UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK _____________________

No. 07 Civ. 5898 (RJS)

_____________________

MERCK EPROVA AG,

Plaintiff,

VERSUS

GNOSIS S.P.A. AND GNOSIS BIORESEARCH S.A.,

 

Defendants.

__________________

OPINION AFTER BENCH TRIAL

September 30, 2012

__________________

RICHARD J. SULLIVAN, District Judge:

Plaintiff Merck & Cie (“Merck”), 

formerly known as Merck Eprova AG, a 

producer of pharmaceutical and dietary 

ingredients, brings this action against 

Defendants Gnosis S.p.A. and Gnosis 

Bioresearch S.A. (collectively, “Gnosis”), 

manufacturers and sellers of raw ingredients 

to nutritional companies, for misleading 

advertising in connection with Gnosis’s 

manufacture and sale of a folate nutritional 

ingredient. Specifically, Merck alleges that 

Gnosis falsely marketed its folate product 

using the chemical name, abbreviation, 

chemical formula, and Chemical Abstracts 

Services registry number (“CAS number”) 

reserved for Merck’s purer folate ingredients. 

Merck also contends that Gnosis described its 

ingredient in brochures, websites, and e-mails 

to clients using statements that only apply to 

the pure product manufactured by Merck. 

Merck seeks to hold Gnosis liable for false 

advertising, contributory false advertising, 

and deceptive trade practices under federal 

and New York law.

Having presided over a bench trial in this 

action, the Court issues the following findings 

of fact and conclusions of law, pursuant to 

Rule 52(a) of the Federal Rules of Civil 

Procedure. For the reasons set forth below, 

the Court finds that: (1) Gnosis engaged in 

false advertising and contributory false 

advertising in violation of the Lanham Act; 

and (2) Merck failed to meet its burden to 

prove that Gnosis engaged in a deceptive 

practice or false advertising in violation of 

New York state law. Accordingly, the Court 

hereby enters judgment for Merck and awards 

Merck damages in the amount of $526,994.13 

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plus interest, as well injunctive relief and 

attorneys’ fees.

1

 

I. PROCEDURAL HISTORY

Merck filed this action on June 21, 2007. 

The case was originally assigned to the 

Honorable Kenneth M. Karas, but was 

reassigned to my docket on September 4, 

2007. On October 22, 2007, Merck filed an 

Amended Complaint, asserting six causes of 

action: (1) false advertising under Section 

43(a)(1)(B) of the Lanham Act, 15 U.S.C. 

§ 1125(a)(1)(B); (2) contributory false 

advertising under Section 43(a) of the 

Lanham Act, 15 U.S.C. § 1125(a)(1)(B); 

(3) “use of false descriptions and false 

representations” in violation of Section 

43(a) of the Lanham Act, 15 U.S.C. 

§ 1125(a)(1)(a); (4) unfair competition under 

New York common law; (5) deceptive trade 

practices pursuant to Section 349(h) of the 

New York General Business Law; and 

(6) false advertising under Section 350(e)(3) 

of the New York General Business Law. 

After denying Gnosis’s motion to dismiss 

the Amended Complaint for lack of personal 

jurisdiction, Merck Eprova AG v. Gnosis 

S.p.A., No. 07 Civ. 5898 (RJS), 2008 WL 

5336587, at *1 (S.D.N.Y. Dec. 12, 2008), 

the Court directed the parties to proceed with 

discovery. What ensued has already been the 

subject of a lengthy opinion concerning 

Gnosis’s outrageous conduct in the course of 

 1 On August 1, 2011, Merck filed a motion requesting 

the Court to find that discovery violations by Gnosis 

warrant an adverse inference that the allegedly missing 

documents would further support a finding of liability 

and willfulness on the part of Gnosis. The Court has 

already found that Gnosis is liable for violations of the 

Lanham Act and that these violations were willful. See 

infra Part III. Thus, even if the Court were to find that 

an adverse inference was warranted, it would not alter 

the Court’s determination of the appropriate remedy. 

Accordingly, Merck’s motion is denied as moot. (See

Doc. No. 231.)

discovery. See Merck Eprova AG v. Gnosis 

S.P.A, No. 07 Civ. 5898 (RJS), 2010 WL 

1631519, at *1 (S.D.N.Y. Apr. 20, 2010). 

The Court will not repeat its findings here, 

other than to note that Gnosis was fined 

$25,000 and ordered to pay $89,921 in 

attorneys’ fees. Id. 

In August 2010, both Merck and Gnosis 

filed motions for summary judgment. (Doc. 

Nos. 88, 96.) The Court heard oral argument 

on both parties’ motions, and, in a 

Memorandum and Order dated March 17, 

2011, the Court denied Merck’s motion for 

summary judgment in its entirety. (Doc. No. 

146.) The Court granted Gnosis’s motion in 

part, dismissing Merck’s third and fourth 

claims, but otherwise denied the motion. See 

Merck Eprova AG v. Gnosis S.P.A., No. 07 

Civ. 5898 (RJS), 2011 WL 1142929, at *1

(S.D.N.Y. Mar. 17, 2011).

The case proceeded to trial on June 20, 

2011. The trial was conducted without 

objection in accordance with the Court’s 

Individual Rules for the conduct of non-jury 

proceedings. The parties submitted affidavits 

containing the direct testimony of their 

respective witnesses, as well as copies of all 

exhibits and deposition testimony that they 

intended to offer as evidence at trial. The 

parties were then invited to call those 

witnesses whom they wished to crossexamine at trial. In all, nine witnesses 

submitted affidavits, and ten witnesses 

testified before the Court at trial. The Court 

ruled on objections made with regard to 

statements in various witness affidavits and 

various exhibits. Closing arguments took 

place on June 30, 2011. 

Each party submitted a post-trial

memorandum (“Post-Trial Mem.”) on August 

1, 2011. On the same date, Merck filed a 

motion to redact portions of the trial transcript 

(Doc. No. 214) and renewed its motion for an 

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adverse inference (Doc. No. 216), requesting 

that the Court infer that documents missing as 

a result of Gnosis’s discovery violations 

support a finding of liability and willfulness 

on the part of Gnosis. On August 2, 2011, 

Gnosis filed a motion to redact portions of the 

trial transcript and certain pre-trial 

submissions. (Doc. No. 223.) On March 30, 

2012, the Court denied Merck’s renewed 

motion for an adverse inference as moot 

(Doc. No. 231), and granted both motions to 

redact the transcript (Doc. No. 232).

II. FINDINGS OF FACT2

At the heart of this case is Gnosis’s folate 

product, which is a mixture of the “active” Sisomer and the “inactive” R-isomer.3

 2 To the extent that any finding of fact reflects a legal 

conclusion, it shall to that extent be deemed a 

conclusion of law, and vice versa. As indicated, 

many of these factual findings are taken directly from 

the parties’ experts’ affidavits and the Joint Pretrial 

Order (“PTO Facts”).

 

Although Gnosis’s product is admittedly a 

mixture of these two isomers (PTO Facts ¶ 8), 

Gnosis used terms and the chemical formula 

for the pure S-isomer product in describing its

product (see infra Parts II.C-D). Merck 

claims that this violates the Lanham Act and 

state law. Gnosis acknowledges that its 

product is a mixture. Nevertheless, Gnosis 

argues that its use of the terms describing its 

product is accurate based on scientific 

naming conventions. In addition, while 

acknowledging that it used the incorrect 

chemical formula and CAS registry number 

on some documents, Gnosis contends that this 

use was not part of an advertising campaign. 

Similarly, it contends that the allegedly false 

descriptions of its product in advertising 

3 In August 2009, Gnosis started to sell a nearly pure 

6S Isomer Product. (PTO Facts ¶ 12.) That product is 

not at issue in this litigation. See Merck Eprova AG v. 

Gnosis S.p.A., No. 07 Civ. 5898 (RJS), slip op. at 1 

(S.D.N.Y. June 15, 2011).

brochures, websites, and emails to clients 

were also not part of an organized advertising 

campaign. Gnosis seeks attorneys’ fees 

against Merck, contending that Merck filed 

this suit with anti-competitive motives.

A. The Parties

Plaintiff Merck is a Swiss corporation 

with its principal place of business in 

Schaffhausen, Switzerland. (PTO Facts ¶ 1.) 

Defendant Gnosis S.p.A. is an Italian 

corporation with its principal place of 

business in Desio, Italy, and Defendant 

Gnosis BioResearch S.A. is a Swiss 

association with its principal place of business 

in San Antonino, Switzerland. (Id. ¶ 2.) 

Gnosis sells its products in the United States, 

advertising them through product literature 

circulated at trade shows, information 

presented on the internet, and promotional 

materials distributed in person and via email 

to current and potential customers. (Id. ¶ 5.) 

The companies are competitors, as both 

Merck and Gnosis produce raw dietary 

ingredients used in the production of 

nutritional supplements. (Id. ¶¶ 3-4; Tr. 

884:17-19.)

B. Stereochemistry4

Stereochemistry is a branch of chemistry 

concerned with the structure and properties of 

molecules. (PTO Facts ¶ 14.) Stereoisomers 

are molecules with the same composition of 

atoms and bond connectivity of atoms, but 

with different arrangements of those atoms in 

space. (Affidavit of Daniel W. Armstrong, 

Ph.D. dated May 17, 2011 (“Armstrong 

Aff.”), ¶ 21.) These differences in spatial 

orientation result in different stereoisomers 

 4 These facts are largely undisputed; however, the 

Court believes that it would be impossible to 

understand the contested issues in this case without a 

brief explanation of stereochemical terms and naming 

conventions.

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having different physical, chemical, and 

biological properties. (Id. ¶ 22.) 

Stereoisomers that are not mirror images 

of each other are called diastereoisomers. 

(Id. ¶ 35; see Affidavit of Dr. Jesse F. 

Gregory dated May 18, 2011 (“Gregory

Aff.”), ¶ 30.) Although they have the same 

molecular formula, virtually all of the 

physical, chemical, and biological properties 

of diastereoisomers are different. (Armstrong 

Aff. ¶ 37.) Accordingly, diastereoisomers of 

the same molecule can have vastly different 

effects in the human body. (Id.; Gregory Aff. 

¶¶ 3-5.) 

As explained in great detail at trial, at 

least three different conventions exist for the

naming of stereoisomers. Under the CahnIngold-Prelog priority rules, an isomer is 

identified as either “R” or “S” depending on 

the isomer’s relation to the carbon atom. 

(PTO Facts ¶ 20.) The Fischer-Rosanoff 

convention labels the isomers either “D” or 

“L” based on the isomer’s relation to the 

glyceraldehyde molecule. (Id. ¶ 21.) Another 

naming convention, based on optical activity, 

calls the isomers either “(+)” or “(-),”

depending on the direction in which the 

isomer rotates the plane of polarized light. 

