A Chicago federal judge has refused to toss a lawsuit brought by a medical waste disposal container company against a competitor it accused of funding and spreading an allegedly specious study on hospital bacterial infection rates, not out of a concern for public safety, but merely to infect their rival’s reputation and suppress its business.
On March 18, U.S. District Judge Samuel Der-Yeghiayan said Chicago-based Daniels Sharpsmart should be allowed to continue with its case alleging Franklin Lake, N.J.-based Becton, Dickinson and Company violated state and federal deceptive trade practices laws by commissioning and then using in its advertising and marketing materials a study purportedly establishing a connection between bacterial infection rates among hospital patients and the products manufactured and sold by Daniels Sharpsmart.
The dispute between the companies landed in federal court in October 2015, when Daniels brought its three-count complaint against Becton Dickinson. The companies both have built their businesses selling container systems for the safe disposable of medical “sharps,” including used syringes, blood collection devices and intravenous needles. Daniels’ disposal products are reusable, while Becton makes and sells disposable units.
In its October complaint, Daniels described competition between companies in the sharps disposal market as “fierce,” and said its name, in particular, had become synonymous among hospitals and other health care facilities with reusable sharps disposal containers.
So, Daniels said it began receiving a steady stream of concerned calls and other messages from health care facilities and professionals after Becton began touting a study conducted by a researcher Becton hired, which appeared to find patients at hospitals that used disposable sharps containers, such as those made by Becton, had lower rates of infection by Clostridum difficile, or C. diff., bacteria.
According to the Centers for Disease Control, C.diff is a “healthcare-associated infection” which is largely spread among patients in hospitals.” The CDC reported, as recently as 2011, C.diff infected about 500,000 people in the U.S. annually, and about 5-6 percent of those infected died within 30 days.
In its complaint, Daniels alleged Becton’s study was a sham, skimming surface date to derive unwarranted conclusions. And Daniels said Becton’s decision to use the study in its marketing efforts and other promotional avenues, including in purported scholarly articles, was designed to specifically damage Daniels’ business.
In response, Becton had asked the judge to dismiss much of Daniels’ lawsuit, saying its marketing tools never mentioned Daniels Sharpsmart by name, meaning those reading the ads or reading about the study could not conclude the efforts were targeted specifically at Daniels. Becton also argued its use of the study was not “commercial speech,” and so should be protected.
Der-Yeghiayan, however, quickly disposed of those arguments, saying the way Becton used the study in its marketing materials appear to make the study more than just a scientific or academic exercise.
And the judge said Becton didn’t need to specifically say Daniels Sharpsmart for readers to infer against whom the study’s purported cautions over reusable containers were aimed.
“Daniels’ allegations do not suggest that Becton funded the study out of a concern for public safety,” Der-Yeghiayan wrote. “The fact that Becton allegedly funded the study with the specific intent to use it to target sellers of Reusables and disparage their product and thereby divert business from such sellers to Becton is a further indication according to Daniels that Becton was specifically targeting Daniels and its product during the alleged disparagement.
“The statements made by Becton clearly disparage the quality of Daniels’ product.”
Daniels Sharpsmart is represented in the action by attorneys with the firm of Levenfeld Pearlstein, of Chicago.
Becton Dickinson is represented by the firm of Epstein Becker & Green, with offices in Newark, N.J., and Chicago.