Pennwalt Corp. v. Zenith Laboratories, Inc.
| Decision Date | 21 June 1979 |
| Docket Number | Civ. A. No. 8-71997. |
| Citation | 472 F. Supp. 413 |
| Parties | PENNWALT CORPORATION, Plaintiff, v. ZENITH LABORATORIES, INC., Lakeshore Drugs and South-Tel Drugs, Defendants. |
| Court | U.S. District Court — Western District of Michigan |
COPYRIGHT MATERIAL OMITTED
Herbert G. Sparrow, III, Philip M. Frost, of Dickinson, Wright, McKean, Cudlip & Moon, Detroit, Mich., A. C. F. Finkbiner, III, of Dechert, Price & Rhoads, Philadelphia, Pa., for plaintiff.
Timothy D. Wittlinger, of Hill, Lewis, Adams, Goodrich & Tait, Detroit, Mich., John E. Gould, Webster & Sheffield, New York City, for defendants.
This is an unfair competition and trademark infringement case. Plaintiff, Pennwalt Corporation, manufactures and sells an anorectic drug with the trademark name Ionamin. Defendant, Zenith Laboratories, Inc., manufactures and sells an anorectic drug called Phentermine Hydrochloride.1 Pennwalt seeks a preliminary injunction prohibiting the continued manufacture, sale, and distribution by Zenith of phentermine products in capsules of confusingly similar size, shape, and color to Ionamin and prohibiting any comparison of Phentermine Hydrochloride to Ionamin. Pennwalt has also moved to dismiss Zenith's counterclaims which allege antitrust violations, interference with business relations, abuse of trademark registration and abuse of process. For reasons stated more fully herein, Pennwalt's motion to preliminarily enjoin Zenith from selling Phentermine Hydrochloride is granted in the forms and to the particular consumers described in this opinion, and Pennwalt's motion to dismiss Zenith's counterclaims is granted.
The following findings of fact are based upon testimony and other evidence presented by the parties at the hearing conducted by this court on plaintiff's motion for a preliminary injunction. Ionamin is Pennwalt's registered trademark for a phentermine resin complex available by prescription only. Ionamin is sold in doses of 30 milligrams and 15 milligrams. Thirty milligram capsules are yellow in color and 15 milligram capsules are yellow and grey. The colors of yellow and yellow and grey were consciously selected by Pennwalt for the purpose of giving Ionamin a unique and distinctive appearance from the viewpoint of the patient. Both capsules are approximately 5/8 of an inch in length and 3/16 of an inch in diameter, with rounded ends. These colors, shapes, and sizes have been used continuously from 1958 to the present. The capsules also bear a small distinctive mark indicating they are a Pennwalt product as well as the National Drug Code Number 18-904.
During the time it has manufactured and sold Ionamin, Pennwalt has made extensive efforts to develop goodwill in its Ionamin products through carefully controlled production, distribution only to wholesale drug dealers and government hospitals, medical journal advertising, direct mail ads to physicians, displays at medical conventions, and a field sales force making face to face presentations to physicians. Much of the advertising and promotion has featured the colors of the Ionamin capsules.
Between 1961 and 1970, Pennwalt has expended between 1 million and 1.5 million dollars on these promotional efforts. Since 1971, the cost of promotion has exceeded two million dollars each year. As a result of these efforts, net sales of Ionamin have grown steadily from 1.5 million dollars in 1963 to 12.5 million dollars in 1976. Net sales dropped in 1977 to 10.8 million dollars and rose again to 12.1 million dollars in 1978.
An investigation of the 1977-78 drop in sales by Pennwalt disclosed the entry of a competitor in the market in 1976, an anorectic drug manufactured by Beecham. This drug is called Fastin and is composed of Phentermine Hydrochloride sold in 30 milligram blue and clear capsules. Pennwalt also discovered, however, that during 1977 and 1978 its decline in net sales of Ionamin was greater than the corresponding decline in prescriptions for Ionamin.
