14‐4353‐cv

Apotex Inc., et al., v. Acorda Therapeutics, Inc.

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

August Term, 2015

(Argued: November 12, 2015      Decided: May 16, 2016)

Docket No. 14‐4353‐cv

‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐x

APOTEX INC., et al.,

Plaintiffs‐Appellants,

‐ v.‐

ACORDA THERAPEUTICS, INC.,

Defendant‐Appellee.

‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐x

Before: JACOBS, LIVINGSTON and DRONEY, Circuit Judges.

This appeal concerns two distinct questions: the circumstances under

which the filing of a citizen petition with the Food and Drug Administration

provides grounds for an antitrust claim, and the scope of false advertising
liability under the Lanham Act.  Plaintiffs Apotex Incorporated and Apotex

Corporation appeal from the judgment of the United States District Court for the

Southern District of New York (Swain, J.) that granted defendant Acorda

Therapeutics, Inc.’s motion to dismiss plaintiffs’ Sherman Act claim and that

granted summary judgment in favor of defendant on the Lanham Act claims

(Torres, J.).  Because each of these conclusions was sound, we affirm.

KEITH D. PARR (with Joseph N. Froehlich,

Scott B. Feder, Hugh S. Balsam, James T.

Peterka, and Andy J. Miller on the brief),

Locke Lord LLP, Chicago, Illinois, for

Appellants Apotex Incorporated & Apotex

Corporation.

JOHN W. NIELDS, JR. (with Jason C.

Raofield and Colin P. Watson on the brief),

Covington & Burling LLP, Washington,

D.C. for Appellee Acorda Therapeutics, Inc.

DENNIS JACOBS, Circuit Judge:

The parties are rival manufacturers of tizanidine, a drug for treating

spasticity.  Plaintiffs Apotex Incorporated and Apotex Corporation (collectively

“Apotex”) allege that defendant Acorda Therapeutics, Inc. (“Acorda”) (i) filed a

sham citizen petition with the Food and Drug Administration (“FDA”) to hinder

approval of Apotex’s competing formulation in violation of Section Two of the

2
Sherman Act, and (ii) violated the Lanham Act’s proscription on false

advertising.  As relevant here, the competition between the manufacturers

focused on the relative efficacy of tablets or capsules in controlling somnolence,

one of the side effects of tizanidine.

The United States District Court for the Southern District of New York

(Swain, J.) ruled that the simultaneous approval by the FDA of Apotex’s drug

application and its denial of Acorda’s citizen petition (raising concerns about the

application) was by itself insufficient to support a Sherman Act claim.  After

discovery, the district court (Torres, J.) granted summary judgment and

dismissed all of Apotex’s false advertising claims on the grounds that (with the

exception of one graph) no representation was literally false or likely to mislead

consumers; and that, as to that one graph, Apotex failed to show that the false

depiction would meaningfully impact consumers’ purchasing decisions.  

Apotex appeals both rulings, arguing that precedent from this Court

allows its antitrust claim to survive dismissal and that material issues of fact

pertinent to Acorda’s representations remain for a jury to decide.   We affirm

these rulings.  

3
Although precedent supports an inference that a citizen petition is an

anticompetitive weapon if it attacks a rival drug application and is denied the

same day that the application is approved, that inference has been undercut by

recent FDA guidance.  As to false advertising, we agree with the district court

that no reasonable jury could have found that Acorda made literally false or

misleading representations in its advertisements, with the exception of a single

representation that Apotex has failed to show affected decisions to purchase.

BACKGROUND

Tizanidine tablets are used to treat spasticity, a symptom of multiple

sclerosis and Parkinson’s disease.  One of the tablets’ most common side effects is

somnolence: sleepiness or drowsiness.  Tizanidine tablets were first marketed in

the United States by Elan Pharmaceuticals, Inc. (“Elan”), under the trade name

“Zanaflex.”  (Elan later sold its rights to Acorda.)  

Zanaflex tablets were initially approved for sale by the FDA on November

27, 1996.  In October 2001, Elan submitted a New Drug Application (“NDA”) to

the FDA seeking approval to market tizanidine in capsule form.   During its

review, the FDA concluded that the absorption of the drug was delayed when

4
tizanidine capsules were taken with food (rather than without), and that the

delay was associated with a mean 20 percent decrease in Cmax, the peak amount

of the drug in a subject’s bloodstream.   More importantly, the FDA found that

“[w]hen bioequivalence of the capsule relative to the tablet is examined under fed

conditions [i.e., with food], there is a delay in absorption and the mean Cmax for

the capsule is approximately 2/3 of the mean Cmax for the tablet (Figure 1).”

Joint Appendix at 2230 (emphasis added).  The FDA subsequently approved

Elan’s NDA on August 29, 2002.

The significance of this phenomenon, in plain terms, is that the faster the

drug is absorbed, the more drowsy the patient may become, whereas the side

effect may be reduced if absorption is slowed.  

While the NDA was pending, Elan filed a patent application for methods

of administering tizanidine capsules to reduce somnolence and Cmax.  Less than

a month after the FDA approved the NDA, Elan’s patent issued as United States

Patent No. 6,455,557 (“the ‘557 patent”).  Elan then received permission to market

its newly approved tizanidine capsules under the trade name “Zanaflex

Capsules.”  In July 2004, Acorda acquired the rights to Zanaflex tablets and

Zanaflex Capsules; in April 2005, it launched the sale of Zanaflex Capsules.

5
Apotex had begun selling its generic tizanidine tablet product in 2004, and was

one of about ten companies to do so.  At the time Acorda began selling Zanaflex

Capsules, Apotex’s tizanidine tablet product had a five percent market share.

