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Court requests non-anecdotal evidence of consumer deception in review of a motion for preliminary injunction in a false advertising case

Repro-Med Systems (RMS) and EMED Technologies (EMED) are both manufacturers of medical devices and have been fighting in court for years claiming that the other party made false and deceptive statements regarding its own or other party’s products. In one of the more recent iterations of the case Repro-Med Sys., Inc. v. EMED Technol. Corp., 2019 WL 1427978, No. 13-cv-01957-TLN-CKD (E.D. Cal. Mar. 29, 2019), RMS sought a preliminary injunction to prohibit EMED from allegedly making false or misleading statements related to an EMED product being FDA approved, when the product had only been cleared by the FDA. RMS also alleged that, for one of its products, EMED’s promotional materials contain different performance data than submitted to the FDA, and such data is misleading.   

In order to succeed in the motion for a preliminary injunction, the Court stated that RMS had to make a showing on all four elements of the Winter test. In applying the four-prong test from Winter v. Natural Res. Def. Council, the Court determined that RMS had failed to carry its burden in demonstrating that a preliminary injunction was warranted. The Court focused most of its attention on two of the four prongs, mainly whether RMS was likely to succeed on the merits of its claims, as well as whether there would be irreparable injury absent a preliminary injunction. 

With regard to succeeding on the merits, from the outset the Court assessed whether EMED intentionally misrepresented FDA clearance as FDA approval. In relying on California law, the Court stated that in order to succeed on a claim for intentional misrepresentation, the plaintiff must prove that the defendant’s statements are misleading to a reasonable consumer” and that “anecdotal evidence alone is insufficient to prove that the public is likely to be misled.” RMS provided a generic declaration of an FDA expert to support its claim, however the Court ultimately held that “without consumer survey information or other specific examples of consumer’s being misled, the vague anecdotal evidence alone submitted by RMS is insufficient to prove that the public is likely to be misled.” The Court had similar reasoning and made the same holding as to the EMED’s promotional materials allegedly containing different performance data than submitted to the FDA. 

As for irreparable injury, RMS alleged that it would suffer irreparable injury if the Court did not grant a preliminary injunction as EMED’s false statements continue[d] to irreparably damage not only the goodwill and reputation of RMS as a company, but also the reputation of its particular products.” In support, RMS cited a District Court opinion and also pointed to the declaration of a senior company executive which confirmed that RMS has suffered a substantial loss of business and market share. However, the Court was unpersuaded about the application of the cited opinion to the current case and found the declaration unhelpful as it did not “reference or allude to any specific dissatisfied customers. In conclusion, the Court stated that “to establish this prong of the Winter test, RMS must show more than a “possibility of irreparable harm. Accordingly, the Court ultimately held that RMS had failed to identify any specific irreparable injury that is not only possibly, but even likely.”  

This is a case where hiring a false advertising survey expert to conduct a consumer survey would have likely been helpful to RMS, as a survey can measure whether or not EMED’s statements and promotional materials at issue are misleading to a reasonable consumer. In addition, a separate survey measuring irreparable harm could have also been introduced as evidence to potentially win the motion for a preliminary injunction. To learn more about false advertising and irreparable harm surveys, please contact us.

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