THE RATIO. One judgment, decoded twice: once for anyone, once for the profession.

Case Details

  • Citation: No. 25-1828 (4th Cir. Aug. 13, 2026), consolidated with Nos. 25-1829, 25-1849, and 25-1850
  • Court: United States Court of Appeals for the Fourth Circuit
  • Decided: August 13, 2026 (argued May 6, 2026)
  • On appeal from: United States District Court for the District of Maryland, at Baltimore (Julie R. Rubin, J.), No. 1:24-cv-03566-JRR
  • Counsel or Representation: Michael Paul Beltran and Todd William Hesel argued for Appellants; separate briefing counsel appeared for Meritain Health (Foley & Lardner LLP) and ProAct (Silverman Thompson Slutkin White). Timothy Alan Waters argued for Appellees Gilead Sciences. William A. Sarraille appeared for amici curiae supporting Gilead.
  • Key precedents applied: K Mart Corp. v. Cartier, Inc., 486 U.S. 281 (1988); Societe Des Produits Nestle, S.A. v. Casa Helvetia, Inc., 982 F.2d 633 (1st Cir. 1992); Shell Oil Co. v. Com. Petroleum, Inc., 928 F.2d 104 (4th Cir. 1991); Zino Davidoff SA v. CVS Corp., 571 F.3d 238 (2d Cir. 2009); Inwood Laboratories, Inc. v. Ives Laboratories, Inc., 456 U.S. 844 (1982); Rosetta Stone Ltd. v. Google, Inc., 676 F.3d 144 (4th Cir. 2012); Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7 (2008)
  • Governing provisions: Lanham Act, 15 U.S.C. §§ 1114(1), 1125(a); Trademark Modernization Act presumption of irreparable harm, 15 U.S.C. § 1116(a); interlocutory appeal jurisdiction, 28 U.S.C. § 1292(a)(1)
  • Key sections: Part II.A.1 (threshold jurisdiction and FDCA preclusion arguments), Part II.A.2 (material differences and quality control doctrines for gray market goods), Part II.A.3 (contributory infringement and the knowledge standard), Parts II.B-C (irreparable harm, equities, and public interest)

Headnote

A Maryland man taking a well known HIV medication opened his mail one month and found pills labeled entirely in Turkish. Gilead, the manufacturer, traced the shipment through a chain of vendors that health plans use to steer patients toward cheaper, internationally sourced versions of the same drug. The company sued, and a district court blocked the entire operation with a preliminary injunction. On appeal, the vendors argued that since the pills were made by Gilead itself and chemically identical to the U.S. version, nothing about the arrangement should count as trademark infringement. The Fourth Circuit disagreed, holding that a drug can be authentic in the sense of being genuinely manufactured by the trademark owner and still not be “genuine” for trademark purposes if it differs materially from the domestic product and skips the manufacturer’s quality control system. It also held that the health plan administrators who helped route patients toward these imports knew enough about what they were facilitating to be liable alongside the importers themselves.

Factual Background

Gilead develops and sells prescription medications worldwide, including the HIV drug Biktarvy, and packages the same drug differently depending on which country’s market it is destined for. Many U.S. employers self-fund their health plans, meaning the employer rather than an insurer bears the cost of employee healthcare, and typically hires a third-party administrator to process claims and a separate pharmacy benefit manager to run the drug side of the plan. Some employers also contract with an “alternative funding program,” or AFP, a vendor that sources certain brand-name drugs from foreign pharmacies instead of the ordinary domestic supply chain, as a way to cut costs.

John Doe, a Maryland resident who had taken Biktarvy for years, enrolled in a new employer plan administered by Meritain Health as the third-party administrator and ProAct as the pharmacy benefit manager. When his pharmacy tried to fill his prescription, ProAct’s system, using data Meritain supplied, automatically rejected the claim and redirected him to Rx Valet, the employer’s separately contracted AFP. Rx Valet, not itself a licensed pharmacy, routed him through an affiliated mail-order pharmacy, Advanced Pharmacy, which in turn forwarded his prescription to a referral service, Affordable Rx, which arranged for a Turkish pharmacy to fill it. Weeks later, Doe received Biktarvy labeled and packaged for the Turkish market, in Turkish, missing the warnings, drug identification number, and patient safety information that appear on the U.S. version. Concerned, he contacted his doctor, who alerted Gilead. Testing confirmed the pills were authentic Gilead product manufactured in Turkey for the Turkish market alone. Gilead’s investigation found this was not an isolated case: the same network had shipped hundreds of bottles of foreign-market Gilead drugs to patients across the country, and Gilead’s report to the FDA did not result in enforcement action.

