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Quidel Corp. v. Siemens Medical Solutions USA, Inc.

United States District Court, S.D. California

October 21, 2019

QUIDEL CORPORATION, Plaintiff,
v.
SIEMENS MEDICAL SOLUTIONS USA, INC., et al., Defendants.

          ORDER: (1) GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION FOR SUMMARY JUDGMENT; AND (2) DENYING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT [ECF NOS. 138, 145]

          Hon, Cynthia Bashant United States District Judge.

         After three years of litigation, this case has reached the summary judgment stage, and both parties seek summary judgment in their favor. Defendants Siemens Medical Solutions USA, Inc. and Siemens Healthcare Diagnostics Inc. move for summary judgment on all claims, (“Def. Mot., ” ECF No. 138), and Plaintiff Quidel Corporation moves for summary judgment on the element of falsity. (“Pl. Mot., ” ECF No. 145.) Both motions are opposed, (“Pl. Opp'n, ” ECF No. 169; “Def. Opp'n, ” ECF No. 166).[1] The Court finds the Motions suitable for determination on the papers and without oral argument. Civ. L. R. 7.1(d)(1). For the reasons stated below, the Court GRANTS IN PART Defendants' Motion and DENIES Plaintiff's Motion.

         BACKGROUND

         This case revolves around two competing assays (blood tests) used for measuring thyroid stimulating immunoglobins, which can aid in the detection of Graves' disease. Graves' disease is an immune system disorder that leads to the overproduction of thyroid hormones. Generally, there are two types of assays available to aid in the diagnosis of Graves' disease: (1) TSH receptor antibody (TRAb) assays and (2) TSI only assays. TRAb assays detect both stimulating and blocking thyroid immunoglobins (also known as “TSI” and “TBI”), while TSI only assays detect only stimulating immunoglobins.

         Plaintiff entered the market first, and in 2008 submitted its product, Thyretain TSI Reporter BioAssay (“Thyretain”), for FDA approval. (See Exhibit 4 to Declaration of Erik Haas, ECF No. 140-1.) The FDA cleared Thyretain in 2009. Plaintiff advertises Thyretain as a “TSI only” assay. (Exhibit 1 to Declaration of Erik Haas, ECF No. 140, at 210:6-10.) According to Plaintiff, “Thyretain is a cell-based assay that measures the functional activity of TSH receptor antibodies and returns a positive result when TSI bind to the stimulating epitope of the TSH receptor.” (Pl. Opp'n at 2 (emphasis omitted).) If TSI is detected, this is a positive result, and a light is emitted. This is known as a qualitative result.

         Defendants entered the market in 2012 with their product IMMULITE, using Thyretain as the predicate device for their 510(k) application to the FDA.[2] (Exhibit 5 to Declaration of T. Kevin Roosevelt, ECF No. 171, at 4.) In applying to the FDA, Defendants acknowledged that Plaintiff's product was “the only FDA-cleared TSI assay on the market at this time” while other approved TRAb assays “detect both stimulating and blocking thyroid antibodies” and had inferior “specificity for Graves' disease.” (Id.) While Thyretain is a bioassay, IMMULITE is an immunoassay. (Def. Mot. 4; Pl. Mot. 4.) According to Defendants, IMMULITE “uses a novel ‘bridge' technology which links the receptors that bind with TSI to signal receptors. Those signal receptors in turn emit light that may be measured in a ‘semi-quantitative' manner, depicting the concentration of TSI in a sample, rather than just a binary ‘qualitative' result.” (Def. Mot. at 4.)

         The crux of this matter lies in Defendants' advertising of IMMULITE. In Plaintiff's opinion, IMMULITE, as an immunoassay, “measures the binding of antibodies to the TSH receptor without discrimination, ” meaning it does not distinguish between stimulating or blocking antibodies. (Pl. Opp'n at 3.) Plaintiff argues IMMULITE “has the potential to and actually does detect blocking antibodies.” (Id. at 3.) However, Defendants advertised IMMULITE as a “TSI only” assay (i.e. one that does distinguish between stimulating and blocking antibodies).

         Defendants' proclaiming of IMMULITE to be an assay that detects TSI only is undisputed. In its de novo request to the FDA, Defendants classified IMMULITE as an assay that “measures stimulating immunoglobins only.” (Exhibit U to Declaration of T. Kevin Roosevelt, ECF No. 147; see also Exhibit 29 to Declaration of T. Kevin Roosevelt, ECF No. 169-1 (Defendants' 510(k) Premarket Notification: “TRAb assays measure both [TBI and TSI] quantitatively without distinguishing between the two, whereas the IMMULITE 2000 TSI measures stimulating immunoglobins only.”)). After the FDA cleared the product, Defendants sent out information to potential customers on the product, saying IMMULITE “utilizes recombinant human TSH receptors (hTSHR) for the specific detection of thyroid stimulating autoantibodies.” (Exhibit 23 to Declaration of T. Kevin Roosevelt, ECF No. 171.) Defendants distinguished IMMULITE from “TSHR autoantibody (TRAb) assays [which] do not distinguish between TSI and TBI.” (Id.). Similar statements appeared on Defendants' website. (See, e.g., Exhibit T to Declaration of T. Kevin Roosevelt, ECF No. 147-3, at 51:3-10 (testimony regarding Defendants' website in May 2016).)

