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Federal Court in Atlanta Upholds Contributory False Advertising Claim Against Emory University Professor; Schulman Bhattacharya Represents Client ExeGi Pharma, Seeking Injunctive Relief and More than $10 million in Damages

Mar 29

On May 20, 2021, Schulman Bhattacharya filed a Complaint in the United States District Court for the Northern District of Georgia on behalf of ExeGi Pharma, LLC against Roberto Pacifici, a Professor of Medicine at the Emory University School of Medicine.  The suit asserted, among other things, a claim against Dr. Pacifici for Contributory False Advertising in violation of the Lanham Act arising out of a false advertising scheme facilitated by Dr. Pacifici that has damaged and continues to damage not only ExeGi but also thousands of consumers of probiotics.  ExeGi alleged that in 2017, Dr. Pacifici, a professor who also had been engaged by VSL Pharmaceuticals, Inc. (“VSL Inc.”) to be a paid consultant, signed off on a false and misleading GRAS report, along with two other professors, that touted the safety and efficacy of a new probiotic product made by VSL Inc. and sold as “VSL#3.”  The report falsely asserted that highly successful clinical research conducted on ExeGi’s probiotic formulation (now sold under the brand name Visbiome) was conducted on VSL#3’s formulation, claiming an equivalency between the two products, when according to the Complaint the authors of the GRAS Report knew this to be false.  ExeGi alleges that the GRAS report provided the foundation for VSL Inc.’s (and its distributors’) false marketing of the VSL#3 product as being equivalent to the formulation sold by ExeGi.

The Visbiome formulation sold by ExeGi was invented in the 1990s by the famed researcher Claudio De Simone and is known internationally as the “De Simone Formulation.”  The De Simone Formulation used to be sold as VSL#3, but as of June 2016 VSL, Inc. lost all rights to the De Simone Formulation and so the company and its distributors began selling a new, untested formulation under that same brand name.  The De Simone Formulation is one of the most extensively studied probiotics now available in the marketplace, having been the subject of more than 70 human clinical trials. Based upon those trials and various studies, the De Simone Formulation is widely considered the gold standard for such products.  The Complaint alleges that VSL Inc. and its advisors, including Dr. Pacifici, have capitalized on those trials and studies—albeit falsely—as part of an effort choreographed by VSL Inc. and its licensee distributors, and materially and knowingly assisted by Dr. Pacifici, to palm off the De Simone Formulation and divert product sales from Visbiome to VSL#3.

Dr. Pacifici moved to dismiss ExeGi’s contributory false advertising and other claims on a host of grounds.  On March 25, 2022, Judge Thomas W. Thrash, Jr. upheld the contributory false advertising claim, determining that ExeGi had satisfied its burden to assert facts demonstrating that Dr. Pacifici “actively and materially furthered the unlawful conduct of VSL#3’s distributors—either by inducing it, causing it, or in some other way working to bring it about.”  Judge Thrash wrote: “Given this [legal] framework and the Plaintiff’s allegations regarding the GRAS Report, the Plaintiff has satisfied its burden at this stage in the litigation. The Plaintiff alleges that the GRAS Report materially supported a third party’s false advertising, that Pacifici knew of the alleged false equivalence being expressed in the Report, that he was informed by De Simone and an attorney for a rival company that these statements indicated equivalence between the formulations, and that he refused to rescind his signature after being presented with this information. (Compl. ¶¶ 17, 43, 51, 55, 87, 97.) At this stage of the litigation, these allegations are sufficient. Thus, the Plaintiff has stated a claim of contributory false advertising related to claims that the De Simone and Italian Formulations were identical.”

Certain other claims asserted by ExeGi were dismissed without prejudice, with ExeGi retaining the right to seek to reassert them.  The case will now progress into discovery.

Schulman Bhattacharya, LLC is an international law firm based in the Washington, D.C. area focused on resolving the most complex and challenging commercial disputes facing its clients— through litigation, arbitration, mediation, and informal negotiation. The Firm has vast experience representing clients in nearly every industry sector. The Firm represents companies of all sizes, locally, regionally, nationally, and internationally, and it represents individuals with valuable commercial and personal interests to protect.

A copy of the Complaint filed in the matter of ExeGi Pharma, LLC v. Pacifici can be found by clicking here.  A copy of Judge Thrash’s decision can be found by clicking here.