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Orthoaccel Technologies, Inc. v. Propel Orthodontics, LLC

United States District Court, E.D. Texas, Sherman Division

May 2, 2017

ORTHOACCEL TECHNOLOGIES, INC.
v.
PROPEL ORTHODONTICS, LLC

          MEMORANDUM OPINION AND ORDER

          AMOS L. MAZZANT UNITED STATES DISTRICT JUDGE.

         Pending before the Court is Defendant Propel Orthodontics, LLC's Emergency Motion to Modify the Court's Preliminary Injunction Order (Dkt. #318). The Court, having considered the relevant proceedings, finds the motion is denied.

         BACKGROUND

         Plaintiff, OrthoAccel Technologies, Inc. (“OrthoAccel”), is a medical device company that manufactures dental appliances. In 2008, OrthoAccel developed a prototype hands-free dental device that uses gentle vibrations to accelerate tooth movement when used with orthodontic treatment. This prototype would eventually become the AcceleDent device, which has two main functional components: (1) a “Mouthpiece” and (2) an “Activator.” The Activator is a small extraoral component that generates a vibrational force of 0.25N at 30 Hz. The Activator connects directly to the Mouthpiece, which the patient lightly bites down on for 20 minutes daily to accelerate tooth movement during orthodontic treatment.

         On November 5, 2011, the Food and Drug Administration (“FDA”) granted 510(k) clearance for AcceleDent as “an orthodontic accessory intended for use during orthodontic treatment. It is used in conjunction with orthodontic appliances such as braces and helps facilitate minor anterior tooth movement.” A 510(k) is a premarketing submission made to the FDA to demonstrate that the device to be marketed is as safe and effective as a legally marketed device (a “predicate device”) that is not subject to premarket approval. 510(k) clearance is required for Class II devices, but Class I devices are 510(k) exempt. Class I devices are deemed to be low risk and are therefore subject to the least regulatory controls. For example, dental floss is classified as a Class I device. Class II devices are higher risk devices than Class I and require greater regulatory controls to provide reasonable assurance of the device's safety and effectiveness. Dental implants and braces are examples of Class II devices.

         In 2012, OrthoAccel launched its Class II AcceleDent device in the United States to be used in conjunction with orthodontic treatment. In 2013, OrthoAccel launched the AcceleDent Aura (“Aura”), the second generation of AcceleDent, which initially was cleared to be used with braces only. OrthoAccel offers its customers special pricing through its AcceleDent NOW Program (“ADNow”). The ADNow agreements require doctors to offer the AcceleDent device to all patients in their practice and keep a certain number of units in stock. As of January 12, 2017, OrthoAccel had 127 providers signed up for the ADNow program.

         Defendant Propel Orthodontics, LLC (“Propel”) is also a medical device company that manufactures dental appliances. In January 2016, Propel began marketing a vibratory Class I device designed to help seat clear aligners. Orthodontic patients wear a series of these removable aligners, marketed under names such as Invisalign and ClearCorrect, to gradually straighten their teeth. In March 2016, Propel released the VPro5, which operates at 120 Hz and requires five minutes of daily use to properly seat (i.e., fit better on the teeth) clear aligners. The VPro5 costs significantly less than the OrthoAccel Aura. On July 8, 2016, OrthoAccel's product-the Aura- was cleared for use with clear aligners.

         Propel primarily markets the VPro5 through its sales force in a consultative setting. Propel sales representatives originally promoted the VPro5 by telling orthodontists that the device offers several clinical benefits (“5 Clinical Benefits”). These 5 Clinical Benefits include: (1) more efficient aligner seating, (2) relieves orthodontic pain, (3) accelerates tooth movement, (4) fast tracks retention, and (5) stimulates bone growth and remodeling. Propel's sales force originally marketed the VPro5 as a quicker, cheaper alternative to the AcceleDent device.

         In May 2016, OrthoAccel sued Propel, claiming Propel falsely advertised the VPro5's 5 Clinical Benefits in violation of the Lanham Act. On October 26, 2016, the Court entered a preliminary injunction order enjoining Propel from advertising the 5 Clinical Benefits (“Preliminary Injunction Order”) (Dkt. #148). On November 25, 2016, Propel filed a notice of appeal of the preliminary injunction (Dkt. #171). On January 30, 2017, Propel filed its opening brief to the Fifth Circuit Court of Appeals. On March 26, 2017, Propel filed this Emergency Motion to Modify the Court's Preliminary Injunction Order (Dkt. #318). On April 10, 2017, OrthoAccel filed its response (Dkt. #329). On April 18, 2017, Propel filed a reply (Dkt. #337).

         LEGAL STANDARD

         As a general rule, a notice of appeal ousts the district court of jurisdiction over the judgment or order appealed. Coastal Corp. v. Texas E. Corp., 869 F.2d 817, 819 (5th Cir. 1989) (citing U.S. v. Hitchmon, 587 F.2d 1357 (5th Cir. 1979)). However, Federal Rule of Civil Procedure 62(c) allows the district court some limited injunctive powers during the pendency of an appeal. Rule 62(c) provides in pertinent part:

Injunction Pending Appeal. When an appeal is taken from an interlocutory or final judgment granting, dissolving, or denying an injunction, the court in its discretion may suspend, modify, restore, or grant an injunction during the pendency of the appeal upon such terms as to bond or otherwise as it considers proper for the security of the rights of the adverse party.

         The Fifth Circuit has held that “the authority granted by Rule 62(c) does not extend to the dissolution of an injunction . . . the district court's power to alter an injunction pending appeal is limited to ‘maintaining the status quo.'” Sierra Club, Lone Star Chapter v. Cedar Point Oil ...


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