Gilead sued Meritain, ProAct, Rx Valet, Advanced Pharmacy, Affordable Rx, the network’s chief executive Gregory Santulli, and the Turkish pharmacy in the District of Maryland, alleging direct trademark infringement by the importing group, which the court called the Quartet, and contributory infringement by Meritain and ProAct for continuing to supply data and processing services to that group. The district court entered a temporary restraining order, then, after an evidentiary hearing, converted it into a preliminary injunction barring the defendants from importing, advertising, or facilitating the sale of foreign-market Gilead medications in the United States, finding the imported drugs materially different from the domestic versions and the defendants aware of those differences. The defendants took this interlocutory appeal.

The Question for Determination

If a company makes the exact same pill for two different countries, does selling the foreign version in the United States without the company’s permission count as trademark infringement, even though nobody disputes that the pills themselves are real and unadulterated? And separately, can a health plan’s administrator be held responsible for that infringement simply for continuing to process the paperwork once it had good reason to know what was going on?

Framed precisely, the questions were whether the district court abused its discretion in finding Gilead likely to succeed on its claims that the Quartet directly infringed Gilead’s trademarks by importing foreign-market medications that were not “genuine” under the Lanham Act’s material differences and quality control doctrines, and that Meritain and ProAct were contributorily liable under Inwood’s knowledge standard for continuing to provide services to the Quartet, along with the remaining preliminary injunction factors of irreparable harm, the balance of equities, and the public interest.

The Court’s Reasoning

The court reviewed the injunction for abuse of discretion, deferring to factual findings unless clearly erroneous while reviewing legal conclusions de novo, and applied the familiar four-factor test from Winter v. Natural Resources Defense Council. Before reaching the merits, it rejected two threshold arguments: that Santulli’s personal jurisdiction objection required a heightened showing the district court never applied, an argument the court found he had never actually raised below, and that the Food, Drug, and Cosmetic Act’s exclusive enforcement scheme precluded Gilead’s Lanham Act claims. On the latter point, the court distinguished cases where resolving a trademark claim would require interpreting FDA regulations directly, since Gilead’s theory rested on material differences between the U.S. and foreign products rather than on any claim that the imports violated FDA labeling rules.

On direct infringement, the court explained that gray market goods, authentic products imported without the trademark owner’s consent, are not automatically infringing, since consumers who receive an identical product get exactly what the mark promises them. But goods bearing a genuine mark can still be legally “non-genuine” in two ways: if they materially differ from what is authorized for domestic sale, or if they bypass the trademark owner’s legitimate quality control system. Applying a standard the court described as a low threshold of materiality, it found the Turkish Biktarvy differed in numerous respects that mattered to consumers: Turkish rather than English labeling, missing drug identification numbers, missing black box warnings about a serious health risk, and the absence of the U.S. patient information document altogether. It rejected the argument that chemical identity was enough to make the products the same, drawing on precedent involving foreign chocolate, dolls, and dishwashing liquid where language and packaging differences alone were held material. Separately, the court found the imports bypassed Gilead’s quality control system entirely: they were not shipped in Gilead’s temperature-monitored containers, carried no pedigree allowing Gilead to trace their chain of custody, fell outside Gilead’s recall protocols, and reached consumers through channels outside its authorized distribution network. Either defect alone would support a finding of infringement; together they made Gilead’s showing strong.

