Opinions — Thursday, August 13, 2026

The Fourth Circuit affirmed the district court's grant of a preliminary injunction against defendants who imported foreign-market, Gilead-branded prescription drugs (primarily Biktarvy) intended solely for foreign sale and distributed them to U.S. patients through an alternative funding program. The court held that Gilead Sciences was likely to succeed on its claims under § 32 and § 43(a)(1)(A) of the Lanham Act for direct trademark infringement against Rx Valet, Advanced Pharmacy, Affordable Rx, and Gregory Santulli (the "Quartet"), and for contributory trademark infringement against third-party administrator Meritain Health and pharmacy benefit manager ProAct. Although the imported medications bore authentic Gilead trademarks and were chemically identical to the U.S. versions, the court concluded they were not "genuine" for Lanham Act purposes because they materially differed from the authorized domestic products—specifically in labeling language (Turkish versus English), omission of FDA-required warnings including a "black box" warning about Hepatitis B risks, absence of National Drug Code numbers, and lack of required storage instructions and patient information. The court further held that the medications were distributed outside Gilead's legitimate quality-control system, an independent basis for finding them non-genuine.

The decision is significant for its application of the material-differences and quality-control doctrines to authentic gray-market goods in the prescription drug context. The Fourth Circuit adopted a "low threshold of materiality, requiring no more than a slight difference which consumers would likely deem relevant," and held that chemical identity is irrelevant when packaging, labeling, and accompanying safety information differ. The court emphasized that material differences undermine consumer expectations that identically marked products will have identical characteristics, creating likelihood of confusion even absent any counterfeit element. The court also rejected defendants' FDCA preemption argument, distinguishing cases like Sandoz Pharmaceuticals Corp. v. Richardson-Vicks, Inc. by holding that determining whether products materially differ for Lanham Act purposes does not require interpreting FDA regulations or finding an FDCA violation. The opinion extends contributory liability to service providers (a TPA and PBM) who facilitated the importation scheme by providing patient data streams and processing payments despite knowledge of the trademark infringement.

The Fourth Circuit affirmed the district court's preliminary injunction restraining defendants from importing, advertising, or facilitating the importation of foreign-market Gilead-branded medications into the United States. Gilead Sciences, manufacturers of HIV drug Biktarvy and other prescription medications, sued Rx Valet LLC, Advanced Pharmacy LLC, Aqua Enterprise Inc. (d/b/a Affordable Rx Meds), Gregory Santulli (collectively, the "Quartet"), along with health plan administrator Meritain Health Inc. and pharmacy benefit manager ProAct Inc., alleging direct trademark infringement under 15 U.S.C. §§ 1114(1) and 1125(a) (the Quartet) and contributory infringement (Meritain and ProAct). The dispute arose after a Maryland patient received Turkish-market Biktarvy—chemically identical to the U.S. version but labeled in Turkish with different warnings and omitted FDA-required disclosures—through defendants' "international sourcing program" for self-funded health plans. The court held that the foreign-market medications bearing Gilead's registered trademarks were not "genuine" goods under the Lanham Act despite their chemical identity and authentic (non-counterfeit) marks, because they (1) materially differed from the domestic versions Gilead authorized for U.S. sale under the material-differences doctrine, and (2) were distributed outside Gilead's quality-control system, thereby creating likelihood of confusion sufficient to support infringement liability.

The opinion's significance lies in its application of the material-differences and quality-control doctrines to gray-market pharmaceuticals where the only variations are labeling, language, and accompanying safety information rather than the product formulation itself. Applying what it characterized as a "low threshold of materiality," the court concluded that differences in language (Turkish vs. English labels), omitted warnings (including FDA "black box" warnings about Hepatitis B exacerbation), missing regulatory identifiers (NDC numbers), and absent FDA contact information were material because prescription-drug consumers would "likely deem relevant" safety disclosures, prescribing information, and regulatory compliance markers "when assessing Gilead-branded products." The court rejected defendants' argument that chemical identity rendered the products genuine, holding that "what matters to consumers varies by product and market" and that non-formulation differences qualify as material where they concern product characteristics consumers reasonably expect when encountering identical marks. The court likewise held the medications non-genuine under the quality-control doctrine because Gilead maintained "established, legitimate, substantial, and nonpretextual" systems governing packaging, labeling, and distribution to ensure regulatory compliance and patient safety, and the imported medications bypassed those systems entirely—making actual quality immaterial where the trademark owner's quality-control standards were circumvented.