Zanaflex Capsules on the open market carried an FDA label pertaining

both to the Capsules and the tablets.  The preamble to this label invites doctors to

distinguish between tablets and Capsules, and between the drug when taken

with food and without:

PHARMACOKINETIC DIFFERENCES BETWEEN ZANAFLEX

CAPSULESTM AND ZANAFLEX® TABLETS: ZANAFLEX

CAPSULESTM ARE NOT BIOEQUIVALENT TO ZANAFLEX®

TABLETS IN THE FED STATE.  THE PRESCRIBER SHOULD BE

THOROUGHLY FAMILIAR WITH THE COMPLEX EFFECTS OF

FOOD ON TIZANIDINE PHARMACOKINETICS (see

PHARMACOKINETICS and DOSAGE AND ADMINISTRATION).

Joint Appendix at 643.  The Pharmacokinetics section of the label, under the

subheading “Pharmacokinetic differences between Zanaflex CapsulesTM and

Zanaflex® Tablets,” advises (consistent with the FDA review of the Zanaflex

Capsules NDA) that there is a 30 percent increase in Cmax when the tablets are

administered with food, but that when the Capsules are administered with food,

Cmax decreases by 20 percent.  “Consequently, the mean Cmax for the [C]apsule

6
when administered with food is approximately 2/3ʹs the Cmax for the tablet

when administered with food.”  Id.

The label contains a graph that figures in a number of the false advertising

claims.  Referred to as “Figure 1,” the graph is titled “Mean Tizanidine

Concentration vs. Time Profiles for Zanaflex Tablets and Capsules (2 × 4 mg)

Under Fasted and Fed Conditions.” It displays the mean plasma tizanidine

concentration at various hours from dosing.  The peak for the curve representing

tizanidine capsules (taken with food) is lower, and occurs later than the peak for

the curve charting concentration over time for tizanidine tablets (taken with

food).

The label then explains, in the Dosage and Administration section, that

pharmacokinetic differences between the fed and fasted state may affect the

7
frequency and onset of certain adverse events.  (The text is in the margin.1

)

Somnolence is explicitly identified as one of these adverse events.2

In 2007, Apotex filed an Abbreviated New Drug Application (“ANDA”)‐‐a

filing that seeks generic drug approval for an existing licensed medication or

approved drug‐‐in order to sell generic tizanidine capsules which would provide

competition to Acorda’s Zanaflex Capsules.  In the ANDA, Apotex certified that

it was not encroaching on any validly claimed intellectual property rights

because the ‘557 patent was invalid.  In predictable response, Acorda filed a

patent‐infringement suit in 2007.  After a seven‐day bench trial, the United States

District Court for the District of New Jersey (Brown, J.) ruled in September 2011

     1 “These pharmacokinetic differences may result in clinically significant

differences when [1] switching administration of the tablet between the fed or

fasted state, [2] switching administration of the capsule between the fed or fasted

state, [and] [3] switching between the tablet and capsule in the fed state . . . .

These changes may result in increased adverse events or delayed/more rapid

onset of activity, depending upon the nature of the switch.  For this reason, the

prescriber should be thoroughly familiar with the changes in kinetics associated

with these different conditions . . . .”  Joint Appendix at 646.

     2 The FDA’s Medical Review of the Zanaflex Capsules NDA observed: “The

most problematic potential situation is that of patients switching from the

capsule formulation to the tablet formulation in the fed state, where there is a risk

of more severe side effects with excessive hypertension and somnolence.”  Id. at

2102 (emphasis omitted).

8
that the ‘557 patent was invalid.  See Acorda Therapeutics Inc. v. Apotex Inc., No.

07‐4937 (GEB‐MCA), 2011 WL 4074116, at *27 (D.N.J. Sept. 6, 2011).  

Soon after that ruling, Acorda filed a citizen petition with the FDA raising

problems with Apotex’s ANDA.  The citizen petition is a means afforded by the

FDA for raising concerns about products the FDA reviews; any individual may

file such a petition concerning scientific or legal issues before or while the

product is on the market.  See 21 C.F.R. § 10.30.  Conceptually, citizen petitions

provide an avenue for public input into the drug approval process; but the

process has been abused by pharmaceutical companies that file meritless

petitions intended to delay approvals sought by their competitors and inhibit

competition.  Acorda’s citizen petition objected to (1) Apotex’s statement that its

product was bioequivalent to Reference Listed Drugs (RLDs) in the fed state; and

(2) allegedly misleading or untrue statements in the proposed label for the

Apotex ANDA.

The FDA denied Acorda’s citizen petition on February 3, 2012.  That same

day, the FDA approved Apotex’s ANDA.  The Sherman Act claim relies

principally on the FDA’s simultaneous dispositions.

9
With the green light from the FDA, Apotex launched its product.  Acorda

countered with its own authorized generic version of Zanaflex Capsules.  Apotex

contends that in the course of Acorda’s marketing: (1) its representatives

misrepresented to doctors that Zanaflex Capsules reduced Cmax‐‐in comparison

with the tablets‐‐and then improperly used reduction in Cmax as a proxy for a

corresponding decrease in somnolence; and (2) Acorda distributed written

promotional materials to the same effect.  In total, Acorda’s advertising efforts

contributed to sales of more than $240 million attributable to its version of

Zanaflex Capsules.

Apotex commenced this lawsuit in December 2011, amending its complaint

in February 2012 to include the FDA’s denial of Acorda’s citizen petition.  Acorda

countered with a motion to dismiss, which the district court (Swain, J.) granted

with respect to the Sherman Act claim and denied with respect to the Lanham

Act claims.  The district court observed that Apotex’s Sherman Act claim relied

purely on temporal proximity‐‐the denial of Acorda’s citizen petition on the same

day the Apotex ANDA was approved‐‐and concluded that was insufficient to

state a claim in view of recent legislation making the requirements for delaying

an ANDA application more stringent: “Congress’[s] explicit directive that ANDA

10
processing should not ordinarily be delayed by a citizen petition, coupled with

its narrowing for the grounds for any such delay and the statutory notice

requirement, strongly undermines any inference that mere simultaneity of

ANDA and citizen petition decisions is indicative of the delay of one by reason of

pendency of the other.”  Apotex Inc. et al., v. Acorda Therapeutics, Inc., No. 1:11‐

cv‐8803 (S.D.N.Y. Feb. 7, 2013), Doc. 45 at 7 (Swain, J.) (“Apotex I”) .  Apotex

moved for leave to amend, but the motion was denied in the interest of judicial

economy.

