You Say Yes, They Say No, No, No!

The District of New Jersey recently denied a defendant’s motion to dismiss a false advertising claim relating to advertising for its generic drug product. (G&W Laboratories, Inc. v. Laser Pharmaceuticals, LLC et al, 3-17-cv-03974 (NJD 2018-06-19, Order.)) This case is a good reminder that many types of branding and advertising are necessarily regulated by more than one entity, and that approval from one does not shield the owner from potential liability under the Lanham Act.

The G&W case involved drug manufacturers arguing over the defendant’s marketing of its product as “equivalent or substitutable” for plaintiff’s drug. Plaintiff submitted that the claims were literally or impliedly false because the products at issue allegedly did not contain the same active ingredients. In its motion to dismiss, defendant took the position that the issue of equivalency was within the FDA’s primary jurisdiction, and that plaintiff was attempting to use the Lanham Act to prevent it from selling its generic – in other words, the plaintiff was trying to make an impermissible end run around the FDCA.

The court disagreed, explaining that while the Lanham Act and the FDCA both regulate the advertising, marketing, and labeling of drugs, “the FDCA is primarily concerned with the safety and efficacy of new drugs, while the Lanham Act is focused on the truth or falsity of advertising claims.” The statutes serve different functions. Thus, plaintiff’s issue of whether defendant’s advertising of its product was literally or impliedly false was within the purview of the court.

This case is a good reminder that branding and advertising may need to meet the approval or criteria of more than one entity. Following are some examples of approvals that do not preclude the owner from potential liability under the Lanham Act:

• Registration of trademark as a business entity name with a Secretary of State;
• Registration of a domain name;
• Registering a trademark with a state trademark registry;
• Clearance of a drug name with the FDA;
• Labeling on food and beverage containers regulated by the Federal Food, Drug, and Cosmetic Act or the U.S. Department of Agriculture; and
• Certificate of Label Approval (COLAs) for beer, wine, and distilled spirits issued by the Alcohol and Tobacco Tax and Trade Bureau (TTB).

The takeaway from this case is that trademark clearance and advertising review should continue to be undertaken as part of the routine business clearances, and not overlooked because a brand or label has been otherwise approved by a different process.

This article appeared in the June 2018 issue of MarkIt to Market. To view our past issues, as well as other firm newsletters, please click here.