competitor succeeds in enjoining sale of competing but non-FDA-cleared medical devices

Telebrands Corp. v. Vindex Solutions LLC, 2021 WL 534361, No. 21-cv-00898-BLF (N.D. Cal. Feb. 12, 2021)

Telebrands sells stuff, including the Hempvana Rocket, a handheld transcutaneous electrical nerve stimulation (TENS) unit, “a pain-relieving pen that uses TENS therapy in the form of direct electrical stimulation to muscles.” TENS units are classified as Class II medical devices requiring a 510(k) premarket notification to the FDA and clearance. Telebrands hired a firm, Exponent, to evaluate competing medical devices, determine whether those devices were TENS units, and determine whether the device distributors had sought out and obtained clearance from the FDA after submitting 510(k) premarket notifications. Exponent identified numerous troublesome devices, including defendants'.

Telebrands alleged that, by unlawfully distributing the competing TENS units without first obtaining clearance, defendants received an unfair advantage. Also, their advertising omitted the lack of clearance, which allegedly meant that consumers “will be confused or misled into purchasing Defendants’ TENS units believing them to be equivalent to the Hempvana Rocket.”

The court found that Telebrands showed extensive evidence of unfair business practices, as well as evidence of lost sales, making it likely to succeed on UCL claims. But the FDCA can only be enforced by the FDA, you say? There’s a narrow path: “The plaintiff must be suing for conduct that violates the FDCA [to avoid explicit preemption], but the plaintiff must not be suing because the conduct violates the FDCA [which would be impliedly preempted].” Telebrands squeezed through this path because it was suing due to the unfair competition it faced, not because of the FDCA violation.

Telebrands also showed irreparable harm in lost sales and “dilution” of the Hempvana brand. Because of the linking practices of third-party marketplaces such as Amazon, “Telebrands anticipates that the expenditures made to create a brand for the Hempvana Rocket will inadvertently inure to the great benefit of Defendants. Defendants will be able to piggyback off of the money spent on and popularity gained by the advertising for the Hempvana Rocket.”