United States District Court, N.D. California
ORDER DENYING PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT Re: Dkt. No. 65
JOSEPH C. SPERO, Chief Magistrate Judge.
This case concerns two medical devices used for the reduction of body fat and related aesthetic procedures. One of them, produced by Plaintiff Zeltiq Aesthetics, Inc. ("Zeltiq"), received clearance from the Food and Drug Administration ("FDA") for such use. The other, produced by Defendant BTL Industries, Inc. ("BTL"), was cleared only for unrelated therapeutic uses. Zeltiq brought this action against BTL and Defendant Saturn Consulting LLC, claiming that Defendants' marketing of BTL's device violates federal, California, and Massachusetts laws regarding false advertising and unfair competition. Zeltiq now moves for partial summary judgment on its claim that Defendants' "off-label" marketing is unlawful conduct under California's Unfair Competition Law ("UCL"). For the reasons stated below, Zeltiq's Motion is DENIED.
A. FDA Premarket Approval and 510(k) Clearance
In 1976, Congress amended the federal Food, Drug, and Cosmetic Act ("FDCA"), which previously only regulated food and drugs, with the Medical Device Amendments ("MDA"), 90 Stat. 539, 21 U.S.C. § 301. The MDA "classif[y] medical devices in three categories based on the risk that they pose to the public." Medtronic, Inc. v. Lohr, 518 U.S. 470, 476 (1996). As explained by the Supreme Court in Medtronic:
Devices that present no unreasonable risk of illness or injury are designated Class I and are subject only to minimal regulation by "general controls." 21 U.S.C. § 360c(a)(1)(A). Devices that are potentially more harmful are designated Class II; although they may be marketed without advance approval, manufacturers of such devices must comply with federal performance regulations known as "special controls." § 360c(a)(1)(B). Finally, devices that either "presen[t] a potential unreasonable risk of illness or injury, " or which are "purported or represented to be for a use in supporting or sustaining human life or for a use which is of substantial importance in preventing impairment of human health, " are designated Class III. § 360c(a)(1)(C).
Id. at 476-77. While "Class III devices must complete a thorough review process with the FDA before they may be marketed, " Buckman Co. v. Plaintiffs' Legal Comm., 531 U.S. 341, 343 (2001), Class I and II devices only need to submit a "premarket notification' to the FDA, in accordance with the less burdensome 510(k) process.'" PhotoMedex, Inc. v. Irwin, 601 F.3d 919, 925 (9th Cir. 2010) (quoting Medtronic, 518 U.S. at 477-79).
"Under the 510(k) process,  if the Class II device is deemed substantially equivalent' to a pre-existing device with prior clearance, it can be marketed without further regulatory analysis.'" Id. (citing Medtronic, 518 U.S. at 478; 21 U.S.C. § 360(k); 21 C.F.R. § 807.100). "[S]ubstantial equivalence' means, with respect to a device being compared to a predicate device, that the device has the same intended use as the predicate device...." 21 U.S.C. § 360c(i)(1)(A) (emphasis added); see also 21 C.F.R. § 807.100 ("FDA will determine that a device is substantially equivalent to a predicate device [if, inter alia, it has] the same intended use as the predicate device." (emphasis added)).
B. Factual Background
1. Zeltiq's CoolSculpting System
Zeltiq manufactures and markets a medical device known as CoolSculpting. Altavilla Decl. (dkt. 18-3) ¶ 6. CoolSculpting is designed to reduce the temperature of fat cells in the treated area, causing fat cell elimination through a natural biological process known as "apoptosis" without causing scar tissue or damage to the skin, nerves, or surrounding tissue. Id. ¶ 7. CoolSculpting is clinically shown to reduce fat bulges in a sixty-minute procedure. Id.
Zeltiq's CoolSculpting system has been cleared by the FDA for cold-assisted lipolysis of the flank, or "love handles, " and the abdomen. Id. ¶ 6. Zeltiq states that it "developed its CoolSculpting technology for a novel indication, " and therefore, "submitted clinical studies and other data to FDA to obtain 510(k) clearance for CoolSculpting." Id. ¶ 8. Zeltiq states that it undertook the expensive endeavor of obtaining 510(k) clearance because clearance of a device for treatment of body fat conveys instant and substantial credibility to the device. Id.
