Rexall Sundown, Inc. v. Perrigo Co.
| Decision Date | 10 September 2009 |
| Docket Number | No. 07-CV-3397 (JFB)(ETB).,07-CV-3397 (JFB)(ETB). |
| Citation | 651 F.Supp.2d 9 |
| Parties | REXALL SUNDOWN, INC., Plaintiff, v. PERRIGO CO., Defendant. |
| Court | U.S. District Court — Eastern District of New York |
Bruce R.M. Ewing, Esq., Sandra Edelman, Esq., and Deirdre Joan Sheridan, Esq., of Dorsey & Whitney LLP, New York, NY, for plaintiff.
Joel A. Hankin, Esq., Matthew David Marcotte, Esq., and Paul W. Garrity, Esq., of Kelley, Drye & Warren LLP, New York, NY, for defendant.
Plaintiff Rexall Sundown, Inc. (hereinafter, "Rexall" or "plaintiff") brings this action against Perrigo Company (hereinafter, "Perrigo" or "defendant"), claiming violations of the Lanham Act, 15 U.S.C. § 1051 et seq. and state law. Perrigo brings counterclaims against Rexall also claiming violations of the Lanham Act.
Rexall is the manufacturer of Osteo Bi-Flex products, which is a brand of nutritional supplement for joint care containing the ingredients Glucosamine and Chondroitin. Rexall alleges that Perrigo, a competitor that manufacturers Glucosamine Chondroitin supplements for sale as leading store brands, is using false and misleading "Compare to Statements" on certain products—such as "Compare to Osteo Bi-Flex Glucosamine with Joint Shield Ingredients," "Compare to Osteo Bi-Flex Ingredients," or "Compare to Osteo Bi-Flex"—in violation of the Lanham Act and state law. In short, Rexall contends that these advertising statements are false and misleading to consumers because the statements allegedly convey that Perrigo's generic nutritional supplements are equivalent to Rexall's Osteo Bi-Flex products even though, according to Rexall, the formulation of Perrigo's products is materially different from Osteo Bi-Flex. Perrigo disputes these claims.
In its counterclaims, Perrigo alleges that Rexall's use of various false and misleading statements on its Osteo Bi-Flex products—namely, "No. 1 Dr. Recommended Brand," (Claim 1), "No. 1 Dr. Recommended Joint Care Brand," (Claim 2), "Clinically Tested," (Claim 3), "provides more pure Glucosamine as compared to Glucosamine Sulfate," (Claim 4), "is 10 times more concentrated than typical Boswellia extracts," (Claim 5) and the use of the Arthritis Foundation's name and logo (Claim 6)—violates the Lanham Act and state law. Rexall disputes these claims.
Both parties now move for summary judgment on all of the opposing party's claims. For the reasons set forth below, the Court (1) denies defendant's summary judgment motion on plaintiff's claims in its entirety, and (2) grants in part and denies in part plaintiff's motion for summary judgment on defendant's counterclaims— namely, summary judgment is granted on Claims 1-4 and 6 and denied on Claim 5.
The Court has taken the facts described below from the parties' depositions, affidavits, and exhibits, and from the Rule 56.1 statements of facts. Upon consideration of a motion for summary judgment, the Court shall construe the facts in the light most favorable to the non-moving party. See Capobianco v. City of New York, 422 F.3d 47, 50 (2d Cir.2005).
Rexall markets Osteo Bi-Flex, a nutritional supplement containing the ingredients Glucosamine and Chondroitin that promotes joint comfort and range of motion in joints. (Pl.'s 56.1 ¶ 1.) In approximately 2006, Rexall introduced reformulated versions of Osteo Bi-Flex that include 5-LOXIN, a standardized extract of herb Boswellia serrata developed to provide enhanced joint-care benefits that have been documented in published, peer-reviewed research. (Pl.'s 56.1 ¶ 2.)
Perrigo has sold products bearing statements comparing such products to Osteo Bi-Flex, by name, since at least 2001. (Pl.'s 56.1 ¶ 13.)
Plaintiff brings this action against defendant, on the basis of defendant's use of the statements "Compare to Osteo Bi-Flex," "Compare to Osteo Bi-Flex Ingredients," and "Compare to Osteo Bi-Flex Glucosamine Chondroitin MSM with Joint Shield Ingredients," and variations of these statements (the "Compare To Statements") in advertising the store brand Glucosamine Chondroitin Products it produces (the "Perrigo Products"), asserting that these statements constitute false and misleading advertising under the Lanham Act and New York State law. (Def.'s 56.1 ¶¶ 1-2.)
