Rhone-Poulenc Rorer Pharmaceuticals, Inc. v. Marion Merrell Dow, Inc.

• Decision Date: 22 August 1996
• Docket Number: RHONE-POULENC,No. 95-3743,95-3743
• Citation: 93 F.3d 511
• Parties: 1996-2 Trade Cases P 71,531, 39 U.S.P.Q.2d 1832 RORER PHARMACEUTICALS, INC., Plaintiff-Appellant, v. MARION MERRELL DOW, INC., Defendant-Appellee. Eighth Circuit
• Court: U.S. Court of Appeals — Eighth Circuit

Page 511

93 F.3d 511

1996-2 Trade Cases P 71,531, 39 U.S.P.Q.2d 1832

RHONE-POULENC RORER PHARMACEUTICALS, INC., Plaintiff-Appellant, v. MARION MERRELL DOW, INC., Defendant-Appellee.

No. 95-3743 United States Court of Appeals,

Eighth Circuit.

Submitted April 10, 1996.

Decided Aug. 22, 1996.

Thomas C. Morrison, argued, New York City (Barbara A. McCormick and Cecilia Loving-Sloane, New York City and Floyd R. Finch, Jr., Kansas City, MO, on the brief), for appellant.

Lawrence G. Meyer, argued, Washington, DC (James P. Parker, Washington, DC and Roger C. Geary, Kansas City, MO, on the brief), for appellee.

Before MAGILL, Circuit Judge, HENLEY, Senior Circuit Judge, and LOKEN, Circuit Judge.

LOKEN, Circuit Judge.

This appeal challenges the district court's ¹ disposition of false advertising claims by competing manufacturers of diltiazem, a "miracle drug" for the treatment of hypertension and angina. The governing law is the false advertising cause of action provided in § 43 of the Lanham Act, 15 U.S.C. § 1125(a)(1)(B). The court found both parties guilty of false advertising. It awarded no damages to plaintiff Rhone-Poulenc Rorer Pharmaceuticals ("RPR") and ordered RPR to undertake corrective advertising to counter the effects of its Lanham Act violation. RPR appeals those rulings. We vacate as not sufficiently specific that portion of the decree requiring RPR to advise the marketplace of "the food effect" associated with its product. We otherwise affirm.

I. Background.

Defendant Marion Merrell Dow ("MMD") introduced the first diltiazem drug, Cardizem, in 1982. The FDA approved Cardizem for the treatment of angina; it was also widely prescribed to treat hypertension. In 1989, MMD introduced a sustained release Cardizem product that is taken twice per day. MMD then developed Cardizem CD, a sustained release drug that is taken only once per day. The FDA approved Cardizem CD for hypertension and for angina.

Diltiazem was a pioneer new drug, which means that the Cardizem products enjoyed a ten-year period of market exclusivity under the Hatch-Waxman amendments to the Food, Drug, and Cosmetics Act. See 21 U.S.C. § 355(j)(4)(D); Abbott Labs. v. Young, 920 F.2d 984 (D.C.Cir.1990), cert. denied, 502 U.S. 819, 112 S.Ct. 76, 116 L.Ed.2d 49 (1991). Cardizem products were immensely successful, generating sales of $1.1 billion in 1992 alone. By the early 1990's, competing drug manufacturers were anxious to penetrate the diltiazem market with less costly alternatives.

RPR launched its diltiazem drug in June 1992. RPR's Dilacor XR, a once-per-day sustained release tablet, initially received FDA new drug approval for the treatment of hypertension but not angina. FDA approval as a new drug, which is more rigorous than approval as a generic substitute, allowed Dilacor XR to compete with Cardizem CD during the latter's period of market exclusivity. FDA classified Dilacor XR as a "BC" drug--one that is not necessarily "bioequivalent" ²--rather than a bioequivalent "AB" drug. Pharmacists may freely substitute among AB drugs, but only a prescribing physician may substitute one BC drug for another.

Given this FDA classification, to significantly penetrate the diltiazem market RPR had to persuade physicians to prescribe its low-cost product, Dilacor XR, as a substitute for Cardizem CD. MMD of course wanted to persuade the same audience that this is an inappropriate substitution. With this issue as the battleground, the two companies launched advertising campaigns for the allegiance of doctors, pharmacists, and hospitals. Because these are sophisticated consumers, the battle was waged with technical advertisements in professional journals and with marketing presentations by each company's sales representatives. RPR sought to convince prescribing physicians that Dilacor XR is the "same as, only cheaper" than Cardizem CD. MMD's message was, in essence, "not same as," and maybe not cheaper.

