promotion of expensive device for off-label uses not shown likely to deceive

Zeltiq Aesthetics, Inc. v. BTL Industries, Inc., No. 13–cv–05473, 2014 WL 1245222 (N.D. Cal. Mar. 25, 2014) (magistrate judge)

Zeltiq sued defendants for allegedly falsely advertising that a BTL medical device was FDA approved for fat reduction and body contouring.  The court denied a preliminary injunction.

Class I and II medical devices don’t need premarket approval, only premarket notification to the FDA.  If the FDA deems a Class II device to be “substantially equivalent” to a preexisting cleared device, it can be marketed without further regulatory scrutiny.

Zeltiq sells a medical device known as CoolSculpting, which is intended to cause fat cell elimination without causing scar tissue or damage to the skin, nerves or surrounding tissue. It’s been FDA-cleared for cold-assisted lipolysis of the flank and the abdomen.  Zeltiq alleged that it obtained clearance by submitting clinical studies and other data, because clearance of a device for treatment of body fat lends instant and substantial credibility.  As a result, CoolSculpting allegedly became the leading noninvasive fat reduction medical device, with huge sales jumps in a year.

BTL submitted a notice of intent to market the BTL Elite, asking for FDA clearance to market the device for applying heat to body tissues for pain relief, treating muscle spasm, increasing range of motion for joints, and increasing blood flow to tissues.  The FDA cleared the BTL Elite for these uses. Zeltiq alleged that BTL was unlawfully marketing a device called the Vanquish—the BTL Elite by another name—for fat reduction and body contouring. Both parties sell to doctors, not patients.

Zeltiq alleged that BTL didn’t promote Vanquish at all for treating muscle aches and spasms, but instead touted it for fat reduction while touting it as “FDA-cleared,” attempting to mislead doctors into believing that Vanquish was FDA-approved for fat reduction.

BTL didn’t dispute that it promoted Vanquish for fat reduction, an admittedly off-label use, nor that it only intended to do so (and not for muscle aches).  Its trademark registration describes Vanquish as a “[b]ody treatment device using heating and cooling for fat cell reduction.”  However, defendants argued that they’d stopped promoting Vanquish in the US for off-label use, and that they never represented that Vanquish had FDA clearance for fat reduction/body contouring.

Judge for yourself: in October 2013, as a sponsor of the annual meeting for the American Society for Dermatologic Surgery, BTL invited doctors to a private demonstration by stating: “Join us for a private demonstration of a newly FDA cleared technology ... The only complete solution for non-invasive body shaping.”  Unless what comes between the dots is a discussion of the clearance for ache treatment (which BTL admitted wasn’t promoted) and clarification of what the FDA clearance was for, this is classic implicature; any linguistically competent English speaker should’ve taken away the implication that the clearance was for fat reduction. 

BTL also promoted fat reduction to end consumers, e.g., the technology “is proven to destroy fat cells.”  In addition, BTL allegedly recruited doctors to promote Vanquish to patients, and BTL didn’t dispute its involvement with vanquishfat.com (though it did dispute its involvement with other sources that promoted Vanquish to consumers for fat reduction). On that website, a doctor stated that he had “heard about a new, fat zipping device that’s about to receive FDA approval,” and the same doctor created a “Vanquish Fat” Facebook page and claimed that “Vanquish Melts Fat With No Pain.”

Also, BTL argued that in 2014, it hadn’t done anything in the US to promote Vanquish for fat reduction.  In rebuttal, Zeltiq submitted evidence that BTL planned to exhibit at two shows in February and April, displaying the Vanquish device “obscurely described as delivering ‘sub-cutaneous heating for body treatment based on induced apoptosis using a contract-free operator-monitored clinical approach.”

BTL has both a US website and a non-US website, bltvanquish.com and bltvanquish.com/en/vanquish.html respectively.  (Um, that looks an awful lot like one website.)  BTL argued that it only controlled the content of the US website, and the content of the non-US website was controlled overseas by a related company and directed at a worldwide audience. Only the non-US website presently promotes Vanquish for fat reduction explicitly, though the US site allegedly used to do so by showing a video from a Texas doctor who said it “shrinks fat cells,” and quoting a number of other U.S. doctors extolling its fat reduction benefits.   

BTL modified the US website after this lawsuit was filed, and BTL said that it sought out help for training about its marketing obligations.  Now, the US website describes Vanquish as “a revolutionary selective radiofrequency system” that “delivers a non-invasive solution with unparalleled efficacy” and “is the first and only non-invasive body treatment finally integrating all the most desired features.” The website states that “Vanquish is FDA cleared for deep tissue heating.”  Fine print describes its specific intended FDA-cleared indications.  (Wow, that really has the feeling of code.  How the heck would a consumer know what Vanquish was for? And why would you only describe what it was really for in fine print, unless you expected that consumers would already have something in mind, or would click around until they found real information, perhaps on the non-US part of the site?)  The website also said that it was for US medical professionals only, and wasn’t cleared for treating adipose tissue (fat).

