Biotech Companies Take Fight to Court

SAN FRANCISCO (CN) - A biotech company claims in court that a competitor used "trickery" and "deception" to steer customers away from its genetic analysis products.

Fluidigm Corp. sued NanoString Technologies in Federal Court, alleging false advertising, unfair trade and unfair competition.

Fluidigm claims NanoString rigged testing of gene expression profiling equipment, "and failed to run even that testing properly."

San Francisco-based Fluidigm claims that its "groundbreaking technology enables genetic analysis that once was beyond the reach of most of its customers."

NanoString recently launched the nCounter Single Cell Gene Expression Assay to compete with Fluidigm's products: the C1 Single-Cell Auto Prep system, and the BioMark and BioMark HD systems, according to the complaint.

Fluidigm claims Seattle-based NanoString used bogus head-to-head comparisons and failed to control variables while testing the equipment.

"In its advertising campaign for the nCounter Single Cell Assay, defendant makes false and misleading statements and claims about the performance of the nCounter Single Cell Assay in comparison to Fluidigm's BioMark system. Most notably, defendant's advertising features the results of a purported 'head-to-head comparison against Fluidigm's BioMark system' that NanoString claims demonstrates the nCounter Single Cell Assay is more sensitive and provides more reliable results that the BioMark system," the complaint states.

"NanoString's testing, however, was flawed and produced inaccurate and misleading results for the BioMark system. Moreover, the comparison itself was not a true or fair 'head-to-head' comparison. Instead, the study failed to control for variables and was designed to favor the nCounter product. In short, defendant rigged the testing to favor its nCounter system and failed to run even that testing properly."

Fluidigm claims that NanoString used tricks because it could not compete on cost.

"Because it costs much less to run samples on the BioMark system compared to running equivalent samples using the nCounter Single Assay, NanoString recognized it could not fairly compete with the BioMark system on the basis of cost. Instead, NanoString chose to falsely represent that its system is more sensitive in comparison with the BioMark system for analyzing single-cell gene expression," the complaint states.

NanoString sells its products to schools and pharmaceutical, biotechnology and life sciences companies.

"Defendant knows, or in the exercise of reasonable discretion should know, that its marketing program deceives potential customers about the nature, characteristics and qualities of its nCounter Single Cell Assay in comparison, connection or association with plaintiff's BioMark system," the complaint states.

"Defendant's conduct amounts to deception, trickery and/or unfair methods and has damaged and jeopardized plaintiff's business. As a result of such malicious, wanton and/or fraudulent conduct, defendant has caused, and unless enjoined by the court, will continue to cause confusion as to the superior sensitivity and reproducibility of data achieved using defendant's nCounter Single Cell Assay in comparison to plaintiff's BioMark system."

Fluidigm wants NanoString's marketing campaign enjoined and punitive damages.

It is represented by Saul Perloff with Fulbright & Jaworski, of San Antonio.

(Companies that make grand claims for their products often do so unscathed, with the claims considered "puffery." But comparing a product with a competitor's product may convert the puffery into disparagement, and bring legal action.)

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