3B Medical, Inc. v. SoClean, Inc.

Background

3B Medical manufactures the Lumin and Lumin Bullet, devices that use ultraviolet light to sanitize continuous positive airway pressure equipment. SoClean manufactures competing devices that use ozone. 3B Medical alleged that SoClean’s marketing materials falsely described ozone as “activated oxygen,” stated that the devices used no chemicals or harsh chemicals, promoted them as safe and healthy, compared their sanitizing process to hospital processes, and made claims about the devices’ filters and closed-loop design.

3B Medical asserted a false-advertising claim under Section 43(a) of the Lanham Act, along with claims under Sections 349 and 350 of the New York General Business Law and a New York common-law unfair-competition claim. SoClean moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), arguing that the complaint failed to state a claim.

Court’s analysis

For a Lanham Act false-advertising claim, the court explained that a plaintiff must plausibly allege that the challenged statements were literally or implicitly false, material, made in interstate commerce, and caused actual or likely injury. The court focused on injury and did not decide SoClean’s arguments about whether the alleged misrepresentations were actionable.

The court held that 3B Medical had not plausibly alleged actual injury. Its assertions that SoClean’s advertising caused declining sales, lost profits, lost goodwill, and other harm were conclusory. Statements from consumers who preferred or purchased Lumin devices because they did not use ozone did not show that SoClean’s alleged misrepresentations injured 3B Medical. The court stated that those statements might support causation, but causation was separate from the requirement to show actual injury.

The court also declined to apply a presumption of injury. It explained that such a presumption generally applies when an advertisement makes a false or misleading comparison to a specific competing product, and that the limited recognized exceptions did not apply. SoClean’s advertisements did not implicitly refer to or denigrate 3B Medical’s products, and the market was not a two-player market because the complaint identified at least three other competitors and consumers who handwashed their equipment instead of buying either company’s devices. The court also noted that SoClean entered the market before 3B Medical, which the court viewed as another reason not to presume that SoClean’s statements targeted Lumin.

Because the Lanham Act claim failed for lack of adequately pleaded injury, and 3B Medical acknowledged that its state-law claims were largely derivative of that claim, the court concluded that the same deficiency defeated the state-law claims.

Disposition

Judge Katherine Polk Failla granted SoClean’s motion to dismiss. The court dismissed 3B Medical’s complaint, directed the Clerk to terminate pending motions and adjourn remaining dates, and closed the case. The opinion does not state that the dismissal was with or without prejudice.