Hughes Hubbard Wins Summary Judgment for ExeGi Pharma and Claudio De Simone

Hughes Hubbard secured a significant victory for ExeGi Pharma and probiotic inventor Claudio De Simone in long-running litigation against VSL Pharmaceuticals involving the marketing of probiotic products. In a July 24 memorandum opinion, Judge Lydia Kay Griggsby of the U.S. District Court for the District of Maryland granted summary judgment in ExeGi’s favor on its declaratory judgment claim and dismissed “most aspects” of VSL’s false advertising counterclaims.

The dispute centered on ExeGi’s marketing of Visbiome, a probiotic product developed by De Simone, and VSL’s allegations that statements by ExeGi and De Simone in Visbiome advertising and packaging violated the Lanham Act. The court rejected nearly all of VSL’s false advertising theories, including claims challenging ExeGi’s use of DSM codes and statements regarding the composition and marketing of VSL#3. The court held that VSL “cannot prevail on most aspects of its Lanham Act-false advertising claim,” noting that as to these aspects VSL “cannot show that the De Simone Parties made a false or misleading description of fact or representation of fact in a commercial advertisement,” or “that the statements are otherwise actionable under the Lanham Act.”

In a major win for ExeGi and De Simone, the court held that ExeGi may continue using DSM codes in the marketing of Visbiome and granted declaratory relief resolving the parties’ ongoing dispute over their use. The court found that VSL failed to show that the presence of the DSM codes on Visbiome’s packaging conveyed a false or misleading message to consumers and concluded that VSL could not establish that consumers would interpret the codes in the manner VSL alleged. The Court specifically declared that “ExeGi has the right to use the DSM Codes (as defined in ExeGi’s complaint) in conjunction with the marketing, advertising, and sale of Visbiome and References by ExeGi to the DSM Codes in conjunction with the marketing, advertising, and sale of Visbiome do not constitute false advertising or unfair competition under the Lanham Act.”

The court also rejected VSL’s claims based on statements describing VSL#3 as an “imitation” or “knock off,” finding that the record showed VSL had attempted to reverse engineer the original formulation and could not replicate it. The court further granted summary judgment in favor of ExeGi and Professor De Simone dismissing VSL’s false advertising claim based on the statement in a pamphlet, entitled “The True Story Behind Visbiome® & VSL#3,” that VSL#3 is not supported by any “published, peer reviewed, controlled trials,” holding that such statement is not actionable “because this statement is literally true.” The court found, “[n]otably,” that “it is undisputed that no published, peer-reviewed, controlled trial of the current VSL#3 existed as of that date in question.”

The court ordered a trial on just three statements challenged by VSL, finding that for these statements there are questions of fact to be resolved by a jury relating to whether the VSL#3 formulation was “untested” or “the subject of any human clinical trial,” and whether VSL#3 “has no clinical documentation.”

Partners Jeremy Schulman and Jeffrey Gavenman represent ExeGi and Claudio De Simone in the matter, assisted by Jake Schaller, Renan Varghese, Anna Kornilova and Abigail McDonough.