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SMITHKLINE BEECHAM CONSUMER v. WATSON PHARM.

September 10, 1999

SMITHKLINE BEECHAM CONSUMER HEALTHCARE, L.P., PLAINTIFF,
v.
WATSON PHARMACEUTICALS, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Chin, District Judge.

MEMORANDUM DECISION

In this case of first impression, plaintiff, the manufacturer of a national brand nicotine gum, seeks to enjoin defendants from marketing a competing generic version of the nicotine gum with "labeling" — an instructional booklet and audio tape — that is "strikingly or substantially similar" to plaintiff's "labeling." Defendants' principal defense to the claim of copyright infringement is that they were required by the Food and Drug Administration (the "FDA") to use "labeling" that was "the same as" the labeling approved for use with the national brand. Plaintiff moves for a preliminary injunction.

For the reasons that follow, the motion for a preliminary injunction is granted. The following constitute my findings of fact and conclusions of law.

FINDINGS OF FACT

Defendants Watson Pharmaceuticals, Inc., Watson Laboratories, Inc., and Circa Pharmaceuticals, Inc. (collectively, "Watson") manufacture a generic or private label version of Nicorette, sold as "Nicotine Gum" or "nicotine polacrilex, USP." Watson's nicotine gum product is intended to compete directly with Nicorette. Watson received approval from the FDA earlier this year to market the product, and it had planned originally to "launch" the product on August 1, 1999. (First Wilkinson Decl. ¶ 10).

The Watson product is accompanied by a user guide and audio tape that are virtually identical to SmithKline's Guide and Tape. The text of the two tapes is identical (except for the product names). Although some of the music on the two tapes is different, some of the music is identical. The text of the two user guides is also identical (except for the names). The graphics in the Watson guide have been changed from the graphics in SmithKline's Guide, but only slightly; for example, instead of the father and a dog found in the SmithKline Guide drawing, a mother and a cat appear in the Watson version.

SmithKline commenced this action for copyright infringement to enjoin Watson's alleged willful and infringing copying of the Guide and Tape. Watson's principal defense is that its user guide and audio tape were part of the "labeling" approved by the Food and Drug Administration (the "FDA"). Watson contends that the Federal Food, Drug, and Cosmetic Act (the "FFDCA") requires that the labeling for a generic drug be "the same as" the labeling approved for the "listed," or brand name, drug, 21 U.S.C. § 355 (j)(2)(A)(v), and notes that the FDA regulations broadly define "labeling" to include "all written, printed, or graphic matter" as well as "booklets" and "sound recordings." 21 C.F.R. §§ 1.3(a), 202.1(1)(2). Watson relies heavily on the fact that during the approval process for its nicotine gum, when it submitted proposed text for an audio tape substantially different from the text of the SmithKline Tape, the FDA rejected the proposed text, advising Watson in a letter dated April 16, 1998 as follows:

  The text for your proposed audio is not the same as
  that for the reference listed drug, Nicorette. . . .
  Please revise your tape text to be in accord with
  that of Nicorette.

(DelGaudio Decl., Ex. C).

On July 28, 1999, SmithKline obtained a copy of Watson's guide for its nicotine gum product from the FDA. It did not obtain a copy of a transcript of Watson's audio tape from the FDA until August 24, 1999. (First Quesnelle Aff. ¶ 32). SmithKline commenced this lawsuit two days later, on August 26, 1999.

The same day that suit was filed, unbeknownst to SmithKline, Watson commenced shipments of its nicotine gum product to its retailer customers. Shipments continued through August 28, 1999, and a total of some twenty-two million pieces of gum were shipped by "Next Day Air." (Wilkinson Decl. ¶ 10).

On August 27, 1999, the day after suit was filed, I issued an order directing Watson to show cause why a preliminary injunction should not be issued enjoining it, during the pendency of this action, from selling or shipping its nicotine gum with a user's guide, audio tape, or other packaging insert "strikingly or substantially similar" to SmithKline's Guide and Tape. SmithKline did not request a temporary restraining order at that time. The motion for a preliminary injunction was made returnable September 15, 1999.

On August 30, 1999, Watson announced that it had "launched" its nicotine gum product. SmithKline learned on September 1, 1999 that Watson had shipped product to four customers (retail chains). (9/2/99 Tr. at 2). Concerned that Watson had commenced or was about to commence shipments, SmithKline requested a temporary restraining order. At a conference on September 2, 1999, Watson agreed to refrain, pending a hearing on SmithKline's motion for a preliminary injunction, from making any additional shipments, without prior ...


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