CoolSculpting has become the leading noninvasive medical device for reduction of body fat. Id. ¶ 9. In a quarterly financial filing, Zeltiq reports having sold over 1, 900 CoolSculpting devices, including over 500 in the twelve months between September 30, 2012 and September 30, 2013. Faucette Prelim. Inj. Decl. (dkt. 20-1) ¶ 2 & Ex. A at 19. Zeltiq also reports having generated over $75 million in revenue in the nine months ending in September 30, 2013. Id. In a preliminary full year report, Zeltiq noted that its revenue increased approximately 91% in one year. Id. Ex. G.
2. BTL's Vanquish Device
a. FDA Clearance
BTL submitted a notice of intent to the FDA under § 510(k) to market a device that, at that time, it called "BTL Elite." See Hanrahan Decl. (dkt. 56-2) ¶ 3 & Ex. 3 (dkt. 56-3). Like certain predicate devices identified in BTL's 510(k) report, the BTL Elite was "intended for the therapeutic application of deep heating." Id. Ex. 3 at ECF p. 5. BTL asked for FDA clearance to market its device for the same purpose as the predicate devices, specifically "treatment of selected medical conditions such as relief of pain, muscle spasms, and joint contractures, but not for the treatment of malignancies, " and represented that "[t]he BTL Elite System is substantially equivalent to its predicate devices when used according to its intended use." Id. at ECF pp. 5, 6. The FDA reviewed the 510(k) report, "determined the device is substantially equivalent (for the indications for use stated in the enclosure) to legally marketed predicated devices, " and signed off on an "Indications for Use Statement" that reads as follows:
Indications for use: Indications for use in applying therapeutic deep heat in body tissues for the treatment of selected medical conditions such as: 1. Relieving pain; 2. Reducing muscle spasm; 3. Increasing range of motion of contracted joints using heat and stretch techniques; and 4. Increasing blood flow to tissues in the treatment area.
Id. at ECF pp. 7-9.
Neither BTL's notice to the FDA, nor the FDA's letter approving clearance, discussed the use of the device for aesthetic procedures such as fat reduction. See id. Subsequently, however, at least one peer-reviewed article published in a medical journal concluded that the device, now marketed as Vanquish, "is safe and effective for body contouring, fat, and circumferential reduction." Katerina Fajkoová, et al., Selective Radiofrequency Therapy as a Non-Invasive Approach for Contactless Body Contouring and Circumferential Reduction, 13 J. Drugs in Dermatology 291 (2014) (available in the record as Faucette Decl. Ex. B, dkt. 58-3).
b. Marketing and Promotion of Vanquish
Although BTL understood that its 510(k) clearance did not include "an indication for use in body contouring or fat reduction, " it "anticipated that doctors would buy Vanquish and then promote [Vanquish] to their patients as a device to reduce patients' body fat." Hanrahan Decl. Ex. 1 (Besse Dep., dkt. 65-1) 39:25-40:20, 66:11-15. Kevin Meyers, who operates Defendant Saturn Consulting LLC and sold Vanquish devices to doctors, testified that although fat reduction is an "off-label use, " that was the only purpose for which Vanquish was sold. Hanrahan Decl. Ex. 6 (Meyers Dep., dkt. 65-3) 68:1-69:11; see Answer (dkt. 17) ¶ 10. To the knowledge of BTL's president Marcel Besse, no physicians bought the device for any other use. Besse Dep. 71:24-72:6.
Until recently, BTL's website continued to promote Vanquish "for all healthy patients who want to take control of their core and improve problem areas when exercise and diet have failed, " and "who desire aesthetic improvement without the cost and recovery time of surgery." For Patients, BTL Aesthetics, www.btlaesthetics.us/for-patients (copyright 2015, accessed March 9, 2015). In a section addressing the kinds of results that patients can expect, the website stated that although "[r]esults may vary from patient to patient... [m]easurable waist reduction is common." Id. Although those references to Vanquish appear to have been recently removed from BTL's website, a section of the website labeled "FDA Clearances" continues to state that "Vanquish... can be used for the non-invasive temporary reduction of waist circumference by the disruption of adipocyte cells within the fat layer for the release of fat and lipids from these cells for non-invasive aesthetic use." FDA Clearances, BTL Aesthetics, accessed by selecting the "FDA CLEARANCES" button at the bottom of www.btlaesthetics.us/for-patients (copyright 2015, accessed March 23, 2015).
There is a great deal of evidence in the record regarding Defendants' promotion of Vanquish. The parties dispute the conclusion that should be drawn from the evidence. For the purpose of the present Motion, however, the Court assumes for the sake of argument that Defendants have marketed Vanquish for aesthetic procedures such as fat reduction and continue ...