After the case was reassigned to Judge Torres, Acorda successfully moved

for summary judgment on the Lanham Act claims.  Judge Torres began the

analysis with the principle that: “[i]n the context of pharmaceutical drugs, courts

have generally rejected Lanham Act claims based on advertisements that merely

repeat labeling information that has been approved by the FDA.”  Apotex Inc. v.

Acorda Therapeutics, Inc., No. 11‐cv‐8803(AT), 2014 WL 5462547, at *3 (S.D.N.Y.

Oct. 23, 2014) (Torres, J.) (“Apotex II”) (quoting Mylan Pharms., Inc. v. Proctor &

Gamble Co., 443 F. Supp. 2d 453, 460 (S.D.N.Y. 2006)).  The court held that

because many of the allegedly false representations were “consistent with the

product label,” Apotex failed to identify a genuine issue of material fact with

11
respect to falsity of any of Acorda’s representations, except one.  Id. at *5.  The

remaining representation was Acorda’s placement of Cmax data on Figure 1, as

to which the district court found that “a reasonable juror could determine that the

juxtaposition of this text and image communicates a literally false message.”  Id.

at *8.  Nevertheless, the claim did not survive because Apotex failed to identify a

material issue of fact as to the representation’s bearing on decisions to purchase.

See id. at *9.      

Apotex appeals both decisions.

DISCUSSION

Apotex’s Sherman Act claim was dispatched at the motion‐to‐dismiss

stage, while its Lanham Act claims succumbed on summary judgment.  “On a

motion to dismiss, all factual allegations in the complaint are accepted as true

and all inferences are drawn in the plaintiff’s favor.”  Littlejohn v. City of N.Y.,

795 F.3d 297, 306 (2d Cir. 2015).  We review de novo a “district court’s grant of a

motion to dismiss under Rule 12(b)(6).”  Id.  And we “review a district court’s

denial of leave to amend for abuse of discretion.”  Presbyterian Church of Sudan

12
v. Talisman Energy, Inc., 582 F.3d 244, 267 (2d Cir. 2009).

Summary judgment “is appropriate when, having resolved all ambiguities

and permissible factual inferences in favor of the party against whom summary

judgment is sought, there are no genuine issues of material fact in dispute and

the movant is entitled to judgment as a matter of law.”  Baez v. JetBlue Airways

Corp., 793 F.3d 269, 273 (2d Cir. 2015).  “A genuine issue of material fact exists ‘if

the evidence is such that a reasonable jury could return a verdict for the

nonmoving party.’” Savino v. City of N.Y., 331 F.3d 63, 71 (2d Cir. 2003) (quoting

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).  The grant of summary

judgment in favor of Acorda is likewise subject to de novo review.  See Baez, 793

F.3d at 273‐74.  

  

I

The claim that Acorda’s filing of a sham citizen petition constitutes illegal

monopolization arises under Section Two of the Sherman Act, which imposes

liability on: “[e]very person who shall monopolize, or attempt to monopolize . . .

any part of the trade or commerce among the several [s]tates . . . .”  15 U.S.C. § 2.

A complaint alleging that a competitor filed a sham citizen petition with the FDA

13
states a claim under that section.  See In re DDAVP Direct Purchaser Antitrust

Litig., 585 F.3d 677, 694 (2d Cir. 2009).  For these purposes, a single sham petition

may be analogized to a single sham litigation.  “A single lawsuit can violate

antitrust law as long as it is both an objective and subjective sham.”  Id. at 686.

“First, the lawsuit must be objectively baseless in the sense that no reasonable

litigant could realistically expect success on the merits . . . . [S]econd . . . , the

court should focus on whether the baseless lawsuit conceals ‘an attempt to

interfere directly with the business relationships of a competitor.’”  Prof’l Real

Estate Inv’rs, Inc. v. Columbia Pictures Indus., Inc., 508 U.S. 49, 60 (1993)

(emphasis in original) (quoting E. R.R. Presidents Conference v. Noerr Motor

Freight, Inc., 365 U.S. 127, 144 (1961)).  Because we conclude that Apotex has

failed to show that Acorda’s citizen petition was objectively baseless, we affirm

on the first ground and do not reach the second.  

As relevant here, the factual basis for the claim in DDAVP was “that the

sham petition caused a delay in generic competition, a possibility reinforced by

the fact that the FDA approved the generic drug on the same day that it rejected

the petition.”  585 F.3d at 694.  Given the simultaneous grant of the ANDA and

denial of the citizen petition, Apotex argues that a straightforward application of

14
DDAVP justifies reversal: “the possibility that the petition was a sham, and that it

impacted the FDA’s decision, is sufficiently plausible to defeat the motion to

dismiss.”  Id. at 695.

However, the FDA issued a new Guidance for Industry (“Guidance”)

explaining how the FDA determines if a petition implicates an issue of public

health, and how the FDA’s decision‐making process is affected by the

simultaneous pendency of an ANDA application and a citizen petition dealing

with the same drug.  Although this case partially arises on a motion to dismiss,

we may properly take judicial notice of this document (without converting

Acorda’s motion to dismiss into a motion for summary judgment) because the

Guidance is publicly available and its accuracy cannot reasonably be questioned.

