Case 3:03-cv-06025-FLW-TJB Document 640 Filed 06/05/09 Page 1 of 175 PageID: <pageID> UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY The Honorable Freda L. Wolfson, U.S.D.J. ___________________________________________ : BRACCO DIAGNOSTICS, INC., Civil Action No. 03-6025 : Plaintiff, : AMENDED OPINION : vs. : : AMERSHAM HEALTH, INC., et al., : Defendants. : _______________________________________ ____ APPEARANCES: Attorneys for Plaintiff Bracco Diagnostics, Inc. Arnold B. Calmann, Esq. Donald L. Rhoads, Esq. Saiber LLC Nicholas L. Coch, Esq. One Gateway Center Christopher A. Colvin, Esq. 13th Floor Albert B. Chen, Esq. Newark, New Jersey 07102 Kramer, Levin, Naftalis & Frankel, LLP 1177 Avenue of the Americas New York, New York 10036 Attorneys for Defendant Amersham Health Inc., Amersham Health AS, Amersham PLC Richard L. DeLucia, Esq. Charles A. Weiss, Esq. Jeffrey S. Ginsberg, Esq. Kenyon & Kenyon, LLP One Broadway New York, New York 10004 -1- Case 3:03-cv-06025-FLW-TJB Document 640 Filed 06/05/09 Page 2 of 175 PageID: <pageID> Glossary of Abbreviations AHI Amersham Health Inc. (U.S.-based Counterclaim Plaintiff) ASD GEH Area Sales Director AWC Adequate and well-controlled study BDI Bracco Diagnostics Inc. [witness] D Designated deposition testimony [witness] Dec Designated declaration CE Continuing Education for doctors, nurses and technicians CIN Contrast Induced Nephropathy or renal damage caused by x-ray contrast medium CM Contrast Medium or Contrast Media CME Continuing Medical Education for doctors CMS Centers for Medicare and Medicaid Services CT Computer Tomography. A type of x-ray procedure where the CM is given by i.v. administration CT DCAM Novation's DCAM for CT (i.e., x-ray) contrast media CT+MR DCAM Novation's DCAM for both CT (i.e., x-ray) and MR contrast media C x Bracco's Proposed Post-Trial Conclusion Of Law at paragraph "x" Dx : y Defendant's Trial Exhibit "x" at page "y" (where y is the last three numbers of a Bates number, if applicable) DCAM Decision Criteria Award Matrix DHRxns Delayed Hypersensitivity Reactions -2- Case 3:03-cv-06025-FLW-TJB Document 640 Filed 06/05/09 Page 3 of 175 PageID: <pageID> Dual DCAM Novation's DCAM for a dual source award for both CT (i.e., x-ray) and MR contrast media FC Financial Criteria FDA United States Food and Drug Administration GEH GEH Healthcare, which acquired the three named defendants, who in turn acquired Amersham and Nycomed GPO Group Purchasing Organization HOCM High Osmolar Contrast Medium i.a. intra-arterial (form of administration directly into an artery) i.v. Intra-venous (form of administration directly into a vein) IOCM GEH’s trademarked term, Isosmolar Contrast Medium ITB Novation's June 14, 2004 "Invitation To Bid" JACC Journal of the American College of Cardiology KOL Key Opinion Leader LBB "Low Best Bid" or "Low Best Bidder" LOCM Low Osmolar Contrast Medium MA Meta-Analysis, a type of clinical study analysis MACE Major Adverse Cardiac Events or Major Adverse Clinical Events, depending on the study design MR DCAM Novation's DCAM for MR contrast media MRI magnetic resonance imaging contrast media NAC N-acetylcysteine -3- Case 3:03-cv-06025-FLW-TJB Document 640 Filed 06/05/09 Page 4 of 175 PageID: <pageID> NEJM New England Journal of Medicine NFC Non-Financial Criteria NQWMI Non-Q-wave Miocardial Infarction RFA GEH’s responses to Bracco's requests for admissions RFP GPO Request For Proposal OTSheet Omnipaque Toss Sheet Px : y Plaintiff's Trial Exhibit "x" at page "y" (where y is the last three numbers of a Bates number, if applicable) PCI percutaneous cardiac intervention PO Pretrial Order POA Plan of Attack or Plan of Action PTCA Percutaneous Transluminal Coronary Angioplasty SR Systematic Review (type of clinical study analysis) TCT Transcatheter Cardiovascular Therapeutics (TCT) Scientific Symposium TF Novation's ICM Task Force URTBrochure Unchallenged Renal Tolerability Brochure x T y Trial Transcript Volume "x" at page "y" VVAT Visipaque Value Analyis Tool Contrast Agents Isovue Bracco x-ray contrast agent ProHance Bracco MRI contrast agent -4- Case 3:03-cv-06025-FLW-TJB Document 640 Filed 06/05/09 Page 5 of 175 PageID: <pageID> MultiHance Bracco MRI contrast agent Visipaque GEH x-ray contrast agent Omnipaque GEH x-ray contrast agent Omniscan GEH MRI contrast agent Optiray Tyco/Mallinckrodt x-ray contrast agent Hexabrix Tyco/Mallinckrodt x-ray contrast agent -5- Case 3:03-cv-06025-FLW-TJB Document 640 Filed 06/05/09 Page 6 of 175 PageID: <pageID> WOLFSON, United States District Judge: This matter comes before the Court upon a Complaint brought by Plaintiff Bracco Diagnostics Inc. (referred to herein as “Bracco”) against Defendants Amersham Health Inc., Amersham Health AS, and Amersham PLC (collectively referred to herein as “GEH”) for alleged false advertising in violation of the Lanham Act. In response, GEH filed a Counterclaim against Bracco for alleged false advertising of its own line of