misrepresentation of FDA clearance as FDA approval needs non-anecdotal evidence of consumer deception to be actionable

Repro-Med Sys., Inc. v. EMED Technol. Corp., 2019 WL 1427978, No. 13-cv-01957-TLN-CKD (E.D. Cal. Mar. 29, 2019)

The parties have been fighting over their competing medical devices for a while. Here, RMS alleged among other things that EMED was intentionally misrepresenting FDA “clearance” as “approval.” There are other cases indicating that this difference can be literal falsity, since clearance and approval are two separate things, but the court here, relying on California law, required evidence that the statements were “misleading to a reasonable consumer,” and further stated that “[a]necdotal evidence alone is insufficient to prove that the public is likely to be misled.”  Seamlessly transitioning to the Lanham Act standard, the court required “extrinsic evidence, such as consumer survey evidence, that the challenged statements tend to mislead consumers.”  By not analyzing the literal/implicit divide and whether "approval" has a literal meaning, the court definitely raised the burden for RMS.

RMS provided the declaration of an FDA expert, who argued that “to the consumer and public at large, an assertion of FDA approval carries with it the implied statement that the product has been subjected to intense review and scrutiny, and the costs of time and resources associated therewith.” But this declaration was no substitute for extrinsic evidence of consumer deception.

Similarly, RMS alleged that EMED’s promotional materials present flow rate data inconsistent with the its 510(k), so that the data provided to the FDA for clearance purposes differs from the data provided to customers for marketing purposes.  Flow rate is the amount of fluid which passes per unit of time, and too-fast or too-slow delivery of infused medications can make a big difference to patient health. As I understand it, RMS argued that EMED used a flow rate in its 510(k) that allowed it to say it was the same as the RMS product, entitling it to clearance; if the truth is otherwise (as indicated by the advertising materials), then it should’ve sought separate approval.  But as EMED pointed out, the connection between this discrepancy and false advertising as a cause of action is unclear.  “RMS failed to provide concrete evidence of how the alleged mischaracterization misled or confused the public. While an average person may understand the flow rates are different, RMS has provided no information as to how this understanding confuses, misleads or deceives customers.”

Further, RMS attacked EMED’s CEO’s online statement that

RMS has been cited by the FDA for numerous regulatory infractions, some of which have potential impact on patient health and safety.... While RMS may snub its nose at the FDA, the deficiencies uncovered by the FDA are serious business. To complete the record, RMS is also a defendant in lawsuits being brought by EMED Technologies alleging that RMS has been consistently infringing patents created and controlled by EMED, to the detriment of the healthcare consumer.

RMS alleged that the CEO “was clearly aware that not only has there been no finding of infringement, but that both of the patents at issue stand at present as invalid.” Some of this was opinion, which couldn’t be a material misrepresentation.  The factual statements were verifiable; in early 2016, the FDA sent a warning letter to RMS raising several adulteration and misbranding violations, that “could significantly affect safety and effectiveness” of RMS products. Thus, the “numerous regulatory infractions, some of which have potential impact on patient health and safety” statement wasn’t objectively false. RMS argued that a warning letter isn’t an enforcement action, as falsely implied by the EMED statement, but again there was no evidence of consumer reception/deception.

Unsurprisingly, the court also found that RMS failed to show irreparable harm or in any way quantify or concretize its losses; it declined to adopt a presumption of harm from false comparative advertising (though that’s likely at least in part driven by its refusal to find false advertising in the first place).