Therapeutics MD, Inc. v. Evofem Biosciences, Inc.

THERAPEUTICS MD, INC., Plaintiff, v. EVOFEM BIOSCIENCES, INC., Defendant.

No. 20-CV-82296-RUIZ/REINHART

United States District Court, S.D. Florida

March 29, 2022

REPORT AND RECOMMENDATION ON PARTIES' MOTIONS FOR SUMMARY JUDGMENT (ECF NOS. 112, 128-1)

BRUCE REINHART UNITED STATES MAGISTRATE JUDGE.

Presently before me are Plaintiff's Motion for Partial Summary Judgment (ECF Nos. 128-1) and Defendant's Motion for Summary Judgment (ECF No. 112), which the Honorable Rodolfo A. Ruiz referred to me for a Report and Recommendation. ECF No. 191.

With its motion, Defendant seeks summary judgment in its favor on all six of the claims in Plaintiff's First Amended Complaint (FAC) (ECF No. 37) and on its Counterclaim (ECF No 29 at 9).^[1] Plaintiff's motion seeks summary judgment in its favor on Defendant's first, second, and fourth affirmative defenses (ECF No. 110 at 10-12)^[2] and Defendant's counterclaim. I have reviewed the pleadings motion papers, Statements of Material Facts, and attached exhibits.

These matters are now ripe for decision. For the reasons that follow, I recommend that Plaintiff's motion (ECF No 128-1) be GRANTED IN PART AND DENIED IN PART and that Defendant's motion (ECF No. 112) be DENIED.

BACKGROUND

This litigation involves two distinct medical products available to women by prescription only. Plaintiff's product, IMVEXXY, is a dissolvable vaginal insert that was approved by the FDA in May 2018 for treatment of vaginal pain during sexual intercourse due to menopause. ECF No. 37 at ¶¶ 9, 11. Plaintiff registered the mark IMVEXXY with the USPTO on February 7, 2017. Id. at ¶ 12. According to Plaintiff, “the IMVEXXY mark evokes a connotation of ‘sexy' in the context of women's sexual and reproductive health.” Id. at ¶ 15.

Defendant's product, PHEXXI, is a vaginal gel that is FDA-approved for the prevention of pregnancy. ECF No. 37 at ¶ 98; Exhibit L. Defendant registered its PHEXXI mark with the USPTO in November 2020 (the ‘656 Registration). ECF No. 37 at ¶ 29.^[3] According to Plaintiff, PHEXXI also “evokes connotations of sexy.” Id. at ¶ 21.

In the FAC, Plaintiff argues that there is a likelihood of consumer confusion between the two marks because the IMVEXXY and PHEXXI marks are “confusingly similar in appearance, sound, and overall connotation . . . when used in connection with pharmaceutical drugs for women's sexual and reproductive health.” Id. at ¶¶ 21, 22. Plaintiff contends that “[t]hese similarities in appearance and sound not only present the risk that consumers will request the wrong drug and/or doctors will prescribe the wrong drug, but also the likelihood that pharmacists may dispense the wrong drug.” Id. at ¶ 20. According to Plaintiff, the two products are “closely related, ” “prescribed by the same physicians . . . [and] prescribed to the same class of patients . . .” ECF No. 37 at ¶¶ 40, 42.

In the FAC, Plaintiff contends that Defendant infringed on its mark “despite its awareness of [Plaintiff's] superior trademark rights, ” thus causing Plaintiff irreparable harm. ECF No. 37 at ¶¶ 46, 47. Plaintiff seeks injunctive relief permanently enjoining Defendant from using the PHEXXI mark, an order cancelling Defendant's registration and applications with the USPTO, disgorgement of Defendant's profits from its use of the PHEXXI mark, and an award of monetary damages. ECF No. 37 at 26-28.

In its motion for summary judgment, Defendant contends that Plaintiff has not established that there is a likelihood of confusion between the two marks and therefore judgment should be entered in its favor on Counts I-V of the FAC. Defendant further contends that Count VI which seeks cancellation of its trademark for PHEXXI should be rejected and that it should prevail on its Counterclaim which seeks cancellation of Plaintiff's trademark for IMVEXXY.

UNDISPUTED FACTS

PHEXXI is prescribed to women of child-bearing age. Defendant's Statement of Facts (Def. SOF) (ECF No. 125-1) at ¶ 2. IMVEXXY is FDA-approved for women who are experiencing symptoms of menopause. Id. at ¶ 3. The packaging that goes inside every box of IMVEXXY states that “IMVEXXY is not indicated for use in females of reproductive potential.” ECF No. 37, Ex. C at 12.

Defendant chose the name PHEXXI because it “began with ‘pH,' which refers to the drug's . . . maintaining a vaginal pH at a level that inhibits the motility of sperm . . . it incorporated an ‘XX,' which symbolizes the female chromosome” (ECF No. 125-8 at 4), and because “it rhymes with ‘sexy'” (ECF No. 166-6 at 10). Def. SOF at ¶ 13; Plaintiff's Additional Facts (PAF) ¶ 61.