The nature of the competing false advertising claims can be briefly summarized. MMD's defensive advertising began with literature telling its sales representatives that Dilacor XR might be only seventy-five percent as bioavailable as Cardizem CD. After agreeing to discontinue that unsubstantiated claim, MMD's next wave of promotional materials advised sales representatives, doctors, and pharmacists that studies showed Dilacor XR only fifty percent as bioavailable as Cardizem CD. In its third wave of advertising, MMD released a four-page brochure in April 1993 reporting the results of a comparative study conducted by an outside laboratory, the "6730 Study." The results, as reported by MMD: "Dilacor XR delivers 81% of a 180-mg dose relative to Cardizem CD" and "74% of a 540-mg dose." RPR sued, contending that these false comparative bioavailability claims violate the Lanham Act.

Throughout this period, RPR's advertising urged doctors and pharmacists to switch their patients from Cardizem products to the low-cost Dilacor XR. In its counterclaims, MMD attacked this advertising as falsely telling medical professionals that Dilacor XR is freely substitutable for Cardizem products when in fact Dilacor XR is not FDA-approved for angina, ³ physicians should monitor patients who switch from Cardizem CD because Dilacor XR does not have "similar bioavailability," and the two drugs are absorbed differently when taken with a meal (the "food effect").

After a bench trial, the district court found that MMD's early literature claiming that Dilacor XR has only seventy-five percent or fifty percent bioavailability violated the Lanham Act. It enjoined MMD from making those claims. However, it found that MMD's advertising based upon the 6730 Study was not false, and it declined to award RPR money damages because RPR failed to prove damage resulting from MMD's earlier false advertising.

Turning to MMD's counterclaims, the district court found that RPR's advertising "contain[ed] a hidden message encouraging indiscriminate substitution" that is false in two respects--Dilacor XR is not approved for treatment of angina, and Dilacor XR has a "food effect" that creates a risk of injury if physicians do not monitor patients who are switched to Dilacor XR. Based upon these violations, the court enjoined RPR to "take necessary steps" to advise sales representatives, physicians, pharmacists, and patients (1) of "the food effect associated with Dilacor XR," (2) that physicians should "carefully monitor and titrate" (adjust the dosages) when they switch patients from Cardizem CD to Dilacor XR, and (3) that "Dilacor XR is not approved to treat angina."

Following the district court's September 1994 decision, RPR filed a motion to correct the judgment, which the court denied. MMD moved to enforce the court's order, and the court granted that motion without further explanation of what compliance is required. RPR appeals. It argues that MMD was guilty of false advertising based on the 6730 Study, that the district court erred in denying RPR money damages, and that the court erred in ordering RPR to conduct corrective advertising disclosing that Dilacor XR is not approved to treat angina and has a "food effect."

II. MMD's Advertising.

MMD advertised Dilacor XR's lower bioavailability in order to persuade medical professionals that Dilacor XR is not a comparable substitute and to undercut Dilacor XR's price advantage. The trial evidence showed that MMD's first claim of seventy-five percent bioavailability was false because it had no substantiation. The second claim of fifty percent bioavailability was false because it was based upon an obvious misinterpretation of data from prior studies. But MMD's third claim of 74% to 81% bioavailability was based upon the specially commissioned 6730 Study. The bona fides of that Study became a principal subject of the trial.

The Lanham Act prohibits "commercial advertising or promotion [that] misrepresents the nature, characteristics, qualities, or geographic origin of [the advertiser's] or another person's goods, services, or commercial activities." 15 U.S.C. § 1125(a)(1)(B). False advertising decisions in other circuits have consistently distinguished between two types of comparative advertising claims: "my product is better than yours," versus "tests prove that my product is better than yours." To successfully challenge the first type of claim, a Lanham Act plaintiff must prove that defendant's claim of superiority is false. But to successfully challenge the second type of claim, where defendant has hyped the claim of superiority by attributing it to the results of scientific testing, plaintiff must prove only "that the tests [relied upon] were not sufficiently reliable to permit one to conclude with reasonable certainty that they established the proposition for which they were cited." Castrol, Inc. v. Quaker State Corp., 977 F.2d 57, 62-63 (2d Cir.1992), quoting Procter & Gamble Co. v. Chesebrough-Pond's, Inc., 747 F.2d 114, 119 (2d Cir.1984). Accord BASF Corp. v. Old World Trading Co., 41 F.3d 1081, 1089-91 (7th Cir.1994); Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1138 (4th Cir.1993), cert. denied, 510 U.S. 1197, 114 S.Ct. 1307, 127 L.Ed.2d 658 (1994); McNeil-P.C.C., Inc. v. Bristol-Myers Squibb Co., 938 F.2d 1544, 1549 (2d Cir.1991). The district court applied this standard for "tests prove" claims to MMD's advertising based upon the 6730 Study. Neither party challenges the standard, and we agree it is a correct application of Lanham Act § 43.

RPR concedes that the 6730 Study results support the claims MMD made in its advertising brochure. Thus, the issue before us is whether that advertising was false because the 6730 Study is not a sufficiently reliable basis for comparing the bioavailability of Dilacor XR and Cardizem CD. At trial, RPR presented expert testimony that the 6730 Study was flawed in design and execution, plus evidence that two RPR studies, the "113 Study" and the "115 Study," did not have these flaws and...