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LIFESCAN V. CAN-AM SUIT COVERING PRIVATE-LABEL BLOOD GLUCOSE TEST STRIPS

This article was originally published in The Tan Sheet

Executive Summary

LIFESCAN V. CAN-AM SUIT COVERING PRIVATE-LABEL BLOOD GLUCOSE TEST STRIPS is tentatively set to go to trial next September in San Jose, Calif. federal court. Filed by Johnson & Johnson subsidiary LifeScan on June 11, the suit accuses Chazy, N.Y.-based Can-Am Care of patent infringement, unfair competition and false advertising for selling its Quick Check One test strips for use in LifeScan's One Touch blood glucose monitoring meters. Milpitas, Calif.-based LifeScan also is charging that the Quick Check One test strips could pose a serious public health risk when used with the One Touch test and that continued sale of the Can-Am Care products "threatens LifeScan with irreparable harm." Can-Am's Quick Check One test strips are marketed in drug chains including Rite-Aid, Kroger and Fay's. Can-Am also manufactures test strips sold under Kmart's Relief Plus OTC private-label brand as well as test strips for use in Miles' Glucometer II and Glucometer III blood glucose test meters. In July, Can-Am filed a countersuit alleging restraint of trade in violation of antitrust laws; monopolization and attempted monopolization of the blood glucose test strip market; federal unfair competition; and false advertising and unfair competition. The counterclaim also asked for a declaratory judgment that the LifeScan patents are invalid and unenforceable, and not infringed. Federal Judge James Ware denied a LifeScan motion for a preliminary injunction on Sept. 17 because the J&J unit failed to show a "combination of probable success on the merits and the possibility of irreparable injury or that serious questions are raised and the balance of hardships tips sharply in its favor," according to the court ruling. "In fact," Judge Ware continued, "the evidence presented to the court to date shows that [Can-Am Care's] product is comparable to [LifeScan's] product and that no serious health risk is posed by the use of defendant's product with plaintiff s equipment." The Sept. 17 ruling ordered an Oct. 29 case management conference, at which the September 1994 trial date was tentatively set. Reportedly, LifeScan has filed an appeal of the Sept. 17 decision. Can-Am Care declared in a recent release that the Sept. 17 "ruling clears the way for Can-Am to continue selling and advertising its Quick Check One low-cost alternative test strips for use in the One Touch blood glucose meters." Can-Am noted that at an average price of "more than $ 1,000 annually" test strips are "the most expensive component of blood sugar self-monitoring regimens." The company said its Quick Check One test strips sell at about a 20-30% discount to LifeScan's One Touch test strips. Can-Am also asserted that its Quick Check One test strips "have a six-month use life, as compared to the four- month use life of One Touch test strips." Can-Am Care manufactures a line of diabetes care products -- including neon-colored lancets, finger creams formulated for lancet users, and fruit-flavored glucose tablets -- which it sells under its own brand name and under the store brand labels of various drug store chains. Founded in 1982, the firm employs 38 and is headed by President Robert Oringer.
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