Turning to Meritain and ProAct, the court held that contributory trademark liability under Inwood does not require the trademark owner to have given prior notice of the infringement before a service provider can be charged with knowledge; it is enough that a defendant knew or had reason to know that identified individuals it was serving were engaging in infringement, and willful blindness to a reasonably aroused suspicion can supply that knowledge. On the record, Meritain’s own internal emails showed analysts and a pharmacy management director explicitly recognizing that the company was paying invoices for internationally sourced Gilead drugs despite a written policy against doing so, while its marketing materials both promoted international sourcing to some clients and warned other clients about the very safety risks of imported drugs that made them non-genuine. ProAct’s own executive testified he understood the Turkish version of Biktarvy to be different from the U.S. version and had reviewed an FDA warning letter describing exactly the kinds of differences the court had already found material. The court also declined to adopt a further “degree of control” requirement that some other circuits have read into contributory liability for service providers, finding no basis for it in Inwood or the court’s own precedent, though it noted the facts here would have satisfied such a requirement in any event.

On the remaining factors, the court applied the Trademark Modernization Act’s presumption of irreparable harm once likelihood of success on a Lanham Act claim is shown, and found the ten-month gap between Gilead learning of the problem and filing suit did not rebut that presumption, since the delay reflected a good faith investigation, including reporting the matter to the FDA, rather than indifference. On the balance of equities and the public interest, the court rejected the argument that consumers benefit from access to cheaper imported medications, since that argument assumed the imports were genuine, which the court had already found they were not.

Critical Assessment

The material differences doctrine, as applied here, operates on what the court itself calls a low threshold, no more than a slight difference a consumer might find relevant. That standard does real work for patient safety on these facts, where the missing information includes a black box warning about a genuine health risk. But it also means that almost any cross-border resale of a pharmaceutical, however chemically identical, will likely qualify as non-genuine given how heavily regulated and jurisdiction-specific drug labeling already is, which effectively forecloses the appellants’ public-interest argument about drug affordability before it can be weighed on its own terms. The court was correct that genuineness and affordability are separate questions under existing doctrine, but the practical effect of a low materiality bar is that the affordability argument has almost nowhere to land in a case like this one, a structural point worth naming even though the court’s legal reasoning is sound on its own terms.

The contributory infringement analysis is a careful piece of work. Rejecting Meritain and ProAct’s proposed rule that liability requires prior notice from the trademark holder is well grounded in Inwood’s actual text, which reaches anyone who “knows or has reason to know” of infringement, and the court’s discussion of willful blindness gives that standard real content rather than leaving it as an empty phrase. Declining to import a separate “control” requirement from Ninth Circuit precedent, while noting in the alternative that the facts would satisfy it anyway, is a sensible way to resolve the immediate case without over-committing the circuit to a doctrinal fight it did not strictly need to have.

It is worth being precise about what this decision does and does not settle. This is an appeal from a preliminary injunction, reviewed for abuse of discretion, and the court repeatedly stresses that it does not reweigh the evidence and defers to plausible factual findings even where it might have weighed things differently itself. The opinion reads like a thorough merits ruling, and its treatment of the material differences and quality control doctrines will likely be cited that way, but liability has not been finally adjudicated, and Gilead’s other claims, including statutory importation and state law causes of action, were not before the court at all. Readers should treat this as a strong, reasoned prediction of how the case is likely to come out, not as the final word.

Implications

If you’re not a lawyer: If your employer’s health plan offers a program that sources your prescription from another country to save money, this case is a reminder that the imported version, even if made by the very same drug company, may lack the English-language warnings, safety monitoring, and recall protections that come with the U.S. version. That gap is exactly what this ruling treats as legally significant, not just a labeling inconvenience. If you receive medication that looks unfamiliar or is labeled in a language you do not expect, it is worth contacting your doctor or the manufacturer directly.

For the profession: This is the Fourth Circuit’s first adoption of the material differences and quality control doctrines in a gray market case, bringing the circuit in line with every other court of appeals to have addressed the question, and the low materiality threshold it applies will be useful to brand owners well beyond pharmaceuticals. On contributory liability, the opinion is a clean rejection of a prior-notice requirement for service providers and a useful data point against the Ninth Circuit’s control-based gloss on Inwood, worth citing wherever a TPA, PBM, marketplace, or payment processor argues it cannot be liable without direct notice or direct control over the underlying conduct. Counsel for any client operating or contracting with an AFP should treat this opinion as a clear signal that internal communications acknowledging the practice, even alongside a formal policy against it, can themselves supply the knowledge element.