See FED. R. EVID. 201(b); Staehr v. Hartford Fin. Servs. Grp., Inc., 547 F.3d 406, 425

(2d Cir. 2008) (“Although the general rule is that a district court may not look

outside the complaint and the documents attached thereto in ruling on a Rule

12(b) motion to dismiss, we have acknowledged that the court ‘may also consider

matters of which judicial notice may be taken.’” (quoting Kramer v. Time Warner

15
Inc., 937 F.2d 767, 773 (2d Cir. 1991))).3

  

The Guidance explains: “If a petition requests that the Agency take an

action related to a specific aspect of a pending application, we will consider the

review status of the affected application(s) in determining whether it would be

appropriate for the Agency to respond to the request to take the action requested

in the petition within the 180‐day timeframe.”  Joint Appendix at 530 (emphasis

added).  Such consideration is necessary because of the differing procedural

rights of an ANDA applicant and the writer of a citizen petition. “[T]he Agency

must give the [ANDA] applicant notice of an opportunity for a hearing on

whether the application is approvable, with a specific timeframe and process

should the applicant request such a hearing.”  Id. at 531.  FDA decisions

adjudicating citizen petitions, on the other hand, “are subject to immediate

review by the courts.  They therefore carry with them none of the procedural

rights for the affected applicants that attach to a decision to deny approval of an

application.”  Id.  To bring these procedural arrangements into sync, the FDA

     3  The document can be accessed at the following website: Food and Drug

Administration, Citizen Petitions and Petitions for Stay of Action Subject to

Section 505(q) of the Federal Food, Drug, and Cosmetic Act‐Guidance for

Industry (June 8, 2011),

http://www.regulations.gov/#!documentDetail;D=FDA‐2009‐D‐0008‐0011.

16
states that it is preferable not to issue a decision on a  citizen petition until it

issues a decision on the corresponding ANDA application.  See id. (“If we were

to respond substantively to a petitioner’s request regarding the approvability of

. . . the application as a whole, such [a] response could interfere with the statutory

and regulatory scheme governing the review of applications and related

procedural rights of applicants.”).

Although it remains conceivable, notwithstanding the Guidance, that a

citizen petition might cause anticompetitive delay, the Guidance tends to

undermine the inference (drawn in DDAVP and advocated now by Apotex) that

when a citizen petition is denied simultaneously with the grant of an ANDA

petition, the citizen petition was a sham and an anticompetitive weapon.  The

Guidance favors contemporaneous adjudications to safeguard the procedural

rights of ANDA applicants such as Apotex.4

  

     4  While DDAVP was pending on appeal, Congress promulgated the Food and

Drug Administration Amendments Act (“FDAAA”), which provides in part that

consideration of a citizen petition shall not delay FDA approval of an ANDA

unless a “delay is necessary to protect the public health.”  21 U.S.C. §

355(q)(1)(A)(ii).  If the FDA determines that delay is necessary, it must give notice

to the applicant “not later than 30 days after making such [a] determination”

along with a brief summary of the “specific substantive issues raised in the

petition which form the basis of the determination.” Id. § (B).  However, it is not

evident that the FDAAA has curbed all abuses of the citizen petition process.  

17
Apotex has pled no other facts from which it can plausibly be inferred that

Acorda’s petition was a sham.  Apotex alleges that, in the patent trial, Acorda

falsely mischaracterized testimony and scientific evidence relating to the

bioequivalence of Apotex’s product.  But that allegation shows that Apotex

disagreed with the arguments Acorda advanced in its citizen petition (which is

hardly surprising), not that the Acorda citizen petition was a sham.5

The FDA letter rejecting Acorda’s citizen petition reinforces this

conclusion.6

  Although Acorda’s objections to Apotex’s ANDA based on

See Michael Carrier & Daryl Wander, Citizen Petitions: An Empirical Study, 34

CARDOZO L. REV. 249, 283 (2012) (“[W]hat is clear is that the 2007 amendment has

not been successful in achieving its stated purposes . . . . [T]o date, the

amendment has not reduced the number of unsuccessful (in other words, denied

or essentially denied) citizen petitions that appear to be filed to delay generic

competition.”).  We cannot foreclose the possibility that Sherman Act liability

might be predicated on the time taken for the FDA to decide whether a citizen

petition raises a legitimate public health concern.  But, for reasons explained

below, Apotex has not plausibly pled any such anticompetitive delay here.

     5 Apotex’s assertions that Acorda falsely mischaracterized trial testimony and

misrepresented Apotex’s bioequivalence studies are legal contentions, not factual

allegations, and therefore need not be credited.  See Bell Atl. Corp. v. Twombly,

550 U.S. 544, 555 (2007) (“[O]n a motion to dismiss, courts ‘are not bound to

accept as true a legal conclusion couched as a factual allegation.’” (quoting

Papasan v. Allain, 478 U.S. 265, 286 (1986))).

  

     6

  We may consider this document because the pleading “‘relies heavily upon

its terms and effect,’ which renders the document ‘integral’ to the complaint.”

Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir. 2002) (quoting Int’l

18
bioequivalence left the FDA unpersuaded, the grounds for rejection were: (1)

Acorda’s use of arithmetic mean values for Cmax instead of geometric mean

values; and (2) Acorda’s reliance on a cross‐study comparison.   Nowhere does

the FDA find that Acorda misrepresented testimony in the Apotex‐Acorda patent

litigation.  See Joint Appendix at 416‐17 n.5 (“The Agency is not a party to that

proceeding, and statements made in private litigation are not directly relevant to

FDA’s statutory obligation to determine the approvability of Apotex’s ANDA.”).  

Similarly, with respect to Acorda’s labeling argument, the FDA

“disagree[d]” with Acorda that the Cmax of Apotex’s product in the fed state

was increased compared to the RLDs.  Id. at 420.  Apotex elides the distinction

between arguments that fail to move the FDA and arguments that are false and

objectively baseless.   As the Supreme Court has cautioned, courts need to “‘resist

the understandable temptation to engage in post hoc reasoning by concluding’

that an ultimately unsuccessful ‘action must have been unreasonable or without

foundation.’” Real Estate Inv’rs, 508 U.S. at 60 n.5 (quoting Christiansburg

Garment Co. v. Equal Emp’t Opportunity Comm’n, 434 U.S. 412, 421‐22 (1978)).