(Id. ¶ 22.) These three conventions have no 

direct relation to each other. (Id. ¶ 17; 

Armstrong Aff. ¶ 24.) The R/S designations 

are most commonly employed, with the 

International Union of Pure and Applied 

Chemistry recommending their use

(“IUPAC”). (Id. ¶ 26.) Nevertheless, when a 

mixture of different isomers, rather than a 

pure isomer, is referenced, this may be 

appropriately indicated by using the symbols 

“D,L,” “R,S,” or “(±)” depending on the 

convention used, as a prefix before the 

chemical name. (Armstrong Aff. ¶ 30). 

Additionally, use of the chemical name with 

no symbol may also indicate a mixture of 

different isomers. (Id.)

Finally, optical purity refers to the degree 

of purity of a particular compound, relative to 

the presence of related compounds in the 

sample. (Id. ¶ 39.) For example, a sample 

containing 90% of stereoisomer A and 10% 

of stereoisomer B is said to be 90% optically 

pure. (Id. ¶ 40.)

C. Folates

The compound at issue in this case is a 

type of folate. Folate is the B vitamin that 

helps the body make new healthy cells. 

(Gregory Aff. ¶ 17.) Although all living 

beings require folates, they are particularly 

useful to promote prenatal health for 

expectant mothers and their fetuses and to 

lessen the risks of some cancers and 

cardiovascular diseases. (Id. ¶¶ 19-20.) Folic 

acid – which does not naturally occur in large 

quantities – is the primary folate form used in 

dietary supplements and food fortification, as 

it is relatively easy and inexpensive to 

manufacture synthetically. (Id. ¶ 23.) By 

contrast, tetrahydrofolates, which are the 

predominant naturally occurring forms of 

folates and are more easily absorbed by the 

human body, are much harder to manufacture. 

(Id. ¶¶ 24, 27; Affidavit of Roger Weibel 

dated May 20, 2010 (“Weibel Aff.”), at ¶¶ 30, 

33.) Each of the tetrahydrofolate forms 

exists in nature in the “L” stereochemical 

form but can also be synthetically 

manufactured. However, the manufacturing 

process yields a stereochemical mixture –

that is, a mixture with two isomers: (1) the 

“S,” “L,” or “(+)” isomer, and (2) the “R,” 

“D,” or “(-)” isomer. (Gregory Aff. ¶ 24.) 

For convenience, the Court will refer to any 

product composed of the former isomer as a 

“6S Isomer Product” and will refer to any 

product composed of a mixture of the two

diastereoisomers as a “6R,S Mixture 

Product.” (PTO Facts ¶ 7.) 

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The substance at issue in this case is a 

tetrahydrofolate with two isomers, commonly 

called the calcium salt of 5-

methyltetrahydrofolate, but also known as “5-

methyltetrahydrofolic acid” or “5-MTHF.”5

 

(Armstrong Aff. ¶¶ 46, 54; Gregory Aff. 

¶¶ 43.) While the “S” isomer exists 

naturally in foods and the human body, the 

“R” isomer is not naturally occurring and 

exists only in synthetically produced 

compounds. (Gregory Aff. ¶¶ 44.) 

Additionally, only the “S” isomer is active in 

the body, whereas the “R” isomer is inactive 

in the body and is arguably unhealthy. (Tr.

481:14-17; Weibel Aff. ¶¶ 51-53; Gregory 

Aff. ¶¶ 5, 27, 35.) 

Merck’s product, which is distributed 

under the tradename Metafolin, is a 6S Isomer 

Product (Weibel Aff. ¶¶ 10-11, 32), while 

Gnosis’s product, Extrafolate, is a 6R,S 

Mixture Product (Revised Affidavit of Renzo 

Berna, dated June 6, 2011 (“Berna Rev. 

Aff.”), ¶¶ 19, 48). Merck refers to Metafolin 

as L-5-methyltetrahydrofolic acid, calcium 

salt (the “common name”) and L-5-MTHF

(the “abbreviation”). (See Weibel Aff. ¶ 2.) 

Gnosis formerly used the same common 

name and abbreviation in connection with

Extrafolate, its 6R,S Mixture Product. (See, 

e.g., PTO Facts ¶ 8.) For a time, Gnosis used 

the common name and abbreviation (or their 

equivalents) on its product specification 

sheets (see, e.g., PTX 10 at 108; PTX 11 at 

 5 The full chemical name of the “pure” 6S isomer is 

N-[4-[[(2-amino-1,4,5,6,7,8-hexahydro-5-methyl-4-

oxo-(6S)-pteridinyl)methyl]amino]benzoyl]-L-glutamic 

acid, calcium salt. (Armstrong Aff. ¶ 50 (emphasis in 

original).) The full chemical name of the 6R isomer 

is N-4-[[(2-amino-1,4,5,6,7,8-5-methyl-hexahydro-4-

oxo-(6R)-pteridinyl)methyl]amino]benzoyl]-Lglutamic acid, calcium salt. (Id. ¶ 51 (emphasis in 

original).) The chemical name of a diastereoisomeric 

mixture of these two isomers is N-[4-[[(2-amino1,4,5,6,7,8-hexahydro-5-methyl-4-oxo-(6R,S)-

pteridinyl)methyl]amino]benzoyl]-L-glutamic acid, 

calcium salt. (Id. ¶ 52 (emphasis in original).)

67; PTX 25 at 4914; PTX 26 at GNO04918), 

product data sheets (see, e.g., PTX 9 at 4159-

60), material safety data sheets (see, e.g., PTX 

9 at 4161-62), certificates of analysis (see, 

e.g., PTX 4 at 4284), emails to its agents and 

customers (see, e.g., PTX 4 at 4283; PTX 12 

at 186; PTX 80 at 43), purchase orders (see, 

e.g., PTX 5 at 113; PTX 6 at 108), and other 

marketing materials (see, e.g., PTX 15 at 

3872).6

 Gnosis stopped using both the 

common name and abbreviation in connection 

with Extrafolate in March 2009, two years 

after the commencement of this action. 

(Berna Rev. Aff. ¶ 43.)

The parties disagree about the 

significance, under the naming conventions, 

of the L prefix in the common name and 

abbreviation. Merck’s experts contend that a 

mixture product, like that of Gnosis, should 

be referred to as D,L-5-MTHF or 5-MTHF. 

(See Gregory Aff. ¶¶ 2, 32, 42.) By contrast, 

Gnosis argues that, under certain naming 

conventions, the common name and 

abbreviation – L-5-methyltetrahydrofolic 

acid, calcium salt and L-5-MTHF – could 

properly be used to describe its product. (See 

Affidavit of Prof. Jay S. Siegel dated May 20, 

2011 (“Siegel Aff.”), ¶ 6; Berna Rev. Aff. ¶ 

35.)

D. The Products

Merck began selling Metafolin, its pure 

6S Isomer Product, in 2002. (Weibel Aff. 

¶¶ 10, 11, 32.) Merck sells Metafolin as a 

bulk substance for use by its customers in 

finished products, such as medical foods, 

prenatal vitamins, dietary supplements, and 

nutritional supplements. (Id. ¶ 10.) Metafolin 

is a result of Merck’s more than forty years 

researching in the field of reduced folates. 

(Id. ¶ 7.) During the last ten years, Merck has 

 6 Exhibits marked DTX were submitted by the 

defendant, Gnosis; PTX refers to exhibits submitted 

by the plaintiff, Merck. 

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invested more than $30 million in the field 

(id. ¶ 7), and, due to the cost and difficultly of

synthesizing a pure S isomer, has spent more 

than $60 million on the development, testing, 

and manufacture of a 6S Isomer Product

alone. (Gregory Aff. ¶ 59; Weibel Aff. ¶¶ 8-

9, 30, 58.) As a result of this research, Merck 

became the first company to produce a 

substantially stable and pure 6S Isomer 

Product. (Weibel Aff. ¶ 12.) Since that time, 

Metafolin has become one of Merck’s most 

important products. (Id. ¶ 15.) Merck and its 

licensees have spent over $100 million on 

marketing and promoting the product, and 

Merck’s customers often tout as a selling 

point the fact that their products contain the

substantially pure S isomer. (Id. ¶¶ 13, 16.) 

Gnosis began selling Extrafolate in 2006. 

(Berna Rev. Aff. ¶ 20.) Because it is far less 

costly to produce the mixture product, 

Gnosis’s 6R,S Mixture Product sold for 

approximately one-third the price of 

Metafolin. (PTX 72; PTX 81; Tr. 715:23-

716:16 (noting that the 2005 price per kilo of 

Metafolin was $14,310.30 and the 2007 price 

per kilo of the Gnosis material was $4,500).) 

Gnosis markets its product by, inter alia, 

attending trade shows, distributing brochures, 

making PowerPoint presentations, 

maintaining a website, and making in-person 

visits to potential clients. (PTO Facts ¶ 11; 

Tr. 884:6-16.)

1. Chemical Name on Product 

Specification Sheets

In March 2006, as part of its marketing 

efforts, Gnosis’s CEO, Renzo Berna, and two 

other employees attended a trade show in 

Anaheim, California to market both its 6R,S 

Mixture Product and a pure 6S Isomer 

Product. (Berna Rev. Aff. ¶ 39.) 

Approximately 120 to 150 visitors approached 

the Gnosis booth at the show. (Id. ¶ 27.) At 

the trade show, Gnosis employees presented 

potential customers with product specification 

sheets for its 6R,S Mixture Product. (Id. 

¶ 39.) Product specification sheets are the 

documents used most frequently by Gnosis 

sales personnel in communicating to 

customers the exact contents of the product 

being sold, and the sheets are frequently 

requested by potential customers. (Id. ¶ 51.) 

Though Gnosis recognizes that the 

chemical names for the 6R,S Mixture Product 

and the 6S Isomer Product are different (id.

¶ 41; Tr. 941:2-3), the product specification 

sheets for the 6R,S Mixture Product given out 

at the trade show contained inaccurate 

information. Specifically, the product 

specification sheet erroneously listed the 

chemical name for the pure 6S Isomer 

Product instead of that for the 6R,S Mixture 

Product. (Berna Rev. Aff. ¶ 51; see PTX 

10.7

) This product specification sheet was 

also sent to potential customers, both by 

Gnosis and by Gnosis’s distributor. (See PTX 

11; PTX 161). Although Berna testified that 

Gnosis corrected the product specification 

sheet by June 2006 (Berna Rev. Aff. ¶ 52), 

the incorrect sheet at the very least remained 

in customers’ files after that date (see PTX 

80; Tr. 719:14-724:11). 

2. Common Name and Abbreviation 

on Brochures

Gnosis also uses brochures to advertise its 

6R,S Mixture Product. (Berna Rev. Aff. 

