"first urgent care" practice claim isn't material or literally false

American Family Care, Inc. v. Medhelp, P.C., 2021 WL 4149782, No. 2:19-CV-01325-LSC (N.D. Ala. Sept. 13, 2021)

Not having a materiality or harm requirement really makes a difference in trademark cases compared to false advertising cases—look at the reasons this false advertising claim fails.

AFC sued MedHelp for Lanham Act false advertising. AFC supplies urgent care, family/primary care, and occupational health services nationwide; its first clinic opened in Hoover, Alabama (Birmingham’s largest suburb), in 1982; no other urgent care clinics were operating in Birmingham.  But, for several years, MedHelp advertised on its website that “MedHelp was founded in 1982 as the first Urgent Care/Family Practice in Birmingham.” (In the 1980s, “urgent care” wasn’t in use, and such clinics were typically called “freestanding emergency rooms,” “minor emergency rooms,” “immediate care clinics,” or “walk-in clinics.”)

First, the court found that “founded in 1982 as the first Urgent Care/Family Practice in Birmingham” was ambiguous because there is no consistent definition of the term “urgent care.” And it was also ambiguous whether “Birmingham” meant with or without its suburbs. [Comment: There is a missing step here not revealed in the court’s decision: is MedHelp’s claim truthful under any plausible definition? Maybe, but the court should have clarified; if there are multiple possible meanings but the defendant’s claim isn’t truthful using any of them, then other courts have found literal falsity, which makes sense given the justifications for the literal/implicit division.]

Since the ad was “merely misleading,” AFC needed evidence of consumer deception, which it did not have.

In addition, AFC failed to show materiality, despite its argument that the claim conveys “broader qualities including, but not limited to, ‘experience,’ ‘trust,’ and ‘competence’ that are important in choosing a health care provider.” AFC’s expert cited two studies: a conjoint analysis of patient decisions in two German hospitals and research involving health-seeking preferences of elderly Filipinos. But the expert failed to link German and Filipino preferences to US urgent care preferences.

Finally, AFC also failed to show injury. Its expert relied on evidence that first movers should have a 24-30% market share advantage, but there wasn’t any evidence that AFC was the first mover in the US urgent care market and indeed a witness testified that there were “less than a hundred” urgent care clinics when AFC opened its clinic in Hoover. Nor did the expert discuss other potential causes like customer service, negative publicity (AFC was sued for insurance fraud), or technology. Further, there wasn’t evidence that the misleading first-mover claim “caused AFC to lose any profits, goodwill, or business opportunities”; there wasn’t even any evidence on how many people saw the claim.

With all this, the TMA’s presumption of irreparable harm was no help.