Litigation Details for Genus Lifesciences Inc. v. Lannett Company, Inc. (D. Del. 2020)

Genus Lifesciences Inc. v. Lannett Company, Inc. (D. Del. 2020)

Docket		Date Filed	2020-06-08
Court	District Court, D. Delaware	Date Terminated	2021-10-20
Cause	35:1 Patent Infringement	Assigned To	Leonard Philip Stark
Jury Demand	Plaintiff	Referred To
Parties	LANNETT COMPANY, INC.
Patents	10,016,407; 10,149,843; 10,231,961; 10,413,505; 10,420,760; 10,857,095; 10,894,012; 10,933,060; 9,867,815
Attorneys	Blake B. Greene
Firms	K & L Gates, LLP
Link to Docket	External link to docket

Details for Genus Lifesciences Inc. v. Lannett Company, Inc. (D. Del. 2020)

Date Filed	Document No.	Description	Snippet	Link To Document
2020-06-08				External link to document
2020-06-08	1	Complaint	This is an action for patent infringement of U.S. Patent Nos. 9,867,815; 10,016,407; and 10,420,760 (collectively…. 15. United States Patent No. 10,016,407 (the “’407 patent”), titled “Pharmaceutical Compositions… THE PATENTS-IN-SUIT 12. United States Patent No. 9,867,815 (the “’815 patent”), titled…collectively, “the Patents-in-Suit”) under the patent laws of the United States, Title 35, United States…1338 because this is a patent infringement action that arises under the patent laws of the United States	External link to document
2020-06-08	14	Declaration	–18 of U.S. Patent No. 9,867,815; and claims 2–5 and 12–15 of U.S. Patent No. 10,016,407 arising from…2020 20 October 2021 1:20-cv-00770 830 Patent Plaintiff District Court, D. Delaware	External link to document
2020-06-08	28	Brief - Reply	10,016,407 (“the ’407 patent”); and claims 1, 4, 7–12, 15, and 18–20 of U.S. Patent No. 10,420,760 (“… U.S. Patent No. 9,867,815 (“the ’815 patent”); claims 1, 6, 9-11, 16, 19, and 20 of U.S. Patent No. 10,016,407…of the ’815 patent and claims 2–5, and 12–15 of the ’407 patent, (2) the Unasserted Patents, and (3) C-Topical…Genus sued Lannett for patent infringement on specific claims of three patents.1 In response, Lannett …(“the ’760 patent”) (collectively, “the Asserted Patents” and “the Asserted Claims”). 2 Lannett’s Memorandum	External link to document

Genus Lifesciences Inc. v. Lannett Company, Inc.: A Comprehensive Litigation Summary and Analysis

Introduction

The case of Genus Lifesciences Inc. v. Lannett Company, Inc. involves a complex legal battle in the pharmaceutical industry, focusing on allegations of false advertising, unfair competition, and anticompetitive practices. Here, we delve into the key aspects of the litigation and analyze the implications of the court's decisions.

Background

Genus Lifesciences Inc. (Genus) is a competitor of Lannett Company Inc. (Lannett) and its wholly owned subsidiary, Cody Laboratories, Inc. (Cody), in the market for cocaine hydrochloride nasal spray. Genus's product, GOPRELTO, competes directly with Lannett's product, C-Topical[3].

Claims and Allegations

Genus filed a lawsuit against Lannett and Cody, alleging several violations:

• False Advertising: Genus claimed that Lannett and Cody falsely advertised, marketed, and promoted C-Topical as if it were FDA-approved, despite it not having received such approval.
• Unfair Competition: Genus alleged that Lannett and Cody engaged in unfair competition by misleading customers and third-party intermediaries about the regulatory status of C-Topical.
• Monopolization: Genus also claimed that Lannett's actions were aimed at maintaining a monopoly in the market, preventing Genus from competing effectively[3].

