ORS sued defendants for breach of contract, false advertising and unfair competition under the Lanham Act, deceptive trade practices, and consumer fraud.  Some defendants counterclaimed.  ORS sells solutions that are used to preserve kidneys during transplant procedures. ORS attempted to improve one solution’s packaging and shelf life and entered into a contract with PSI to have PSI assist with testing, manufacturing and obtaining regulatory approval for the product, known as KPS–1. Defendant BTL competes with ORS, and ORS alleged that PSI misappropriated ORS’s confidential information, using it in FDA applications and delivering it to BTL. ORS also alleged that defendants gave current and prospective customers false information about ORS products.  (Note the unraised standing issue: PSI appears to be a supplier, not a competitor, of ORS, but that doesn’t affect the court’s analysis of the false advertising claims.)

ORS’s Lanham Act claims against PSI were based on a letter PSI sent to, among others, an Illinois organization called Gift of Hope Organ& Tissue. PSI said that a company that had distributed the solution “in compliance with” PSI’s FDA applications was now distributing a solution not made by PSI, and that this was “critical to you and your patients” because the instructions for use might differ, the PSI product had been “stability tested, reviewed and certified” for certain important features.  The letter continued, “The transplant solution is an integral part of your organ transplant procedure. We know that patient safety is paramount and that full disclosure is essential to protecting your patient. Please check the product label to determine the manufacturer of the solution being supplied to your center.” ORS alleged that PSI sent this letter to organ procurement organization (OPO) administrators, hospitals, and other potential ORS customers throughout the country, leading numerous customers and potential customers to express confusion and concern to ORS and to others in the market.