Zeltiq argued that despite the purported two-site solution, the non-US website was actually intended to promote to the US.  For example, BTL sent invitations to doctors to attend open houses, and only listed the address for the non-United States website on the invitation.  “Moreover, until recently, the largest and boldest text on the United States website was a link in the middle of the page that stated, ‘Go to Non-US Website.’”  In fact, the US website contained hardly any information—most of it is quoted above.  The non-US site promotes Vanquish for fat reduction, including a page that links to magazine articles and videos quoting United States doctors who promote Vanquish for fat reduction.  The “international” website also used to include a page for seminars for doctors, listing five conferences in the US.  A version listing conferences in 2014 showed conferences planned both inside and outside the US.

A new US-targeted website, which BTL denied any control over, promoted Vanquish for fat removal, including links to two video clips—allegedly the same clips that were deleted from BTL’s original website.  In one, a doctor appears on Fox News. When he’s asked whether Vanquish is safe, he responds:

This is exceptionally safe. The FDA basically is there to provide safety, it is not so much there to provide efficacy. So when they do these FDA approval studies, the number one, two and three thing they are looking at is safety, and this is exceptionally safe. They—even in the animal models, they looked at every part of the animal to ensure that there was no damage to anything other than the fat.

Zeltiq, understandably, argued that this was misleading, suggesting that the FDA approved Vanquish for the purpose for which it was being promoted.  (Query: after Lexmark, can Zeltiq sue individual doctors making claims about Vanquish?)

But what do doctors think? Both sides submitted declarations from doctors. Zeltiq’s declarant said that doctors make off-label uses, but that they generally only develop after doctors have experience with a new device for its approved use, and that information about a new device is generally scant.  She concluded that when a manufacturer promotes a new device in the early stages after device is launched, physicians would presume that the new device has been approved by the FDA for the promoted use.   BTL submitted declarations from two other doctors.  One noted that both parties’ devices cost approximately $80,000 to $90,000, and both said that before they bought the Vanquish device they were made aware of the scope and limits of FDA clearance.

BTL argued preemption.  The court found this a serious question, but better dealt with on a full record.  For one thing, the core claim—a false or misleading representation of clearance for fat reduction—wasn’t preempted regardless. Also, since BTL didn’t dispute that it promoted Vanquish for a non-FDA-cleared use, interpretation of FDA rules wouldn’t be required to decide the false advertising claim.

However, the court concluded, Zeltiq didn’t show literal falsity.  Instead, the “newly FDA cleared technology” invitation wasn’t literally false because Vanquish was FDA cleared, even if not for body shaping.  (Ugh.  That’s sophistry, which is the point of having a doctrine of falsity by necessary implication.)  Nor does the current website contain literal falsity. Zeltiq argued falsity by necessary implication, but the court didn’t buy it, stating without further explanation that none of the identified statements necessarily implied FDA clearance for fat reduction.  Half-truths aren’t literally false.

Zeltiq did show that BTL’s promotions were potentially misleading, and its use of FDA clearance as a selling point in promotional materials was evidence of materiality. But Zeltiq didn’t show that any doctors had been fooled. “At best, Zeltiq’s evidence shows that physicians in general presume the Vanquish device is FDA cleared for fat reduction because it was marketed for that use in the early stages after its launch.” This evidence was too general—it didn’t show that actual purchasers believed the Vanquish was FDA cleared.  BTL’s evidence suggested that “at least one group of physicians decides to purchase such an expensive medical device only after fully evaluating the device’s efficacy and safety for patients and understanding the official FDA clearances.” 

In light of the device’s high cost and limitation to doctor-purchasers, Zeltiq wasn’t likely to prove deception. Still, there were serious questions going to the merits.

Zeltiq brought a serpate claim under the California UCL’s “unlawful” prong.  While the UCL prohibits the sale of an uncleared device, the Vanquish was cleared, and the statute wasn’t use-specific. Zeltiq also argued that the Vanquish was misbranded because its labeling fails to include “adequate directions for use” in fat reduction procedures. “In light of the fact the FDCA regulations require instructions to be catered to ‘the purposes for which [the device] is intended,; Zeltiq raises an interesting argument.”  But the “labeling” was the targeted source of misbranding, and the operator’s manual included instructions detailing the FDA-cleared uses and providing directions for such uses.  Zeltiq didn’t convince the court that misbranding can come from overall promotional practices, though it did raise serious questions going to the merits.

But the balance of hardships didn’t tip sharply in Zeltiq’s favor.  Zeltiq could suffer without an injunction, losing its unique place in the market.  But BTL would endure hardship from an injunction, which as Zeltiq proposed would require delinking the US and non-US websites and providing written notification to every doctor who bought the Vanquish that it’s not FDA-cleared for fat reduction. Zeltiq also wanted to bar BTL from selling Vanquish for non-cleared uses, but doctors have the right to make off-label uses.

Also, Zeltiq didn’t show irreparable injury. Though lost market share can be irreparable harm, Zeltiq didn’t show actual lost market share. Zeltiq argued that it could show likely irreparable injury by showing that the parties competed and that there was a logical causal connection between the false advertising and its own sales position.  But the court thought that this wasn’t enough in light of Winter, which held that a showing of irreparable injury is always required.  “Merely showing that the parties are competitors and that there is a logical connection between the false advertising and the plaintiff’s sales may be sufficient to show a possibility of irreparable harm, but is insufficient to show a likelihood of irreparable harm without additional evidence.”  (Again, I wonder when if ever this kind of reasoning will hit trademark.)