Dexatrim introduced a new product, Dexatrim 18, which was advertised as effective for 18 hours. Ciba brought an action to enjoin the advertising of Dexatrim-18, which was heard by Judge Broderick of this Court.
Central to that case was the issue of the duration of appetite suppression. Because of the inherent difficulty in measuring hunger, there have been no well controlled clinical studies of duration.
Clinical studies, as opposed to BA studies, would require administering PPA to human subjects and then, some how, measuring their hunger in a scientific way. Absent clinical duration studies, the question of whether Dexatrim-18 suppresses appetite for 18 hours was tried using BA studies. The inquiry then shifted to what blood level of PPA is necessary to suppress appetite.
Judge Broderick held that Thompson could not claim that Dexatrim-18 lasted 18 hours because the blood level (BA) of PPA dropped below 60 nanograms per Ml/blood well before the 18 hour mark. Accordingly he indicated that he would enjoin the marketing of Dexatrim-18. The 60 nanogram level was chosen simply because if PPA is administered in three 25 mg. dosages per day, four hours apart, the BA of PPA is at 60 nanograms when the redosing occurs.
Judge Broderick, in a subsequent decision, 85 Civ. 7070 (1985), characterized his holding as follows:
My 60 nanogram per milliliter holding, to the extent that it was a holding in that prior opinion, may perhaps be characterized as a legal estoppel holding. It was applied to prohibit claims from being made that a product was effective when the blood level readings fell below 60 nanograms per milliliter. It did not, however, authorize the converse. It did not authorize a claim that a product was not effective if the blood levels fell below 60 nanograms per milliliter absent clinical proof to support such a claim.
Now, applying this in this case, that opinion in the former case prohibited Thompson from advertising that its products were effective when the blood level readings fell below 60 nanograms per milliliter, at least until such time as competent scientific or clinical proof established a precise minimum therapeutic level.
That finding did not allow either Thompson or a competitor's product was not effective when blood level readings fell below 60 nanograms per milliliter since such claims would not be supported by competent scientific proof.
Opinion dated December 19, 1985 pp. 8-9 (85 Civ. 7070).
In August 1985, Ciba began airing two television commercials which compared Acutrim to Dexatrim. They are referred to as the "Nighttime" and "Sundae" commercials.
Thompson brought an action before this Court to enjoin those commercials. Thompson characterizes its complaint as stating five claims against Ciba's advertising of Acutrim. They are:
1. That a person who has taken a 12-hour appetite suppressant will binge and lose control when it wears off.
2. That Acutrim is at its strongest more than 12 hours after its ingestion.
3. That Acutrim has more active ingredients than any other appetite suppressant.
4. That Acutrim maintains a 60 nanogram level 4 hours longer than Extra-Strength Dexatrim.
5. That users of Acutrim lose more weight than users of Extra Strength Dexatrim.
Ciba counter claimed against Thompson alleging that Thompson's advertising and packaging of Dexatrim is false.
Shortly after this action was filed, Ciba instituted a new action, CIBA-GEIGY Corp. v. Thompson Medical Co., Inc., 85 Civ. 7070 (VLB), which Judge Broderick accepted as related to the previous litigation before him. In that case, Ciba challenged the durational claims made in regard to Thompson's new product Dexatrim-15. While at first the various claims and counterclaims in the two actions seemed distinct, as time passed it became increasingly clear that they were inextricably intertwined.
Judge Broderick completed trial on his case just prior to the beginning of trial in the instant action. At the start of trial in this case, counsel for both sides could not agree on which claim had been presented to Judge Broderick for decision. Because of heavy calendar congestion, this Court resolved to proceed with trial on any issues which the parties could not agree were presented to Judge Broderick and to reserve decision until Judge Broderick ruled. On December 19, 1985, Judge Broderick delivered his opinion in the case, and on January 2, 1986, he signed an order of injunction. Judge Broderick, inter alia, ruled that:
7. [CIBA] is enjoined from making any express or implied claims of therapeutic advantage or superiority over Extra-Strength DEXATRIM or other PPA appetite suppressants in any packaging, labeling, advertising, or promotional materials for ACUTRIM OR ACUTRIM II, included but not limited to the following express and implied claims that were before this Court:
(a) that ACUTRIM or ACUTRIM II will aid in greater weight loss than Extra-Strength DEXATRIM or any other PPA appetite suppressant;
(b) that ACUTRIM or ACUTRIM II is more effective as an appetite suppressant than Extra-Strength DEXATRIM or any other PPA appetite suppressant;
(c) that ACUTRIM or ACUTRIM II has more active ingredients than Extra-Strength DEXATRIM or any other PPA appetite suppressant;
(d) that ACUTRIM or ACUTRIM II is stronger at night than Extra-Strength DEXATRIM or any other ...