Bracco Diagnostics, Inc. v. Amersham Health, Inc.

Decision Date25 March 2009
Docket NumberCivil Action No. 03-6025.
PartiesBRACCO DIAGNOSTICS, INC., Plaintiff, v. AMERSHAM HEALTH, INC., et al., Defendants.
CourtU.S. District Court — District of New Jersey

Arnold B. Calmann, Esq., Saiber LLC, Newark, NJ, Donald L. Rhoads, Christopher A. Colvin, Albert B. Chen, David Lindenbaum, Benu Mehra, Kramer, Levin, Naftalis & Frankel, LLP, New York, NY, for Plaintiff Bracco Diagnostics, Inc.

Richard L. DeLucia, Esq., Charles A. Weiss, Esq., Jeffrey S. Ginsberg, Esq., Kenyon & Kenyon, LLP, New York, NY, for Defendant Amersham Health Inc., Amersham Health AS, Amersham PLC.

OPINION

WOLFSON, District Judge.

                Glossary of Abbreviations
                AHI                Amersham Health Inc. (U.S.-based
                                    Counterclaim Plaintiff)
                ASD                GEH Area Sales Director
                AWC                Adequate and well-controlled study
                BDI                Bracco Diagnostics Inc
                [witness] D        Designated deposition testimony
                [witness] Dec      Designated declaration
                CE                 Continuing Education for doctors
                                    nurses and technicians
                CIN                Contrast Induced Nephropathy or
                                    renal damage caused by x-ray
                                    contrast medium
                CM                 Contrast Medium or Contrast Media
                CME                Continuing Medical Education for
                                    doctors
                CMS                Centers for Medicare and Medicaid
                                    Services
                CT                 Computer Tomography. A type of
                                    x-ray procedure where the CM is
                                    given by i.v. administration
                
                CT DCAM            Novation's DCAM for CT (i.e., x-ray)
                                    contrast media
                CT+MR DCAM         Novation's DCAM for both CT (i.e
                                    x-ray) and MR contrast media
                C x                Bracco's Proposed Post-Trial Conclusion
                                    Of Law at paragraph "x"
                Dx: y              Defendant's Trial Exhibit "x" at page
                                    "y" (where y is the last three
                                    numbers of a Bates number, if
                                    applicable)
                DCAM               Decision Criteria Award Matrix
                DHRxns             Delayed Hypersensitivity Reactions
                Dual DCAM          Novation's DCAM for a dual source
                                    award for both CT (i.e., x-ray) and
                                    MR contrast media
                FC                 Financial Criteria
                FDA                United States Food and Drug
                                    Administration
                GEH                GEH Healthcare, which acquired the
                                    three named defendants, who in
                                    turn acquired Amersham and
                                    Nycomed
                GPO                Group Purchasing Organization
                HOCM               High Osmolar Contrast Medium
                i.a.               intra-arterial (form of administration
                                    directly into an artery)
                i.v.               Intra-venous (form of administration
                                    directly into a vein)
                IOCM               GEH's trademarked term, Isosmolar
                                    Contrast Medium
                ITB                Novation's June 14, 2004 "Invitation
                                    To Bid"
                JACC               Journal of the American College of
                                    Cardiology
                KOL                Key Opinion Leader
                LBB                "Low Best Bid" or "Low Best Bidder"
                LOCM               Low Osmolar Contrast Medium
                MA                 Meta-Analysis, a type of clinical study
                                    analysis
                MACE               Major Adverse Cardiac Events or
                                    Major Adverse Clinical Events
                                    depending on the study design
                MR DCAM            Novation's DCAM for MR contrast
                                    media
                MRI                magnetic resonance imaging contrast
                                    media
                NAC                N-acetylcysteine
                NEJM               New England Journal of Medicine
                NFC                Non-Financial Criteria
                NQWMI              Non-Q-wave Miocardial Infarction
                RFA                GEH's responses to Bracco's requests
                                    for admissions
                RFP                GPO Request For Proposal
                OTSheet            Omnipaque Toss Sheet
                Px: y              Plaintiff's Trial Exhibit "x" at page
                                    "y" (where y is the last three
                                    numbers of a Bates number, if
                                    applicable)
                PCI                percutaneous cardiac intervention
                PO                 Pretrial Order
                POA                Plan of Attack or Plan of Action
                PTCA               Percutaneous Transluminal Coronary
                                    Angioplasty
                SR                 Systematic Review (type of clinical
                                    study analysis)
                TCT                Transcatheter Cardiovascular Therapeutics
                                    (TCT) Scientific Symposium
                TF                 Novation's ICM Task Force
                URTBrochure        Unchallenged Renal Tolerability
                                    Brochure
                x T y              Trial Transcript Volume "x" at page
                                    "y"
                VVAT               Visipaque Value Analyis Tool
                Contrast Agents
                Isovue             Bracco x-ray contrast agent
                ProHance           Bracco MRI contrast agent
                MultiHance         Bracco MRI contrast agent
                Visipaque          GEH x-ray contrast agent
                Omnipaque          GEH x-ray contrast agent
                Omniscan           GEH MRI contrast agent
                Optiray            Tyco/Mallinckrodt x-ray contrast
                                     agent
                Hexabrix           Tyco/Mallinckrodt x-ray contrast
                                     agent
                