¶¶ 50, 54; Tr. 920:15-16.) It does so by 

 7 Although PTX 10 is dated May 17, 2006, after the 

trade show, it is identified as the first edition of the 

product specification sheet, and Berna testified that the 

first edition of the product specification sheet was in 

use through June 22, 2006. (Berna Rev. Aff. ¶ 52.) On 

cross-examination, after initially making the dubious 

claim that PTX 10 was a product specification sheet for 

Gnosis’s 6S Isomer Product (Tr. 956:6), Berna 

eventually admitted that this was the product 

specification sheet for the 6R,S Mixture Product (id. at 

961:11-16).

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distributing and referring to the brochures at 

sales presentations. (Berna Rev. Aff. ¶ 54.) 

In the fall of 2006, Gnosis handed out a 

brochure at a trade show in Las Vegas. (Tr. 

919:11-12, 920:11-14; see PTX 15 (the 

brochure).) The brochure referred to Gnosis’s 

6R,S Mixture Product as L-5-

methyltetrahydrofolate calcium salt and L-5-

MTHF – the same names used by Merck for 

its substantially pure 6S Isomer Product. 

(PTX 15 at 3872-73; Tr. 918:17-25.) The 

brochure also listed, as features of Gnosis’s 

product, characteristics attributed to the pure 

6S Isomer Product, including, inter alia, that 

(1) it is the naturally predominant folate form, 

(2) it is the nutritionally active form, and (3) it 

is the essential form in which natural folates 

occur and are stored in the human 

bloodstream. (PTX 15.) 

3. Product Data Sheets, Certificates of 

Analysis, and Material Safety Data Sheets

When it delivers products to its customers 

– manufacturers of nutritional supplements 

and vitamins – Gnosis attaches various 

technical documents, including product data 

sheets, certificates of analysis, and material 

safety data sheets. (Berna Rev. Aff. ¶ 49.) In 

the documents attached to its 6R,S Mixture 

Product, Gnosis referred to the product by the 

common name (L-5-methyltetrahydrofolic 

acid, calcium salt) or abbreviation (L-5-

MTHF) of the pure 6S Isomer Product, and 

often described the chemical properties of the 

pure product, even though Gnosis’s product 

was a mixture. (See, e.g., PTX 4; PTX 10; 

PTX 12.) These same materials were also 

sent to potential, as opposed to existing, 

customers in order to solicit new sales. (PTX 

9.)

In short, by advertising its 6R,S Mixture 

Product with terms commonly used to 

describe the 6S Isomer Product, Gnosis 

attempted to capitalize on Merck’s premier 

position in the folate market – a market that 

Merck singlehandedly created by developing 

the pure isomer product. By offering a 

product that appeared identical to Merck’s 6S

Isomer Product, but that was far less costly 

due to its mixed chemical makeup, Gnosis 

captured many of Merck’s former customers 

by underselling Merck. Consequently, 

Gnosis was able to take a significant portion 

of that market from Merck. 

III. CONCLUSIONS OF LAW

As noted above, Merck alleges the 

following claims in this action: (1) false 

advertising under Section 43(a)(1)(B) of the 

Lanham Act, 15 U.S.C. § 1125(a)(1)(B); 

(2) contributory false advertising under 

Section 43(a) of the Lanham Act, 15 U.S.C. 

§ 1125(a)(1)(B); (3) deceptive trade practices 

pursuant to Section 349(h) of the New York 

General Business Law; and (4) false 

advertising under Section 350(e)(3) of the 

New York General Business Law.

8

 8 As discussed above, the Court granted summary 

judgment in favor of Gnosis on Merck’s claims for 

unfair competition under both the Lanham Act and 

New York law.

 To 

prevail on its claims, Merck has the burden of 

proof to present evidence in support of the 

allegations set forth in its Amended

Complaint and to prove those allegations by a 

preponderance of the evidence. McNeilP.C.C., Inc. v. Bristol-Myers Squibb Co., 938 

F.2d 1544, 1548-49 (2d Cir. 1991). “‘The 

burden of showing something by a 

preponderance of evidence . . . simply 

requires the trier of fact to believe that the 

existence of a fact is more probable than its 

nonexistence.’” Metro. Stevedore Co. v. 

Rambo, 521 U.S. 121, 137 n.9 (1997) 

(quoting Concrete Pipe & Prod. of Cal., Inc. 

v. Constr. Laborers Pension Trust for S. Cal., 

508 U.S. 602, 622 (1993)). As the finder of 

fact, the Court is entitled to make credibility 

findings of the witnesses and testimony.

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8

A. Jurisdiction

The Court has jurisdiction over this action 

pursuant to 28 U.S.C. §§ 1331 and 1338. The 

Court has supplemental jurisdiction over the 

state law claims pursuant to 28 U.S.C. § 1367. 

Venue in the Southern District of New York 

is proper under 28 U.S.C. § 1391.

B. Standing

“[I]n order to establish standing under the 

Lanham Act, a plaintiff must demonstrate 

(1) a reasonable interest to be protected 

against the alleged false advertising and (2) a 

reasonable basis for believing that the interest 

is likely to be damaged by the alleged false 

advertising.” Famous Horse Inc. v. 5th Ave. 

Photo Inc., 624 F.3d 106, 113 (2d Cir. 2010). 

It is not required that litigants be in 

competition, but competition is viewed “as a 

strong indication of why the plaintiff has a 

reasonable basis for believing that its interest 

will be damaged by the alleged false 

advertising.” Id.

In the Joint Pretrial Order, Gnosis raises

Merck’s lack of standing under the Lanham 

Act as an affirmative defense. However, 

Merck clearly has standing to bring these 

claims. Merck has an established product that

it advertises using the terms L-5-

methyltetrahydrofolate and L-5-MTHF, and it 

alleges that it is being damaged by Gnosis’s 

use of the same terms to describe its different 

product. While Gnosis initially argued that it 

and Merck are not direct competitors – a 

claim abandoned post-trial (compare Defs.’ 

Trial Mem. at 10, with Defs.’ Post-Trial 

Mem.) – direct competition is not required 

under the Lanham Act. In any event, the 

record indicates that the two companies are 

indeed competitors. (See, e.g., Tr. 51:10-12,

1192:15-17); see also Famous Horse, 624 

F.3d at 113 (concluding that plaintiff and 

defendant were competitors when the two 

parties sold similar goods and that plaintiff’s 

allegation of lost sales to defendant’s lowerpriced counterfeit goods “constitute the 

competitive injury required for Lanham Act 

standing”). Thus, it is clear that Merck’s 

“stake in the [folate] market gives it a 

‘reasonable interest to be protected against the 

alleged false advertising.’” Johnson & 

Johnson v. Carter-Wallace, Inc., 631 F.2d 

186, 190 (2d. Cir. 1980) (quoting 1 Rudolf 

Callmann, Unfair Competition, Trademarks 

and Monopolies, § 18.2(b) at 625 (3d ed. 

1967)). 

Gnosis also argues that Merck lacks 

Article III standing to bring this action. (See 

Defs.’ Trial Mem. at 9-10.) To establish 

Article III standing,

a plaintiff must show [1] that he 

“suffered an injury-in-fact – an 

invasion of a legally protected interest 

which is (a) concrete and 

particularized . . . and (b) actual or 

imminent, not conjectural or 

hypothetical”; [2] that there was a 

“causal connection between the injury 

and the conduct complained of”; and 

[3] that it is “likely, as opposed to 

merely speculative, that the injury will 

be redressed by a favorable decision.”

Carver v. City of New York, 621 F.3d 221, 

225 (2d Cir. 2010) (quoting Lujan v. 

Defenders of Wildlife, 504 U.S. 555, 560 

(1992)). Gnosis argues only that Merck has 

failed to demonstrate an injury in fact. (Defs.’

Trial Mem. at 11.) The Court has no 

difficulty finding that Merck has suffered an 

injury in fact in this case. Plainly, a 

manufacturer such as Merck is injured when a 

competitor falsely advertises that its 

chemically distinct product is identical to the 

manufacturer’s product.9

 9 Apparently unconvinced by the Court’s analysis of 

the issue in its summary judgment opinion, Gnosis also 

Accordingly, the 

Case 1:07-cv-05898-RJS-JCF Document 234 Filed 09/30/12 Page 8 of 23
9

Court concludes that Merck has standing to 

bring this action.

C. False Advertising Under the Lanham Act 

Section 43(a)(1)(B)

Merck challenges certain advertising 

practices in which Gnosis previously 

engaged, specifically: (1) the use of the full 

chemical name of the 6S Isomer Product in 

advertising the 6R,S Mixture Product; (2) the 

use of the common name and the abbreviation 

in advertising its 6R,S Mixture Product; 

(3) the use of the Chemical Abstracts Services 

registry number for the 6S Isomer Product in 

advertising the 6R,S Mixture Product; (4) the 

use of the name (6S)-5-methyltetrahydrofolic 

acid on documents that accompanied the 6R,S 

Mixture Product, and (5) various statements 

that appear to conflate research about the 6S 

Isomer Product and the 6R,S Mixture 

Product. (Pl. Post-Trial Mem. at 2-3.) Merck 

argues that these acts violated the Lanham 

Act. (See id.)

The Lanham Act expressly forbids false 

or misleading descriptions or representations 

of fact “in commercial advertising or 

promotion” concerning “the nature, 

characteristics, qualities, or geographic origin 

of . . . goods, services, or commercial 

activities.” 15 U.S.C. § 1125(a)(1)(B). To 

establish a false advertising claim under 

Section 43(a) of the Lanham Act, a plaintiff 

must prove the following elements: (1) the 

defendant has made a false or misleading 

statement; (2) the false or misleading 

statement has actually deceived or has the 

capacity to deceive a substantial portion of the 

intended audience; (3) the deception is 

material, in that it is likely to influence 

 renews its argument that this action is precluded by the 

Food, Drug, and Cosmetic Act. (Defs.’ Trial Mem. at 

21-22.) The Court rejects this argument, yet again, for 

the reasons stated in the summary judgment opinion. 

See Merck II, 2011 WL 1142929, at *6-7.

purchasing decisions; (4) the defendant 

placed the false or misleading statement in 

interstate commerce; and (5) the plaintiff has 

been injured as a result of the 

misrepresentation, either by direct diversion 

of sales or by a lessening of goodwill 

associated with its products. S.C. Johnson & 

Son, Inc. v. Clorox Co., 241 F.3d 232, 238 (2d 

Cir. 2001). “[T]he touchstone of whether a 

defendant’s actions may be considered 

‘commercial advertising or promotion’ under 

the Lanham Act is that the contested 

representations are part of an organized 

campaign to penetrate the relevant market. 

