Summit Tech. v. High-Line Med. Instruments Co.
| Decision Date | 16 July 1996 |
| Docket Number | No. CV 95-6491 ABC (SHx).,CV 95-6491 ABC (SHx). |
| Citation | 933 F. Supp. 918 |
| Parties | SUMMIT TECHNOLOGY, INC., Plaintiff, v. HIGH-LINE MEDICAL INSTRUMENTS, CO., et al., Defendants. |
| Court | U.S. District Court — Central District of California |
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Blanc Williams Johnston & Kronstadt, John A. Kronstadt, John C. Rawls, Cynthia S. Arato, Mona D. Miller, Los Angeles, CA, for plaintiff.
Foley Lardner Weissburg & Aronson, James R. Kalyvas, Shana T. Torem, Los Angeles, CA, for Hi-Line Medical.
Blecher & Collins Maxwell Blecher, Alicia Rosenberg, William C. Hsu, Los Angeles, CA, for Kenneth York/York Lago Eye Center.
Alioto & Alioto, John Alioto, Margaret M. Weems, San Francisco, CA, for William Ellis/Eye Center of No. Calif.
Defendants' motions to dismiss Plaintiff's First Amended Complaint came on regularly for hearing before this Court on July 15, 1996. After reviewing the materials submitted by the parties, argument of counsel, and the case file, it is hereby ORDERED that Defendants' motions are GRANTED in part and DENIED in part.
On September 28, 1995, Plaintiff SUMMIT TECHNOLOGY, INC. ("Summit") filed a Complaint against Defendants HIGH-LINE MEDICAL INSTRUMENTS COMPANY, INC., d/b/a HI-LINE MEDICAL ("Hi-Line"), KENNETH K. YORK AND YORK LASER EYE CENTER ("York" Defendants), WILLIAM ELLIS AND EYE CENTER OF NORTHERN CALIFORNIA, INC. ("Ellis" Defendants), and PARIS E. ROYO, PARIS E. ROYO, INC. and ROYO EYE CENTER MEDICAL GROUP ("Royo" Defendants). Summit asserts that Defendants have unlawfully imported, advertised, promoted, used, or serviced Summit Excimer Laser Systems (used to correct a variety of vision disorders) which, according to Summit, have not been approved by the United States Food and Drug Administration ("FDA"). The original Complaint asserted causes of action for false and misleading advertising under § 43(a) of the Lanham Act (15 U.S.C. § 1125(a)), importation of goods bearing infringing marks or names (15 U.S.C. § 1124), infringement of a registered trademark (15 U.S.C. § 1114), copyright infringement, unfair competition in violation of Cal.Bus. & Prof.Code § 17200, common law unfair competition, false and misleading statements in violation of Cal.Bus. & Prof. Code § 17500, and violation of the Sherman Food, Drug, and Cosmetic Act (Cal. Health & Safety Code §§ 26000-26851).
On February 28, 1996, the Court dismissed Summit's original Complaint in its entirety. See Order (dated February 28, 1996); Summit Technology, Inc. v. High-Line Medical Instruments Company, Inc., 922 F.Supp. 299 (C.D.Cal.1996). For the most part, this dismissal was with prejudice and without leave to amend. However, the Court dismissed Plaintiff's false and misleading advertising claims (Lanham Act § 43(a) and Cal.Bus. & Prof.Code § 17500) and its California unfair competition claims without prejudice and with leave to amend.
On April 5, 1996, Plaintiff filed a First Amended and Supplemental Complaint ("FASC") against Defendants Hi-Line, York and Ellis.1 In the FASC, Plaintiff asserts causes of action for violations of 15 U.S.C. § 1125(a), unfair competition in violation of Cal.Bus. & Prof.Code §§ 17200 et seq., common law unfair competition, and violations of Cal.Bus. & Prof.Code §§ 17500 et seq. The substance of these allegations will be discussed in further detail below. In addition, Plaintiff initially asserted causes of action against York and Ellis for violation of 15 U.S.C. § 1124 and copyright infringement. On April 24, 1996, the parties stipulated to dismiss these last two claims against York and Ellis because they would be directly subject to the Court's February 28, 1996 Order.
On May 15, 1996, Defendants filed separate motions to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). On June 17, 1996, Plaintiff filed a consolidated Opposition to Defendants' motions. Defendants filed separate Reply briefs on July 1, 1996.
In the FASC, Plaintiff realleges the underlying facts alleged in the original Complaint. In its prior Order, the Court discussed these allegations in great detail. See Summit, 922 F.Supp. at 302-04. Accordingly, there is no reason to repeat that discussion in large part. Nevertheless, some repetition will be required in order to fully describe the First Amended and Supplemental Complaint.
