Stiefel Laboratories, Inc. v. Brookstone Pharmaceuticals, L.L.C. ( 2013 )


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  •                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                                                                          [DO NOT PUBLISH]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
                                  ________________________
    
                              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.
                      Case: 12-14309     Date Filed: 08/19/2013        Page: 2 of 10
    
    
           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
    1
      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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