Proof of widespread dissemination within the 

relevant industry is a normal concomitant of 

meeting this requirement.” Fashion Boutique 

of Short Hills, Inc. v. Fendi USA, Inc., 314 

F.3d 48, 57 (2d Cir. 2002). 

To prove the first element of a Lanham 

Act claim, a plaintiff must show either: 

(1) that the “challenged advertisement is 

literally false, i.e., false on its face” or 

(2) “that the advertisement, while not literally 

false, is nevertheless likely to mislead or 

confuse customers.” Tiffany (NJ) Inc. v. 

eBay, Inc., 600 F.3d 93, 112 (2d Cir. 2010). 

To be literally false, the message must be 

unambiguous; if the representation “is 

susceptible to more than one reasonable 

interpretation, the advertisement cannot be 

literally false,” and the advertisement is 

actionable only upon a showing of actual 

consumer confusion. Time Warner Cable, 

Inc. v. DIRECTV, Inc., 497 F.3d 144, 158 (2d 

Cir. 2007). When a plaintiff demonstrates the 

literal falsity of an advertisement, consumer 

deception is presumed. Id. at 153. 

Furthermore, injury may be presumed when 

the plaintiff is an obvious competitor with 

respect to the misrepresented product. Reckitt 

Bensicker v. Motomco Ltd., 760 F. Supp. 2d 

446, 453 (S.D.N.Y. 2011).

Case 1:07-cv-05898-RJS-JCF Document 234 Filed 09/30/12 Page 9 of 23
10

Alternatively, “plaintiffs alleging an 

implied falsehood are claiming that a 

statement, whatever its literal truth, has left an 

impression on the listener [or viewer] that 

conflicts with reality.’” Time Warner, 497 

F.3d at 153 (quoting Schering Corp. v. Pfizer 

Inc., 189 F.3d 218, 229 (2d Cir. 1999)). In a 

case where a plaintiff seeks to prove that an 

advertisement is implicitly false, the plaintiff 

must put forth extrinsic evidence of consumer 

deception. Id. However, there is a “narrow 

exception to this rule” – where a plaintiff 

demonstrates that a defendant has 

“intentionally set out to deceive the public, 

and the defendant’s deliberate conduct in this 

regard is of an egregious nature, a 

presumption arises that consumers are, in fact, 

being deceived.” Tiffany (NJ), Inc. v. eBay, 

Inc., 04 Civ. 4607 (RJS), 2010 WL 3733894, 

at *3 (S.D.N.Y. Sept. 13, 2010) (quoting 

Johnson & Johnson * Merck Consumer 

Pharm. Co. v. Smithkline Beecham Corp., 960 

F.3d 294, 298 (2d Cir. 1992)); see also

Stokley Van Camp, Inc. v. Coca-Cola Co., 

646 F. Supp. 2d 510, 527 (S.D.N.Y. 2009); 

Johnson & Johnson Vision Care, Inc. v. 

Ciba Vision Corp., 348 F. Supp. 2d 165, 179 

(S.D.N.Y. 2004). The burden then shifts to 

the defendant to show that consumers were 

not misled or confused. Tiffany, 04 Civ. 4607 

(RJS), 2010 WL 3733894, at *3. 

1. Use of Chemical Name and CAS Number

on Product Specification Sheets

With regard to the first edition of the 

product specification sheets, Merck has 

proven that Gnosis engaged in false 

advertising under the Lanham Act. 

First, the product specification sheets fall 

under the category of “commercial 

advertising.” The sheets were not “isolated 

disparaging statements,” Fashion Boutique, 

314 F.3d at 57, but part of an organized 

campaign. Specifically, the sheets were 

widely distributed to attendees at the 

Anaheim trade show, cf. id. at 57 (noting that 

“promotion” includes displays at sales 

shows), and sent to potential customers by 

both Gnosis and Gnosis’s agents. Indeed, 

Berna admitted that the sheets constitute 

advertising in his affidavit. (See Berna Rev. 

Aff. ¶¶ 50-51 (listing product specifications as 

a form of Gnosis’s advertising).) 

Second, the product specification sheets 

were literally false. As discussed above, 

though the sheets gave the chemical name and 

CAS number of the 6S Isomer Product, the 

Gnosis product in question was in fact the

6R,S Mixture Product. (See Berna Rev. Aff.

¶ 51; PTX 10.) 

Finally, this falsehood was material. As 

the Court explained in its summary judgment 

opinion, the very nature of what a 

manufacturer is selling is material. Merck 

Eprova AG v. Gnosis S.p.A., No. 07 Civ. 5898 

(RJS), 2011 WL 1142929, at *4 (S.D.N.Y. 

Mar. 17, 2011); see Rexall Sundown, Inc. v. 

Perrigo Co., 651 F. Supp. 2d. 9, 30 (E.D.N.Y. 

2009). Berna acknowledged that the 

chemical name was especially important 

because it is the only way to distinguish 

between the product specification sheets for 

his two products, the 6R,S Mixture Product 

and the 6S Isomer Product. (See Tr. 932:7-8 

(“[T]he differentiation was in the full 

chemical name . . . .”); id. at 941:2-3 (“From 

the product name . . . I can’t tell. I have to go 

down to the – the full chemical name.”).) 

Because Merck has demonstrated the 

literal falsity of the product specification 

sheets, consumer deception – the second 

element of a Lanham Act – is presumed. 

Furthermore, by widely distributing the 

product specification sheets and sending 

them to potential customers, Gnosis placed 

the false statement in interstate commerce. 

Finally, because Merck and Gnosis are 

Case 1:07-cv-05898-RJS-JCF Document 234 Filed 09/30/12 Page 10 of 23
11

competitors with respect to the folate 

products at issue, injury is presumed. 

Accordingly, the Court will enter judgment in 

favor of Merck on Merck’s claims under the 

Lanham Act with regard to the product

specification sheets.

2. Use of Common Name and 

Abbreviation on Brochures, Product 

Specification Sheets, Certificates of Analysis, 

and Material Safety Data Sheets

Merck has also proven that Gnosis’s use 

of the terms L-5-methyltetrahydrofolic acid, 

calcium salt – the common name – and L-5-

MTHF – the abbreviation – to describe its 

6R,S Mixture Product in brochures, product 

specification sheets, material safety data 

sheets, and certificates of analysis is literally 

false and violates the Lanham Act.

First, Gnosis has used the common name 

and abbreviation in its advertising as part of 

an organized campaign. The common name 

and abbreviation were used on product 

specification sheets (see, e.g., PTX 10 at 108),

and brochures (see, e.g., PTX 15 at 3872-73),

both of which Gnosis admits were 

promotional activities (PTO Facts ¶¶ 5, 11).

The material data safety sheets and 

certificates of analysis likewise use the 

common name and abbreviation of the pure 

6S Isomer Product. (PTX 4; PTX 5; PTX 6;

PTX 9; PTX 12.) Although Gnosis argues 

that material data safety sheets are not 

advertisements because they accompanied 

shipments to existing customers, the record 

indicates that Gnosis sent these documents in 

response to customer inquiries as well. 

(Defs.’ Mem. 13; PTX 9.) Furthermore, the 

record shows that Gnosis distributed 

certificates of analysis widely within the 

industry. (Tr. 556:14-22, 912:3-7.) Thus, the 

material data sheets and certificates of 

analysis were part of Gnosis’s “organized 

campaign” to sell the 6R,S Mixture Product to 

its customers. 

Second, Gnosis’s use of the common 

name and abbreviation was literally false. 

Merck has presented a wealth of evidence in 

favor of its position that the common name 

and abbreviation Gnosis used for Extrafolate 

refers only to the 6S Isomer Product. For 

instance, both of Merck’s experts testified 

credibly that under the existing conventions in 

the scientific community, the common name 

and abbreviation are used only to refer to the 

6S Isomer Product. (Armstrong Aff. ¶¶ 50, 

61; Gregory Aff. ¶¶ 2, 40.) Moreover, 

Merck’s usage is consistent with the terms’ 

usage in the industry. L-5-

methyltetrahydrofolate calcium salt and L-5-

MTHF are identified as synonyms for the 6S 

Isomer Product in documents issued by both 

the Joint Food and Agriculture Organization 

of the United Nations and the World Health 

Organization Expert Committee on Food 

Additives, as well as the European Food and 

Safety Authority. (See Armstrong Aff. ¶¶ 58-

59; PTX 22 at 15; PTX 23 at 1-3.) Various 

scientific articles cited by Merck’s experts 

also use L-5-MTHF and/or L-5-

methyltetrahydrofolic acid, calcium salt to 

refer to the 6S Isomer Product only, not the 

6R,S Mixture Product. (See, e.g., PTX 212 

at 1; PTX 223 at 2; PTX 224 at 1.)10 

Even Gnosis’s own expert, Dr. Siegel,

conceded that he was aware of no scientific or 

scholarly article in which the terms L-5-

methyltetrahydrofolic acid, calcium salt or L5-MTHF were used to refer to anything other 

than the pure isomer. (See, e.g., Tr. 340:13-

16, 342:19-22, 351:23-352:2, 572:18-21.) 

 10 The fact that many of the articles were authored or 

allegedly “influence[d]” (a dubious allegation based 

largely on conjecture) by Merck is of no import, as it 

does not change the fact that the terms were 

consistently used in the manner that Merck promotes. 

(See Tr. 439:4-7, 460:20-461:19.)

Case 1:07-cv-05898-RJS-JCF Document 234 Filed 09/30/12 Page 11 of 23
12

The literature introduced at trial likewise 

demonstrated that the common name and 

abbreviation uniformly refer to the pure 6S 

Isomer Product and not the 6R,S Mixture 

Product. 

Merck’s argument is further supported by

the fact that Gnosis referred to Extrafolate by 

a different nomenclature – the nomenclature 

that Merck argues is correctly applied to a 

mixture product – in its own internal 

documents. For example, Dr. Bianchi 

admitted that in the laboratory, on batch 

records, Gnosis referred to its product as “5-

MTHF” or “6-RS 5 methyltetrahydrofolic 

acid of calcium,” not as “L-5-MTHF” or “L5-methyltetrahydrofolic acid, calcium salt.” 

(Id. at 372:16-373:13; see PTX 181; PTX 

182.) Similarly, patents filed by Drs. Valoti 

and Bianchi referred to the 6R,S Mixture 

Product as “5-MTHF,” not “L-5-MTHF.” 

(See Tr. 304:3-305:20; PTX 128; PTX 179.) 

Indeed, on cross-examination Dr. Bianchi 

referred to the product in question as “5-

methyltetrahydrofolate.” (Tr. 421:2.) In 

addition, Gnosis’s own reports use “L” to 

refer to the natural isomer. (See PTX 206 at 

4; PTX 208 at 5-6; Tr. 528:16-531:1.)

