Ferring Pharmaceuticals Inc. v. Braintree Laboratories, Inc.

38 F. Supp. 3d 169, 2014 WL 3850072, 2014 U.S. Dist. LEXIS 106450
CourtDistrict Court, D. Massachusetts
DecidedAugust 4, 2014
DocketCivil Action No. 13-12553-NMG
StatusPublished
Cited by11 cases

This text of 38 F. Supp. 3d 169 (Ferring Pharmaceuticals Inc. v. Braintree Laboratories, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Massachusetts primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ferring Pharmaceuticals Inc. v. Braintree Laboratories, Inc., 38 F. Supp. 3d 169, 2014 WL 3850072, 2014 U.S. Dist. LEXIS 106450 (D. Mass. 2014).

Opinion

MEMORANDUM & ORDER

GORTON, District Judge.

This case arises out of a dispute between pharmaceutical companies that promote and offer for sale competing bowel preparation drugs that are administered prior to colonoscopies. Plaintiff/counterclaim-defendant Ferring Pharmaceuticals Inc. (“Ferring”), a Delaware corporation based in Switzerland, promotes and offers for sale a treatment under the name Prepopik. DefendanVcounterclaim-plaintiff Braintree Laboratories, Inc. (“Braintree”), a Massachusetts corporation with a principal place of business in Braintree, Massachusetts, promotes and offers for sale a treatment under the name Suprep.

Both parties allege that the other has engaged in false advertising in violation of the Lanham Act and unfair business practices in violation of M.G.L. ch. 93A. Fer-ring also alleges that Braintree has diluted its trademark in Prepopik by suggesting that it poses the same risks as a chemically-identical product promoted for sale in Canada, Pico-Salax. Braintree counterclaims for misappropriation of trade secrets based upon Ferring’s possession of [174]*174certain Braintree training documents related to Prepopik and Suprep.

Pending before the Court are Ferring’s motion to dismiss Braintree’s Amended Counterclaim and Braintree’s motions for leave to file a Second Amended Counterclaim and for summary judgment on all claims asserted by Ferring.

I. Procedural History

Ferring filed its Complaint against Braintree in October, 2013. Braintree answered, filed a Counterclaim and moved for expedited limited discovery. Ferring moved to dismiss the Counterclaim for failure to state a claim in December, 2013 and Braintree thereafter filed an Amended Counterclaim in lieu of opposing the motion to dismiss. Shortly thereafter, Ferring moved to dismiss the Amended Counterclaim and Magistrate Judge Bowler denied the motion for expedited limited discovery for lack,of good cause shown.

In May, 2014, Braintree moved for summary judgment on all claims in the Complaint and for leave to file a Second Amended Counterclaim that would supplement its allegations and add two new counts under New Jersey Consumer Fraud Act. The Court heard oral argument on the pending motions on July 14, 2014.

II. Ferring’s Motion to Dismiss Brain-tree’s Amended Counterclaim

Braintree’s three-count Amended Counterclaim alleges 1) misappropriation of trade secrets and confidential information, 2) false advertising in violation of § 43(a) of the Lanham Act and 3) unfair and deceptive trade practices in violation of M.G.L. c. 93A. Ferring moves to dismiss for failure to state a claim upon which relief can be granted.

A. Legal Standard

To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). In considering the merits of a motion to dismiss, the Court must accept all factual allegations in the complaint as true and draw all reasonable inferences in the plaintiffs favor. Langadinos v. Am. Airlines, Inc., 199 F.3d 68, 69 (1st Cir.2000). Yet “[tjhreadbare recitals of the elements of a cause of action, supported by mere eonclusory statements,” do not suffice to state a cause of action. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). Accordingly, a complaint does not state a claim for relief where the wellpled facts fail to warrant an inference of anything more than the mere possibility of misconduct. Id. at 679, 129 S.Ct. 1937.

B. Count I: Misappropriation of Trade Secrets

1. Relevant Background

In June, 2013, Howard Dorfman (“Dorfman”), the Vice President and General Counsel of Ferring, contacted Braintree to express his concerns about certain Brain-tree training materials that he had come to possess. Dorfman told Braintree that the subject materials were “sent in from the field” by an unknown source and denied that they had been provided to Ferring by a former Braintree employee. Ferring has returned the six pages of training materials to Braintree and denies possessing additional pages. Nevertheless, Braintree believes that Ferring possesses the full scope of its training materials because it is unaware of any plan to disseminate only the six pages that Ferring returned to Braintree. It asserts that Ferring has misappropriated an undisclosed number of [175]*175pages of Braining training materials and the trade secrets contained therein.

2. Legal Standard

A trade secret is

any formula, pattern, device or compilation of information which is used in one’s business, and which [provides] an opportunity to obtain an advantage over competitors who do not know or use it.

Burlen v. Milton Bradley Co., 763 F.2d 461, 463 (1st Cir.1985). On the other hand, “[m]atters of public knowledge or general knowledge in an industry” are not trade secrets. J.T. Healy & Son, Inc. v. James A. Murphy & Son, Inc., 357 Mass. 728, 260 N.E.2d 723, 729 (1970) (quoting Restatement of Torts § 757 cmt. b). Courts consider several factors when determining whether particular information qualifies as a trade secret, including:

1) the extent to which the information is known outside of the business; 2) the extent to which it is known by employees and others involved in the business; 3) the extent of measures taken by the employer to guard the secrecy of the information; 4) the value of the information to the employer and to his competitors; 5) the amount of effort or money expended by the employer in developing the information; and 6) the ease or difficulty with which the information could be properly acquired or duplicated by others.

Jet Spray Cooler, Inc. v. Crampton, 361 Mass. 835, 282 N.E.2d 921, 925 (1972). Ultimately, whether information qualifies as a trade secret “depends on the conduct of the parties and the nature of the information.” Id.

To prevail on a claim of misappropriation of trade secrets, a party must show: 1) the existence of a trade secret, 2) that it took reasonable steps to preserve secrecy, and 3) that the other party “use[d] improper means in breach of a confidential relationship” to acquire the secret. Data Gen. Corp. v. Grumman Sys. Support Corp., 36 F.3d 1147, 1165 (1st Cir.1994), abrogated on other grounds by-Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154, 159-60 & n. 2, 130 S.Ct. 1237, 176 L.Ed.2d 18 (2010). The party asserting the claim must identify with .adequate specificity the trade secret or proprietary information that was allegedly misappropriated by the defendant. See Sutra, Inc. v. Iceland Express, ehf, No. 04-11360-DPW, 2008 WL 2705580, at *3-4 (D.Mass.

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38 F. Supp. 3d 169, 2014 WL 3850072, 2014 U.S. Dist. LEXIS 106450, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ferring-pharmaceuticals-inc-v-braintree-laboratories-inc-mad-2014.