Since 1975, Zenith has manufactured and sold Phentermine Hydrochloride in capsules of the identical dosages, colors, size, and shape as Ionamin. The capsules of Phentermine Hydrochloride do not, however, bear the distinctive Pennwalt mark which appears on the Ionamin capsules and, instead of 18-904, Phentermine Hydrochloride capsules display the National Drug Code Number 172. Zenith also manufactures and sells Phentermine Hydrochloride in blue and clear capsules similar to those manufactured and sold by Beecham. Zenith asserts that it intentionally puts its Phentermine Hydrochloride in capsules with colors corresponding to those used for Ionamin and Fastin so as to preserve any therapeutic effect the patient might derive from the color of the capsule by associating efficacy of the drug with appearance of the capsule.
At some time after it began to manufacture Phentermine Hydrochloride, Zenith published a catalogue of its products in which Phentermine Hydrochloride was listed. The introductory pages of this catalogue include the following statements:
In the body of the catalogue, Zenith's product "Phentermine 30 mg. ** CIV" is listed in a verticle column along with other timed disintegration capsules. In parenthesis underneath the product name appears the description "No. 3 Yellow Capsule." Two other parallel columns on the same page as the column identifying the product "Phentermine 30 mg. ** CIV" describe it as "SIMILAR TO" "Ionamin" and indicate its "CATEGORY OR USE" to be an "Anorexic."
Phentermine Hydrochloride and Ionamin, which is composed of a phentermine resin complex, both contain the same active ingredient, phentermine. "Phentermine" is the generic name for both drugs. However, all the evidence received by this court indicates that Phentermine Hydrochloride is not the generic equivalent of Ionamin. The only testimony received on this difficult subject was to the effect that a strict definition of generic equivalence is chemical equivalence. Drug products are chemical equivalents according to the United States Food and Drug Administration and the Michigan State Board of Pharmacy if they contain the same active ingredients and are identical in strength, dosage form and route of administration. According to this definition, Phentermine Hydrochloride and Ionamin are not chemical equivalents. A 30 milligram capsule of Ionamin contains 30 milligrams of phentermine whereas a 30 milligram capsule of Phentermine Hydrochloride contains only 24 milligrams of phentermine.
During the hearing it was also brought out that due to the chemical composition of Phentermine Hydrochloride as a highly soluble salt of phentermine all of the active ingredient is released for absorption into the blood stream upon ingestion. Timed release of the active ingredient can be achieved through the use of coatings on the capsule, however, the timing is subject to variation with such factors as the ph level of the patient's gastro-intestinal fluids. Furthermore, the basic mechanism of release, dissolution, remains the same. Unlike Phentermine Hydrochloride, the phentermine resin composing Ionamin is highly insoluble and has no physiological or pharmacological effect until it reacts with cations found in the gastro-intestinal fluids. The rate of drug release from the resin complex depends only upon the total concentration of these cations. Since this concentration is nearly constant throughout the entire gastro-intestinal tract and is insufficient to effect immediate release of all of the active ingredient, predictable, continuous and controlled release of the active ingredient into the blood stream is achieved. These differences in the timing of the release of the active ingredient result in different levels of phentermine in the blood of the patient. Although the medical significance of this variation is unknown, there was uncontradicted testimony to the effect that a physician might consider this difference in drug release mechanisms to be therapeutically significant in the case of a particular patient who had, for instance, a high level of acidity or alkalinity in his or her gastro-intestinal fluids.
The Phentermine Hydrochloride manufactured by Zenith is distributed in bottles which clearly identify the source and nature of the drug. The great bulk of Phentermine Hydrochloride is dispensed by doctors who have the authority to dispense medicine. However, some Phentermine Hydrochloride is dispensed by pharmacists. Jerome Adoree, a pharmacist with ten years of experience, and Dr. Domino, a University of Michigan pharmacology professor, testified that no competent pharmacist could confuse Zenith's Phentermine Hydrochloride with Ionamin given the bottle labels and the unique markings of the capsules themselves. Yet in his affidavit, Paul Mittleman, a registered pharmacist and partner in Lakeshore Drugs, stated that he comingled capsules of Ionamin with capsules of Zenith's Phentermine Hydrochloride when filling a prescription for Ionamin, although he had intended to dispense only Ionamin. Mittleman ascribed this confusion to the identical size, shape, and color of the capsules.
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