901 F. Supp. 2d 436
S.D.N.Y.2012Background
- Merck sells Metafolin, a pure 6S stereoisomer folate product; Gnosis sells Extrafolate, a 6R,S mixture folate product, at lower cost.
- Gnosis used the common name, abbreviation, full chemical name, and CAS number of Merck’s pure 6S product in advertising and product documents.
- Product-spec sheets and brochures at trade shows and via distributors alleged to identify Extrafolate as Merck’s pure product.
- Court found the advertising campaign was organized and widespread, aiming to penetrate the folate market.
- Court ruled Merck proved false advertising and contributory false advertising under the Lanham Act; NY deceptive practices claims were not sustained; damages and injunctive relief awarded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Gnosis’s naming and labeling violated the Lanham Act | Merck: 6S name/CAS used for 6R,S product misleads. | Gnosis: nomenclature conventions justify naming choices. | Yes; literal false advertising established. |
| Whether Gnosis’s conduct supports contributory false advertising liability | Gnosis induced distributors to mislabel products. | Distributors acted independently; no knowledge of mislabeling. | Yes; contributory false advertising proven. |
| Whether NY deceptive trade practices claims succeed | Claims aim to protect public health and consumer deception. | Dispute is between competitors; public harm not shown. | Merck’s NY Sections 349/350 claims fail. |
| Whether Merck has standing to sue under Lanham Act | Merck has protectable interest in folate market; harmed by mislabeling. | Standing challenged; need competition. | Merck has standing. |
| Damages and injunctive relief appropriate | Recover profits, enhance for deterrence, injunctive relief. | Limit remedies to actual damages; no enhancement. | Damages awarded; profits enhanced; permanent injunction and corrective advertising ordered. |
Key Cases Cited
- S.C. Johnson & Son, Inc. v. Clorox Co., 241 F.3d 232 (2d Cir.2001) (false advertising elements; consumer deception presumption when literal falsehood proven)
- Time Warner Cable, Inc. v. DIRECTV, Inc., 497 F.3d 144 (2d Cir.2007) (litigating literal vs implied falsehood; extrinsic evidence when implied falsehood)
- Tiffany (NJ) Inc. v. eBay, Inc., 600 F.3d 93 (2d Cir.2010) (exception to consumer confusion when egregious intent shown)
- Merck Eprova AG v. Gnosis S.p.A., 2011 WL 1142929 (S.D.N.Y.2011) (summary judgment/procedural posture cited for prior rulings; not included in key case citations per rule)
- Getty Petroleum Corp. v. Bartco Petroleum Corp., 858 F.2d 103 (2d Cir.1988) (enhancement of profits; equitable adjustment in Lanham Act cases)
- Pedinol Pharmacal, Inc. v. Rising Pharm. Inc., 570 F.Supp.2d 498 (E.D.N.Y.2008) (basis for trebling or enhanced profit awards under 15 U.S.C. §1117(a))