Accordingly, the objective component of Apotex’s claim is lacking; so there is no

Audiotext Network, Inc. v. Am. Tel. & Tel. Co., 62 F.3d 69, 72 (2d Cir. 1995)).

19
need to evaluate Acorda’s subjective motivations in filing the petition.       

Apotex relies on In re Suboxone Antitrust Litig., 64 F. Supp. 3d 665, 690‐91

(E.D. Pa. 2014), which is inapposite.  The district court in Suboxone held that a

Section Two claim based on the filing of a sham citizen petition survived

dismissal because of the many indicia that the petition was objectively baseless.

Among the indicia: the “FDA acknowledged in its ruling that it had no authority

to grant much of [the] requested relief,” id. at 689; and the competitor that filed

the citizen petition requested that “the FDA investigate why Suboxone tablets

had been withdrawn from the market” even though the competitor “was

continuing to sell the product at that time.”  Id. at 690.  It was therefore plausibly

pled that the petition was “objectively baseless in that no reasonable litigant

could have realistically expected success on the merits.”  Id.  Here, however, the

only fact Apotex has pled other than the timing of the FDA’s decision on

Acorda’s citizen petition is that Acorda’s citizen petition was ultimately fruitless.7

     7 Apotex’s reliance on Tyco Healthcare Grp. LP v. Mut. Pharm. Co., 762 F.3d

1338 (Fed. Cir. 2014) is misplaced.  The Federal Circuit found a disputed issue of

fact as to whether Tyco’s citizen petition was objectively baseless because the

FDA’s response stated that the petition “relie[d] entirely on uncorroborated

generalities and theoretical speculation” and “fail[ed] to provide any evidence at

all” on a key issue.  Id. at 1347.  Furthermore, Mutual provided an expert who

testified that the citizen petition was baseless.  See id.  In contrast, the FDA’s

20
In the alternative, Apotex argues that the district court’s denial of leave to

amend the antitrust claim was based on a misapplication of the rules set forth in

the Southern District’s Pilot Project Regarding Case Management Techniques for

Complex Civil Cases (“Pilot Rules”).  However, the district court denied the

motion to amend in the interests of judicial economy, not because of Apotex’s

noncompliance with the Pilot Rules.  Apotex sought to amend in order to cite the

FDA’s fourth annual report to Congress, issued in December 2012, detailing the

ineffectiveness of the FDAAA.  The district court found that this report was

available to Apotex before its decision issued dismissing Apotex’s claims in

February 2013, that Acorda expressly relied on the FDAAA in its initial motion to

dismiss Apotex’s Sherman Act claim, and that Apotex brought the FDA annual

report to the district court’s attention only after Acorda’s motion to dismiss was

adjudicated.  Because Apotex delayed seeking leave to include the FDA’s fourth

annual report until March 2013, and because the general findings of the report

were largely immaterial to Apotex’s specific claim, the district court concluded

that the interests of judicial economy warranted denial of Apotex’s motion.  We

letter to Acorda provided no such language indicating the citizen petition was

wholly baseless, and Apotex did not plead any other facts that would indicate

baselesness.

21
have consistently afforded district courts latitude to deny leave to amend on this

basis.  See Ruffolo v. Oppenheimer & Co., 987 F.2d 129, 131 (2d Cir. 1993)

(“Where it appears that granting leave to amend is unlikely to be productive,

however, it is not an abuse of discretion to deny leave to amend.”).        

In sum, Apotex has not stated a claim under Section Two of the Sherman

Act, and the district court did not abuse its discretion in denying Apotex leave to

amend.  The district court’s decision dismissing Apotex’s antitrust claim is

affirmed.

II

The Lanham Act’s prohibition on false advertising states:

Any person who, on or in connection with any goods or services . . .

uses in commerce . . . any . . . false or misleading description of fact,

or false or misleading representation of fact, which . . . in commercial

advertising or promotion, misrepresents the nature, characteristics,

qualities, or geographic origin of his or her or another person’s

goods, services, or commercial activities, shall be liable in a civil

action by any person who believes that he or she is likely to be

damaged by such act.

15 U.S.C. § 1125(a)(1).  False advertising claims based on this proviso contain two

components.

22
First (and obviously), a plaintiff bringing a false advertising claim must

show falsity.  There are two ways to do that.  First, a “plaintiff can demonstrate

that the challenged advertisement is literally false, i.e., false on its face.”  Time

Warner Cable, Inc. v. DIRECTV, Inc., 497 F.3d 144, 153 (2d Cir. 2007).

“[C]onsumer deception is presumed, and ‘the court may grant relief without

reference to the advertisement’s [actual] impact on the buying public.’”  Id.

(quoting Coca‐Cola Co. v. Tropicana Prods., Inc., 690 F.2d 312, 317 (2d Cir. 1982)).

This inquiry requires evaluating “the message conveyed in full context.”  Id. at

158 (quoting Castrol Inc. v. Pennzoil Co., 987 F.2d 939, 946 (3d Cir. 1993)).  “If the

words or images, considered in context, necessarily imply a false message, the

advertisement is literally false and no extrinsic evidence of consumer confusion is

required.”  Id.  Importantly, however, “‘only an unambiguous message can be

literally false,’”; “if the language or graphic is susceptible to more than one

reasonable interpretation, the advertisement cannot be literally false.”  Id.

(quoting Novartis Consumer Health, Inc. v. Johnson & Johnson‐Merck Pharms.

Co., 290 F.3d 578, 587 (3d Cir. 2002)).  One kind of literally false claim is a claim of

test‐proven superiority. The premise is that the “defendant’s ad[vertisement]

explicitly or implicitly represents that tests or studies prove its product superior”

23
and “plaintiff satisfies its burden by showing that the tests did not establish the

proposition for which they were cited.”  Castrol, Inc. v. Quaker State Corp., 977

F.2d 57, 63 (2d Cir. 1992).    

