Medical Graphics Corp. v. SensorMedics Corp.

872 F. Supp. 643, 33 U.S.P.Q. 2d (BNA) 1751, 1994 U.S. Dist. LEXIS 19869, 1994 WL 719108
CourtDistrict Court, D. Minnesota
DecidedOctober 31, 1994
DocketCiv. 3-94-525
StatusPublished
Cited by27 cases

This text of 872 F. Supp. 643 (Medical Graphics Corp. v. SensorMedics Corp.) is published on Counsel Stack Legal Research, covering District Court, D. Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Medical Graphics Corp. v. SensorMedics Corp., 872 F. Supp. 643, 33 U.S.P.Q. 2d (BNA) 1751, 1994 U.S. Dist. LEXIS 19869, 1994 WL 719108 (mnd 1994).

Opinion

MEMORANDUM OPINION AND ORDER

KYLE, District Judge.

Introduction

Before the Court is Plaintiff Medical Graphics Corporation’s (“Medical Graphics”) Motion for a Preliminary Injunction, brought pursuant to Rule 65 of the Federal Rules of Civil Procedure. Plaintiff seeks to enjoin Defendant SensorMedics Corporation (“Sen-sorMedics”) from making false and misleading statements in the marketplace about Medical Graphics and its products which will further damage Medical Graphics’ goodwill and reputation.

Background

Medical Graphics is a Minnesota corporation headquartered in Vadnais Heights, Minnesota, which manufactures and sells medical devices. (Compl. ¶ 2.) SensorMed-ics, a California corporation, also manufactures and sells medical devices; SensorMed-ics has engaged in such business in the state of Minnesota. (Answer, ¶3.) The parties are competitors in the market of cardiopulmonary diagnostic equipment; SensorMedics currently holds the larger share of the market in this type of equipment. Answer, ¶ 4; Aff. of Terrance J. Kapsen, ¶¶2, 3. The potential customers for this equipment include hospitals, clinics, doctor’s offices, research facilities and academic institutions. Deck of William Ross, ¶ 2. This equipment is subject to regulation by the United States Food and Drug Administration (“FDA”). Kapsen Aff., ¶ 4.

Plaintiff has based its motion upon a number of incidents involving representations made by SensorMedics sales personnel to present or potential customers of Medical Graphics. SensorMedics’ sales staff consists of twenty-three sales representatives, two district sales managers and two regional sales managers. Ross. Deck, ¶ 3. As part of its ongoing sales and marketing efforts, Sen-sorMedics distributes “marketing flashes” to its sales force which contain background information on the products of SensorMedics and its competitors. Id., ¶ 4. Plaintiff contends that SensorMedics’ conduct has created misconceptions and caused confusion in the marketplace and has delayed purchases; plaintiff asserts that it has found it necessary to spend substantial time and resources to correct the misconceptions and confusion. The Court will discuss each of the complained of representations below.

A. Medical Graphics and the FDA

Plaintiff contends that SensorMedics has falsely represented to Medical Graphics’ present and potential customers that Medical Graphics was having difficulties with the United States Food and Drug Administration (“FDA”) and that Medical Graphics’ pneumo-taeh, a key component of its equipment, was being recalled by the FDA. Aff. of Patti Wenberg, ¶ 2. A Medical Graphics sales representative averred that he has been receiving a number of questions from new customers inquiring about whether Medical Graphics was having difficulties with the FDA and whether the FDA has recalled Medical Graphics’ pneumotach. Deck of Michael Fussell, ¶4. The Medical Graphics sales representative does not know firsthand, however, that SensorMedics salespeople had made these suggestions to Medical Graphics potential customers.

B. The “German” Connection

Plaintiff further contends that SensorMed-ics has falsely stated to a potential customer that Medical Graphics is actually a front for a German company and is in fact a German company “masquerading as an American company.” Aff. of Marie Easterling, ¶4. The sales representative from SensorMedics who allegedly made these statements denied doing so. Deck of Felix Perez, ¶3. The Court notes that quarterly financial announcements from Medical Graphics indicate that Medical Graphics has a subsidiary in *646 Dusseldorf, Germany. Aff. of Mindy Morales, Exh. C.

