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Alliance Security Products, Inc. v. Fleming Co.

January 26, 2007

ALLIANCE SECURITY PRODUCTS, INC., ET AL., PLAINTIFFS,
v.
FLEMING COMPANY, DEFENDANT.



The opinion of the court was delivered by: Lewis A. Kaplan, District Judge

MEMORANDUM OPINION

Plaintiffs Alliance Security Products, Inc. ("ASP") and Alliance Security International, LLC ("ASI") allege that defendant Fleming and Company, Pharmaceuticals ("Fleming"), misappropriated their idea to manufacture and market a potassium iodide liquid solution to prevent thyroid cancer in children exposed to radiation. Plaintiffs seek to enjoin Fleming from selling a product called ThyroShield, which they claim is their product marketed according to their unique business plan. Fleming moves for summary judgment dismissing the complaint. Plaintiffs move for a preliminary injunction.

Facts

I. Rule 56.1 Statements

A preliminary matter must be addressed before getting to the pertinent facts.

On a motion for summary judgment, the moving party bears the burden of demonstrating that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. In considering such a motion, all facts and inferences reasonably drawn therefrom are construed in favor of the nonmoving party.*fn1

In addition, Local Civil Rule 56.1 of this Court provides that a party moving for summary judgment must file a concise statement of material facts it claims are undisputed, with each statement of fact followed by a citation to admissible evidence. Each statement then is deemed undisputed for purposes of the summary judgment motion unless the nonmovant specifically denies it, citing to competent evidence.*fn2

Plaintiffs have failed properly to put many of defendant's statements of fact into dispute. First, they respond to several of defendant's statements without references to admissible evidence.*fn3 Statements responded to in this way are deemed undisputed for purposes of this motion.*fn4

Second, plaintiffs respond to a number of defendant's statements by stating that they "lack[] knowledge or information sufficient to form a belief as to whether" the statements are true.*fn5 Such responses are insufficient to put a statement of fact into dispute. Statements responded to in this way are deemed undisputed as well.*fn6

Finally, plaintiffs respond to many of defendant's statements by making legal arguments. For example, in paragraph 14, plaintiffs concede that it has been common knowledge for decades that ingesting potassium iodide is a safe way of aiding the prevention of thyroid cancer, but go on to "dispute[] any implication that this fact renders Alliance's confidential information and novel idea 'common knowledge.'"*fn7 Such legal arguments, which are plentiful in plaintiff's counter-statement, belong in briefs, not Rule 56.1 statements, and so are disregarded in determining whether there are genuine issues of material fact.*fn8

II. Undisputed Facts

In light of the foregoing, the following facts are undisputed for purposes of this motion unless otherwise noted.

A. Potassium Iodide

It has been well known, at least since the late 1970s, that ingesting potassium idodide ("KI") is a safe and effective way to block the uptake of radioactive iodine by the thryroid gland. It therefore aids in preventing the development of thyroid cancer in those exposed to radiation.*fn9

1. PIMA Defendant develops, manufactures, and sells ethical pharmaceutical and over-the-counter products.*fn10 Beginning in 1968, it manufactured a raspberry flavored syrup called PIMA,*fn11 which originally was marketed as a cough expectorant,*fn12 but was known to have additional valuable properties because it contained KI.*fn13

In 1986, Fleming supplied PIMA to the victims of the Chernobyl disaster to be used as a thyroid protectant.*fn14 In 1998, Fleming contacted the Nuclear Regulatory Commission ("NRC"), which had recommended creating national stockpiles of KI to improve government preparedness for nuclear disasters,*fn15 and asked to be considered as a provider of KI for these stockpiles.*fn16 At least as early as 1999, Fleming included in its PIMA product insert a paragraph indicating that the syrup could be used as a radiation protectant for the thyroid gland.*fn17

2. Public Awareness

Federal agencies have been advocating the stockpiling of KI products near nuclear power plants since the 1980s.*fn18 Public awareness of the potential need for KI grew after the September 11, 2001 terrorist attack. Numerous politicians and news commentators began discussing the possibility of terrorist attacks on U.S. nuclear facilities and the need to be prepared for the medical emergencies that could follow. Several commentators mentioned specifically the need to stockpile KI.*fn19

In late 2001, presumably in response to this heightened awareness, the FDA published a guidance document in which it outlined procedures for administering KI to children in the event of a radiation emergency. The document listed safe dose sizes for children of various ages and recommended dissolving solid tablets in liquid to ease ingestion, especially when administering KI to babies.*fn20

3. Fleming Contacts the NRC

In early 2002, Fleming offered again to provide the NRC with PIMA for government stockpiles of KI.*fn21 It was told, however, that the NRC had awarded a two-year contract for KI pills to a company called Anbex, in part because the NRC's "bid specs required that the manufacturer have FDA approval for their drug product,"*fn22 which Fleming lacked for PIMA. At that time, PIMA was available only by prescription and was not FDA-approved for use as a radiation protectant. Nor had it been sold with pediatric droppers or child-safe caps.*fn23

B. The Parties Meet

Plaintiffs sell safety and antiterrorism equipment. According to plaintiffs, while public awareness of the potential need for KI was growing, Steven Baker, co-owner and chief executive officer of both ASP and ASI, recognized that there was a market for a child-friendly KI solution that could be used in the event of a nuclear ...


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