“Alternatively, a plaintiff can show that the advertisement, while not

literally false, is nevertheless likely to mislead or confuse consumers.”  Time

Warner, 497 F.3d at 153.  Such an implicit falsity claim requires “a comparison of

the impression [left by the statement], rather than the statement [itself], with the

truth.”  Id. (quoting Schering Corp. v. Pfizer Inc., 189 F.3d 218, 229 (2d Cir. 1999)).

“[W]hereas ‘plaintiffs seeking to establish a literal falsehood must generally show

the substance of what is conveyed, . . . a district court must rely on extrinsic

evidence [of consumer deception or confusion] to support a finding of an

implicitly false message.’”  Id. (second alteration in original) (quoting Schering

Corp., 189 F.3d at 229).  

Falsity alone does not make a false advertising claim viable; “[u]nder either

theory, the plaintiff must also demonstrate that the false or misleading

representation involved an inherent or material quality of the product.”  Id. n.3.

Such a “requirement is essentially one of materiality, a term explicitly used in

other circuits.”  S.C. Johnson & Son, Inc. v. Clorox Co., 241 F.3d 232, 238 (2d Cir.

24
2001) (quoting Nat’l Basketball Ass’n v. Motorola, Inc., 105 F.3d 841, 855 (2d Cir.

1997)).  This Court has defined materiality as “likely to influence purchasing

decisions,” a definition in harmony with other Circuits’ use of the term.  Nat’l

Basketball Ass’n, 105 F.3d at 855 (quoting Am. Tel. & Tel. Co. v. Winback &

Conserve Program, Inc., 42 F.3d 1421, 1428 n.9 (3d Cir. 1994)).8  

A majority of Apotex’s claims attack Acorda’s representations as

inconsistent with the FDA‐approved label for Zanaflex Capsules.  A prior

question is whether representations that are wholly consistent with an FDA label

     8 See also Grubbs v. Sheakley Grp., Inc., 807 F.3d 785, 798 (6th Cir. 2015)

(defining “material” in the false advertising context as likely to “influence the

deceived consumer’s purchasing decisions”) (quoting Am. Council of Certified

Podiatric Physicians & Surgeons v. Am. Bd. of Podiatric Surgery, Inc., 185 F.3d

606, 613 (6th Cir. 1999)); Cashmere & Camel Hair Mfrs. Inst. v. Saks Fifth Ave.,

284 F.3d 302, 311 (1st Cir. 2002) (“The materiality component of a false

advertising claim requires a plaintiff to prove that the defendant’s deception is

‘likely to influence the purchasing decision.’”) (quoting Clorox Co. P.R. v. Proctor

& Gamble Commercial Co., 228 F.3d 24, 33 n.6 (1st Cir. 2000)); ALPO Petfoods,

Inc. v. Ralston Purina Co., 913 F.2d 958, 964 (D.C. Cir. 1990) (noting that to

succeed on a false advertising claim, a plaintiff must show that representations

were “material in their effects on buying decisions”); Taquino v. Teledyne

Monarch Rubber, 893 F.2d 1488, 1500 (5th Cir. 1990) (“To succeed, it must be

proved that . . . the deception is material, in that it is likely to influence the

purchasing decision . . . .”); 5 MCCARTHY ON TRADEMARKS AND UNFAIR

COMPETITION § 27:35 (4th ed. 1996) (“Plaintiff must make some showing that the

defendant’s misrepresentation was ‘material’ in the sense that it would have

some effect on consumers’ purchasing decisions.”).

25
are subject to Lanham Act liability.  This Court has yet to so hold, although a

number of district courts in this Circuit have sensibly adhered to this principle.9

We agree with these courts and now hold that representations commensurate

with information in an FDA label generally cannot form the basis for Lanham Act

liability.10

Such a rule reflects proper “deference to the expertise” of the FDA as the

regulatory agency responsible for issuing the label by respecting the exhaustive

process preceding the issuance of a label.  Am. Home Prods. Corp. v. Johnson &

Johnson, 672 F. Supp. 135, 144 (S.D.N.Y. 1987) (Conner, J.); see also Smithkline

Beecham, 1996 WL 280810, at *13.  This principle rightfully insulates

pharmaceutical companies from liability when they engage in First Amendment

     9 See Mylan Pharms., 443 F. Supp. 2d at 460 (Castel, J.) (“In the context of

pharmaceutical drugs, courts have generally rejected Lanham Act claims based

on advertisements that merely repeat labeling information that has been

approved by the FDA.”); Smithkline Beecham Consumer Healthcare, L.P. v.

Johnson & Johnson‐Merck Consumer Pharms. Co., No. 95 Civ. 7011, 1996 WL

280810, at *13 (S.D.N.Y. May 24, 1996) (Baer, J.) (“[T]o enjoin SmithKline Beecham

from claiming that TAGAMET HB works faster than PEPCID AC on the basis of

package [labeling], would substitute this Court’s discretion for that of the FDA in

approving package [labeling] for over‐the‐counter medications.”).

     10 Lanham Act liability might arise if an advertisement uses information

contained in an FDA‐approved label that does not correspond substantially to the

label, or otherwise renders the advertisement literally or implicitly false.

26
speech that is consistent with the directive of the regulatory body having

oversight of product labels.  

We “have been careful not to permit overextension of the Lanham Act to

intrude on First Amendment values.”  Groden v. Random House, Inc., 61 F.3d

1045, 1052 (2d Cir. 1995).  Accordingly, in order to avoid chilling speech that

ought to be protected, Acorda’s advertisements cannot form the basis for

Apotex’s claims to the extent they were in line with the FDA‐approved label.  

Apotex, however, goes further and contends that Acorda’s advertisements

exceeded the boundaries imposed by the FDA label.  Each of Apotex’s specific

Lanham Act challenges is now considered.