products. Bracco and GEH have competing product lines in the contrast medium healthcare industry. The crux of Bracco’s case is that GEH has falsely advertised the superiority of its product, Visipaque, over Bracco’s product, Isovue. The Court conducted a thirty-nine day bench trial with numerous experts1 and witnesses testifying as to each party’s product lines and the underlying clinical studies upon which GEH and Bracco have based their advertising campaigns. In light of the evidence presented at trial, the Court concludes that GEH did promote false messages which were sufficient in number to constitute actionable commercial advertisements or promotions under the Lanham Act, however the Court finds that Bracco has failed to establish a causal nexus between GEH’s false advertisements and Bracco’s alleged lost profit damages. In that regard, the Court determines that the greater number of GEH’s advertisements were in fact true and based on reliable scientific studies. The messages that the Court finds false are those that extrapolate beyond the studies’ results. In connection with Bracco’s claim, the Court finds that an injunction and damages for post and future corrective advertising are appropriate remedies to prevent future 1Since this was a bench, not a jury, trial, the parties agreed to forego pre-trial Rule 104 hearings and instead permit the experts to appear once at trial and that the Court could rule on the Daubert motions in its findings of fact and conclusions of law - after hearing the testimony. See infra Section III. -6- Case 3:03-cv-06025-FLW-TJB Document 640 Filed 06/05/09 Page 7 of 175 PageID: <pageID> violations of the Lanham Act. As to GEH’s counterclaim, GEH dismissed its claim for damages and Bracco has stipulated that it no longer uses the offending advertisements. Thus, although the Court finds that certain of Bracco’s ads were false, nonetheless, an injunction is not appropriate in this case. In addition, the Court imposes an alternative dispute mechanism applicable to both parties for safeguarding against any future false advertisements. I. Overview A. Parties and Product Lines GEH and Bracco market and sell x-ray contrast media ("CM") in the United States. CM are classified by osmolality. HOCM (high osmolar CM) have osmolalities of greater than 1500 mOsm/kg. LOCM (low osmolar CM) have osmolalities between 600 and 850 and include Omnipaque (iohexol), Isovue (iopamidol), Hexabrix (ioxaglate), Ultravist (iopromide), Iomeron (iomeprol), and Optiray (ioversol). The osmolality of blood is approximately 290 mOsm/kg. Both GEH and Bracco market LOCM; GEH sells Omnipaque and Bracco sells Isovue. In addition, GEH also markets a product called Visipaque (iodixanol) which it classifies as iso-osmolar or isotonic, (i.e. - its osmolality equals blood). Visipaque is referred to in various medical literature as an IOCM (iso-osmolar CM). Part of GEH’s advertising campaign is that its iso-osmolar CM performs better than LOCM. Visipaque was introduced in 1996, ten years after Omnipaque and Isovue were marketed and is the only “IOCM” available in the U.S. B. Procedural History On December 16, 2003, Bracco filed a four count Complaint in the District of New Jersey against GEH alleging: (1) dissemination of false and misleading advertisements in violation of Section 43(a) of the Lanham Act; and (2) N.J.S.A. 56:4-1, et seq.; (3) violations of the common law -7- Case 3:03-cv-06025-FLW-TJB Document 640 Filed 06/05/09 Page 8 of 175 PageID: <pageID> of unfair competition; and (4) negligent misrepresentations. GEH filed an Answer and two counterclaims against Bracco alleging: (1) dissemination into commerce of allegedly false and misleading statements concerning the relative safety of Omnipaque, Visipaque, and Isovue in violation of Section 43(a) of the Lanham Act; and (2) N.J.S.A. 56:4-1, et seq. GEH’s counterclaim was filed against Bracco and its foreign affiliates, Bracco S.p.A. and Bracco Imaging S.p.A. However, pursuant to an Order entered on September 7, 2004, GEH’s counterclaim against Bracco’s foreign affiliates was dismissed for lack of personal jurisdiction. Motions for Summary Judgment were denied by the Court, after which, a thirty-nine day bench trial was conducted between the period of May 7, 2007 and December 2007, followed by further written submissions. The Court held a hearing on May 15, 2008, wherein the Court resolved evidentiary objections regarding the admission of disputed exhibits. Subsequently, the parties submitted proposed Findings of Fact and Conclusions of Law, which were supplemented by Reply briefs and additional Daubert briefs to exclude expert testimony proffered by both sides. II. Findings of Fact A. Bracco’s Case in Chief As set forth below, the Court finds that GEH advertises and promotes Visipaque with establishment claims asserting that studies show it is superior in several ways, including renal and cardiovascular safety, pain, heat and discomfort.