Gnosis largely relies on the testimony of 

Dr. Siegel to argue that its use of the common 

name and abbreviation when referring to the 

6R,S Mixture Product was justified. In 

essence, Gnosis has bet the house on Dr. 

Siegel in the hope that his testimony on the 

intricacies of scientific nomenclature and 

naming conventions will be enough to create 

an ambiguity and defeat Merck’s claim of 

literal falsity. To that end, Dr. Siegel 

attempted to argue that Gnosis’s use of the 

common name and abbreviation was 

reasonably derived from Fischer-Rosanoff 

and IUPAC conventions. (See Tr. 653:8-18.) 

What followed was a largely esoteric and at 

times metaphysical discussion of the 

intricacies of scientific nomenclature and the 

limits of language to approximate and explain 

the chemical composition of stereoisomers. 

Although at times fascinating, the testimony 

was largely beside the point for the simple 

reason that the Lanham Act and the law 

generally require inquiry into whether a 

particular use is “susceptible to more than one 

reasonable interpretation.” Time Warner, 

497 F.3d at 158 (emphasis added). 

Notwithstanding Dr. Siegel’s best efforts 

to the contrary, Gnosis has failed to 

demonstrate such ambiguity here. Indeed, 

while the Court found Dr. Siegel to be 

credible, his testimony was largely irrelevant 

to this action, as it spoke to a theoretical use 

of the contested terms that bordered on the 

aspirational, not to how those terms are 

actually used. At times, Dr. Siegel seemed to 

delight in being a voice in the wilderness, 

criticizing scientists and practitioners for 

misusing nomenclature in their scientific 

articles (see, e.g., Tr. 646:16-647:13), and 

using various terms inconsistently (id. at 

647:21). But, even if some terms are 

misused, he ultimately did not dispute that 

these terms are consistently used in the way 

Merck contends that they should be. (See id.

at 586:5-8.) In fact, neither Dr. Siegel nor 

Gnosis’s other witnesses were able to point to 

a single organization or a single article that 

uses the common name or abbreviation in the 

manner Gnosis does.11 (See, e.g., id. at 

340:13-16, 342:19-22, 351:23-352:2, 572:18-

21.) 

In sum, Gnosis and only Gnosis used the 

common name and abbreviation for the 6S 

Isomer Product to refer to its 6R,S Mixture 

 11 Gnosis makes much of an e-mail sent by Dr. Gregory 

in which he stated that “[f]rom the viewpoint of 

chemical nomenclature, L-5-methyltetrahydrofolic acid 

is an ambiguous term.” (DTX 69 at 1034.) However,

Dr. Gregory testified credibly that he was attempting to 

say that the term is not the formal nomenclature and 

that, if asked, he would have said the term could only 

refer to the 6S Isomer Product. (Tr. 838:1-10.)

Case 1:07-cv-05898-RJS-JCF Document 234 Filed 09/30/12 Page 12 of 23
13

Product. It follows that Gnosis’s use cannot 

alone render the meaning of these terms 

ambiguous. Cf. Schering-Plough Healthcare 

Prods., Inc. v. Neutrogena Corp., Civ. No. 

09-642-SLR, 2010 WL 2788240, at *1 (D. 

Del. July 15, 2010) (finding literal falsity 

where only defendant’s use of term departed 

from norm). Indeed, having carefully 

considered the testimony, affidavits, and 

evidence introduced at trial, the Court is 

firmly convinced that Dr. Siegel’s theories of 

nomenclature – which were not consulted 

before Gnosis embarked on its advertising 

campaign using the common name and 

abbreviations – were seized upon by Gnosis 

as an after-the-fact rationalization for a 

scheme that was animated by purely 

commercial, and not scientific, motives.

In addition, the Court finds Gnosis’s story 

about how it derived its name to be simply 

fanciful – and false – and discounts it entirely. 

In his testimony on June 21, 2011, Dr. Valoti, 

upon whom Gnosis allegedly relied in naming 

its product (see Berna Rev. Aff. ¶ 35), said 

that in making the naming decision, he relied 

in part on two or three articles that used the 

term L-5-methyltetrahydrofolate, without a 

(+) or (-) when referring to the mixture (Tr. 

249:9-14, 250:9-14). When directed by the 

Court to produce the articles in question, Dr. 

Valoti balked: 

THE COURT: You’re under oath. 

You were testifying under oath that 

you recall articles that referred to the 

mixture as L-5-MTHF.

THE WITNESS: I do not recall the 

article or the review or the journal. 

I’d have to go and review the 

document and then, you know, once 

I’ve reviewed the documents, then I 

can show it to you, and then I can 

show that as I was a witness.

THE COURT: When was the last 

time you reviewed such articles?

THE WITNESS: It’s quite some time 

ago.

THE COURT: When, approximately?

THE WITNESS: Probably 20 days 

ago.

THE COURT: 20 days ago. And you 

can’t remember the names of any 

articles?

THE WITNESS: No. I do not recall. 

I don’t know what to say to you.

THE COURT: Well, I want you to 

just tell me what you remember. You 

recall there being more than one 

article that referred to the mixture 

substance as L-5-MTHF? Yes or no, 

more than one article?

THE WITNESS: Two or three, I’m 

certain.

THE COURT: Certain, two or three.

THE WITNESS: Okay. Perhaps even 

more.

THE COURT: I’d like those produced 

to me. 

(Id. 249:17-250:16.) The next day, Gnosis’s 

counsel was forced to admit that Dr. Valoti’s 

story was flatly untrue and that none of the 

articles referenced by Dr. Valoti “has a 

reference to the mixture ingredient using 

those terms.” (Id. at 275:21-22.) 

Gnosis argues that a ruling in Merck’s 

favor will “turn the leading stereochemistry 

treatises on their heads” and that it is 

Case 1:07-cv-05898-RJS-JCF Document 234 Filed 09/30/12 Page 13 of 23
14

improper for courts to impose definitions and 

naming conventions on scientists. (Defs.’

Trial Mem. at 1; see also Tr. 595:1-596:5) To 

be clear, this Court’s ruling does not endeavor 

to dictate terms to scientists or to stop Drs. 

Gregory, Armstrong, Siegel, and their 

colleagues from continuing to debate 

nomenclature issues at conferences and in 

scientific papers, none of which could 

possibly be construed as advertising. This 

case involves only the use of the common 

name and abbreviation as they are used today 

in the advertising of folate products. In this 

narrow application, the use of “L-5-

methyltetrahydrofolate acid, calcium salt” and 

“L-5-MTHF” clearly refer to the pure 6S 

Isomer Product and only the 6S Isomer 

Product. Their application to the 6R,S 

Mixture Product is literally false.

In short, the Court finds it obvious that 

Gnosis’s use of the common name and 

abbreviation in its marketing efforts was a 

calculated decision to copy Merck’s 

advertising and capture a portion of Merck’s 

market share, knowing full well that its 6R,S 

Mixture Product was materially 

distinguishable from Merck’s pure 6S Isomer 

Product. In this regard, the Court finds Dr. 

Valoti and Berna to be completely noncredible and their testimony to be wholly 

false, a finding that will have implications for 

the damages in this case.

Additionally, as discussed above, Merck 

has met the other elements of a Lanham Act 

violation – consumer deception, materiality, 

interstate commerce, and injury to plaintiff. 

See supra Part III.C.1. Accordingly, the 

Court finds in favor of Merck on Merck’s 

claims under the Lanham Act with regard to 

Gnosis’s use of the common name and 

abbreviation on brochures, product

specification sheets, certificates of analysis, 

and material safety data sheets. 

3. Description of the Pure Isomer in 

Brochures, Material Safety Data Sheets, 

and Certificates of Analysis

Merck also alleges that descriptions of a 

pure 6S Isomer Product in Gnosis’s 

brochures, material safety data sheets, and 

certificates of analysis constitute false 

advertising under the Lanham Act because 

Gnosis failed to disclose that its product is a 

mixture. In its brochures, Gnosis describes a

pure 6S Isomer Product as one that is the 

natural form of folate and the essential form 

in which folates are stored in the human body. 

(PTX 14-16.) Likewise, the material safety 

data sheets and certificates of analysis 

describe chemical properties of the pure 6S 

Isomer Product. (See, e.g., PTX 5; PTX 9.) 

Such statements are literally true when 

applied to the pure product. However, since 

the statements were used in connection with 

Gnosis’s Extrafolate, which is not a pure 6S 

Isomer Product, the Court has little difficulty

concluding that the statements are impliedly 

false and were intended to mislead customers. 

As noted above, though a claim of

deceptive advertising generally requires 

extrinsic evidence of consumer confusion to 

prevail, a presumption of deceit arises where 

a defendant is shown to have intended to 

mislead consumers and acted egregiously to 

that end. Tiffany, 2010 WL 3733894, at *3

(citing Merck, 960 F.2d at 298). In such 

cases, the burden shifts to the defendant to 

demonstrate an absence of confusion. Id. 

Here, Gnosis deliberately referred to its 

6R,S Mixture Product in terms that refer 

only to the pure 6S Isomer Product. Further, 

Gnosis did so for purely commercial 

motives and in flagrant disregard of 

prevailing scientific conventions. 

Accordingly, the Court finds that Gnosis 

“intentionally set out to deceive the public,”

Merck, 960 F.2d at 298, and that Merck is 

entitled to a presumption of consumer 

Case 1:07-cv-05898-RJS-JCF Document 234 Filed 09/30/12 Page 14 of 23
15

deception with regard to the brochures, 

material safety data sheets, certificates of 

analysis, and emails that Gnosis sent to 

customers. As a result, Merck has satisfied 

the first element of a Lanham Act claim. 

For the reasons stated above, see supra

Part III.C.1, Merck has also satisfied the 

other elements of a false advertising claim 

under the Lanham Act with regard to its

descriptions of the pure 6S Isomer Product 

in brochures, material safety data sheets, and 

certificates of analysis. Namely, Merck has 

demonstrated the materiality of Gnosis’s

false statements and that Gnosis put the false 

statements in interstate commerce. Finally, 

because Gnosis is a competitor of Merck

with respect to the folate products, injury is 

presumed.

Thus, because the information contained 

in the documents was literally true, but 

designed to make customers believe that 

Gnosis’s 6R,S Mixture Product was, in fact, 

the pure 6S Isomer Product, the Court finds 

in favor of Merck with regard to Merck’s 

claims that Gnosis engaged in false 

advertising with its brochures, material safety 

data sheets, and certificates of analysis.

