Wednesday, October 10, 2012

Brand Protection Developments in the Medical Device Field


By Bob Rouder


We have been following recent brand protection developments in the medical device sector, an effort challenged by the long shadows cast by the FDA. Two recent cases lead to an interesting paradox:

A company harmed by FDA action may find a seat at the plaintiff’s table while a company harmed by a competitor who benefits from FDA action may find the courthouse doors locked.

Prevor Imbues Its Brand With Manageable Regulatory Oversight Despite FDA Opposition

Prevor manufactures Diphoterine™ Skin Wash (DSW), a highly pressurized spray can filled with a liquid compound of 96% water and 4% Diphoterine. Spraying the liquid washes away chemicals accidentally spilled on industrial workers. It also neutralizes and dilutes chemicals at the extreme ends of the pH scale, although the company asserts the neutralizing effect to be incidental.

Because DSW has a physical and chemical mechanism, the FDA classifies it as a combination product (i.e. medical device/drug). Under Title 21 §353(g)(1) of the Federal Food, Drug and Cosmetic Act the FDA assesses a combination product’s “primary mode of action” in order to determine whether it will be regulated as a drug or a device.

Brand manufacturers generally prefer their combo products to be regulated under the less burdensome device regime rather than under the drug rules.

FDA Classification of Prevor’s Diphoterine™ Skin Wash Ipse Dixit

Thus, when the FDA ruled DSW would be regulated as a drug, Prevor challenged the decision. Granting Prevor’s motion for summary judgment, the D.C. District Court found that:
  1. FDA’s dismissal of Prevor’s claim that DSW’s chemical activity was incidental had no basis in reason or science and as such was unacceptably ipse dixit;
  2. the FDA’s position that any chemical activity made the product a drug was at cross purposes with its statutory duty to find the primary mode of action; and
  3. the FDA’s prior device classification of a product with “an ephemeral distinction” from DSW made its decision in the Prevor matter “arbitrary and capricious.”
The Court struck down FDA’s determination and sent the matter back to the agency. See Prevor Opinion (Sep. 25, 2012).

Labor Pains Continue in Resolving the Conflict Between Brands in the HPT Market

The home pregnancy test (HPT) market is approximately $300 million per year, 90% of which is vested with pregnancy testing, while 10% is devoted to ovulation and pregnancy aid kits. Two of the largest brand manufacturers in the market have been in legal conflict for almost a decade.

Church & Dwight (C&D”) manufactures the First Response® brand pregnancy tests. Swiss Precision Diagnostics (SPD), a joint venture between Inverness Medical Innovations (n/k/a Alere, Inc.) and Proctor & Gamble, manufactures the CLEARBLUE® Easy™ brand.

In January 2009, SPD filed a Lanham Act suit alleging that C&D’s advertising—which claimed that First Response® yields accurate results earlier than competitive products—are false and misleading. SPD also alleged that C&D’s claim that First Response® detects “a hormone variant that better predicts early pregnancy” was unsubstantiated. See SPD Complaint (Jan. 22, 2009).

A companion suit was filed when the technology and products changed but the gravamen of the complaint remained. See C&D Complaint (Jan. 15, 2010).

Church & Dwight Gives Up Claims of “First and Only”

In support of its original petition, SPD noted that the National Advertising Division (NAD) of the BBB, concluded in 2001 that C&D misled consumers by affiliating the accuracy claim and the early detection claim in too close a proximity to each other. More recently, the NAD, responding to a challenge by SPD, recommended that C&D cease making claims of being the “only” or “first and only” product to “predict ovulation based on the user’s individual LH hormone level.”

Although it disagreed with the finding, C&D agreed to cease making those claims. See Sep. 21, 2012 Press Release by the Advertising Self-Regulatory Council.

The Lanham Act Case Reaches The Summary Judgment Phase

After 27 depositions, exchanging a million pages of document discovery and 23 expert reports, C&D filed a motion for summary judgment on August 15, 2012. See Mem. in Support of MSJ.

The motion seeks a finding that SPD’s allegation that the First Response® ads are literally false and misleading fail because expert opinions SPD offered are unreliable and cannot survive a Daubert challenge.

C&D also argues that in clearing First Response® on a 510(k) application which demonstrated “substantial equivalence” the FDA reviewed data supporting the challenged advertising claims.

Lanham Act Preclusion

C&D’s last argument may find at least some support from case law which holds that courts are precluded from effectively reconsidering a previous FDA determination to clear or approve a product.

In Photomedex, for example, the Ninth Circuit noted that a Lanham Act plaintiff could challenge a defendant’s assertion that its product had been approved by the FDA when in fact it had not. However, the plaintiff could not challenge an advertising claim whose falsity rested on matters decided by the FDA, even if that decision could presumably be deemed arbitrary and capricious. See PhotoMedex Opinion.

Thus, SPD’s false advertising allegations in this case may survive or fall based on a determination whether they require the judge or jury to second guess the FDA’s decision to clear First Response®.

Sources and References
  1. Prevor v. Food and Drug Administration, Case No. 1:11-cv-01187-RMC (D. DC) (Sep. 25, 2012 Opinion)
  2. SPD Swiss Precision Diagnostics GmbH v. Church & Dwight Co., Inc., Case No. 3:09-cv-01802-MAS-TJB (D. N.J.) (Jan. 22, 2009 Complaint) (Aug. 15, 2012 Mem.)
  3. Church & Dwight Co., Inc. v. SPD Swiss Precision Diagnostics GmbH, Case No. 3:10-CV-00276 (D. N.J.) (Jan. 15, 2010 Complaint)
  4. The Advertising Self-Regulatory Council (ASRC)
  5. PhotoMedex, Inc. v. Dean Stewart Irwin and RA Medical Systems, Inc., Case No. 07-56672, D.C. No. 04-00024-JLS (Apr. 14, 2010)

This article was prepared by Bob Rouder (rrouder@fulbright.com / 512 536 2491) of Fulbright’s False Advertising practice.