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.”

from Blogger

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