Stiefel Laboratories, Inc. v. Brookstone Pharmaceuticals, L.L.C.

Case: 12-14309 Date Filed: 08/19/2013 Page: 1 of 10
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 12-14309
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D.C. Docket No. 1:08-cv-03773-CAP
STIEFEL LABORATORIES, INC.,
Plaintiff - Appellant,
versus
BROOKSTONE PHARMACEUTICALS, L.L.C.,
Defendant - Appellee.
________________________
Appeal from the United States District Court
for the Northern District of Georgia
________________________
(August 19, 2013)
Before MARTIN and FAY, Circuit Judges, and EDENFIELD, * District Judge.
PER CURIAM:
*
Honorable B. Avant Edenfield, United States District Judge for the Southern District of
Georgia, sitting by designation.
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Stiefel Pharmaceutical (Stiefel) sued Brookstone Pharmaceutical
(Brookstone), claiming that Brookstone falsely advertised its acne gel, BPO Gel, as
a generic equivalent to Stiefel’s acne gel, Brevoxyl, in violation of section 43(a) of
the Lanham Act, 15 U.S.C. § 1125(a)(1)(B). The district court granted summary
judgment in favor of Brookstone, determining that Stiefel did not present enough
evidence for a reasonable jury to find that Brookstone violated the Lanham Act. 1
Stiefel appealed. After careful consideration, and having had the benefit of oral
argument, we affirm.
I. BACKGROUND AND PROCEDURAL HISTORY
Stiefel and Brookstone are pharmaceutical companies who produce
competing prescription topical acne gels. Even though BPO Gel and Brevoxyl are
prescription drugs, they are “generally recognized as safe and effective” (GRAS/E)
which means a non-name brand drug, such as BPO Gel, does not need approval
from the Food and Drug Administration (FDA) before calling itself a “generic” for
a name-brand drug, such as Brevoxyl. In fact, even if a pharmaceutical company
asked the FDA for approval to call its GRAS/E drug a generic, the FDA would not
give permission because it does not approve or accept comparative testing for this
category of drugs. Because the FDA does not regulate the labeling of generics for
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Stiefel also alleged violations of Georgia state law. Because the same factual and legal analysis
is used for these claims as the Lanham Act claims, the district court also found summary
judgment appropriate on the state-law claims. Stiefel does not argue this on appeal, except to
mention that if summary judgment is reversed for the federal-law claims, it should also be
reversed for the state-law claims.
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GRAS/E drugs, these drugs, including BPO Gel and Brevoxyl, are not found in the
so-called “Orange Book,” which is the FDA publication listing FDA-approved
generics.
Brookstone competed with Stiefel by advertising its BPO Gel as a generic
for Stiefel’s Brevoxyl. Stiefel says that BPO Gel is not a generic for Brevoxyl, so
Brookstone falsely advertised BPO Gel as a generic in violation of the Lanham
Act. Specifically, Stiefel claims that three categories of Brookstone’s
advertisements violated the Lanham Act. First, Brookstone submitted “Labeling
Statements” to a pharmaceutical database listing the product name as “Benzoyl
Peroxide 4% Gel” and “Benzoyl Peroxide 8% Gel” instead of “BPO 4% Gel” and
“BPO 8% Gel.” Second, in “Marketing Statements,” Brookstone announced
through several communications that its BPO Gel was a generic for Brevoxyl.
Third, on a Texas Medicaid Form, Brookstone indicated that BPO Gel was graded
an “A” in the “Orange Book.”
In granting summary judgment in favor of Brookstone, the district court
found that Stiefel failed to produce enough evidence for a reasonable jury to
conclude that Brookstone’s Marketing Statements were false or misleading, as
required to establish a violation of the Lanham Act. For the Labeling Statements
and the Texas Medicaid form, the district court found that Steifel produced
competent proof of falsity. However, the court concluded that Stiefel did not
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present enough evidence of the material impact of these false statements to survive
summary judgment.
