The Upjohn Company v. Riahom Corporation

641 F. Supp. 1209 (1986)

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Nature of the Case

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Facts

P was conducting clinical investigations of a compound now known generically as minoxidil. P owned the patent on the compound which covered the manufacture, use, and sale of minoxidil for any purpose. The patent specifically disclosed the use of minoxidil for the treatment of hypertension (high blood pressure). Dr. Charles Chidsey, a cardiologist, observed high blood pressure drug caused the growth of excess facial and body hair. After consulting with two dermatologists, the idea of applying minoxidil topically to promote hair growth was born. Research was performed, and patents applied for and were granted, and P feverishly began preparing to market a prescription drug product called REGAINE, a topical solution for the treatment of baldness once FDA approval had been obtained. D’s hair treatment product, RIVIXIL, was developed by Kemyos Bio Medical Research. Kemyos filed two patent applications in Italy in 1984 covering minoxidil compounds used for the stimulation of hair growth and treatment of baldness. Kemyos advertises RIVIXIL as a cosmetic treatment for baldness which attempts to prevent or retard hair loss. Utsick (D) saw RIVIXIL when traveling in Italy in 1985 and purchased a package of it for more than $100. Utsick's (D) hair evidently became thicker and fuller through his use of the shampoo. Utsick (D) met with Kemyos officials and eventually negotiated an agreement in March 1986 giving Riahom Corp. (D) the exclusive right to market and sell RIVIXIL in the United States. Riahom (D) is marketing RIVIXIL as a cosmetic, rather than a drug so that they have not submitted the product to the FDA for testing and approval. The original advertising brochures for RIVIXIL described it as 'Europe's Answer to Minoxidil.' The brochures, among other things, stated that RIVIXIL contained 'the patent molecule 'SKM005'' and 'has been tested in many European universities and the tests conclude that it is non-toxic and safe to use.' The brochure also stated that RIVIXIL is 'a product proven safe and easy for your clients to use' and is 'a product that has the most 'pre-sale' publicity of any hair product ever including coverage on 20/20 (TV) and articles in People Magazine, Newsweek, Time, Esquire, Science Digest, and all major European publications.' P visited the Riahom/RIVIXIL exhibit at the All-Texas Beauty Show on April 7, 1986. P received a brochure and a letter to salon owners. The letter related how Utsick (D) had seen in Italy a RIVIXIL package listing a minoxidil compound among the ingredients. The letter then stated: 'From all the press generated in the United States about Minoxidil, I knew Minoxidil grew hair!!! About two-thirds of those tested in the United States grew hair to varying degrees of satisfaction. Well, any product that had that kind of proven record was worth a try for me, because the top of my head is 'losing it' very rapidly.' The letter also stated that D 'is 'mo hair' spelled backward.' A D marketing plan distributed at the show stated that SKM005 is 'the 'salt' of a product produced in the United States. . . . The product produced in the United States is the only substance which has proven in many scientific tests to dramatically improve the appearance of the scalp by promoting a fuller, thicker head of hair.' P sent D a letter stating that D's alleged advertisement and promotion of a minoxidil product to promote hair growth infringed the '619 patent owned by P and asking D to stop these practices. D prepared new promotional materials for RIVIXIL reflecting changes that took the word monoxidil out of the brochures and D also diluted the concentration of minoxidil in the product. One of Ds' independent dealers sold a product containing 0.89% minoxidil on June 21, 1986 and at least one of Ds' independent dealers was telling prospective customers that RIVIXIL grew hair, distributing brochures which touted RIVIXIL as a hair growth product, and handing out copies of newspaper articles about minoxidil, P, and the treatment of baldness. A letter from D's national sales manager to its regional sales managers told them to 'capitalize upon' and include in their presentation packs articles about the price increase of Upjohn stock caused by news of the favorable results of minoxidil testing. P sued Ds.