         Defendants advertised IMMULITE as “TSI only” for a few months. (Def. Mot. at 7-8.) When Plaintiff protested this advertising, Defendants dropped the “TSI only” claim. (Id.) Plaintiff argues that advertising IMMULITE in this way was false and has caused Plaintiff damages. Specifically, before IMMULITE entered the market, Quidel had four U.S. customers, which were four laboratories, two of which were LabCorp and Sonic. LabCorp and Sonic since have switched to using IMMULITE. (Id. at 12.) Whether these two customers (and others) considered or were deceived by Defendants' advertising in making the decision to switch is an issue in this case.

         LEGAL STANDARD

         Summary judgment is appropriate under Rule 56(c) where the moving party demonstrates the absence of a genuine issue of material fact and entitlement to judgment as a matter of law. See Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A fact is material when, under the governing substantive law, it could affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute about a material fact is genuine if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id.

         A party seeking summary judgment always bears the initial burden of establishing the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323. The moving party can satisfy this burden in two ways: (1) by presenting evidence that negates an essential element of the nonmoving party's case; or (2) by demonstrating that the nonmoving party failed to make a showing sufficient to establish an element essential to that party's case on which that party will bear the burden of proof at trial. Id. at 322-23. “Disputes over irrelevant or unnecessary facts will not preclude a grant of summary judgment.” T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987).

         If the moving party fails to discharge this initial burden, summary judgment must be denied, and the court need not consider the nonmoving party's evidence. Adickes v. S.H. Kress & Co., 398 U.S. 144, 159-60 (1970). If the moving party meets this initial burden, however, the nonmoving party cannot defeat summary judgment merely by demonstrating “that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986); Triton Energy Corp. v. Square D Co., 68 F.3d 1216, 1221 (9th Cir. 1995) (“The mere existence of a scintilla of evidence in support of the non-moving party's position is not sufficient.” (citing Anderson, 477 U.S. at 242, 252)). Rather, the nonmoving party must “go beyond the pleadings” and by “the depositions, answers to interrogatories, and admissions on file, ” designate “specific facts showing that there is a genuine issue for trial.” Celotex, 477 U.S. at 324 (quoting Fed.R.Civ.P. 56(e)). Such admissions may be presented in testimony of a party's own witnesses through declarations. See Fed. R. Civ. Pro. 56(c)(4).

         When making this determination, the court must view all inferences drawn from the underlying facts in the light most favorable to the nonmoving party. See Matsushita, 475 U.S. at 587. “Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge, [when] he [or she] is ruling on a motion for summary judgment.” Anderson, 477 U.S. at 255.

         DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

         Defendants move for summary judgment on Plaintiff's Lanham Act false advertising claims (section 43(a)), unfair competition claims (Cal. Bus. & Prof. Code § 17200), and False Advertising Law claims (Cal. Bus. & Prof. Code § 17500).[3] Defendants argue they should be granted judgment on various grounds: (1) Defendants' advertising is not false or deceptive; (2) the message in the advertising is immaterial and did not cause injury to Plaintiff; and (3) Plaintiff's unclean hands bar its claims.

(1) that the IMMULITE Assay detects TSI only, (2) that the IMMULITE Assay is a “TSI assay” that detects TSI only, and (3) that TRAb assays are distinguishable from the IMMULITE Assay, while failing to disclose that the IMMULITE Assay is substantially similar to TRAb assays that fail to differentiate between stimulating and blocking antibodies.

(First Amended Complaint, ECF No. 12, ¶ 24.) These can be summed up to one overarching statement: IMMULITE detects TSI only.

         A. Legal Standard

         The same legal standard applies to all three of Plaintiff's causes of action. The elements of a Lanham Act § 43(a) false advertising claim are:

(1) a false statement of fact by the defendant in a commercial advertisement about its own or another's product; (2) the statement actually deceived or has the tendency to deceive a substantial segment of its audience; (3) the deception is material, in that it is likely to influence the purchasing decision; (4) the defendant caused its false statement to enter interstate commerce; and (5) the plaintiff has been or is likely to be injured as a result of the false statement, either by direct diversion of sales from itself to defendant or by a lessening of the goodwill associated with its products Southland Sod Farms v. Stover Seed Co., 108 F.3d 1134, 1139 (9th Cir. 1997). Claims pursuant to California Business and Professions Code section 17200 and section 17500 are “substantially congruent” to claims made under the Lanham Act. Cleary v. News Corp., 30 F.3d 1255, 1262-63 (9th Cir. 1994) (citing Academy of Motion Picture Arts & Scis. v. Creative House Promotions, Inc., 944 F.2d 1446, 1457 (9th Cir. 1991)); JHP Pharm., Ltd. Liab. Co. v. Hospira, Inc., 52 F.Supp.3d 992, 997 n.4 (C.D. Cal. 2014).

         B. Literal Falsity

         To meet the first element, statements can be “literally false, either on [their] . . . face or by necessary implication, ” or “literally true but likely to mislead or confuse consumers.” Southland Sod Farms, 108 F.3d at 1139. When evaluating whether a claim is ...


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