1.  Statements by Acorda’s Sales Representatives

Apotex challenges statements, attributable to Acorda sales representatives,

that patients taking Zanaflex Capsules with food enjoy the benefits of reduced

Cmax, including dosing flexibility and diminished somnolence.   Representative

samples of these sales pitches include the following:

Upon learning of the ability to decrease somnolence . . . by using

Zanaflex Capsules, the doctors agreed to give it a try.     

27
Joint Appendix at 3072;

I explained to [the doctor] that the [C]apsule[] [is] really unique in

that it counteracts a lot of the drowsiness when you dose it with

food.  He said he would give that a try and see how well it works for

his patients.

Joint Appendix at 3093.

When Acorda learned that its representatives may have made unauthorized

promotional claims for Zanaflex Capsules, Acorda’s head of sales sent a

memorandum to the sales team explicitly forbidding promotions that Zanaflex

Capsules had fewer side effects and less sedation than the tablets.

Apotex specifically objects to representations that Zanaflex Capsules

provide more flexibility than the Capsules’ counterpart‐‐the tablets‐‐a point on

which the FDA label is silent.  However, statements that Zanaflex Capsules

reduce Cmax when taken with food are fully consistent with the FDA label, as

the district court correctly found, and Lanham Act liability therefore cannot

attach to these statements.  See Apotex II, 2014 WL 5462547, at *5.  To the extent

Apotex challenges statements about dosing flexibility, it misconstrues its burden.

It is not enough to show that Acorda made representations absent from the FDA

label; instead, Apotex must show that these comments were inconsistent with the

28
FDA label in a manner sufficient to support a false advertising claim.  See Procter

& Gamble Co. v. Chesebrough‐Pond’s Inc., 747 F.2d 114, 119 (2d Cir. 1984)

(“[E]ach plaintiff bears the burden of showing that the challenged advertisement

is false and misleading, not merely that it is unsubstantiated by acceptable tests

or other proof.” (internal citations omitted)).  Apotex has adduced no evidence

that Acorda’s promotion of dosing flexibility was either literally false or likely to

cause consumer confusion.

Apotex next argues that Acorda’s sales representatives used Cmax as a

proxy for somnolence and improperly claimed that Zanaflex Capsules reduce it.

Critically, Apotex relies on a test‐proven superiority argument‐‐that the

representations relied on tests or studies allegedly proving the superiority of

Zanaflex Capsules.  The district court, however, properly rejected liability under

the test‐proven superiority theory.

The theory comes into play only when the “defendant’s ad[vertisement]

explicitly or implicitly represents that tests or studies prove its product superior

. . . .”  Castrol, 977 F.2d at 63 (emphasis added).  Apotex proffers no evidence that

sales representatives referred to tests or studies when they discussed the

potential of Zanaflex Capsules to reduce somnolence.  At most, Acorda’s

29
representatives used Figure 1 (or a similar graph of pharmacokinetic results) as a

tool to aid their reduced somnolence pitch.  There is no record evidence that

Acorda representatives used graphs of pharmacokinetic results to represent that

Zanaflex Capsules reduced somnolence.  Consider one of the statements at issue:

Talked to Dr. Corondan for the first time.  I asked him about the

most common complaint with Zanaflex tablets and he said the

drowsiness and then we went to the graph and I discussed the

[C]apsules (which is how I love a call to work out).

Joint Appendix at 1520.  At no point in this passage is it explicitly stated or

implied that Figure 1 necessarily shows that Zanaflex Capsules reduce

somnolence; instead, the graph was used as a tool for further discussion.  The

district court’s reasoning on this issue was sound: “[a]t most, the statements

suggest that, due to pharmacokinetic differences between the products, Zanaflex

[C]apsules cause less somnolence than Zanaflex tablets when taken with food.

The statements do not, by contrast, ‘explicitly or implicitly represent[] that tests

or studies prove’ that there is less somnolence with Zanaflex [C]apsules.”

Apotex II, 2014 WL 5462547, at *7 (third alteration in original) (quoting Castrol,

977 F.2d at 63).  Unable to identify a misrepresentation based on test‐proven

superiority, Apotex is left to find a genuine issue of material fact on falsity on

30
some other theory‐‐something it has failed to do.  It is immaterial that no study

has shown a reduction in somnolence associated with Zanaflex Capsules;

Chesebrough makes clear that Apotex must show falsity, not merely uncertainty.

Moreover, Acorda’s somnolence representations find a harbor in the FDA label,

which states that increased adverse events, such as somnolence, may occur when

switching between the tablets and Capsules in the fed state.  Reinforcing this

conclusion, the FDA’s medical review concluded that the most problematic

situation in terms of exacerbating somnolence was switching from the Capsules

to the tablets in the fed state.  In other words, the FDA has given some support to

Acorda’s representations; more importantly, however, there is no evidence that

the representations are false.  There is no basis to disturb the grant of summary

judgment relating to Acorda’s sales representatives’ statements.

2.  Acorda’s Promotional Materials

Supplementing representations by Acorda’s sales team were written

promotional materials heralding the benefits of Zanaflex Capsules in a manner

Apotex believes was false and misleading.  Apotex specifically attacks Acorda’s

“gatefold brochure,” a piece of advertising that Acorda disseminated in the

thousands.  The front cover announces: “Flexible Control in a Capsule” directly

31
above two images of the sun and the moon with the words “DAY” and “NIGHT”

printed underneath.  The bottom of the front cover urges: “For Treatment of

Spasticity When Relief is Most Important.”  The second page contains Figure 1

juxtaposed with relevant Cmax data, along with additional text at the bottom of

the graph.  The text reads:

Effects and Adverse Events are Dose Related to Plasma Levels of

Tizanidine.   

• Significant pharmacokinetic changes including plasma level

differences occur when administering Zanaflex Capsules or

tablets with food.

• These (pharmacokinetic) differences can result in clinically

important differences in effectiveness and adverse events.

Joint Appendix at 3327‐28.  See Appendix A.  

