Healthpoint, Ltd. v. Derma Sciences, Inc.

939 F. Supp. 2d 680, 2013 WL 1455648, 2013 U.S. Dist. LEXIS 50717
District Court, W.D. Texas·Decided April 9, 2013·No. Cv. No. SA:12-CV-01062-DAE·Published·Cited by 7 cases

Opinion

ORDER DENYING DEFENDANT’S MOTION TO TRANSFER VENUE

DAVID ALAN EZRA, Senior District Judge.

On April 5, 2013, the Court heard oral argument on the Motion to Transfer Venue to the District of New Jersey filed by Defendant Derma Sciences, Inc. (“Derma Sciences”). (Doc. #15 (“Mot.”).) Saul Perloff, Esq., Katharyn A. Grant, Esq., and Bob Rouder, Esq., appeared on behalf of Plaintiff Healthpoint Ltd., d/b/a Health-point Biotherapeutics (“Healthpoint”). Winn Carter, Esq., appeared on behalf of Derma Sciences. After considering the Motion and the supporting and opposing memoranda, and in light of the parties’ arguments at the hearing, the Court, for the reasons below, DENIES Defendant’s Motion.

BACKGROUND

This is a false advertising and unfair competition lawsuit. Plaintiff Healthpoint is a Texas limited partnership headquartered in Fort Worth, Texas. (Doc. # 1 (“Compl.”) ¶ 1; doc. # 17 (“Resp.”) at 6.) Healthpoint markets a range, of pharmaceuticals, biologies, and medical products for- the prevention and treatment of diseased and traumatized skin and tissue. (Compl. ¶1.) Among the products that Healthpoint markets is Collagenase SAN-TYL® ointment (“SANTYL”), an FDA-approved, sterile enzymatic ointment used [683] to help remove dead tissue and foreign material from wounds in order to promote healthy tissue formation and wound closure (a process known as “debridement”). (Id. ¶¶ 1, 12.) According to Healthpoint, SANTYL is the only FDA-approved prescription enzymatic (i.e., chemical) debriding product available in the United States. (Id. ¶ 12.) Annual sales of SANTYL exceed $140. million. (Id. ¶ 14.)

Defendant Derma Sciences is a corpora:tion organized under the laws of Delaware; its principal place of business is Princeton, New Jersey. (Mot. at 1.) Derma Sciences markets a line of wound and burn dressings known as MEDIHONEY® (“MEDIHONEY”) nationwide. (Compl. ¶ 15; doc. #10 (“Answer”) ¶1.) MEDIHONEY is available in several formats, including adhesive and non-adhesive hydrogel, sheet dressings, and is promoted as containing “active” Leptospermum honey. (Compl. ¶ 15; Answer ¶ 15.) Healthpoint alleges that Leptospermum honey is also known as “Manuka Honey” and is produced by bees that feed- off the manuka plant (Leptospermum scoparium) in New Zealand. (Compl. ¶ 15 n. 1.) Internet advertising touts manuka honey as having “unsurpassed healing qualities” for a wide range of conditions, including stomach ulcers, sore throats and colds, skin .ulcers, wounds, boils, and infections. (Id. (citing http://manukahoney.com).) However, according to Healthpoint, the FDA has never approved a drug containing manuka honey for any purpose. (Id.) Instead, the FDA recently issued an import alert allowing FDA field personnel to detain shipments of certain products from New Zealand that contain manuka honey. (Compl. Ex. 1.)

MEDIHONEY’s labeling lists no active ingredient or enzyme content. (Compl. ¶ 16; Answer ¶ 16.) According to the Complaint, MEDIHONEY dressings are “unclassified” medical devices subject only to the premarket notification requirements of Section 510(k) of the Federal Food, Drug, and Cosmetic Act (“FDCA”), 21 U.S.C. § 360(k). (Compl. ¶ 3; see also Mot. ¶ 3 (stating that MEDIHONEY products have been evaluated by the FDA “as devices subject to the regulatory requirements of Section 510(k)” and have been “cleared by the FDA. for assisting in wound healing and debridement”).) Moreover, Healthpoint alleges that MEDIHO-NEY was cleared for sale in -the United States based on a determination that the products are substantially equivalent to legally, marketed predicate devices marketed prior to May 28, 1976, that provide moisture to a wound. (Id.) Healthpoint claims that MEDIHONEY “does not debride wounds” and that the FDA has not approved MEDIHONEY as either a drug or a medical device. (Id.)

On November 7, 2012, Healthpoint brought suit against Derma Sciences in this Court for false advertising and unfair competition in violation of Section 43(a) of the Lanham Act and for common-law unfair competition. (See Compl.) The crux of Healthpoint’s allegations is that Derma Sciences, “[i]n its commercial advertising and promotion of MEDIHONEY, including on its web site, in print publications, in brochures distributed by its sales staff, and in oral presentations ... makes misrepresentations of fact concerning the nature, characteristics and qualities of MEDIHONEY, both alone and in comparison, connection or association with SANTYL.” (Id. ¶ 18.) Specifically, Healthpoint alleges that Derma Sciences makes the following material misrepresentations: (1) that the honey used in MEDIHONEY is “active” in healing wounds (id. ¶ 18(a)-(b)); (2) that MEDIHONEY debrides wounds- and is clinically proven- (id. ¶ 18(c)-(f)); (3) that MEDIHONEY provides anti-inflammatory/antimicrobial activity (id. ¶ 18(g)-(h)); that MEDIHONEY creates an osmotic effect and lowers wound pH (id. ¶ 18(i)-(j)); [684] and (4) that MEDIHONEY is an equally or more effective. alternative to SANTYL (id. ¶ 18(k)).

Healthpoint alleges that these misrepresentations are material because they “are likely to affect, and in fact, do affect the decision by acute care centers, extended care facilities, wound and burn care clinics, hospitals, nursing homes, home health agencies, group purchasing organizations, managed care organizations and/or others to purchase and use MEDIHONEY as an alternative to SANTYL.” (Id. ¶ 26.) By convincing potential customers to purchase MEDIHONEY instead of SANTYL, Derma Sciences’ misrepresentations' have harmed Healthpoint. (Id. ¶¶ 27-28.) Moreover, claims Healthpoint, Derma Sciences knows that its promotional claims are false and misleading, because it promised, inter alia, in response to a cease-and-desist letter from Healthpoint, “not to represent that ‘MEDIHONEY is as effective as enzymatic debridement’ or words to that effect”; and “not to represent that ‘MEDIHONEY is more cost effective than SANTYL,’ or words to that effect.” (Id. ¶ 29.)

On January 3, 2013, Derma Sciences filed its Answer. (Doc. # 10 (“Answer”).) On January 11, 2013, Derma Sciences filed the Motion to Change Venue to the District of New Jersey that is now before the Court. (Doc. # 15 (“Mot.”).) Healthpoint filed a Response in Opposition to the Motion on January 31, 2013. (Doc. # 17 (“Resp.”).) Derma Sciences filed its Reply in Support of the Motion on February 11, 2013. (Doc. # 21 (“Reply”).)

STANDARD OF REVIEW

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Healthpoint, Ltd. v. Derma Sciences, Inc., 939 F. Supp. 2d 680, 2013 WL 1455648, 2013 U.S. Dist. LEXIS 50717 (W.D. Tex. 2013).

939 F. Supp. 2d 680 (Healthpoint, Ltd. v. Derma Sciences, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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