Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Simone v. VSL Pharmaceuticals, Inc.

United States District Court, D. Maryland

June 20, 2016

CLAUDIO DE SIMONE, Plaintiff/Counterclaim Defendant,
v.
VSL PHARMACEUTICALS, INC. and SIGMA-TAU PHARMACEUTICALS, INC., Defendants/Counterclaim Plaintiffs,
v.
EXEGI PHARMA, LLC, DANISCO USA, INC., and MENDES SA, Third-Party Defendants.

          MEMORANDUM OPINION

          THEODORE D. CHUANG UNITED STATES DISTRICT JUDGE

         In the 1990s, Plaintiff and Crossclaim Defendant Claudio De Simone, in collaboration with two other scientists, invented a probiotic that De Simone would later bring to the United States market through a partnership with Defendants and Crossclaim Plaintiffs VSL Pharmaceuticals, Inc. ("VSL") and Sigma-Tau Pharmaceuticals, Inc. ("Sigma-Tau") (collectively, "the VSL Parties"). That probiotic was sold and prescribed under the VSL-owned trademark "VSL#3." In 2015, De Simone parted ways with the VSL Parties and began a partnership with Third-Party Defendant ExeGi Pharma, LLC ("ExeGi") to bring his probiotic formulation to market under the name "Visbiome." De Simone and ExeGi (collectively, "the De Simone Parties") have made efforts to compete with VSL#3 during the pendency of this lawsuit, in which the parties dispute who rightfully owns certain intellectual property connected with the probiotic and whether De Simone breached any contractual or fiduciary duties to his former business partners by now allying with ExeGi. As relevant here, the VSL Parties allege that the De Simone Parties have infringed the VSL#3 trademark in their efforts to market Visbiome and have falsely advertised that VSL#3 is no longer on the market or that Visbiome is the febranded version of that product. It is these trademark infringement and false advertising claims that are presently before the Court, as part of Motions for a Preliminary Injunction filed by the VSL Parties seeking to enjoin the De Simone Parties from continuing to engage in this allegedly unlawful activity. The Motions are fully briefed, the Court held an evidentiary hearing on May 19, 2016, and it heard oral argument on the Motions at a second hearing on June 3, 2016. For the reasons outlined below, the Motions for a Preliminary Injunction are GRANTED IN PART and DENIED IN PART.

         BACKGROUND

         I. The Court's Orders

         A. The September 2015 Order

         On September 23, 2015, this Court issued a Memorandum Opinion and Order granting in part and denying in part Motions for a Preliminary Injunction (the "First Preliminary Injunction Motions") filed by the VSL Parties. The full history among the parties that has led to this present litigation is set out in detail in that Opinion and will not be repeated here. As relevant to the present Motions for a Preliminary Injunction ("Second Preliminary Injunction Motions"), in the First Preliminary Injunction Motions, VSL sought to enjoin ExeGi from distributing various marketing and packaging materials for Visbiome because, it contended, those materials infringed the "VSL#3" trademark. The materials at issue included the website depiction of the Visbiome product box that referred to the product as the "Original Formula VSL#3 Probiotic Blend" and "Visbiome/VSL#3 blend." First Mot. Prelim. Inj. Exs. BB & CC, ECF Nos. 55-31 & 55-32. On September 23, 2015, the Court concluded that the original Visbiome materials likely infringed the VSL#3 mark and thus enjoined ExeGi from using those materials and the identifiers "Original Formula VSL#3 Probiotic Blend" and "Visbiome/VSL#3 blend" in any future marketing materials or packaging. First Prelim. Inj. Mem. Op. at 42, ECF No. 99.

         B. The November 2015 Order

         On November 12, 2015, after reviewing ExeGi's revised marketing materials, the Court found that they continued to be likely to confuse consumers about the relationship between Visbiome and VSL#3. The Court accordingly issued an Order enjoining ExeGi from using the following on any of its marketing or packaging materials:

1. The phrase "Same as Original Formula VSL#3 Probiotic Blend."
2. References to clinical studies as "Reported as VSL#3."
3. The general statement that Visbiome is "the same" as VSL#3.

Nov. 12, 2015 Order at 2, ECF No. 113.

         In that November 12, 2015 Order (the "November 2015 Order"), the Court also provided safe harbor language, which the Court indicated would likely constitute a fair use of the VSL#3 trademark if employed within the parameters set out by the Court. Specifically, the Court stated that ExeGi could use in the Visbiome marketing materials and packaging:

1. The phrase "Compare to Ingredients in VSL#3, " as long as it is accompanied in close proximity by the disclaimers that VSL#3 is a registered trademark of, and manufactured exclusively for, VSL Pharmaceuticals, Inc., and that Visbiome is manufactured exclusively for ExeGi Pharma, LLC and is not affiliated with, endorsed by, or distributed by VSL Pharmaceuticals, Inc.
2. The statement that "Visbiome contains the same strains, in the same concentrations and proportions, as the VSL#3 probiotic blend as produced before [Date], " provided that such a statement appears only once in the Visbiome materials and is accompanied in close proximity by the disclaimers that VSL#3 is a registered trademark of, and manufactured exclusively for, VSL Pharmaceuticals, Inc., and that Visbiome is manufactured exclusively for ExeGi Pharma, LLC and is not affiliated with, endorsed by, or distributed by VSL Pharmaceuticals, Inc.
3. Accurate information about De Simone's role in developing VSL#3 that makes clear that there is no current affiliation between Visbiome and ExeGi Pharma, LLC on the one hand and VSL#3 and VSL on the other. For example, the following language would not be barred by the injunction: "In the mid-1990s, Professor Claudio De Simone, M.D. invented a proprietary blend of probiotic strains and collaborated with VSL Pharmaceuticals, Inc. to produce and market it as 'VSL#3, ' a trademark owned by VSL Pharmaceuticals, Inc. In 2014, Professor De Simone decided to leave VSL Pharmaceuticals and is now collaborating with ExeGi Pharma, LLC to produce Visbiome, a probiotic using the same proprietary blend of probiotic strains that De Simone originally invented." Any discussion of De Simone's role in the creation of VSL#3 and his history with VSL must be accompanied in close proximity by the disclaimer that VSL#3 is a registered trademark of, and manufactured exclusively for, VSL Pharmaceuticals, Inc., and that Visbiome is manufactured exclusively for ExeGi Pharma, LLC and is not affiliated with, endorsed by, or distributed by VSL Pharmaceuticals, Inc.

Id. at 3.

         C. The February 2016 Order

         ExeGi decided to launch Visbiome into the marketplace on February 1, 2016, the day after the 2010 Know-How License Agreement between VSL and Danisco, the original manufacturer of VSL#3 and current manufacturer of Visbiome, expired on January 31, 2016.[1]On January 28, 2016, Saara Khadir of JPA Health Communications, allegedly acting on behalf of ExeGi, sent an email to several U.S. media outlets stating that, "The probiotic formulation that's recommended in multiple clinical practice guidelines for those three conditions will be available under a new name, " which it identified as Visbiome. VSL Mem. Supp. Second Mot. Prelim. Inj. at 11, ECF No. 144.

         On February 1, 2016, ExeGi issued a press release and a LinkedIn posting. Conforming to the safe harbor language of the November 2015 Order, the press release stated that Visbiome "has the same strains, in the same concentrations and proportions, and is therapeutically equivalent to the VSL#3 probiotic blend produced before January 31, 2016, " with a footnote to "VSL#3" containing the same language (the "Disclaimer") suggested in the November 2015 Order:

VSL#3 is a registered trademark of, and manufactured exclusively for, VSL Pharmaceuticals, Inc. Visbiome is manufactured exclusively for ExeGi Pharma, LLC and is not affiliated with, endorsed by, or distributed by VSL Pharmaceuticals, Inc.

Hr'g Exhibit No. 111-1: Press Release. The press release also redefined those specific strains and concentrations as the "De Simone Formulation, " nomenclature designed to indicate a continuity with VSL#3 without the actual use of that trademark, and asserted that the De Simone Formulation had undergone numerous scientific trials and was the subject of "over 60 peer-reviewed studies." Id.

         Echoing the safe harbor language relating to Professor De Simone's role with ExeGi, the press release stated:

Professor De Simone initially partnered with VSL Pharmaceuticals, Inc. to produce and market his proprietary blend of probiotic strains under the designation "VSL#3, " which is a trademark owned by VSL Pharmaceuticals, Inc. Professor De Simone is now collaborating exclusively with ExeGi Pharma, LLC to produce Visbiome.

         However, the release then added:

The license agreement between Professor De Simone and VSL Pharmaceuticals, Inc., which provided VSL Pharmaceuticals, Inc. the rights to market the De Simone Formulation using the 'VSL#3' trademark, expired on January 31, 2016.

(the "License Expiration Language")- Press Release at 1-2.

         That same day, ExeGi sent a message to its 85 LinkedIn followers stating:

Have you prescribed the medical food VSL#3 in the past to your patients with IBS, Pouchitis or Ulcerative Colitis? The De Simone formulation you've been prescribing to your patients will now be available as Visbiome. Learn more at http://buff.ly/InABFRY.

Hr'gEx. 111-2: LinkedIn Posting. The posting did not contain the Disclaimer.

         VSL promptly took issue with these materials and notified the Court of its intent to seek a temporary restraining order ("TRO") and preliminary injunction that would prevent ExeGi from circulating these and any similar marketing materials, bar ExeGi from making reference to clinical studies on VSL#3, and issue an order to show cause as to why those materials did not violate the November 2015 Order. The Court convened a conference call on February 2016 and brokered an agreement that would prove to be a precarious detente. In exchange for the VSL Parties agreeing not to proceed with their proposed motion, the De Simone Parties agreed to the entry of an order, issued on February 4, 2016 ("the February 2016 Order"), imposing various additional restrictions on its marketing activities, including:

1. In the press release . . . and in any future public materials using the same or similar ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.