4. Purchase Orders

Merck also seeks damages based on 

Gnosis’s use of the abbreviation, CAS 

numbers, and the term “L-5-

methyltetrahydrofolic acid” in purchase 

orders enclosed with Gnosis’s 6R,S Mixture 

Product. While the use of the abbreviation

and CAS numbers in such documents is also 

false when used to describe the 6R,S Mixture 

Product, the Court concludes that these 

documents did not constitute “advertising” 

under the Lanham Act. Fashion Boutique of 

Short Hills, 314 F.3d at 57 (“[W]hether a 

defendant’s actions may be considered 

‘commercial advertising or promotion’ under 

the Lanham Act [depends on whether] the 

contested representations are part of an 

organized campaign to penetrate the relevant 

market.”). Merck has offered no evidence to 

suggest that the purchase orders were used to 

market Gnosis’s 6R,S Mixture Product, as 

opposed to being merely included with 

shipments. See Hyosung Am., Inc. v. Sumagh 

Textile Co., 934 F. Supp. 570, 580 (S.D.N.Y. 

1996) (finding that “neither advertisement nor 

promotion [was] involved” when false 

description of a product was referenced on 

purchase orders included with shipments and 

not made available to the public), rev’d on 

other grounds 137 F.3d 75 (2d Cir. 1998). 

For the same reason, Merck’s claims related 

to Gnosis’s references to the CAS number for 

the 6S Isomer Product in purchase orders also 

fail.

D. Contributory False Advertising

In addition to its false advertising claims, 

Merck also brings claims for contributory 

false advertising. “[L]iability for trademark 

infringement can extend beyond those who 

actually mislabel goods.” Inwood Labs., Inc. 

v. Ives Labs., Inc., 456 U.S. 844, 853 (1982). 

“Thus, if a manufacturer or distributor 

[1] intentionally induces another to infringe a 

trademark, or [2] continues to supply its 

product to one whom it knows or has reason

to know is engaging in trademark 

infringement, the manufacturer or distributor 

is contributorially responsible for any harm 

done as a result of the deceit.” Id. at 854; see

also Societe Des Hotels Meridien v. LaSalle 

Hotel Operating P’ship, L.P., 380 F.3d 126, 

133-34 (2d Cir. 2004); Polymer Tech. Corp. 

v. Mimran, 975 F.2d 58, 64 (2d Cir. 1992). 

Gnosis is liable to Merck for contributory 

false advertising because its false use of the 

common name caused its distributors to also 

falsely advertise. For example, AHD was 

Gnosis’s exclusive distributor of Lmethylfolate products in the United States in 

Case 1:07-cv-05898-RJS-JCF Document 234 Filed 09/30/12 Page 15 of 23
16

2006-2007. (See Deposition of John Alkire 

dated January 11, 2010 (“Alkire Dep. Tr.”),

59:25-60:4.) AHD only purchased the 6R,S 

Mixture Product from Gnosis. (See Alkire 

Dep. Tr. 143:22-143:3.) Nevertheless, 

AHD’s product specification sheet from 2006 

– when Gnosis was selling only the 6R,S 

Mixture Product – states that the product 

being sold was L-5-methyltetrahydrofolic 

acid. (See PTX 75 at 7.) AHD also stated in 

a solicitation to customers on its website that 

it was selling L-5-Methytetrahydrofolic Acid. 

(PTX 159 at 379.) Berna admitted that AHD 

was following its lead in naming the products, 

at least with regard to the certificates of 

analysis and labeling. (See Tr. 916: 17-25.) 

The Court agrees and concludes that AHD 

followed Gnosis’s lead in its product 

specification sheets and other advertising as 

well.

Accordingly, the Court finds that Gnosis 

intentionally induced AHD and others to 

falsely advertise and that Merck has prevailed 

on its contributory false advertising claim. 

E. Deceptive Trade Practices and False 

Advertising under New York State Law

A plaintiff bringing a claim of deceptive 

trade practices under Section 349 of the New 

York General Business Law “must prove 

three elements: first, that the challenged act 

or practice was consumer-oriented; second, 

that it was misleading in a material way; and 

third, that the plaintiff suffered injury as a 

result of the deceptive act.” Stutman v. Chem. 

Bank, 95 N.Y.2d 24, 29 (N.Y. 2000). A 

claim of false advertising under Section 350 

must meet all the same elements as a claim 

under Section 349, as well as proof of actual 

reliance. Rodriguez v. It’s Just Lunch, Int’l, 

No. 07 Civ. 9227 (SHS) (KNF), 2010 WL 

685009, at *10 (S.D.N.Y. Feb. 23, 2010). 

Corporate competitors have standing to 

bring a Section 349 claim if “the gravamen of 

the complaint [is] consumer injury or harm to 

the public interest.” Azby Brokerage, Inc. v. 

Allstate Ins. Co., 681 F. Supp. 1084, 1089 n.6

(S.D.N.Y. 1988). “[P]otential danger to the 

public health or safety” satisfies this standard. 

Gucci Am., Inc. v. Duty Free Apparel, Ltd., 

277 F. Supp. 2d 269, 273 (S.D.N.Y. 2003). 

However, where the “dispute[ is] between 

competitors [and] the core of the claim is 

harm to another business as opposed to 

consumers,” courts have found that the 

“public harm . . . is too insubstantial to satisfy 

the pleading requirements of § 349.” Id. at 

273. 

In this case, Merck does not have standing 

to pursue its claims under Section 349. 

Although Merck’s experts posit that there 

may be some negative health consequences 

associated with the R-isomer, Merck has not 

definitively established that these negative 

health consequences are also associated with 

the 6R,S Mixture Product. Instead, Merck’s 

allegations focus almost entirely on losses 

suffered by Merck itself, not to the eventual –

and theoretical – harm suffered by the public 

at large. See Vitolo v. Mentor H/S, Inc., 426 

F. Supp. 2d 28, 34 (E.D.N.Y. 2006) (finding 

that plaintiff had not demonstrated 

“consumer-oriented conduct” when the 

alleged harm was suffered by plaintiff himself 

and his business instead of consumers or the 

public). 

Accordingly, Merck’s claims under 

Sections 349 and 350 of the New York 

General Business Law must fail. 

III. DAMAGES

Merck seeks monetary relief in the 

amount of three times Gnosis’s profits from 

the sale of its 6R,S Mixture Product through 

Case 1:07-cv-05898-RJS-JCF Document 234 Filed 09/30/12 Page 16 of 23
17

the end of 2009, as well as costs. (Pl.’s PostTrial Mem. at 19-22.) 

When a plaintiff establishes a violation of 

the Lanham Act, the plaintiff is entitled,

subject to the principles of equity, to 

recover (1) defendant’s profits, 

(2) any damages sustained by the 

plaintiff, and (3) the costs of the 

action. The court shall assess such 

profits and damages or cause the 

same to be assessed under its 

direction. In assessing profits the 

plaintiff shall be required to prove 

defendant’s sales only; defendant 

must prove all elements of cost or 

deduction claimed. In assessing 

damages the court may enter 

judgment, according to the 

circumstances of the case, for any 

sum above the amount found as 

actual damages, not exceeding three 

times such amount. If the court shall 

find that the amount of the recovery 

based on profits is either inadequate 

or excessive the court may in its 

discretion enter judgment for such 

sum as the court shall find to be just, 

according to the circumstances of the 

case.

15 U.S.C. § 1117(a). 

The award of profits is justified by three 

rationales: (1) to deter a willful wrongdoer 

from doing so again; (2) to prevent the 

defendant’s unjust enrichment; and (3) to 

compensate the plaintiff for harms caused by

the infringement. Pedinol Pharmacal, Inc. v. 

Rising Pharm. Inc., 570 F. Supp. 2d 498, 504 

(E.D.N.Y. 2008) (citing George Basch Co. v. 

Blue Coral, Inc., 968 F.2d 1532, 1537 (2d 

Cir. 1992)). To prevail under these rationales, 

a plaintiff must prove that a defendant acted 

willfully. George Basch Co., 968 F.2d at 

1537. However, such a showing is not alone 

sufficient. Courts must also consider other 

factors, such as “(1) the degree of certainty 

that the defendant benefited from the 

unlawful conduct; (2) [the] availability and 

adequacy of other remedies; (3) the role of a 

particular defendant in effectuating the 

[wrongdoing]; (4) plaintiff’s laches; and (5) 

plaintiff’s unclean hands.” Id. at 1540. The 

district court “exercises its discretion as to the 

proper weight to be given these factors under 

the circumstances.” Pedinol, 570 F. Supp. 2d 

at 504.

The evidence adduced at trial leaves little 

doubt that Merck is entitled to recover 

Gnosis’s profits from its sales of Extrafolate. 

Such an award is supported by all three of the 

rationales identified by the Second Circuit. 

First, the award is necessary to prevent 

Gnosis from falsely advertising in the future. 

As an initial matter, Gnosis’s conduct during 

its advertising campaign and this litigation 

reveals its disdain for the law and this Court

that is nothing short of appalling. Thus, 

Gnosis has given this Court little reason to 

believe that it will comply with orders that fall 

short of a full accounting of profits. 

Moreover, though Gnosis has stopped using 

L-5-MTHF and L-5-methyltetrahydrofolate to 

describe its mixture products, it had long used 

these terms to gain a valuable entry into the 

folate market, all while enhancing its ability 

to manufacture a pure 6S Isomer Product. If 

Gnosis were allowed to keep its profits, there 

would be no incentive for it to comply with 

the requirements of the Lanham Act in the 

future – indeed no other pharmaceutical 

company would be deterred from false 

advertising if it were thus able to gain an 

enviable market position with minimal 

financial repercussion. Second, Gnosis was 

unjustly enriched when it impinged on 

Merck’s market for pure folate ingredients by 

falsely representing its 6R,S Mixture Product 

as a pure 6S Isomer Product. Third, the 

Case 1:07-cv-05898-RJS-JCF Document 234 Filed 09/30/12 Page 17 of 23
18

record indicates that Merck lost sales to 

Gnosis as a result of Gnosis’s false 

advertising. (See Tr. 1040:3-1041:8.)

Further, the record is clear that Gnosis 

deliberately and willfully engaged in false 

advertising as part of a strategy designed to 

gain its market share in the lucrative vitamin 

and nutritional supplement industry through 

deception. As noted above, Gnosis’s own 

expert, Dr. Siegel, could provide no

reasonable explanation for Gnosis’s use of the 

contested terms to advertise its 6R,S Mixture 

Product. Instead, the Court finds that Dr. 

Siegel’s attempt to legitimate Gnosis’s

marketing was merely a post-hoc justification 

for a naming decision divorced from scientific 

conventions. In fact, Gnosis’s decision to use 

the chemical name, common name, and 

abbreviation of the pure 6S isomer was the 

result of a deceptive and willful decision to 

induce customers to purchase its 6R,S 

Mixture Product believing that it was the pure 

6S Isomer Product. The fact that Gnosis 

referred to Extrafolate in its internal 

documents by the standard nomenclature 

employed by Merck and others for a mixture 

product clearly supports this finding. 

