Inapplicable studies and lost market share equal literal falsity and irreparable harm

OrthoAccel Technologies, Inc. v. Propel Orthodontics, LLC, No. 4:16-CV-350, 2016 WL 6248711 (E.D. Tex. Oct. 26, 2016)

OrthoAccel is a medical device company that makes dental appliances, including the AcceleDent, a hands-free dental device that uses gentle vibrations to accelerate tooth movement when used with orthodontic treatment. It has two main functional components: (1) a “Mouthpiece” and (2) an “Activator,” a small extraoral component that generates a vibrational force when the patient lightly bites down on it to accelerate tooth movement during orthodontic treatment.  It received 510(k) clearance in 2011, which requires a showing that the device is as safe and effective as a legally marketed device that is not subject to premarket approval.  In 2013, OrthoAccel launched its second-generation product, the Aura, which was cleared for use with braces and in 2016 for use with clear aligners.

Propel is an OrthoAccel competitor.  It released the VPro5, which costs significantly less than the Aura.  Propel markets the Vpro5 through its sales force, promoting it as a quicker, cheaper alternative to the Aura that offers “5 Clinical Benefits”: (1) more efficient aligner seating, (2) relieves orthodontic pain, (3) accelerates tooth movement, (4) fast tracks retention, and (5) stimulates bone growth and remodeling.

OrthoAccel argued that the burden of avoiding a finding of falsity should shift to Propel under Novartis v. Johnson & Johnson-Merck Consumer Pharm. Co., 290 F.3d 578 (3d Cir. 2002), because its claims were “completely unsubstantiated.”  But the Fifth Circuit hasn’t adopted this rule, and anyway Propel’s claims weren’t “completely” unsubstantiated.

However, the court did find several Propel claims to be literally false.  For example, a document for the sales force said that, “We have many research studies that show the benefits of high frequency vibration. Let me detail some of them with you.” Another claim was that there are “significant clinical findings that support the VPro5’s ability to increase bone formation and accelerate tooth movement.” But no such studies existed. Propel also claimed that the frequency of the VPro5’s vibration was clinically optimal, also completely unsubstantiated.  OrthoAccel also showed falsity by disproving Propel’s establishment claims; the literature and studies on which Propel relied weren’t reliable enough to support its claims, mainly because they didn’t test the VPro5 or just offered hypotheses.  One article summarized a single patient’s positive experience with the VPro5, but that didn’t support the “Clinical Benefits” claims.

OrthoAccel also showed actual deception, though it didn’t need to because of the literal falsity, by showing that dentists’ websites had copied the 5 Clinical Benefits to tout the devices.  One doctor’s declaration also indicated that he “would expect the VPro5 to have scientific support, similar to AcceleDent.”  Materiality was a given.  OrthoAccel also showed injury: a sharp decline in sales following the launch of the VPro5.

Irreparable injury:  “It is well established that loss of market share due to false advertising constitutes irreparable harm.”  (Quoting a case involving “a competitive industry where consumers are brand loyal” without discussing whether that’s true of orthodontic devices.)  While OrthoAccel’s annual operating plan and actual revenues varied by 7% in 2014 and 2% in 2015, the variance measured 57% after the launch of the VPro5.  Thus, OrthoAccel showed irreparable harm. 

“Propel can still claim that the VPro5 aids in aligner seating. It will only enjoin Propel from disseminating claims of the VPro5’s 5 Clinical Benefits, which are false and misleading.”

Propel argued that OrthoAccel had unclean hands, based on statements made by OrthoAccel that allegedly misrepresented Propel’s FDA status. Without explaining its reasoning, the court found these arguments preempted, but regardless, such statements weren’t enough to “shock[s] the moral sensibilities of the judge, or...[be] offensive to the dictates of natural justice.”