Allergan, Inc. v. Merz Pharmaceuticals, LLC, et al.

8:11-cv-00446
March 18, 2011
Federal Court
California
United States District Court for the Central District of California

Allergan, Inc., makers of the famous anti-wrinkle medication Botox, successfully obtained an injunction against the release of its competitor Merz Pharmaceuticals, LLC’s rival product Xeomin, immediately ahead of its planned nationwide launch. Allergan claimed in the United States District Court for the Central District of California that seven former employees had stolen volumes of customer information before defecting to Merz. The information consisted of spreadsheets with customer details and contact information for over 24,000 Botox customers in the United States. Merz then used this information to create anticipation for its competing product among these customers.

The terms of the injunction prohibit Merz from: “retaining, disclosing, or using” the trade secrets; selling Xeomin or soliciting its purchase for 10 months in the “facial aesthetics” market; doing the same in the “therapeutics market” for specific customers; and selling “dermal filler” products for 10 months. Some exceptions are provided for customers that seek out Merz with no solicitation. Merz is also ordered to search for and destroy all Allergan trade secrets in its possession and then follow up with a report to the court. The remedy is noteworthy because of the judge’s willingness to completely block a product’s release, instead of disgorging profits, for example.

Update: Defendants requested a modification of the injunction order to also add an exception for “customers who are provided or purchase dermal filler products, or who are solicited to purchase dermal filler products, from a company other than” Merz. Judge Guilford issued an in camera order denying this amendment on April 12, 2012, noting that the defendants had not complied with his instructions to keep the order as-is and to “solve the problem” as applied to co-defendant Amber Prumer, a salesperson for Allergan who went to work Merz after sending sensitive sales information to her personal e-mail account. (Ostensibly the injunction, as is, would be too broad to apply properly to Prumer, but the reasoning is not clear from the judge’s order.)

The parties are conducting post-injunction discovery, and the court has scheduled the jury trial to commence on March 26, 2013.

Allergan, INC.
Merz Aesthetics, Inc., Merz Pharmaceuticals, LLC
Uniform Trade Secrets Act