II. DISCUSSION
We review a district court’s grant of summary judgment de novo, applying
the same legal standard as the district court. Whatley v. CNA Ins. Cos., 189 F.3d
1310, 1313 (11th Cir. 1999). Summary judgment should be granted only when
“there is no genuine issue as to any material fact and the movant is entitled to
judgment as a matter of law.” Fed. R. Civ. P. 56(a). In making this decision, we
view all evidence and draw all reasonable inferences in favor of the party opposing
summary judgment. Whatley, 189 F.3d at 1313.
To establish a false advertising claim under section 43(A) of the Lanham
Act, Stiefel must establish that 1) Brookstone’s ads were false or misleading; 2)
Brookstone’s ads deceived, or had the capacity to deceive, consumers; 3) the
deception had a material effect on purchasing choices; 4) BPO Gel affects
interstate commerce; and 5) Stiefel has been, or is likely to be, injured because of
the false advertising. See Johnson & Johnson Vision Care, Inc. v. 1-800 Contacts,
Inc., 299 F.3d 1242, 1247 (11th Cir. 2002).
Stiefel challenges three of the district court’s conclusions. First, Stiefel
contends that it presented evidence that Brookstone’s statements were both false
and misleading, and thus, the district court got it wrong by considering only
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Stiefel’s evidence that Brookstone’s statements were false, and not whether
Brookstone’s statements were misleading. Second, Stiefel challenges the district
court’s conclusion that Stiefel did not present competent evidence that
Brookstone’s statements were literally false. Finally, for the statements on the
Texas Medicaid form and the Labeling Statements, Stiefel argues that the district
court erred in concluding there was insufficient evidence for a reasonable jury to
decide that the false statements had a material impact. We consider each argument
in turn.
A.
First, Stiefel argues the district court erred in only considering whether
Brookstone’s statements were literally false. Under the first element of the test for
a violation of the Lanham Act, a plaintiff must show either that the statements were
literally false or misleading. Hickson Corp. v. N. Crossarm Co., Inc., 357 F.3d
1256, 1261 (11th Cir. 2004). The evidence that a plaintiff must present to satisfy
the first element depends on whether the plaintiff is claiming the statements were
literally false or misleading. See Johnson & Johnson, 299 F.3d at 1247. A
plaintiff alleging misleading statements must present evidence of consumer
deception, while a plaintiff alleging literally false statements need not present
evidence of deception. Id. Here, Stiefel was not explicit about whether it was
claiming Brookstone’s statements were false or misleading. Because Stiefel did
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not point to evidence supporting any direct claims that Brookstone’s statements
were misleading, the district court decided that Stiefel was alleging Brookstone’s
statements were literally false. The district court then proceeded with the summary
judgment analysis only on the theory of literal falsity.
Stiefel argues the district court erred in limiting its claims to literal falsity
because its evidence included an expert report, which Stiefel says it offered for the
purpose of proving the statements were misleading. However, Stiefel did not
clearly identify this report as supporting, as the theory of the case, that
Brookstone’s statements were misleading. Instead, it appears that Stiefel argued
that Brookstone’s statements were false, and this report was cited to advance
arguments in support of the falsity theory. While Stiefel points us to a few uses of
the word “misleading” in its brief in opposition to summary judgment, none clearly
support the conclusion that Stiefel was advancing a theory that Brookstone’s
statements were misleading within the meaning of the Lanham Act. While we
draw all reasonable inferences in favor of Stiefel, we will not marshal evidence in
support of arguments which were not supported in this way for the District Judge.
Cf. Peppers v. Coates, 887 F.2d 1493, 1498 (11th Cir. 1989) (“[W]hen a motion
for summary judgment is made and supported according to Rule 56, the
nonmoving party’s response must set forth specific facts showing a genuine issue
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for trial.”). For these reasons, we consider only whether Brookstone’s statements
were literally false.
B.
Stiefel next challenges the district court’s conclusion that it did not produce
competent evidence to show the literal falsity of Brookstone’s marketing
statements that BPO Gel is a generic for Brevoxyl. For two reasons, we conclude
that Stiefel did not produce sufficient proof for a reasonable jury to conclude that
Brookstone’s statements were literally false.
