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Federal Judge Upholds $18 Million Jury Verdict in Favor of Schulman Bhattacharya’s Clients, Enters Broad Permanent Injunction to Block Further False Advertising of the VSL#3 Product

Jun 24

In 54 pages of rulings issued this past Friday, June 21, 2019, Judge Theodore D. Chuang of the United States District Court for the District of Maryland found decisively in favor of Schulman Bhattacharya’s clients—Professor Claudio De Simone and ExeGi Pharma, LLC—upholding our $18 million jury verdict from November 2018 and entering a permanent injunction against the current and former distributors of VSL#3, halting their false advertising of the product.  The rulings conclude over four years of litigation in which the Firm, representing the inventor of the well-studied De Simone Formulation probiotic (previously sold under the name VSL#3, until July 2016), sought to defend his ownership rights and prevent his former business partners from claiming that a reverse-engineered imitation product was, in fact, his own formulation.

On November 20, 2018, a federal jury unanimously found in favor of De Simone and ExeGi, awarding them over $18 million dollars in damages for violations including false advertising under the Lanham Act. Schulman Bhattacharya succeeded in proving that, after De Simone terminated his long-term partnership with VSL Pharmaceuticals, VSL attempted and failed to reverse-engineer his formula. De Simone’s original formulation had been studied extensively and established as a “medical food” for dietary management of serious gastrointestinal issues, such as ulcerative colitis and irritable bowel syndrome (IBS). VSL, along with its marketing agents at Alfasigma and Leadiant, launched their version of VSL#3, an untested imitation product, without informing patients or physicians of the change and instead affirmatively claiming that the product contained the same trusted formula.

Following the jury verdict, the defendants (VSL Pharmaceuticals Inc., Leadiant Biosciences, and Alfasigma USA, Inc.) filed post-trial motions attacking key jury findings and requested a new trial.  The Court denied each and every one of those motions and, accepting Schulman Bhattacharya’s arguments, affirmed that the original VSL#3 product containing De Simone’s formulation was materially different from the imitation formulation now being sold by Alfasigma. The Court also found that, in marketing their product as the original, Alfasigma and Leadiant committed false advertising in violation of the Lanham Act, and that VSL Pharmaceuticals acted with the intent to confuse or deceive the public.

Citing concerns about public health and well-being, the Court also issued a permanent injunction preventing the defendants from linking their product with the original De Simone Formulation, including by citing clinical studies that were, in fact, performed only on the De Simone Formulation. To date, over 70 clinical trials have been conducted on the original formulation, which is currently sold as VISBIOME®.

“We are very pleased with the Court’s rulings on Friday and proud of the landslide victory we achieved for our valued clients, Professor De Simone and ExeGi, over this four-year legal battle,” Jeremy Schulman said.  “Establishing that Professor De Simone owns the Know-How, winning a large cash judgment, obtaining a broad permanent injunction to bring Alfasigma’s false advertising to a stop, and defeating 52 counterclaims aggressively asserted by a team of more than 30 lawyers and staff for the three defendants is very gratifying.  We will continue to work hard to protect the life’s work of a brilliant scientist, Prof. Claudio De Simone, who is responsible for helping thousands of patients worldwide to live better lives by managing their serious medical conditions through the invention of a superior, high-potency probiotic product.”

Judge Chuang’s decisions and orders issued June 21, 2019, can be found here.
927 Memorandum Opinion 
928 Order
929 Memorandum Opinion
930 Order