Lanham Act Unfair Competition And False Advertising Lawsuit Filed by Orthopedic Development and MinSurg Against Viking Craft Spine In Santa Ana, CA, With Patent Infringement Lawsuit Lurking

Litigation commenced in Central District Court of California, Santa Ana Division, alleging unfair competition under the Lanham Act 43(a), 15 U.S.C 1125. Plaintiffs, Orthopedic Development and MinSURG Corp., are the owners of a patent-pending TruFUSE® medical device product which is a spinal facet fusion system invented by Dr. David A. Petersen, M.D., “that offers a low-risk and minimally invasive surgical solution to back pain resulting from facet joint degeneration and from mild spinal instability.” The complaint alleges that the TruFUSE® surgery can be completed in less than an hour and the patient usually needs one night of hospital stay. Although the invention is patent-pending and cannot be currently asserted in a patent infringement lawsuit, Orthopedic Development currently owns a registered trademark with the USPTO for the TruFUSE® trademark.

us20060111782-fig3.jpgThe Plaintiffs discovered that one of their own distributors, Nutech Medical, Inc., was allegedly developing and marketing a “TruFUSE® knock-off” facet fusion product. The complaint alleges that Plaintiffs discovered that the infringing product was going to be marketed under a confusingly similar name of “NUFUZE” and that the product incorporates Plaintiffs’ proprietary information and trade secrets, which were provided under the Plaintiffs’ distribution agreement with NuTech. Upon learning of NuTech’s application to the USPTO to register the NUFUZE trademark, Plaintiffs filed an opposition to the application before the Trademark Trial And Appeal Board (“TTAB”). NuTech filed an answer in the TTAB proceeding and abandoned its NUFUZE and BIOFUZE trademarks, and allegedly began marketing the product under the “NuFix” trademark. The case is titled Orthopedic Development Corp. v. Vikingcraft Spine, SACV08-01888 (C.D. California)

The complaint alleges that numerous surgeons that use Plaintiffs’ TruFUSE® product began receiving solicitations from NuTech and its distributor, Vikingcraft, offering the NuFix product at a reduced price. Plaintiff filed suit against NuTech and other defendants in Florida and sent notice to Vikingcraft, putting it on notice of the patent application and the Plaintiffs’ unfair competition and false advertising claims. Plaintiff claims that Defendant falsely asserts “that (a) the TruFUSE® Allograft has a tendency to pop out after it is implanted and that the ridge design of NuFix reduces this occurrence; and that (b) NuFix is designed to be used with TruFUSE® Instruments held on consignment by hospitals.”

Plaintiff asserts that Defendant’s statements to customers causes confusion and asserts a cause of action under the Lanham Act unfair competition – false designation of origin (15 U.S.C. §1125(a)(1)(A)). Also, Plaintiff asserts a cause of action for false advertising under the Lanham Act (15 U.S.C. §1125(a)(1)(B)). Plaintiffs also include causes of action for common law unfair competition and for violation of California Business and Professions Code § 17200. In addition to preliminary and permanent injunctive relief, Plaintiffs seek monetary and punitive damages.

PRACTICE NOTE: Although a patent-pending application cannot be asserted in a patent infringement action, damages – in the form of a reasonable royalty – may be obtained against a potential infringer by putting the infringer on notice of a published patent application. See 35 U.S.C. 154(d).