pleading falsity can be done even with sophisticated consumers

10x Genomics, Inc. v. Celsee, Inc., 2019 WL 5595666, No.
19-862-CFC-SRF (D. Del. Oct. 30, 2019) (magistrate)
Skipping the patent parts. 
“10x is a life sciences technology company that markets and sells its
Chromium product line, which provides researchers with the ability to measure
gene activity on a cell-by-cell basis for large numbers of cells in a single
experiment.” Celsee’s Genesis System “is designed to capture and isolate single
cells, … allowing the user to track a molecule and the cell of origin for that
molecule.”
10x successfully alleged false advertising: Celsee
advertised a 70% cell capture rate. Unconvincingly, Celsee argued puffery. And
it argued that 10x failed to show an industry standard for making cell capture
rate calculations, and that it didn’t specify how the 70% figure was
calculated.  10x nonetheless sufficiently
alleged literal falsity by alleging that “market participants evaluate the
performance of single cell systems based on the cell capture rate, which the
complaint defines as ‘a measure of the percentage of input cells that are
assayed in each experimental run.’” 10x claimed to have a 65% capture rate.
Celsee advertised using the tagline “Because every cell matters,” and Celsee
ads and brochures claimed “[d]eep and accurate view of cell populations with
>70% capture of input cells.” This figure allegedly measured only the percentage
of cells caught in the teeny little wells it used that were actually analyzed,
while not counting the cells put into the system that never make their way into
the wells.   It was plausible that this was literally false
because the calculation failed to account for all the cells put into the
system, and that this was objectively inaccurate.
This was also plausibly misleading, since 10x alleged that
cell capture rate is “[a] key criterion on which market participants evaluate
the performance of single cell systems.” [Not to mention Celsee’s own tagline.]
It was plausible that targeted consumers would presume the parties’ advertised cell
capture rates were directly comparable, and that Celsee’s advertised 70% rate
was intended to make its product seem superior.
Celsee argued that 10x didn’t sufficienly plead materiality
“because researchers purchasing single cell technology would not plausibly base
their purchase decision on a non-specific statement of capture efficiency
without first understanding the method of calculation.” Nope. If (as alleged)
there was a superiority misrepresentation that confused consumers, and if cell
capture was a key criterion for customers, that was enough.

from Blogger https://ift.tt/2JUME5O

This entry was posted in Uncategorized and tagged . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s