If this were not enough, Gnosis’s 

continued use of the terms L-5-MTHF and L5-methyltetrahydrofolic acid in its advertising 

for almost two years after Merck initiated this 

suit evinces that Gnosis gave little 

consideration to this suit and more than 

supports a finding of willfulness.

12

 12 Merck filed its Complaint on June 21, 2007. 

(Compl. at 1.) Gnosis continued using the common 

name and abbreviation until March 2009. (Berna Rev. 

Aff. ¶ 43.) 

 

“Although awareness of an adverse claim 

would not necessarily make [false 

advertising] willful, especially where the 

defendant believed in good faith [that its 

advertising was truthful],” where the evidence 

shows that the defendant “gave short shrift to 

plaintiff’s claim out of arrogance,” a finding 

of willful infringement is appropriate. Stuart, 

489 F. Supp. at 832. Such is the case here. 

Gnosis has been giving Merck’s claim “short 

shrift” since its inception. Indeed, as the 

Court discussed in its sanctions opinion, 

Gnosis failed to issue a litigation hold and 

deliberately flouted Court orders during the 

course of discovery. See Merck, 2010 WL 

1631519, at *3 & n.6. The conduct of 

Gnosis’s principal officers at trial further 

demonstrated Gnosis’s willful infringement. 

As recounted above, Dr. Valoti lied when he 

testified on June 21, 2011 that he reviewed 

two or three articles that used the term L-5-

methyltetrahydrofolate to refer to the R,S 

mixture. (Tr. 249:17-250:16.) Similarly, Dr. 

Valoti gave simply unbelievable testimony 

when questioned on the contents of a

certificate of analysis he reviewed concerning 

the Gnosis product. (See Tr. 281:10-283:24.) 

Likewise, Berna told numerous lies in his 

sworn testimony. Among these lies – some of 

which he later acknowledged under crossexamination – were Berna’s claims that 

Gnosis’s initial product specification sheet for 

Extrafolate was not modeled on the sheet 

Gnosis requested from Merck (it was) (Tr. 

1125:17-1126:5) and that the full chemical 

name of Extrafolate had never been 

misrepresented or omitted on the product’s 

certificate of analysis (it had been) (id. at 

917:24-918:6; see Berna Rev. Aff. ¶ 44). 

This false testimony, coupled with the other 

findings of Gnosis’s knowing conduct, 

confirms that Gnosis’s false advertising was 

willful. See Stuart, 489 F. Supp. at 832

(finding that jury could have found conduct 

was willful due to clearly false testimony 

because “a callous disregard for the oath, 

suggest[s] the possibility of an equally callous 

disregard for adverse rights”).

Finally, in considering the other factors 

pertinent to an award of profits – defendant’s 

benefit from the unlawful conduct, the 

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19

availability of other remedies, the role of 

particular defendants in the wrongdoing, and 

plaintiff’s laches and unclean hands – the 

Court finds that the equities tip decidedly in 

favor of awarding Gnosis’s profits to Merck. 

It is clear that Gnosis benefitted from its 

deception both in launching its product and 

attracting the attention of Merck’s former 

customers. There are no other adequate 

remedies that would deter Gnosis from future 

misconduct, offset its unjust returns, and 

make Merck whole. Further, Gnosis was 

directly involved in the false advertising, with 

its senior executives and hired consultants 

deciding how to name the product. And there 

is no contention that Merck waited an 

unreasonable amount of time to bring this 

action, or that it has unclean hands. 

Once an award of profits is deemed 

appropriate, a plaintiff need only prove a 

defendant’s sale; the defendant retains the 

burden of proving appropriate costs or 

deductions. 15 U.S.C. § 1117(a); George 

Basch Co., 968 F.2d at 1539. Merck has 

provided sufficient evidence of Gnosis’s sales 

during the relevant period to arrive at a 

determination of profit. Gnosis sold $30,100 

of Extrafolate in 2006 (PTX 137), $64,700 in 

2007 (PTX 138), $45,500 in 2008 (PTX 139), 

and $35,364.7113 during the first three months 

of 2009 (PTX 168).14

 13 This amount is based on an exchange rate of 1.38 

dollars for each euro. (See Defs.’ Post-Tr. Mem. at 24.)

 While Gnosis has 

produced some evidence of costs that would 

limit the amount of damages awarded to 

Merck (see PTX 240; Tr. 1100:24-1102:20), 

it has not met its burden in this regard. This is 

14 Though Merck seeks costs for all of 2009, in 

determining the amount of an award of the defendant’s 

profits, “[t]he time period for calculating that profit is 

the period during which the false statements were 

disseminated.” Pedinol Pharmacal, Inc., 570 F. Supp. 

at 505. Merck’s argument that the statements must 

have continued to be disseminated after March is 

possible but not proven by the evidence.

because the costs Gnosis provides are from 

2011 and 2010, well after the profits at issue 

here. (See PTX 240 at 10273-74.) Further, 

Gnosis provides no breakdown of costs, it 

merely provides a total number. (Tr. 1102:7-

15, 1103:22-1105:8.) Finally, given the 

Court’s findings about the credibility of 

Gnosis’s witnesses, the Court is not prepared 

to accept these figures without justification. 

Accordingly, the Court finds that Gnosis’s 

profits during the applicable period were 

$175,664.71. 

However, this determination of profits 

does not sufficiently reflect the harm caused 

in this case. Instead, the Court finds that “the 

principles of equity” dictate that an award of 

Gnosis’s profits should be enhanced to best

reflect the intangible benefits that accrued to 

Gnosis as a result of its false advertising, 

primarily Gnosis’s usurpation of Merck’s 

market share. Though the plain language of 

the Lanham Act permits trebling of only 

plaintiff’s damages, the Court may enhance 

an award of profits without identified limit to 

“such sum as the court shall find to be just” if 

“the amount of the recovery based on profits 

is . . . inadequate.” 15 U.S.C. § 1117(a); see 

Getty Petroleum Corp. v. Bartco Petroleum 

Corp., 858 F.2d 103, 109 (2d Cir. 1988) 

(“Unlimited enhancement or reduction of an 

award based on defendant’s profits is 

permitted in order to correct inadequacy or 

excessiveness.”); Deering, Milliken & Co. v. 

Gilbert, 269 F.2d 191, 194 (2d Cir. 1959)

(“[I]t is apparent from the face of the statute 

that the court in formulating its award has as 

much discretion as to the defendant’s profits 

as it has over the plaintiff’s damages. The 

only difference is that the statute places no 

precisely stated ceiling over the amount of 

the defendant's profits which may be 

included in the award.”). Thus, if there is 

evidence in the record to support an 

enhancement of defendant’s profits, 

BeautyBank, Inc. v. Harvey Prince LLP, No. 

Case 1:07-cv-05898-RJS-JCF Document 234 Filed 09/30/12 Page 19 of 23
20

10 Civ. 955 (DAB) (GWG), 2011 WL 

671749, at *5-6 (S.D.N.Y. Feb. 24, 2011), the 

Court may order such an award so long as the 

amount “constitute[s] compensation and not a 

penalty,” 15 U.S.C. § 1117(a), see Doctor’s 

Assocs. Inc. v. Agnello, No. 08 Civ. 5452 

(WHP), 2009 WL 2878098, at *2 (S.D.N.Y. 

Aug. 27, 2009).

The Court finds that the award of 

Gnosis’s profits must be increased in order to 

fully compensate Merck for the improved 

market position Gnosis enjoyed solely as a 

result of its false advertising. At the time 

Gnosis entered the market, Merck was the 

only manufacturer of the pure S-Isomer 

Product. (Weibel Aff. ¶ 12.) Gnosis’s false 

advertising allowed it to enter the lucrative 

methyltetrahydrofolate market, meaning 

Gnosis’s very existence as a competitor was 

predicated on its misdeeds. Consequently, 

Gnosis’s sales in that market even after it 

corrected its advertising – and therefore after 

the window for accounting – stemmed from 

its initial deception. Because the profits 

award considers only sales made during the 

period in which Gnosis falsely advertised, 

Merck has not been adequately compensated 

for losses incurred after this window closed. 

Additionally, a profits award alone cannot 

fully capture Merck’s loss of market share, 

customer loyalty, and potential customers as a 

result of Gnosis’s actions. Cf. Mobius Mgmt. 

Sys., Inc. v. Fourth Dimension Software, Inc., 

880 F. Supp. 1005, 1025 (S.D.N.Y. 1994)

(enhancing monetary award to compensate 

plaintiff for the “difficult to quantify” loss of 

customer goodwill). Because it is thus

impossible to return the parties to their 

respective positions prior to Gnosis’s false 

advertising campaign, an enhancement is all 

the more appropriate. Cf. N.Y. Racing Ass’n, 

Inc. v. Stroup News Agency Corp., 920 F. 

Supp. 295, 301 (N.D.N.Y. 1996) (enhancing 

award of defendant’s profits when the court 

could not “compute the value of the 

intangible benefits [defendant] received as a 

result of its deliberate, flagarant, and mulish 

violation of [plaintiff’s] mark”). 

Merck has requested that this Court order 

an award of three times Gnosis’s profit – an 

amount the Court deems appropriate. Though 

an award of three times profit is an imprecise 

measure of compensation, the impossibility of 

gauging Merck’s losses along with the 

undeniable existence of those losses makes it 

a proper, if crude, measure. See Getty

Petroleum Corp., 858 F.2d at 110 (noting that 

the “enhancement provision . . . was included 

to enable courts to redress fully plaintiffs 

whose actual damages were difficult to 

prove”). Further, while an award under the 

Lanham Act must promote a compensatory 

and not punitive purpose, it is no small matter 

that Gnosis may be deterred from again 

engaging in such brazen behavior by being 

required to fully account for its actions. See

id. at 113 (“To the extent that deterrence of 

willful infringement is needed, the statutorily 

provided remedies of [the Lanham Act] are 

sufficient: a district court is empowered to

enhance a monetary recovery of damages or 

profits, or to award plaintiff a full accounting 

of an infringer's profits.” (citations omitted)). 

This is particularly true because the Court 

finds it inappropriate to grant the majority of 

injunctive relief Merck seeks, see infra Part 

IV; if Gnosis were not required to financially

compensate Merck, it would largely benefit 

from its violations. Thus, the Court awards 

Merck damages in the amount of 

$526,994.13.

Finally, Merck is awarded prejudgment 

interest from March 2006, when Gnosis 

entered the market, until the date of this 

Opinion at the rate set forth in 26 U.S.C. 

§ 6621(a)(2). Cf. TigerCandy Arts, Inc. v. 