This matter comes before the Court upon a Complaint brought by Plaintiff Bracco Diagnostics Inc. (referred to herein as "Bracco") against Defendants Amersham Health Inc., Amersham Health AS, and Amersham PLC (collectively referred to herein as "GEH") for alleged false advertising in violation of the Lanham Act. In response, GEH filed a Counterclaim against Bracco for alleged false advertising of its own line of products. Bracco and GEH have competing product lines in the contrast medium healthcare industry. The crux of Bracco's case is that GEH has falsely advertised the superiority of its product, Visipaque, over Bracco's product, Isovue. The Court conducted a thirty-nine day bench trial with numerous experts1 and witnesses testifying as to each party's product lines and the underlying clinical studies upon which GEH and Bracco have based their advertising campaigns.

In light of the evidence presented at trial, the Court concludes that GEH did promote false messages which were sufficient in number to constitute actionable commercial advertisements or promotions under the Lanham Act, however the Court finds that Bracco has failed to establish a causal nexus between GEH's false advertisements and Bracco's alleged lost profit damages. In that regard, the Court determines that the greater number of GEH's advertisements were in fact true and based on reliable scientific studies. The messages that the Court finds false are those that extrapolate beyond the studies' results. In connection with Bracco's claim, the Court finds that an injunction and damages for post and future corrective advertising are appropriate remedies to prevent future violations of the Lanham Act. As to GEH's counterclaim, GEH dismissed its claim for damages and Bracco has stipulated that it no longer uses the offending advertisements. Thus, although the Court finds that certain of Bracco's ads were false, nonetheless, an injunction is not appropriate in this case. In addition, the Court imposes an alternative dispute mechanism applicable to both parties for safeguarding against any future false advertisements.

I. Overview
A. Parties and Product Lines

GEH and Bracco market and sell x-ray contrast media ("CM") in the United States. CM are classified by osmolality. HOCM (high osmolar CM) have osmolalities of greater than 1500 mOsm/kg. LOCM (low osmolar CM) have osmolalities between 600 and 850 and include Omnipaque (iohexol), Isovue (iopamidol), Hexabrix (ioxaglate), Ultravist (iopromide), Iomeron (iomeprol), and Optiray (ioversol). The osmolality of blood is approximately 290 mOsm/kg. Both GEH and Bracco market LOCM; GEH sells Omnipaque and Bracco sells Isovue. In addition, GEH also markets a product called Visipaque (iodixanol) which it classifies as iso-osmolar or isotonic, (i.e.—its osmolality equals blood). Visipaque is referred to in various medical literature as an IOCM (iso-osmolar CM). Part of GEH's advertising campaign is that its iso-osmolar CM performs better than LOCM. Visipaque was introduced in 1996, ten years after Omnipaque and Isovue were marketed and is the only "IOCM" available in the U.S.

B. Procedural History

On December 16, 2003, Bracco filed a four count Complaint in the District of New Jersey against GEH alleging: (1) dissemination of false and misleading advertisements in violation of Section 43(a) of the Lanham Act; and (2) N.J.S.A. 56:4-1, et seq.; (3) violations of the common law of unfair competition; and (4) negligent misrepresentations. GEH filed an Answer and two counterclaims against Bracco alleging: (1) dissemination into commerce of allegedly false and misleading statements concerning the relative safety of Omnipaque, Visipaque, and Isovue in violation of Section 43(a) of the Lanham Act; and (2) N.J.S.A. 56:4-1, et seq. GEH's counterclaim was filed against Bracco and its foreign affiliates, Bracco S.p.A. and Bracco Imaging S.p.A. However, pursuant to an Order entered on September 7, 2004, GEH's counterclaim against Bracco's foreign affiliates was dismissed for lack of personal jurisdiction. Motions for Summary Judgment were denied by the Court, after which, a thirty-nine day bench trial was conducted between the period of May 7, 2007 and December 2007, followed by further written submissions. The Court held a hearing on May...

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