FDA preemption argument loses again

Codonics, Inc. v. DatCard Systems, Inc., 2009 WL 2382567 (N.D. Ohio)

The parties compete in the market for dry diagnostic medical images and associated CD/DVD disc publishers. Codonics sells disc publishers and supplies under the name Virtua, and DatCard sells Smartline imagers and PacsCube disc publishers. DatCard sued Codonics for patent infringement. Half a year later, Codonics filed a citizen petition with the FDA citing DatCard’s alleged noncompliance with FDA regulations, including a failure to warn properly and misbranding because of absence of required labeling information. It also sued for Lanham Act violations and coordinate state claims.

Codonics alleged that DatCard advertises PacsCube and Smartline as particularly suited for medical applications, but that they aren’t because their component parts can cause harm to patients. DatCard argued FDA preemption.

The court separated the state and federal analysis. There’s a presumption against preemption of historic state police powers, but no presumption against preemption of a separate federal act. Applying Wyeth v. Levine, 129 S.Ct. 1187 (2009), the court found no preemption of the state claims because Congress didn’t clearly express its preemptive intent, though it noted that preemption of medical device claims is different than preemption of prescription drug claims, given the express preemption provision for medical devices. DatCard hadn’t argued that the express preemption provision applied.

Turning to the Lanham Act, the court noted that the FDCA provides no private cause of action. But that doesn’t mean that separate private causes of action disappear. The FDCA is designed to protect consumer safety, while the Lanham Act is primarily directed at commercial interests; a competitor is not a vicarious avenger of the public’s right to be protected against false advertising. (Note the mismatch with the dominant consumer-protection theory of the Lanham Act in other contexts.)

DatCard argued that adjudicating Codonics’s claims would usurp FDA responsibility for interpreting and enforcing potentially ambiguous regulations. But when a plaintiff can prove falsity through other means, such as reference to a market definition of a term, or through reference to an unambiguous definition, Lanham Act claims are generally allowed to proceed.

Codonics alleged that DatCard’s products contain non-medical grade power sources that are known to emit current leakage, posing risks to patients. But the scope of its claims hadn’t been completely defined, and DatCard hadn’t explained how resolving its falsity allegations would require interpretation of ambiguous FDA regulations. Thus, the Lanham Act claims were not subject to dismissal, but the issue could be revisited on summary judgment if appropriate.