- Private drugmaker Kaleo, criticized last year for sharp price hikes to its opioid reversal drug, now faces a legal challenge alleging shady business practices promoting its other marketed product, called Auvi-Q.
- In June, Adamis Pharmaceuticals sued Kaleo in U.S. district court, claiming the company "engaged in an elaborate scheme to undercut the commercial launch and success" of Symjepi, its rival drug to Auvi-Q. Per the complaint, Kaleo bought three domains featuring the brand name of Adamis' drug — mysymjepi.com, symjepi.co and the misspelled sympjepi.net — and redirected that web traffic to Auvi-Q's site instead.
- Symjepi and Auvi-Q are each epinephrine injections, approved as emergency treatments for allergic reactions. Both companies declined to comment on the pending legal matter. Adamis seeks a jury trial in its complaint, filed June 21.
Cybersquatting was most common in the 1990s and early 2000s, with someone snatching a domain and then selling it to the trademark holder for an easy payday.
The practice has since fizzled out as federal law enacted in 1999 outlined the grounds to take action against cybersquatters. Referencing that legal framework, two intellectual property experts who reviewed the complaint at the request of BioPharma Dive said the case appeared relatively clearcut against Kaleo.
They said a key legal question is if Kaleo was using the domain in bad faith.
Alexandra Roberts, an associate professor at University of New Hampshire's law school, said that component is pretty clear here in this case.
"There's no other reason to choose Symjepi as a domain name, unless you're trying to mislead people, you're trying to divert traffic," she said. "People are looking for Symjepi and, instead, you are going to pull them over to your site and try to sell them products. That's textbook cybersquatting."
Adamis' first approved product is Symjepi, which contains the same active ingredient as and competes with Kaleo's Auvi-Q. Adamis gained U.S. approval in June 2017 and partnered with Novartis' Sandoz to sell and distribute the drug just over one year later.
In February 2019, a Sandoz customer contacted the pharma to inform them symjepi.net had redirected them to Auvi-Q, the complaint states. Kaleo acknowledged it owned the site after Adamis requested they stop using the domain. Since that request in February, the site no longer redirects to Auvi-Q, according to the suit, and navigating to the site now returns a placeholder webpage from GoDaddy.com, a web hosting company.
Adamis claims this confusion translates to trademark infringement, cybersquatting and, ultimately, "irreparable harm" to the company's goodwill and marketplace reputation.
For Kaleo, the lawsuit is unwelcome news, just a few months after it came under scrutiny with a Senate report and a "60 Minutes" segment on its pricing practices.
"It's hard for me to see what the escape route is going to be and how they are going to get out of it," said Mark McKenna, a professor specializing in intellectual property at the University of Notre Dame's law school.
Kaleo would be on firmer legal grounds if they used the websites to compare the two drugs instead of simply redirecting the user, Mark Lemley, a professor at Stanford Law School wrote in an email to BioPharma Dive.
"I'm surprised to see anyone still cares about domain names in 2019," Lemley wrote.
That said, Adamis has elevated the issue to the point of suing Kaleo and seeking injunctive and monetary relief.