Having a product in development isn’t enough for Lanham Act standing

Pulse Health LLC v. Akers Biosciences, Inc., 2017 WL
1371272, No. 16-cv-01919 (D. Or. Apr. 14, 2017)
Pulse was formed to develop a product that can measure
aldehyde molecules in human breath via a non-invasive hand-held device. Its
device was called FRED or Revelar. Akers develops and sells diagnostic products
and devices designed to deliver various health information test results. The
parties entered into contracts for Akers to make a breath tube containing a
chemical reagent that could accurately measure aldehyde molecules in human
breath, to be used with the FRED/Revelar device. Akers’ development failed,
according to Pulse, and Pulse requested to part ways. The final agreement
provided that Pulse transferred the relevant tech back to Akers, and Akers
waived the remainder of what Pulse was supposed to pay.  Akers granted Pulse an exclusive and
perpetual license to use the relevant tech in the field of aldehyde tests,
which included any testing for oxidative stress, but excluded tests relating to
diabetes, cancer, and alcohol. The agreement further provided that Akers had no
rights with respect to Pulse’s technology for its hand-held FRED/Revelar
device.
Akers started to sell hand-held products that Pulse claimed measured
oxidative stress and free radical damage through disposable tubes, which Pulse
determined was a copy of its FRED/Revelar product. “The chemistry for the
OxiChek and the Assigned Technology reagents are the same, and the circuit
boards for the OxiChek product have a similar layout and the same optical
chamber, LED, diodes, switches and gates as the original FRED/Revelar device
developed by Plaintiff.”
The court rejected Lanham Act and state-law consumer
protection claims.  Pulse wasn’t within
the zone of interests protected by the statute and there could be no proximate
causation of injury, even if, as alleged, Akers “knowingly made false
statements in advertising the technology’s ability to detect levels of oxidative
stress or free radicals” using Pulse’s technology.  Because Pulse didn’t have a competing product
on the market, it failed to allege any injury to a commercial interest in
reputation or sales. Possible future sales of a product under development weren’t
enough, despite the alleged “spoiling” of the market based on Akers’ false
advertising.  Any such injury was purely
speculative.
The Oregon Unlawful Trade Practices Act only protects
consumers, not competitors. Because leave to amend would not allow Pulse to fix
either of these problems, it was denied.

Lesson: write your noncompete more clearly so that suing for
breach will give you all the relief you seek, I guess?

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