The Mostyn law firm, that uncovered an alleged scheme to import counterfeit plastic resin smuggled in from China, is now blasting the FDA for its lackluster response in pursing a criminal investigation.
Discovery in the ongoing pelvic mesh litigation showed Boston Scientific (BSC) allegedly sourced polypropylene resin, used to make pelvic mesh implants, from a known Chinese smuggler and BSC looked the other way when lot numbers didn’t match.
The Houston-based firm filed a class action lawsuit (Teresa Stevens v. Boston Scientific, Case no. 2:16-cv-00265) in Charleston, WV, on behalf of the women allegedly implanted with the mesh made from the Chinese resin, shown to contain high levels of the mineral selenium.
In response, the FDA in an April 1 safety alert, said it would allow Boston Scientific to conduct its own investigation see if the mesh is the equivalent to other pelvic meshes made by Boston Scientific used to treat incontinence and pelvic organ prolapse. See FDA story here.
Steve and Amber Mostyn
In a strongly-worded letter today, Amber Mostyn blasted FDA commissioner Dr. Robert Califf and Health and Human Services Secretary Sylvia Mathews Burwell asking if equivalence of the product would be a defense to trafficking in counterfeit material?
She says the equivalence of the end product is irrelevant.
“The FDA‘s investigation should not be into the quality of the raw material, but rather the source of the raw material. Allowing the defense of equivalence undermines the public policy positions articulated in the very statutes Congress passed to prevent this type of criminal conduct.”
Waiting months to determine if the end mesh is equivalent does nothing to address the question of counterfeit conduct, a criminal violation of the Trademark Counterfeiting Act, 18 U.S. C. 2320, the letter says. It defines counterfeiting as trafficking in goods and services using a counterfeit mark, documentation or packaging that is false or a counterfeit mark used to “cause confusion, to cause mistake or to deceive,” and then traffic in those goods or services knowing they could cause harm.
The letter calls for the mesh product to be immediately recalled if the company violated federal counterfeit laws and Mostyn urges the FDA to immediately work with the Department of Justice for guidance.
Criminal penalties can range from 20 years in prison for serious bodily injury to $15 million fine for an organization. The penalties for dealing in counterfeit products are outlined in the Food and Drug Administration Safety and Innovation Act of 2012. The government has to prove the company has an awareness or firm believe that the mark used was counterfeit.
“Knowledge can also be proved with evidence that the defendant acted with willful blindness, conscious avoidance, or deliberate ignorance, which means the defendant ‘deliberately closed his eyes to whatever otherwise would have been obvious to him concerning the fact in question."~Prosecuting Intellectual Property Crimes, 2013
BSC previously sourced its polypropylene (PP) resin from Phillips Sumika, the petroleum company that supplied raw polypropylene resin from LaPorte Texas. It has since shut down all U.S. operations and moved to Saudi Arabia. Marlex is the trade name for the BSC mesh made from this PP resin.
On January 12, 2016, West Virginia resident Teresa Stevens filed a class action lawsuit alleging Racketeer Influenced and Corrupt Organizations Act (RICO) and filed a motion asking Judge Goodwin to stop the sale of Boston Scientific pelvic mesh. Judge Goodwin denied the motion and requested the FDA to look at the issue. See background story here. A citizen petition was filed the day the FDA issued its safety alert.
Yimao plastic molding,
Guangdong Province China, where BSC bought resin
Evidence uncovered lays out a prima facia case of counterfeiting including:
*BSC lacked normal documentation that would accompany raw material
*BSC did not have import documentation for the raw PP resin to show it was originally imported to China
*Internal BSC documents list two different raw material suppliers in China
*BSC knew the companies counterfeited material yet it purchased the product from EMAI Plastic Raw Material
*The purchase price was unusually low compared to the current market price
*BSC split up the supplies and send them to different ports
*Their original supplier, Phillips had alerted BSC the lot numbers on the bags of raw material was invalid.
*Another division of BSC had rejected the plastic resin from the same distributor because the lot number was invalid and alerted all divisions of BSC.
The Marlex bags said the polypropylene raw material came from La Porte but ended up being imported from China.
“How did all of this resin end up in China if it was made in Texas?” says an email from BSC’s import/export coordinator Robert Mullally (click on image at lower right).
The red circles indicate copies of trademarks registered in the US Patent and Trademark Office for companies such as Phillips Sumika, but the lot number was invalid (see image on left) and BSC had confirmed that fact, something Mostyn calls “direct evidence of trafficking in counterfeit goods by BSC.”
Trademarks are also important to the International Origination for Standardization (ISO) (here) which assures products are safe, reliable and consistent in their production.
The FDA should on its own contact the Department of Justice for guidance on the alleged criminal behavior, the firm asks.
Boston Scientific is facing 20,790 product liability lawsuits consolidated in multidistrict litigation in Charleston, WV. #
April 12, Letter to FDA
STEVENS FINAL LETTER TO FDA (1)
Prosecuting Intellectual Property Crimes (here)
Mostyn Law Court Documents, Citizen Petition
Mesh News Desk, Jan. 15, 2016 – RICO Suit Accused Boston Scientific of Fraud in Smuggling Defective Pelvic Mesh from China
RICO Complaint Jan 12, 2016