Synthes, a medical device company, sued competitor Emerge (founded in part by former employees) for various torts, including false advertising, which is all I'll discuss. Emerge allegedly falsely claimed that its products were “identical,” of “statistical equivalence,” or made in the same location as Synthes's products, and that the FDA had determined that Emerge's drill bits and guide wires were substantially equivalent to Synthes's drill bits and guide wires. Emerge moved to dismiss this claim because Synthes hadn’t alleged that the statements were made in “commercial advertising and promotion.” Under Gordon & Breach, neither private statements to competitors nor isolated statements to potential customers suffice. The statements, though not necessarily part of a classic ad campaign, must be widely disseminated and part of an organized campaign to penetrate the relevant market.
The specifics alleged were that “labels bearing Emerge's name and logo that directed Synthes customers to reorder Synthes' surgical drill bits from Emerge appeared in a Synthes Inventory Management System (‘SIMS’) cabinet in an account in [one defendant’s] former territory in Arizona as well as on product sealed in Synthes packaging. … Since that time, Emerge's labels have begun to appear in additional SIMS and sets stored at other of Synthes' customers' facilities ….” The complaint also generally alleged that the defendants had made identical/equivalence claims. Synthes’ brief also referred to an e-mail to a customer, a video broadcast distributed by a well-known publisher in the orthopedics industry, and a PowerPoint presentation made to a health system.
The court thought that “[a]t first blush—and taken in isolation—these allegations appear to identify only sporadic instances of dissemination, in lieu of the requisite public dissemination of the purportedly false advertising.” But closer reading suggested that they were examples of a broad and widespread dissemination to the relevant purchasing public. “A requirement that Plaintiff describe in detail the precise scope of Emerge's advertising campaign would far exceed the pleading mandates under the Federal Rules of Civil Procedure and the Twombly/Iqbal standards.” Discovery could be used to test the truth of the idea that there was a relatively large-scale marketing campaign at work.