Inwood Laboratories, Inc. v. Ives Laboratories, Inc.

456 U.S. 844 (1982)

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Nature of the Case

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Facts

Ives (P) received a patent on the drug cyclandelate. Until its patent expired in 1972, P retained the exclusive right to make and sell the drug, which it did under the registered trademark CYCLOSPASMOL. P produced the product in colored gelatin capsules. A blue capsule, imprinted with 'Ives 4124,' for its 200 mg dosage, and a combination blue-red capsule, imprinted with 'Ives 4148,' for its 400 mg dosage. Once the patent expired. Ds began marketing cyclandelate. They intentionally copied the appearance of the P's capsules, selling cyclandelate in 200 mg and 400 mg capsules in colors identical to P. P concentrates its marketing on convincing physicians to indicate on prescriptions that a generic drug cannot be substituted for CYCLOSPASMOL. Ds' catalogs truthfully describe generic cyclandelate as 'equivalent' or 'comparable' to CYCLOSPASMOL. The generic products reach wholesalers, hospitals, and pharmacists in bulk containers which correctly indicate the manufacturer of the product contained therein. The capsules are removed from the container in which they are received and dispensed and the final consumer sees no identifying marks other than those on the capsules themselves. The capsules by themselves have no information about origin or manufacture. P alleged that Ds contributed to the infringing activities of pharmacists who mislabeled generic cyclandelate. P asked that the court enjoin the petitioners from marketing cyclandelate capsules in the same colors and form as P uses for CYCLOSPASMOL. The court held that P had not established that Ds conspired with the pharmacists or suggested that they disregard physicians' prescriptions. The Court of Appeals stated that Ds would be liable under § 32 either if they suggested, even by implication, that retailers fill bottles with generic cyclandelate and label the bottle with P's trademark or if Ds continued to sell cyclandelate to retailers whom they knew or had reason to know were engaging in infringing practices. After a bench trial on remand, the District Court entered judgment for Ds. P appealed. The Court of Appeals concluded that the petitioners violated § 32. The Supreme Court granted certiorari.