Both products are dispensed in pharmacies and each company's sales representatives visit many of the same OB/GYN offices to educate prescribers about their drug's use and to provide sample products for the prescribers to give to patients. PAF ¶¶ 65-67, 69. Both products are also directly marketed to patients. PAF ¶ 80.

The way the PHEXXI and IMVEXXY marks appear in the marketplace differ in font and color. Def. SOF ¶ 22; FAC ¶¶ 10, 25.

Defendant submitted the PHEXXI mark to the FDA for its approval and the FDA conducted a Proprietary Name Review which compared the sound, appearance, and product characteristics of PHEXXI and IMVEXXY; the FDA concluded that there were “sufficient differences” between the two. ECF No. 125-5. In conducting its assessment, the FDA used its Phonetic Orthographic Computer Analysis (POCA) software program and gave the PHEXXI/IMVEXXY name pair a score of 59% which corresponds to the category of “moderately similar names.” Id. at 19.^[4] The FDA's threshold for “high similarity” is 70%. Defendant's Additional Facts (DAF) ¶ 56.

Defendant's branding company, The Brand Institute, emailed Defendant in November 2019 regarding possible bases for the FDA to reject the PHEXXI name. ECF No. 166-4. One reason the email noted was “some concern with the similarity of IMVEXXY (already FDA approved) and PHEXXI.” Id. The email explained,

A POCA screen calculated an ortho similarity of .54 and a phono similarity of .64. These scores are well within range of acceptability. Again, please note that POCA is one element of a multi-faceted review process - however, we do agree that they appear to sound more similar than the phono POCA score indicates.

Id.

Plaintiff owns a registered trademark for IMVEXXY, which is a distinctive and made-up word. PAF ¶¶ 56, 57. During the prosecution of its PHEXXI trademark applications with the USPTO, Defendant did not inform the USPTO of Plaintiff's IMVEXXY registration. ECF No. 37 at ¶ 35. Plaintiff contacted Defendant in May 2020, regarding Plaintiff's concerns about the likelihood of confusion between the two marks. Plaintiff's SOF ¶ 11; DAF ¶ 62, 63. Plaintiff launched PHEXXI in the marketplace on September 8, 2020. Plaintiff's SOF ¶ 16. Plaintiff filed the instant lawsuit on December 14, 2020. ECF No. 1.

DISPUTED FACTS

Do the products compete and what is the impact of Defendant's product on Plaintiffs business?

Defendant argues that the parties' products treat different medical concerns and they are marketed and prescribed to females at vastly different stages of their lives. Def. Resp. to PAF ¶ 70. Defendant contends that because of their different purposes, the two products are not competing products and there is no evidence of confusion (nor likelihood of confusion) by patients, prescribers or pharmacists. Plaintiff contends that IMVEXXY and PHEXXI target overlapping female age groups and that both products could potentially be prescribed to the same patient. ECF No. 166-2 at ¶¶ 5, 6, 26; PAF ¶ 70.

Defendant claims that Plaintiff cannot prove that PHEXXI has had any impact on its business or caused lost sales. Def. SOF ¶¶ 17, 18, 28. Plaintiff contends that “Evofem's conduct has harmed and did impact IMVEXXY sales.” Plaintiff's Response to Def. SOF ¶ 28; PAF ¶ 84.

Who is the relevant consumer and is there evidence of confusion?

Defendant's expert surveyed pharmacists and prescribers and found no confusion between the two products. Def. SOF ¶¶ 29-32, 34. Plaintiff contends that pharmacists are the “wrong universe for studying likelihood of confusion.” Id.

Plaintiff's expert surveyed prescribers and patients and found a net confusion rate of approximately 20%. ECF No. 164-2 at 9. Defendant contends that patients are not the relevant consumers because “patients do not choose (or write) their own prescriptions.” ECF No. 112 at 14.

Defendant contends that Plaintiff's witnesses “testified that they were not aware of a single instance” of patient confusion (Def. SOF ¶ 33), but Plaintiff counters that it has identified over 24 pharmaceutical sales representatives who describe instances of confusion by prescribers and their office staff, whom Plaintiff contends are also prospective patients. Plaintiff's Resp. to Def SOF ¶ 33; PAF ¶ 77. Plaintiff has provided sworn declarations and deposition testimony from many of these sales reps. ECF Nos.166-20, 166-21, 167-1 through 167-17. According to Defendant, at least one of the physicians identified in a sales representative's declaration as having been confused, later denied ever being confused by the two products. Def. SOF ¶ 39, ECF No. 125-21. Defendant contends that the sales representatives' declarations describe instances of “momentary, fleeting confusion” (Def. SOF ¶ 42), but Plaintiff refutes this claim with two instances where the doctors left the conversation before their confusion was corrected. Plaintiff's Resp. to Def SOF ¶ 42.

Defendant's Intent

Plaintiff contends that internal emails from Defendant's employees demonstrate concern about the similarity of the names PHEXXI and IMVEXXY, but that Defendant chose to use the PHEXXI name anyway. Plaintiff's SOF ¶ 7; PAF ¶ 60; ECF...