Merck Eprova AG v. Gnosis S.P.A., 760 F.3d 247

Merck sued Gnosis for Lanham Act false advertising related to Extrafolate, a 6R,S mixture folate, marketed as if it were Merck’s pure 6S Isomer Product (Metafolin).
The district court found literal falsity and implied falsity in Gnosis’s materials, and held Gnosis acted with deliberate deception in a two-player folate market.
Merck was awarded damages including profits disgorgement, prejudgment interest, and a corrective advertising campaign; attorney’s fees and costs were also awarded.
The court applied presumptions of consumer confusion and injury due to literal falsity and deliberate deception, given the two-player market and the product distinction.
The court enhanced damages (three times profits) to reflect intangible benefits and deter future false advertising; it also ordered corrective advertising and substantial fees.
On appeal, Gnosis challenged the presumptions, the profits award, the enhancement, and other relief; the Second Circuit affirmed in full.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Presumption of consumer confusion	Merck satisfied intentional deception, justifying a presumption of confusion.	Presumption improperly rested on comparative-advertising logic.	Presumption of confusion upheld; literal falsity plus egregious deception supports it.
Presumption of injury	In two-player market with willful deception, injury presumption is proper.	Injury should require actual extrinsic proof, not presumptive.	Presumption of injury affirmed; appropriate where deliberate deception occurs in a direct market.
Damages and enhanced damages	Defendant’s profits can be awarded and enhanced due to deterrence and unjust enrichment.	Full profits awards and trebling are improper without stricter causation proof.	Merck’s profits awarded; enhanced (trebled) damages upheld as appropriate in this exceptional case.
Corrective advertising and related relief	Corrective campaign is necessary to explain product differences and remedy harm.	Campaign risks double recovery and overbreadth.	Corrective advertising upheld as narrowly tailored and appropriate; no abuse of discretion.
Prejudgment interest and fees	Exceptional case supports prejudgment interest and attorneys’ fees.	Interest and fees are improper or excessive.	Prejudgment interest and substantial fees affirmed as appropriate in light of willfulness and exceptional nature.

PPX Enterprises, Inc. v. Audiofidelity Enterprises, Inc., 818 F.2d 266 (2d Cir. 1987) (literal falsity permits relief without showing actual confusion)
Time Warner Cable, Inc. v. DIRECTV, 497 F.3d 144 (2d Cir. 2007) (presumption of injury/irreparable harm in non-name-specific context)
Coca-Cola Co. v. Tropicana Prods., Inc., 690 F.2d 312 (2d Cir. 1982) (facial falsity permits relief without consumer-impact evidence)
Johnson & Johnson v. Merck Consumer Pharm. Co., 960 F.2d 294 (2d Cir. 1992) (deception plus intent shifts burden to show absence of confusion)
Resource Developers, Inc. v. Statue of Liberty-Ellis Island Foundation, Inc., 926 F.2d 134 (2d Cir. 1991) (explain burden-shifting regarding deception and presumed injury)
McNeilab, Inc. v. American Home Prods. Corp., 848 F.2d 34 (2d Cir. 1988) (distinguishes non-comparative vs. comparative advertising presumptions)
Getty Petroleum Corp. v. Bartco Petroleum Corp., 858 F.2d 103 (2d Cir. 1988) (enhanced damages and deterrence under Lanham Act §1117(a))
Ortho Pharm. Corp. v. Cosprophar, Inc., 32 F.3d 690 (2d Cir. 1994) (comparative advertising presumptions and harm considerations)