The Fourth Circuit affirmed the district court's grant of a preliminary injunction against defendants who imported and distributed foreign-market versions of Gilead's prescription medications into the United States. Following a two-day evidentiary hearing, the district court enjoined Meritain Health, Inc. and ProAct, Inc. (a third-party administrator and pharmacy benefit manager, respectively) and Rx Valet, LLC, Advanced Pharmacy, LLC, Affordable Rx, and Gregory Santulli (collectively, the "Quartet") from importing, advertising, or facilitating the sale of medications bearing Gilead's registered marks that were intended for foreign markets. The court held that Gilead was likely to succeed on its claims under § 32 and § 43(a)(1)(A) for both direct infringement (against the Quartet) and contributory infringement (against Meritain and ProAct). The Fourth Circuit concluded that the Turkish-market Biktarvy and other foreign-sourced medications bearing Gilead's marks were not "genuine" goods for Lanham Act purposes, despite being chemically identical to the domestic versions and bearing authentic Gilead trademarks, because they (1) materially differed from the domestic products in labeling, warnings, and patient information, and (2) were distributed outside Gilead's legitimate quality-control system.

The decision is significant for its application of both the material-differences doctrine and the quality-control doctrine to pharmaceutical gray-market goods, confirming that chemical identity does not defeat trademark infringement liability where packaging, labeling, and regulatory disclosures differ. The court applied a "low threshold of materiality" and held that differences in language (Turkish versus English), omitted FDA-required warnings (including black-box warnings), missing NDC numbers, and absent contact information for reporting adverse events were material as a matter of law because consumers would "likely deem [them] relevant when considering a purchase" of prescription medications. The court also held that goods distributed outside a trademark owner's "established, legitimate, substantial, and nonpretextual" quality-control measures are not genuine even if no actual quality defect is proven, emphasizing that the trademark owner's right to control distribution standards is "one of the most valuable and important protections afforded by the Lanham Act." The decision extends Shell Oil Co. v. Commercial Petroleum, Inc. beyond petroleum products to pharmaceuticals and confirms that the FDCA's exclusive enforcement provision does not preclude Lanham Act claims where the infringement theory rests on material differences rather than violations of FDA regulations.

The Fourth Circuit affirmed the district court's entry of a preliminary injunction following a bench hearing on Gilead Sciences, Inc.'s claims against Meritain Health, Inc., ProAct, Inc., Rx Valet, LLC, Advanced Pharmacy, LLC, Aqua Enterprise Inc. (d/b/a Affordable Rx Meds), and Gregory Santulli. The case concerned defendants' importation and distribution of foreign-market Gilead-branded HIV medications bearing Gilead's registered trademarks but intended for sale only in Turkey and other foreign markets. The court held that Gilead was likely to succeed on its § 32 registered mark infringement claims against the pharmacy defendants (the "Quartet") and its contributory infringement claims against Meritain and ProAct under the material-differences and quality-control doctrines applicable to gray-market goods. The court concluded that although the foreign medications were chemically identical to their domestic counterparts and bore authentic Gilead marks, they were not "genuine" for Lanham Act purposes because they materially differed from FDA-approved domestic versions in labeling language (Turkish versus English), packaging warnings, storage instructions, NDC identifiers, patient information disclosures, and FDA-mandated black-box warnings, and because they were distributed outside Gilead's established quality-control system for the U.S. market. The court rejected defendants' argument that the Federal Food, Drug, and Cosmetic Act precluded Gilead's Lanham Act claims, distinguishing cases where liability turned on interpreting FDA regulations.

The opinion applies a "low threshold of materiality" standard for the material-differences doctrine in gray-market cases, holding that prescription drug labeling differences—including language, safety warnings, regulatory disclosures, and product identifiers—constitute material differences even where the underlying pharmaceutical formulation is chemically identical. The court reasoned that consumers purchasing prescription medications bearing a trademark reasonably expect not only chemical identity but also compliance with domestic labeling, safety information, and regulatory requirements, and that "[i]f slight differences in packaging and labeling suffice in the ordinary gray-market case, they certainly suffice where the product is a prescription medication accompanied by different safety information and regulatory disclosures." The opinion also applies the quality-control doctrine from Shell Oil Co. v. Commercial Petroleum, Inc., holding that goods distributed outside the trademark owner's "established, legitimate, substantial, and nonpretextual" quality-control measures are not genuine regardless of actual quality, and that importation through foreign pharmacies and non-FDA distribution channels circumvented Gilead's domestic quality controls. The court further held that PBMs and TPAs who facilitate gray-market importation by directing prescription claims to alternative funding programs are subject to contributory infringement liability when they know or have reason to know of the direct infringement.