First, Stiefel did not establish the meaning of the term “generic” in the
relevant context. In considering false advertising claims under the Lanham Act,
we “must analyze the message conveyed in full context,” Johnson & Johnson, 299
F.3d at 1248 (quotation marks omitted), because it is only possible to determine the
falsity of an advertisement when it is considered contextually. See, e.g., Osmose,
Inc. v. Viance, LLC, 612 F.3d 1298, 1311 (11th Cir. 2010) (“This Court has
[repeatedly] recognized the importance of context when analyzing false advertising
claims.”).
Thus, we must examine the context in which we consider the meaning of the
term “generic.” Since BPO Gel and Brevoxyl are prescription drugs, Stiefel urges
us to look to the FDA definition of “generic” to derive the meaning of term.
Brookstone counters that the FDA definition of “generic” is not relevant here,
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because BPO Gel and Brevoxyl are GRAS/E drugs not subject to FDA approval.
Brookstone allows that the term “generic” has a different meaning in the context of
non-regulated drugs.
Our review of the record leads us to conclude that Stiefel did not present
competent evidence to show that, in the context of drugs not regulated by the FDA,
pharmacists understand the term “generic” to have the same meaning as it does in
the regulated context. On appeal, Steifel points to several pieces of evidence in
arguing that the FDA definition of “generic” should apply in the context of
GRAS/E drugs not subject to FDA-approval. None are availing. In fact, Stiefel’s
evidence reflects uncertainty about the meaning of the term “generic” in the
context of GRAS/E drugs. For example, three emails from Brookstone executives
address the potential dual meaning of the term “generic” in the regulated and non-
regulated context. Because Stiefel did not produce contextually appropriate
evidence in support of its definition of the term “generic,” a reasonable jury could
not decide that Brookstone’s statements were literally false.
Second, even if we assume that Stiefel did present evidence on the meaning
of the term “generic,” it did not present equivalency tests to show that
Brookstone’s BPO Gel was not a generic. While Stiefel argues that BPO Gel and
Brevoxyl have different ingredients, Stiefel stresses the only way to establish
whether a drug is “generic” as understood by the FDA is through bioequivalence
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testing. However, in its own statement of facts, Stiefel concedes that “BPO Gel
has never been tested for bioequivalence, pharmaceutical equivalence or
therapeutic equivalence to Brevoxyl Gel.” We agree with the district court’s
assessment that Stiefel’s arguments and evidence are contradictory: On the one
hand, Stiefel argues that Brookstone falsely stated that BPO Gel is a generic and
that equivalency testing is required to determine whether or not BPO Gel is a
generic. On the other hand, Stiefel presents no equivalency testing to show that
BPO Gel is not a generic. Because there is no evidence from which a reasonable
jury could conclude that Brookstone’s marketing statements claiming generic
equivalency were literally false, there is “an absence of evidence to support
[Stiefel’s] case,” and summary judgment is appropriate. See Celotex Corp. v.
Catrett, 477 U.S. 317, 325, 106 S. Ct. 2548, 2554 (1986).
C.
Finally, Stiefel argues the district court erroneously found that the false
statements in the Texas Medicaid form and the Labeling Statements did not have a
material impact on the consumer’s purchasing decision. Stiefel says it offered
evidence of materiality by showing that pharmacies “linked” BPO Gel and
Brevoxyl, which caused pharmacists to substitute the less expensive BPO Gel for
the more expensive Brevoxyl. Stiefel’s argument based on this evidence fails
because it shows only that Brookstone captured some of Stiefel’s market share; it
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does not show that Brookstone’s false statements influenced pharmacists’
purchasing choices. See Johnson & Johnson, 299 F.3d at 1250 (“The materiality
requirement is based on the premise that not all deceptions affect consumer
decisions.”); Osmose, 612 F.3d at 1319 (“In order to establish materiality, the
plaintiff must demonstrate that the defendant’s deception is likely to influence the
purchasing decision.” (quotation marks omitted)). Because Stiefel did not show
that Brookstone’s false statements on the Texas Medicaid form and the Labeling
Statements influenced consumer choices, the district court properly granted
summary judgment. See Osmose, 612 F.3d at 1319 (“Even if an advertisement is
literally false, the plaintiff must still establish materiality.”).
III. CONCLUSION
For these reasons, summary judgment is appropriate in favor of Brookstone.
The decision of the district court is AFFIRMED.
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