Monday, August 26, 2019

proof of lost market share needs something extra to be irreparable harm

BioTE Medical, LLC v. Jacobsen, 2019 WL 3943166, No. 18-cv-866 (E.D. Tex. Aug. 21, 2019)

“BioTE provides hormone replacement therapy … through a method called Pellet Therapy,” using an allegedly custom and proprietary formula using “bio-identical and natural ingredients that act to maintain a patient’s hormone levels throughout the day.” It sued defendants, alleging that they were unlawfully manufacturing and selling unapproved new drugs instead of lawful “compounding” and were engaging in false advertising in violation of the Lanham Act. (It also alleged RICO violations which we can ignore because they are RICO allegations.)

Defendants allegedly misrepresented that defendant EvexiPEL had developed an exclusive, proprietary hormone replacement pellet; that defendant Terri DeNeui participated in the development of the allegedly proprietary hormone pellet; that defendant Farmakeio had a federally required 503B “registration pending,” when there is no such thing and no paperwork for any such registration had been submitted; that their Pellet “has been shown to produce better outcomes for patients too” and similar claims; that Farmakeio was “a leading pharmacy in the U.S.” when it had just been formed and started operating; etc.

BioTE failed to get a preliminary injunction for want of irreparable injury.  Some courts have held that false comparative ads can be presumed to cause injury and even irreparable injury. Here, the court held that, even assuming false comparisons, irreparable harm shouldn’t be presumed after eBay and Winter.  Anyway, cases presuming irreparable harm in the Lanham Act context are mostly trademark cases, and trademark is special because no proof of injury is required to succed in a trademark case. [Sigh.] 

BioTE also argued that it lost market share to defendants; lost market share due to false advertising can result in irreparable harm, at least in an industry where consumers are brand loyal. But BioTE didn’t provide evidence that its lost customers couldn’t be redressed with damages; it provided no “affidavits, declarations, or any other support, that shows imminent harm that is difficult to quantify.” Proof of lost market share and lost sales alone didn’t show irreparable harm.

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