Rexall manufactures various Osteo Bi-Flex products. All of these products contain Glucosamine and Chondroitin, which have have been shown to aid in joint lubrication, cartilage rebuilding, and joint comfort. (Def.'s 56.1 ¶ 9.) Some, but not all, Osteo Bi-Flex products contain an extract of Boswellia serrata known as 5-LOXIN. (Id.) The Advanced Double Strength and Advanced Triple Strength versions of Osteo Bi-Flex each contain 100 milligrams of 5-LOXIN. (Id.) Studies suggest that Boswellia serrata has anti-inflammatory effects, and can be used in the treatment of a variety of conditions. (Def.'s 56.1 ¶ 10.) There are at least six boswellic acids, including AKBA. (Rosenbush Decl. ¶¶ 3-11; Pl.'s Ex. 7.) Published scientific research has shown that AKBA is the most active of the boswellic acids. (Rosenbush Decl. ¶ 7; Pl.'s Ex. 2.) Typical Boswellia serrata extracts are comprised of 2-3% AKBA, but 5-LOXIN is standardized to no less than 30% AKBA. (Rosenbush Decl. ¶¶ 7-9.) 5-LOXIN contains reduced or non-existent amounts of the other boswellic acids.
Rexall commissioned a survey by Robert Klein (hereinafter, "Klein Survey"), which found that Perrigo's Compare To Statements are understood by 29% of consumers as communicating a message that Perrigo Products are equivalent to Osteo Bi-Flex in terms of formulation and/or efficacy. (See Klein Decl. ¶¶ 26-28.)
Perrigo contends that that the Compare To Statements are not false or misleading. Specifically, Perrigo has put forth evidence that "independent laboratories determined that the amounts of AKBA in the Perrigo Products were nearly identical to the amounts of AKBA in the Osteo Bi-Flex Products and these amounts would be considered equivalent when considering the margin of measurement uncertainty." (Def.'s 56.1 ¶ 45.) Thus, according to Perrigo, "[b]ased on the results of either test, the products cannot be reasonably said to differ with respect to the amount of AKBA—the key differentiating factor between the products according to the Complaint." (Id.)
Although Rexall does not dispute that the amounts of AKBA are nearly identical in the Perrigo Products and the Osteo Bi-Flex Products, Rexall disputes that the products are equivalent for two reasons. (Pl.'s Response to Def.'s 56.1 ¶ 45.) First, Rexall has submitted evidence that Osteo Bi-Flex has a much higher percentage of AKBA in relation to the total of boswellic acids in each product. (Id.) Second, Rexall contends that "the Perrigo Product contains twice the amount of beta boswellic acid, a compound that significantly reduces the anti-inflammatory activity of the most active compound, AKBA" and thereby makes it less effective. (Id.) (emphasis added). Therefore, according to Rexall, "[t]he chemical differences revealed in these test results significantly impact the physiological activity of the parties' supplements." (Id.)
Based upon these tests and expert evidence, Rexall asserts that the "Compare To Statements" are impliedly false and misleading because the Perrigo Products are materially different from the Osteo Bi-Flex Products in formulation and efficacy. (Compl. ¶¶ 16-19.)
Perrigo's counter-claims assert that six statements used by Rexall in the advertising or packaging for Osteo Bi-Flex are false or misleading. These statements are:
1. Osteo Bi-Flex is the "No. 1 Dr. Recommended Brand" of Glucosamine and Chondroitin nutritional supplements among doctors who recommend a branded form of Glucosamine and Chondroitin ("Claim 1").
2. Osteo Bi-Flex is the "No. 1 Dr. Recommended Joint Care Brand" of Glucosamine and Chondroitin nutritional supplements among doctors who recommend a branded form of Glucosamine and Chondroitin ("Claim 2").
3. Osteo Bi-Flex has been "clinically tested" ("Claim 3").
4. Osteo Bi-Flex "provides more pure Glucosamine as compared to Glucosamine Sulfate" ("Claim 4").
5. Osteo Bi-Flex's key ingredient "is 10 times more concentrated than typical Boswellia extracts" ("Claim 5").
6. Osteo Bi-Flex treats, prevents, and/or cures arthritis ("Claim 6"). Defendant contends that this claim is conveyed to consumers through the numerous references to the Arthritis Foundation, arthritis treatment and prevention in packaging, print and Internet advertising for Osteo Bi-Flex products.
(Pl.'s 56.1 ¶ 3; Def.'s Response to Pl.'s 56.1 ¶ 3.) The Court will briefly summarize the evidence regarding each claim in turn.
Rexall has promoted Osteo Bi-Flex as the "No. 1 Doctor Recommended Brand" of Glucosamine and Chondroitin nutritional supplements since the late 1990s. (Pl.'s 56.1 ¶ 4.) This claim is based on an ongoing independent survey of physicians called the National Disease and Therapeutic Index ("NDTI") that tracks the treatments recommended to patients by their physicians. (Pl.'s 56.1 ¶ 5.) "The quarterly results of the NDTI survey generated over many years, as confirmed by an independent consultant Rexall employs to monitor the survey results, have established that Osteo Bi-Flex is the most recommended, branded form of Glucosamine and Chondroitin nutritional supplements among doctors who recommend a branded form of such supplements." (Pl.'s 56.1 ¶ 6.)
However, Perrigo contends that the claim is false and misleading because those same reports reflect that a majority of doctors simply recommended Glucosamine as treatment for joint problems, without naming a specific brand. (Marcotte Dec. Ex. 9.) Therefore, at times, only 10% of the doctors surveyed actually recommended Osteo Bi-Flex. (Id.) Rexall notes that it has always accompanied its claim as the "No. 1 Dr. Recommended...
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