Apotex asserts that the brochure is misleading as a whole because the sun

and moon imagery, with the text underneath the graph on page 2 of the

brochure, delivers the message that Zanaflex Capsules undoubtedly reduce

Cmax and somnolence.

Although Acorda argues that it merely reprinted the graph from the FDA

label in its advertisements (including the gatefold brochure) Apotex accuses

Acorda of manipulation because the following text is superimposed on the

32
graph: “30 % INCREASE FOR TABLETS”; “20 % DECREASE FOR CAPSULES.”

Joint Appendix at 3258. Apotex argues that the graphic, as a whole, conveys a

false message because Figure 1 depicts mean tizanidine concentration, which is

the average drug concentration at different points in time, while the text relates to

Cmax data, which is the maximum drug concentration at different time points

and, by definition, different from the mean drug concentration. See Appendix B.

With the exception of the version of Figure 1 with superimposed text,

Apotex fails to create a triable issue of fact as to the falsity of the brochure.

Literal falsity cannot be shown because no unambiguous message is conveyed by

the remainder of the brochure; Apotex argues that the presence of the sun and

the moon implies that the drug is equally effective during the day and at night

and thereby implies efficacy in combating somnolence.  This conclusion is

plausible, but it is not unambiguous, especially because the cover never mentions

somnolence.  Nor has Apotex shown extrinsic evidence of consumer confusion

with respect to the sun‐moon imagery.  Apotex relies on internal marketing

statements from Acorda focusing on reduced Cmax and somnolence; but

Acorda’s motivations for launching the gatefold brochure do not constitute

extrinsic evidence as required.

33
Apotex contends that the district court erred by examining the brochure in

isolation while ignoring the context of Acorda’s launch letters and other

documents detailing Acorda’s marketing efforts.  True, a “district court

evaluating whether an advertisement is literally false ‘must analyze the message

conveyed in full context.’” Time Warner, 497 F.3d at 158 (quoting Pennzoil Co.,

987 F.2d at 946).  But the relevant context of the advertisement is the overall

message conveyed by the brochure.  The district court was not required to

consider external marketing documents.  A review of the brochure in its entirety

does not change the conclusion reached here: there is no unambiguous message

that Zanaflex Capsules reduce somnolence nor has Apotex proffered evidence of

consumer confusion on this point.

Acorda’s use of the version of Figure 1 with superimposed text, seen on the

second page of the gatefold brochure, raises a closer issue.

! Figure 1 shows the average concentration for a group of subjects

over time after the drug is administered (i.e., the mean drug

concentration); while

! Cmax is the maximum concentration of the drug that is reached in a

subject, which varies from subject to subject and is not correlated

34
with the time elapsed from administration of the drug.

Since Cmax values are not time‐dependent, and Figure 1 displays mean drug

concentration over time, Figure 1 cannot display mean CMax values.  We

therefore agree with the district court that “a reasonable juror could determine

that the juxtaposition of this text and image communicates a literally false

message.”  Apotex II, 2014 WL 5462547, at *8.  However, falsity is not enough;

Apotex must also raise a factual issue as to materiality.  “Under either theory, the

plaintiff must also demonstrate that the false or misleading representation

involved an inherent or material quality of the product.”  Time Warner, 497 F.3d

at 153 n.3 (emphasis added).  Apotex contends that it is not required to show that

the relevant misrepresentation would have an effect on consumers’ purchasing

decisions.  This argument ignores precedent from this Court which endorsed that

definition of materiality‐‐in line with the vast majority of our sister circuits.  See

Nat’l Basketball Ass’n, 105 F.3d at 855.  Apotex counters that, when an

advertisement is literally false, “consumer deception is presumed, and ‘the court

may grant relief without reference to the advertisement’s [actual] impact on the

buying public.’”  Time Warner, 497 F.3d at 153 (alteration in original) (quoting

Coca‐Cola Co., 690 F.2d at 317).  The argument conflates falsity with materiality.

35
Once literal falsity is proved, there is no requirement of extrinsic evidence

showing consumer deception.  But Apotex is not thereby relieved of the burden

of showing materiality, which requires that the allegedly “false or misleading

representation involved an inherent or material quality of the product,” id. n.3‐‐

i.e., that the representation was “likely to influence purchasing decisions,” Nat’l

Basketball Ass’n, 105 F.3d at 855 (quoting Am. Tel. & Tel., 42 F.3d at 1428 n.9).

Applying the materiality standard, the district court concluded that, at

most, Acorda “overstated the increase in mean tizanidine plasma concentration”

but that this evidence ultimately “does not reveal anything about the impact on

consumers’ purchasing decisions.”  Apotex II, 2014 WL 5462547, at *9.  This

conclusion was sound; the only plausible effect attributable to the

misrepresentation in the graph was an exaggeration of the scale of the mean drug

concentration curves, or an improper conflation of the mean Cmax with the

highest mean drug concentration for a given treatment.  However, there is no

record evidence that this inaccuracy would dissuade consumers from purchasing

Zanaflex Capsules.  Certainly, Apotex has provided none.  Apotex’s showing on

this point consists of generalized evidence that Acorda’s increased sales of

Zanaflex Capsules stemmed from its advertisement efforts.  Apotex fails to make

36
the necessary showing that the specific misrepresentation in the graphic‐‐in any

of Acorda’s advertisements‐‐was likely to influence consumers’ purchasing

decisions.

The remainder of Apotex’s attacks on Acorda’s promotional materials

suffer from a common flaw: although Acorda unquestionably made statements

that were not drawn from the FDA label, the thrust of Chesebrough is that this

fact is insufficient to show falsity.  A pharmaceutical company is entitled to make

advertising statements outside the four corners of an FDA label so long as none

of its representations is inconsistent with it.

In sum, the district court correctly granted summary judgment on all of

Apotex’s false advertising claims.      

CONCLUSION

For the foregoing reasons, we AFFIRM the judgment of the district court.

37