Opinion ID: 6928650
Heading Depth: 2
Heading Rank: 3

Heading: Count 3 — Lanham Act Claim

Text: Count 3 of Mylan’s Third Amended Complaint introduces a new claim, namely that defendants AHP, Quantum, PBI, and Par each violated § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), by making false and misleading advertisements and representations about their generic drug products. Mylan maintains that its complaint properly alleges that each of the defendants’ package inserts, brochures, and other advertisements violated § 43(a) of the Lanham Act because they falsely represented or implied (1) that the defendants’ drugs had been properly approved by the FDA and (2) that the defendant’s drugs were “bioequivalent” to Mylan’s drugs. 9 In order to constitute a violation of § 43(a) of the Lanham Act, the contested statement or representation must be either false on its face or, although literally true, likely to mislead and to confuse consumers given the merchandising context. See, e.g., Castrol Inc. v. Pennzoil Co., 987 F.2d 939 (3d Cir.1993); Sandoz Pharmaceuticals Corp. v. Richardson-Vicks, Inc., 902 F.2d 222 (3d Cir.1990); see also Procter & Gamble Co. v. Chesebrough-Pond’s Inc., 747 F.2d 114, 118 (2d Cir.1984) (“ ‘Section 43(a) of the Lanham Act encompasses more than blatant falsehoods.’ ” (quoting Vidal Sassoon, Inc. v. Bristol-Myers Co., 661 F.2d 272, 277 (2d Cir.1981))). The parties dispute whether, for the purposes of Rule 12(b)(6), Mylan has sufficiently alleged the essential element of a false or misleading statement. Judge Smalkin dismissed Mylan’s Lanham Act claims on the grounds that the complaint failed to allege specifically that the defendants’ drugs were not in fact bioequiva-lent. The failure to allege non-bioequiva-lence, he concluded, was fatal to Mylan’s claim. Judge Smalkin correctly noted that, in order ultimately to succeed on its Lanham Act count, Mylan will have to show more evidence than mere proof that the defendants’ claims were supported by unpersuasive test results. “Rather the plaintiff must demonstrate that such tests are ‘not sufficiently reliable to• permit one to conclude with reasonable certainty that they established’ the claim made.” McNeil-P.C.C., Inc. v. Bristol-Myers Squibb Co., 938 F.2d 1644, 1549 (2d Cir.1991) (emphasis added) (quoting Chesebrough-Pond’s, 747 F.2d at 119). Given that ultimate standard and construing the complaint in a light most favorable to Mylan, we conclude that Count 3 alleges sufficient falsity to survive early dismissal under Rule 12(b)(6). The complaint repeatedly alleges, inter alia, that a defendant “falsely represented” that its product was “bioequivalent to its innovator counterpart and other approved generic equivalents;” that the product was “entitled to an AB rating” 10 from the FDA; or that the product was the “generic alternative” to the innovator drug. See, e.g., Third Am.Compl. ¶¶ 140, 146, 151, 155. In support of those claims, Mylan has alleged that approval of the defendants’ ANDAs had been obtained through “fraud” and ultimately was withdrawn and that the data for the ANDAs or bioequivalence studies had been “falsified” or was seriously “unreliable.” In one instance Mylan even has alleged that bioequivalence studies either had not been performed or had been performed on a drug manufactured differently from the one advertised. See id. ¶ 138. In short, Mylan has set forth in the complaint sufficiently particularized allegations of false or misleading representations to sustain, for now, Count 3. Put in other terms, we cannot say, when fairly reading the pleadings, that Mylan has failed to state a set of facts which, if proven, would entitle it to relief. 11 However, Mylan’s claims that the defendants’ falsely represented that their drugs had been “properly approved by the FDA” must fail. First, in its complaint, Mylan nowhere points to any statement or representation in the defendants’ advertising which declared “proper FDA approval.” Moreover, that fatal deficiency cannot be cured by contentions that the very act of placing a drug on the market, with standard package inserts often used for FDA-approved drugs, somehow implies (falsely) that the drug had been “properly approved by the FDA.” Such a theory is, quite simply, too great a stretch under the Lanham Act. We agree with the defendants that permitting Mylan to proceed on the theory that the defendants violated § 43(a) merely by placing their drugs on the market would, in effect, permit Mylan to use the Lanham Act as a vehicle by which to enforce the Food, Drug, and Cosmetic Act (“FDCA”) and the regulations promulgated thereunder. An attempt, by ingenious pleading, to escape one principle of law by making it appear that another not truly appropriate rule is applicable appears to have been attempted. Mylan, in short, is not empowered to enforce independently the FDCA. Cf Sandoz, 902 F.2d at 230 (“The Lanham Act is primarily intended to protect commercial interests .... [It] provides a private remedy to a commercial plaintiff who meets the burden of proving that its commercial interests have been harmed by a competitor’s false advertising. The [FDCA], in contrast, is not focused on the truth or falsity of advertising claims” but on protecting the public interest in safety and efficacy (citations omitted)); see also FDCA, 21 U.S.C. § 337 (authorizing enforcement proceedings only by the United States and, under some circumstances, by a state). In order to state a proper claim for relief under § 43(a) of the Lanham Act, Mylan was required to point to some claim or representation that is reasonably clear from the face of the defendants’ advertising or package inserts. That it did not do. Accordingly, that part of the complaint which alleges that the defendants violated the Lanham Act by representing or implying that the drugs had been “properly approved by the FDA” must be rejected.