Gilead Sciences, Inc. v. Meritain Health, Inc.
1:24-cv-03566
| D. Maryland | Jun 24, 2025Background
- Gilead sued Meritain (TPA), ProAct (carve-out PBM), Rx Valet (AFP), Advanced Pharmacy, Affordable Rx, Gregory Santulli, and Turkish pharmacy Fetih Eczanesi after a Maryland patient (John Doe) received authentic Turkish-labeled BIKTARVY® instead of U.S. labeled product.
- The shipment bore genuine Gilead marks but Turkish-language labels and lacked U.S. FDA labeling, NDC, English patient information, black-box warnings, and pedigree data; Gilead traced the bottle to Fetih Eczanesi.
- Gilead argues this is a gray‑market importation that undermines its quality‑control and trademark rights and filed for a TRO and preliminary injunction on Lanham Act Counts I (§1114) and II (§1125(a)).
- Meritain supplies eligibility data feeds to carve‑out PBMs and processes invoices; ProAct uses automated "system edits" to divert patients to international sourcing vendors and has paid invoices for internationally sourced Gilead drugs.
- Rx Valet/Advanced Pharmacy/Affordable Rx and Santulli operate an international sourcing/referral pipeline that ordered and shipped Turkish BIKTARVY® to U.S. patients.
- The court granted relief in part: it found Gilead likely to succeed on Lanham Act claims (direct liability as to the Quartet and Fetih; contributory liability as to Meritain and ProAct), found irreparable harm, and concluded the equities and public interest favor injunctive relief.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Applicability of Lanham Act to gray market imports | Gilead: non‑U.S. BIKTARVY® is materially different and not "genuine" (different labeling, missing safety info, no pedigree), so first‑sale/exhaustion does not bar relief | Defendants: goods are authentic; first‑sale/exhaustion should bar Lanham relief | Court: found strong likelihood that Turkish product is materially different and subject to quality‑control concerns, so exhaustion does not bar Lanham claims |
| Direct infringement by Rx Valet/Advanced Pharmacy/Affordable Rx/Santulli/Fetih | Gilead: these defendants used Gilead marks in commerce to sell/distribute non‑U.S. labeled product to U.S. patients | Quartet: conduct lawful or protected; laches/unclean hands defenses | Court: likelihood of success on direct infringement and unfair competition against the Quartet, Santulli (as principal actor), and Fetih |
| Contributory liability of Meritain and ProAct | Gilead: Meritain and ProAct knowingly facilitated importation (eligibility feeds, system edits, invoice processing/referrals) and thus contributed to infringement | Meritain/ProAct: services are passive, follow client plans, and they did not directly import/pay for John Doe's bottle; challenge standing | Court: found evidence Meritain provided critical eligibility feed and processed invoices and ProAct used system edits and referrals; likelihood of contributory liability established |
| Standing and causation for TPA/PBM defendants at PI stage | Gilead: commercial injury traceable to Meritain/ProAct conduct (data feeds, referrals, invoices) and redressable by injunction | Meritain/ProAct: Gilead has not shown they caused Doe’s procurement or paid invoices; no likelihood of standing | Court: concluded Gilead met the preliminary‑injunction stage showing of Article III standing and causation for Meritain and ProAct |
| Irreparable harm, voluntary cessation, and balance of equities | Gilead: reputational harm, loss of quality control, public‑health risk; injunction needed despite some defendants' cessation promises | Defendants: any harm speculative, they have stopped the conduct so injunction unnecessary; public interest favors access to cheaper drugs | Court: irreparable harm likely; voluntary cessation not reliable given industry practices and past conduct; equities and public interest favor Gilead |
| FDCA overlap and scope of Lanham remedies | Gilead: Lanham claims protect commercial interests and do not require FDCA enforcement | Defendants: Gilead improperly seeks to enforce FDCA via Lanham Act | Court: followed POM Wonderful—Lanham and FDCA can coexist; adjudication did not require interpreting FDCA so Lanham claims stand |
| Laches / Unclean hands defenses | Defendants: Gilead unreasonably delayed and/or has unclean hands | Gilead: delay was reasonable while working with FDA and investigating; no bad‑faith acquisition of marks | Court: delay was reasonable and within analogous statute period; no unclean‑hands bar at this stage |
Key Cases Cited
- Winter v. Natural Res. Def. Council, 555 U.S. 7 (2008) (standard for preliminary injunctions requiring likelihood of success, irreparable harm, balance of equities, and public interest)
- Inwood Laboratories, Inc. v. Ives Laboratories, Inc., 456 U.S. 844 (1982) (two bases for contributory trademark infringement: inducement and continued supply to known infringers)
- Rosetta Stone Ltd. v. Google, Inc., 676 F.3d 144 (4th Cir. 2012) (discussing contributory infringement in trademark context)
- Shell Oil Co. v. Commercial Petroleum, Inc., 928 F.2d 104 (4th Cir. 1991) (quality‑control doctrine and first‑sale/exhaustion limits)
- POM Wonderful LLC v. Coca‑Cola Co., 573 U.S. 102 (2014) (Lanham Act and FDCA can coexist; private Lanham suits complement regulatory scheme)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (Article III standing framework and evidentiary burdens across litigation stages)
- Lone Star Steakhouse & Saloon, Inc. v. Alpha of Virginia, Inc., 43 F.3d 922 (4th Cir. 1995) (irreparable harm often follows trademark infringement)
- Direx Israel, Ltd. v. Breakthrough Medical Corp., 952 F.2d 802 (4th Cir. 1991) (plaintiff’s burden to establish injunction factors)
- Zino Davidoff S.A. v. CVS Corp., 571 F.3d 238 (2d Cir. 2009) (low threshold for material differences in gray‑market cases)