Bracco Diagnostics, Inc. v. Amersham Health, Inc., Civil Action No. 03-6025.

• Decision Date: 05 June 2009
• Docket Number: Civil Action No. 03-6025.
• Citation: 627 F.Supp.2d 384
• Parties: BRACCO DIAGNOSTICS, INC., Plaintiff, v. AMERSHAM HEALTH, INC., et al., Defendants.
• Court: U.S. District Court — District of New Jersey

Page 384

627 F.Supp.2d 384

BRACCO DIAGNOSTICS, INC., Plaintiff, v.AMERSHAM HEALTH, INC., et al., Defendants.

Civil Action No. 03-6025.

United States District Court, D. New Jersey.

June 5, 2009.

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Arnold B. Calmann, Esq., Saiber LLC, Newark, NJ, Donald L. Rhoads, Esq., Nicholas L. Coch, Esq., Christopher A. Colvin, Esq., Albert B. Chen, Esq., Kramer, Levin, Naftalis & Frankel, LLP, New York, NY, for PlaintiffBracco Diagnostics, Inc.

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

AMENDED OPINION

FREDA L. 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 PlaintiffBracco Diagnostics Inc.(referred to herein as "Bracco") against DefendantsAmersham 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 isoosmolar 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 15, 2008, wherein the Court resolved evidentiary objections regarding the admission of disputed...