C. Statements Regarding Cost and Performance

Plaintiff has identified in its supporting materials numerous other statements made by SensorMedics relating to the cost and performance of Medical Graphics’ products which plaintiff alleges are false or misleading. A memorandum from SensorMedics stated that a Dr. Revels Cayton of the East Bay Pulmonary Laboratory in Oakland, California, was currently evaluating a Sen-sorMedies product to “replace” an eight-month old Medical Graphics product “due to chronic down time.” See Decl. of Terry Robinson, Exh., at fifth unnumbered page. Dr. Cayton learned of this memorandum in August of 1994 and objected to the use of his name. Aff. of Dr. Revels Cayton, ¶ 2. Whereas it is true that Dr. Cayton had spoken with a SensorMedics sales representative and had agreed to try a SensorMedics system for a period of time at no cost, he avers that he did not say anything negative about Medical Graphics. 1 Id. ¶ 4. Dr. Cayton demanded and received a letter of apology from the sales representative with whom he had dealt. Id. ¶ 5 and Exh.

Plaintiff has identified other statements by SensorMedics relating to performance issues such as the tendency of Medical Graphics’ pneumotach to lose its calibration if reused and to be affected by temperature and humidity. Aff. of Dr. David Nielsen, ¶ 5. A SensorMedics sales representative also represented to a prospective customer that Medical Graphics’ gas validator would not perform to the standards suggested by Medical Graphics and that Medical Graphics had ineffectively copied Dr. Wasserman’s gas vali-dator. Id., ¶ 6. Medical Graphics contends that these statements were false. Kapsen Aff., ¶ 9. Specifically, Medical Graphics contends that its gas validator is manufactured to Dr. Wasserman’s patented specifications, and Dr. Wasserman in fact uses the Medical Graphics gas validator. Id., ¶ 10. The Sen-sorMedics sales representative involved denies making these representations. Decl. of Don Sievers, ¶¶ 5, 6.

Plaintiff also complains of SensorMedics’ statements relating to cost issues such as those found in the documents attached to a letter from Scott Minnich, a sales representative for SensorMedics, to David Best at Sum-mersville Memorial Hospital. Medical Graphics contends that other allegedly false cost comparisons are found in the materials sent by Bob Messmer of SensorMedics to Dr. Michael Davis of the Doctors’ Hospital in Manteca, California. Aff. of Dale Knox, Exh. A.

D. The ECRI Alert

Plaintiff also complains that SensorMedics has distributed false or misleading documents to potential customers, including a memorandum or “alert” which appears to, but does not, originate from a non-profit health services research organization called the Emergency Care Research Institute (“ECRI”). ECRI distributes information on medical devices to thousands of hospitals. Aff. of Ronni P. Solomon, ¶ 1.

The “alert” came to the facsimile machines of both the bio-medical and pulmonary departments of a hospital in Long Island, New York at a time when the hospital was considering whether to buy equipment from either SensorMedics or Medical Graphics. Decl. of Ira Bauer, ¶ 4.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

BCBSM, Inc. v. GS Labs, LLC
D. Minnesota, 2023
My Pillow, Inc. v. LMP Worldwide, Inc.
331 F. Supp. 3d 920 (D. Maine, 2018)
Aviva Sports, Inc. v. Fingerhut Direct Marketing, Inc.
829 F. Supp. 2d 802 (D. Minnesota, 2011)
INTERNATIONAL TECHNOLOGIES CONSULTANTS, INC. v. Stewart
554 F. Supp. 2d 750 (E.D. Michigan, 2008)
Auto-Chlor System of Minnesota, Inc. v. JohnsonDiversey
328 F. Supp. 2d 980 (D. Minnesota, 2004)
Sports Unlimited, Inc. v. Lankford Enterprises, Inc.
93 F. Supp. 2d 1164 (D. Kansas, 2000)
Sanderson v. Spectrum Labs, Inc.
227 F. Supp. 2d 1001 (N.D. Indiana, 2000)
Synygy, Inc. v. Scott-Levin, Inc.
51 F. Supp. 2d 570 (E.D. Pennsylvania, 1999)
Group Health Plan, Inc. v. Philip Morris, Inc.
68 F. Supp. 2d 1064 (D. Minnesota, 1999)
Ultra-Temp Corp. v. ADVANCED VACUUM SYSTEMS, INC.
27 F. Supp. 2d 86 (D. Massachusetts, 1998)
Fashion Boutique of Short Hills, Inc. v. Fendi USA, Inc.
942 F. Supp. 209 (S.D. New York, 1996)

Cite This Page — Counsel Stack

Bluebook (online)
872 F. Supp. 643, 33 U.S.P.Q. 2d (BNA) 1751, 1994 U.S. Dist. LEXIS 19869, 1994 WL 719108, Counsel Stack Legal Research, https://law.counselstack.com/opinion/medical-graphics-corp-v-sensormedics-corp-mnd-1994.