Blairson Corp., No. 09 Civ. 6215 (GBD) 

(FM), 2012 WL 760168, at *1 (S.D.N.Y. Feb. 

23, 2012). Interest should be calculated based 

Case 1:07-cv-05898-RJS-JCF Document 234 Filed 09/30/12 Page 20 of 23
21

on Gnosis’s annual profits, accumulating 

from March 2006 through March 2009, and 

the total amount of those profits thereafter. 

IV. INJUNCTIVE RELIEF

Merck further asks this Court to 

permanently enjoin Gnosis from: (1) labeling 

its 6R,S Mixture Product or any other product 

that is not a pure 6S Isomer Product with the 

name 6S-5-methyltetrahydrofolate or any 

synonyms thereof, (2) labeling any of its 

products with the names L-5 

methyltetrahydrofolate, L-5-MTHF, or any 

synonyms thereof, and (3) selling any 

methylfolate product for five years. (Pl.’s 

Post-Tr. Mem. at 24.) Merck also asks the 

Court to order Gnosis to engage in a 

campaign of corrective advertising at Merck’s 

discretion. (Id.)

To obtain a permanent injunction, a 

plaintiff must satisfy a four factor test, 

demonstrating: “(1) that it has suffered an 

irreparable injury; (2) that remedies available 

at law, such as monetary damages, 

are inadequate to compensate for that injury; 

(3) that, considering the balance of hardships 

between the plaintiff and defendant, a remedy 

in equity is warranted; and (4) that the public 

interest would not be disserved by a 

permanent injunction.” eBay Inc. v. 

MercExchange, L.L.C., 547 U.S. 388, 391 

(2006). “The historic purpose of an

injunction is to ensure that past wrongdoing is 

not repeated, not to further punish the 

wrongdoer. Accordingly, an injunction is 

unnecessary if there is no reasonable 

likelihood that the conduct at issue will be 

repeated.” Pedinol, 570 F. Supp. 2d at 507.

To prove irreparable harm, a Lanham Act 

plaintiff “must show two things: ([1]) that the 

parties are competitors in the relevant market, 

and ([2]) that there is a ‘logical causal 

connection between the alleged false 

advertising and its own sales position.’” 

Zeneca Inc. v. Eli Lilly & Co., No. 99 Civ. 

1452 (JGK), 1999 WL 509471, at *36 

(S.D.N.Y. July 19, 1999) (quoting CarterWallace, 631 F.2d at 190-91). As noted 

above, the Court has found that Merck and 

Gnosis are competitors in the market for 

methyltetrahydrofolate ingredients. (See Tr. 

51:10-12, 884:17-23.) Moreover, there is 

certainly a logical connection between 

Gnosis’s false advertising and Merck’s sales 

position – Gnosis sells a cheaper competing 

product that it attempts to pass off as being 

the same as Merck’s product. Therefore, the 

Court finds that Merck has met its burden of 

demonstrating irreparable harm.

While damages have partially 

compensated Merck for its injuries, Gnosis 

has still gained its market position as a result 

of its false advertising. The damages award, 

because it is based only on sales up to March 

2009, does not fully compensate Merck. 

Accordingly, the Court finds that equitable 

relief is appropriate.15

That said, it appears to the Court that, 

balancing the equities and examining the 

public interest, Merck is entitled to some of 

the relief it seeks, but not the full extent. 

First, the Court will permanently enjoin 

Gnosis from labeling its 6R,S Mixture 

Product with the names 6S-5-

methyltetrahydrofolate, L-5 methyltetrahydrofolate, L-5-MTHF, or any synonyms 

 15 Gnosis contends that no equitable relief is 

appropriate because it voluntarily stopped using the 

terms at issue. (Defs.’ Post-Trial Mem. at 25.) 

However, as Gnosis only stopped using those terms in 

response to this litigation, and only then after this case 

had been ongoing for almost two years (see Berna Rev. 

Aff. ¶ 53), the Court has no confidence that Gnosis’s 

wrongdoing will not be repeated absent a prohibitory 

injunction. Indeed, Gnosis’s conduct throughout this 

case – during discovery, in depositions, and even at trial 

– suggests that injunctive relief is essential to ensure 

future compliance.

Case 1:07-cv-05898-RJS-JCF Document 234 Filed 09/30/12 Page 21 of 23
22

thereof. As discussed above, Gnosis’s 

application of these terms to its 6R,S Mixture 

Product is literally false, and it is well settled 

that there is no public interest in false 

advertising. See Reckitt Benckiser, Inc. v. 

Motomco Ltd., 760 F. Supp. 2d 446, 456-57 

(S.D.N.Y. 2001). While Merck seeks a 

broader injunction preventing Gnosis from 

using the terms L-5 methyltetrahydrofolate 

and L-5-MTHF with regard to any of its 

products, the Court sees no reason why 

Gnosis should be prevented from using these 

terms, so long as they accurately reflect the 

product they advertise. 

The Court also denies Merck’s request to 

ban Gnosis from the methylfolate market for 

a period of five years. The Court has already 

enjoined Gnosis from repeating the false 

advertising at issue and has addressed many 

of the concerns associated with Gnosis’s 

unfairly acquired market position by 

enhancing the award of Gnosis’s profits. 

Accordingly, a market ban for a period of five 

years is not “narrowly tailored to fit the 

specific legal violations” and imposes an 

“unnecessary burden[] on lawful activity.” 

See Waldman Pub. Corp. v. Landoll, Inc., 43 

F.3d 775, 785 (2d Cir. 1994) (denying 

injunctive relief that would have prohibited 

defendant from publishing “adapted classics” 

instead of “books with a false representation 

as to their source” for those reasons). 

Furthermore, banning non-infringing Gnosis 

products from the market would “disserve[]” 

the public interest by artificially inflating 

prices and decreasing consumer choice. 

Merck cites only one case supporting the 

imposition of such a drastic penalty, and the 

Court has no difficulty distinguishing it. Cf. 

E.G.L. Gem Lab Ltd. v. Gem Quality Inst., 

Inc., 90 F. Supp. 2d 277, 310 (S.D.N.Y. 2000) 

aff’d, 4 F. App’x 81 (2d Cir. 2001) (ordering 

permanent ban on use of corporate name only, 

where entire corporate identity had been built 

on false claim of association with industry 

leader, and endorsing use of corrective 

advertising in less egregious cases).

Therefore, the Court will not ban Gnosis from 

selling methylfolate products in the United 

States, provided that it complies with the 

Court’s prior directives. 

Finally, the Court will order Gnosis to 

engage in a campaign of corrective 

advertising, to explain the differences 

between the pure 6S Isomer Product and the 

6R,S Mixture Product. Such corrective 

advertising shall be approved by the Court, 

with input from Merck. Alternatively, the 

parties may elect to have Merck develop its 

own corrective advertising campaign, for 

which Merck shall be compensated by 

Gnosis.

V. ATTORNEYS’ FEES

Merck also seeks attorneys’ fees. In 

“exceptional cases,” a court may award 

attorneys’ fees to the prevailing party. 15 

U.S.C. § 1117(a). “Such fees should be 

awarded only on evidence of fraud or bad 

faith.” Twin Peaks Prods., Inc. v. Publ’ns 

Int’l, Ltd., 996 F.2d 1366, 1383 (2d Cir. 1993) 

(internal quotation marks omitted). 

“Exceptional circumstances include willful 

infringement.” Bambu Sales, Inc. v. Ozak 

Trading Inc., 58 F.3d 849, 854 (2d Cir. 1995) 

(internal quotation marks omitted). 

As noted above, the Court finds that 

Gnosis’s false advertising in this case was 

willful and done in bad faith. In addition, 

much of Gnosis’s litigation strategy was 

conducted in bad faith, with senior officials, 

including Berna, frustrating the litigation 

process at every turn, from withholding 

documents in discovery and obstructing 

depositions (see Merck, 2010 WL 1631519, at 

*1) to testifying falsely under oath at the 

bench trial in this action. In light of this 

conduct, and Gnosis’s utter lack of respect for 

Case 1:07-cv-05898-RJS-JCF Document 234 Filed 09/30/12 Page 22 of 23
the judicial process, the Court finds that this 

case is one justifying the award of attorneys' 

fees: 6 

VI. CONCLUSION 

For the reasons stated above, the Court 

finds in favor of Merck on its false 

advertising and contributory false advertising 

claims under the Lanham Act, and awards 

damages in the amount of $S26,994.13. The 

Court also grants injunctive relief as follows: 

(1) Gnosis is permanently enjoined 

from advertising its 6R,S Mixture 

Product with the names 6S-Smethyltetrahydrofolate, L-S methyltetrahydrofolate, L-S-MTHF, or any 

synonyms thereof. 

(2) Gnosis is ordered to engage in a 

campaign of corrective advertising 

that is either approved by the Court or 

developed by Merck. 

IT IS HEREBY ORDERED THAT, no 

later than October 30, 2012 Merck shall 

submit a fee application to the Court, 

including a sworn declaration providing each 

attorney's background, experience, and 

billing rate at the time the work was 

expended, as well as copies of the attorneys' 

time sheets. Gnosis may submit papers 

opposing the amount of fees requested, 

though not the imposition of fees themselves, 

no later than November IS, 2012. 

The Clerk of the Court is respectfully 

directed to enter judgment in favor of Merck 

16 Gnosis also seeks attorneys' fees against Merck. As 

Merck is the prevailing party in this litigation, such fees 

are obviously not appropriate and the request is denied. 

23 

and to terminate the motions located at docket 

entries 214,216, and 223. 

SO ORDERED. 

United States District Judge 

Dated: September 30, 2012 

New York, New York 

* * * 

Plaintiff Merck Eprova AG is represented 

by Robert Elliot Hanlon, Esq., Thomas Jude 

Parker, Esq., Lance Anders Soderstrom, Esq., 

Natalie Christine Clayton, Esq., and Victoria 

Elizabeth Spataro, Esq., of Alston & Bird, 

LLP, 90 Park Avenue, New York, New York 

10016. 

Defendants Gnosis S.p.A. and Gnosis 

Bioresearch S.A. are represented by William 

Don. Chapman, Esq., and Catherine A. Close, 

Esq" of Julander, Brown, Bollard & 

Chapman, 9110 Irvine Center Drive, Irvine, 

California 92618, and Bryon L. Friedman, 

Esq. of Littleton, Joyce, Ughetta, Park & 

Kelly, LLP, 39 Broadway, 34th Floor, New 

York, New York 10006, 

USDSSDNY 

DOCUMENT 

ELECTRONICALLY FILED 

DOC#: ______ ~-.---

DATE FILED: Cf I ~o I J-p \2-

Case 1:07-cv-05898-RJS-JCF Document 234 Filed 09/30/12 Page 23 of 23