With Weight Loss Drugs in High Demand, Trademark Litigation Targets Counterfeits

Novo Nordisk and Lilly, two pharmaceutical giants behind the blockbuster diabetes and obesity drugs Ozempic, Wegovy, Mounjaro, and Zepbound (Ozempic, et al.), currently find themselves embroiled in legal battles with wellness centers, medical spas, and compounding pharmacies. Both companies are taking action to protect their trademarks and intellectual property.  Despite being separate companies, the key trademark-related legal concerns they face have significant overlap.  

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Trademark Infringement and Dilution

Trademark infringement is at the core of the lawsuits brought by Novo Nordisk and Lilly. To establish trademark infringement under the Lanham Act, a plaintiff must demonstrate that: (1) the mark is valid and legally protectable; (2) the plaintiff owns the mark; and (3) the defendant’s use of the mark to identify goods or services is likely to cause consumer confusion concerning the origins.

Both companies hold registered trademarks for their high-profile, prescription-only diabetes and obesity medications.  Both companies assert infringement claims primarily centered around unauthorized marketing and misleading use of logos and branding by unaffiliated businesses.

Consumer confusion occurs when someone uses another’s trademark as their own, leading consumers to mistakenly believe that the product associated with the mark is affiliated with the original brand.  Wellness centers, med spas, and online pharmacies often use the Ozempic, et al., marks in advertisements, creating the impression that their products are endorsed by or affiliated with the brand names.  By intentionally using trademarks to market their products, these businesses lead consumers to believe they are receiving genuine, brand-approved versions of these medications, when in fact they not.

Additionally, compounding pharmacies present an additional layer of complexity.  Compounding involves creating customized medications for a patient’s needs or when a critical drug is in shortage. But compounded medications differ significantly from the original, FDA-approved versions and may not meet the same efficacy, quality or safety standards as brand name drugs.  When a compounding pharmacy markets their compounded drugs as equivalent to or even as Ozempic, et al., it implies a level of endorsement or equivalency that creates significant consumer confusion and leads to patient harm.

Not only does the unauthorized use infringe upon these trademarks, but it also dilutes the distinctiveness of their brands. Dilution can occur when a famous trademark’s power is weakened by blurring (where a mark used exclusively by its owner becomes less distinct) or tarnishment (where the brand’s reputation is damaged).  The misuse of the Ozempic, et al., marks by unauthorized parties undermines the exclusivity of the brand and blurs their distinctiveness. Marketing lower-quality or counterfeit versions further tarnishes consumer perception of the brand-name drugs by promoting exaggerated effectiveness for unapproved, off-label uses. 

Counterfeit or improperly compounded formulations of Ozempic, et al., are already leading to significant patient confusion and harm.  Patients have reported over 400 unexpected and adverse side effects to the FDA’s Adverse Event Reporting System, including 319 “serious” adverse events, 99 reported hospitalizations, and seven deaths.  As a result, harmed patients have filed class action lawsuits against Novo Nordisk and Lilly, aiming to hold them liable for adverse events from drugs they did not produce, market, or sell. This threatens the integrity of the Novo Nordisk and Lilly brands.  They argue compounders are purposely deceiving consumers into believing they are receiving authentic, FDA-approved medications, thereby putting patients at risk of harm for their own financial gain.  Not only does this infringe on Novo Nordisk and Lilly trademark rights but also poses serious risks to consumer health by exposing patients to unsafe, substandard or ineffective counterfeit medicines.    

False Advertising and Consumer Misrepresentation

Another significant legal issue in these lawsuits is false advertising.  To establish a false advertising claim under the Lanham Act, Novo Nordisk and Lilly must prove: (1) false or misleading statements about Ozempic, et al., (2) used in commercial advertisements or promotion (3) deceive (or likely to) intended audiences (4) in interstate commerce, and (5) caused (or likely to) competitive or commercial injury to Novo Nordisk and Lilly.  Courts often scrutinize the allegedly false and misleading statements made in the sales efforts to determine the extent to which those statements were disseminated to potential customers.

Both Novo Nordisk and Lilly assert that wellness centers, med spas, and compounding pharmacies are making misleading statements in commerce about the effectiveness and approved uses of their drugs, particularly when promoting weight loss treatments.  They claim wellness centers, med spas, and compounding pharmacies falsely advertise unauthorized or compounded versions of Ozempic, et al.,  as equivalent to the original, FDA-approved products.  Ozempic and Mounjaro are FDA-approved diabetes medications, while Wegovy and Zepbound are FDA-approved weight loss medication prescribed only when specific medical reasons exist.  Promoting compounded drugs for off-label use and with exaggerated weight-loss claims or misleading information about the products’ benefits constitutes false advertising under the Lanham Act. Additionally, any false statements implying that compounded versions of Ozempic are equivalent to the genuine articles not only violate the Lanham Act but could also be seen as a breach of consumer protection laws.  Coupled with the lack of medical authorization or expertise to prescribe or monitor the use of these drugs, these businesses further place patients under a heightened risk of harm by misrepresenting the safety and benefits of the products.

Conclusion

Strong intellectual property protections encourage business investments in research and development to create new and innovative products and services, while protecting consumers from being misled or deceived by counterfeit or inferior products.  By emphasizing the importance of intellectual property protections and the potential consequences of unauthorized trademark use, these cases will have a lasting impact on businesses operating in the healthcare and wellness industry and beyond. 

Novo Nordisk and Lilly are using these lawsuits to protect their trademark rights, commercial interests, and consumer safety.  They argue that unauthorized and potentially dangerous knockoffs of Ozempic, et al., are misleading consumers and causing harm.  While it is clear that these companies hold the trademarks and that consumers are being confused by online marketing and false advertising by wellness centers, med spas, and compounding pharmacies, the cases are still ongoing.  The courts must determine if the level of consumer confusion and patient harm is severe enough to constitute trademark infringement and false advertising under the Lanham Act.