Lanham Act Claims

The Lanham Act, which governs false advertising, was a central focus of the litigation. Genus argued that Lannett's statements and actions implied that C-Topical was FDA-approved, which was misleading. Key points include:

• Survey Evidence: Genus presented survey data showing that 91% of pharmacists believe all products they dispense are FDA-approved, supporting the claim that Lannett's marketing was deceptive[1].
• SEC Filings and Investor Calls: Lannett's statements in SEC filings and investor calls, describing C-Topical as "grandfathered" or sold under a "preliminary new drug application," were deemed potentially misleading by the court[3].
• Website and Packaging: The court considered whether Lannett's website and the packaging of C-Topical could be seen as implying FDA approval. While the packaging itself was not found to be overtly false, the meta description on Lannett's website suggesting C-Topical was a generic product could support a Lanham Act claim[1].

Sherman Act Claims

Genus also alleged violations of the Sherman Act, specifically monopolization claims against Lannett. However, the court found that Genus failed to state a monopolization claim based on false advertising. The court ruled that Genus did not adequately allege that Lannett's actions were part of a larger scheme to monopolize the market[1].

Role of Third Party Intermediaries

Genus accused Lannett of providing incomplete or false information to third-party intermediaries such as wholesalers, group purchasing organizations (GPOs), and integrated delivery networks (IDNs). This was seen as part of Lannett's strategy to mislead the market about C-Topical's regulatory status[3].

First Databank, Inc.

Genus also sued First Databank, Inc., a pharmaceutical pricing list company, for contributory false advertising. However, the court dismissed these claims, finding that First Databank's listings did not constitute commercial speech and did not influence Lannett's conduct in a way that would support Genus's claims[1][3].

Court Decisions

The court's decisions were mixed:

• Motion to Dismiss: The court granted Lannett and Cody's motion to dismiss in part and denied it in part. Genus's claims against First Databank were dismissed entirely[1][3].
• Lanham Act Claims: The court allowed some of Genus's Lanham Act claims to proceed, particularly those related to the implied approval of C-Topical through various marketing channels[1].
• Sherman Act Claims: The court dismissed Genus's Sherman Act claims, finding insufficient evidence to support the monopolization allegations[1].

Implications and Future Outlook

The case highlights the importance of accurate and transparent marketing in the pharmaceutical industry. Companies must ensure that their marketing materials do not mislead consumers or healthcare professionals about the regulatory status of their products.

Regulatory Compliance

The FDA's role in regulating pharmaceutical products is crucial. The case underscores the need for clear and consistent regulatory frameworks to avoid confusion and litigation. Companies like Lannett must adhere strictly to FDA guidelines and avoid using misleading terminology that could imply regulatory approval where none exists[2].

Market Competition

The litigation also emphasizes the competitive nature of the pharmaceutical market. Companies must compete fairly, avoiding practices that could be seen as anticompetitive or deceptive. This ensures a level playing field and protects consumer interests[3].

Key Takeaways

• Accurate Marketing: Pharmaceutical companies must ensure their marketing materials accurately reflect the regulatory status of their products.
• Regulatory Compliance: Adherence to FDA guidelines is essential to avoid litigation and ensure public trust.
• Fair Competition: Companies must engage in fair and transparent competitive practices to maintain market integrity.
• Legal Implications: False advertising and monopolization claims can have significant legal and financial consequences.

FAQs

Q: What was the main issue in the Genus Lifesciences Inc. v. Lannett Company, Inc. case?

A: The main issue was Genus's allegation that Lannett falsely advertised and marketed its cocaine hydrochloride nasal spray, C-Topical, as if it were FDA-approved.

Q: What were the key claims made by Genus against Lannett?

A: Genus claimed false advertising under the Lanham Act, unfair competition, and monopolization under the Sherman Act.

Q: How did the court rule on Genus's Lanham Act claims?

A: The court allowed some Lanham Act claims to proceed, particularly those related to implied approval through marketing channels.

Q: What was the outcome for Genus's Sherman Act claims?

A: The court dismissed Genus's Sherman Act claims due to insufficient evidence of monopolization.

Q: Why was First Databank, Inc. dismissed from the case?

A: First Databank's listings were not considered commercial speech, and it did not influence Lannett's conduct in a way that supported Genus's claims.

Cited Sources

1. Genus Lifesciences Inc. v. Lannett Co., Case No. 18-cv-07603-WHO - Casetext
2. Deconstructing Genus Medical Technologies, LLC v. FDA - Epstein Becker & Green, P.C.
3. Genus Lifesciences Inc. v. Lannett Co., 378 F. Supp. 3d 823 - Casetext