As discussed in the prior Order, Summit is a Massachusetts corporation that develops, manufactures, sells, and services ophthalmological laser systems for treatment of a variety of eye disorders. FASC ¶¶ 10, 16-18. It holds a registered trademark in the name "Summit Technology." FASC ¶ 21. In the past decade, Summit has manufactured and sold its "Excimer" laser systems for use abroad and in the United States. FASC ¶ 31. Some of these products were manufactured at domestic Summit facilities and some were manufactured at a Summit facility in Ireland. FASC ¶ 35.
On March 10, 1995 and October 20, 1995, Summit received FDA approval for the commercial use of two Excimer systems, the ExciMed UV 200LA (domestic) and SVS Apex (domestic) Systems, to perform Phototherapeutic Keratectomy ("PTK") and Photorefractive Keratectomy ("PRK") under limited circumstances. FASC ¶¶ 32-33. Prior to FDA approval, Summit marketed its Excimer systems in approximately 45 foreign countries, including Canada, Mexico, and several European countries. FASC ¶ 35. Two of the models sold abroad are the ExciMed UV 200LA (international) and the SVS Apex (international) systems. FASC ¶ 36. According to Plaintiff, these systems differ materially from their domestic counterparts. FASC ¶ 36.
The core allegation in Plaintiff's First Amended and Supplemental Complaint is that Defendants have acquired, sold, or used international models of the Excimer systems in the United States. More specifically, Plaintiff alleges that Defendant Hi-Line has "acquired, imported, reimported or facilitated the importation or reimportation into the United States for distribution in the United States" used Summit Excimer systems. FASC ¶ 48. Summit also alleges that Hi-Line may have acted as a broker, arranging or facilitating the sale of the used international Summit systems. FASC ¶ 48. According to the FASC, Hi-Line has also advertised and promoted the availability of Summit Excimer systems in sales catalogs, brochures, and at conventions orally. FASC ¶ 49.
In these advertisements, Hi-Line has allegedly made numerous false or misleading statements about the Summit systems. FASC ¶ 50. The specifics of the statements will be discussed in further detail below. According to Plaintiff, the statements allegedly convey the false impression that Summit is affiliated with or approves of Hi-Line's actions, and that there is no difference between the international Excimer laser system models and the domestic models. FASC ¶ 50. Furthermore, Plaintiff alleges that Hi-Line's statements convey the impression that the used Hi-Line models can be maintained, installed, serviced and tested by Hi-Line in a manner that makes the machines safe and reliable. FASC ¶ 50. According to Summit, Hi-Line's allegedly false or misleading statements are likely to cause public confusion and threaten to harm Summit in a variety of ways. FASC ¶ 55-56.
Plaintiff alleges that Defendant Ellis purchased a Summit ExciMed UV 200LA (international) in Canada in August 1994 and then imported it into the United States. FASC ¶ 58. The laser machine purchased by Ellis bears a label stating: "CAUTION — Investigational Device; Limited by Federal Law to Investigational Use." FASC ¶ 58. Similar restrictions also appear in the manual accompanying the machine. FASC ¶ 58. According to Plaintiff, prior to purchasing the laser, Ellis sought and received an opinion from counsel, stating that Ellis could lawfully import the device only if it were "solely for use and experimentation upon animals." FASC ¶ 59. And, in order to pass the machine through U.S. Customs, counsel advised Ellis that the machine had to be "clearly labelled" to exclude the possibility that the machine would be used upon humans. FASC ¶ 59. Ellis allegedly followed this advice and directed his customs broker to indicate that the laser system was for "non-human use." FASC ¶ 60. After the successful importation, Ellis also allegedly told an FDA representative (who was visiting Ellis' office) that the "Excimer laser will be used for animal research ... only." FASC ¶ 61.
According to Plaintiff, Ellis, in fact, "fully intended" to use the imported device on humans. FASC ¶ 62. Moreover, according to Plaintiff, Ellis has never conducted a single animal study with the laser system. FASC ¶ 62. However, Ellis allegedly has performed, continues to perform, and offers to perform various surgical procedures (including PRK and Laser Intrastromal Keratomileusis ("LASIK")) with his imported Summit Excimer laser, although the FDA allegedly has not approved the use of his system for these procedures. FASC ¶ 63. In addition, Ellis has allegedly made a variety of false and misleading statements, by means of writings, advertisements, radio, television, and video. FASC ¶ 64. The specific details of the statements will be discussed below. According to Plaintiff, these statements imply: (1) that the ExciMed UV 200LA (international) possessed by Ellis is the same as the Summit device sold domestically by Summit; (2) that the Ellis system has been properly serviced and tested; (3) that the Ellis system has been approved by the FDA; (4) that the Ellis system is a new laser. FASC ¶ 64. Ellis' allegedly false or misleading statements are likely to cause confusion in the public, and threaten to harm Summit in a variety of ways. FASC ¶ 82-83.
According to Plaintiff, Defendant York has acquired two used Summit Excimer systems. FASC ¶ 84. York allegedly acquired one...
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