Mead Johnson & Co. v. Abbott Laboratories

• Decision Date: 18 March 1999
• Docket Number: No. EV 98-131-CH/H.,EV 98-131-CH/H.
• Citation: 41 F.Supp.2d 879
• Parties: MEAD JOHNSON & COMPANY, Plaintiff, v. ABBOTT LABORATORIES, Defendant.
• Court: U.S. District Court — Southern District of Indiana

41 F.Supp.2d 879

MEAD JOHNSON & COMPANY, Plaintiff, v. ABBOTT LABORATORIES, Defendant.

No. EV 98-131-CH/H.

United States District Court, S.D. Indiana, Indianapolis Division.

March 18, 1999.

Order Modifying Opinion April 13, 1999.

Patrick A. Shoulders, Ziemer, Stayman, Weitzel & Shoulders, Evansville, Indiana, for Plaintiff.

Thomas C. Morrison, Patterson Belknap Webb & Tyler, New York City, for Defendant.

ENTRY ON PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION

HAMILTON, District Judge.

Introduction

Defendant Abbott Laboratories advertises its Similac line of infant formulas under the banner "1st Choice of Doctors." Abbott's chief competitor in the infant formula market is plaintiff Mead Johnson & Company. Mead Johnson contends that the "1st Choice of Doctors" claim is false and/or misleading and thus violates Section 43(a)(1) of the Lanham Act, 15 U.S.C. § 1125(a)(1). Mead Johnson contends the claim is misleading because consumers interpret it to mean that most doctors believe Abbott's product is medically superior to Mead Johnson's product, when in fact most doctors do not have a preference between the two leading brands and there is no evidence that one product is medically superior to the other. Mead Johnson seeks a preliminary injunction to stop Abbott from continuing to advertise with the "1st Choice of Doctors" claim.

The court held an evidentiary hearing on November 23-25, 1998. Pursuant to Rules 52 and 65 of the Federal Rules of Civil Procedure, the court now states its findings of fact and conclusions of law.¹ As explained below, the court finds that Mead Johnson has shown a substantial likelihood of prevailing on its claim that "1st Choice of Doctors" misleads consumers with respect to Similac in two independent ways. The market research on doctors' views of the competing brands is not consistent with consumers' actual and reasonable interpretations of the "1st Choice of Doctors" claim in two ways. First, consumers reasonably interpret the claim to mean that a majority of doctors choose Abbott products over Mead Johnson products. A fair reading of the many doctor surveys in question shows that Abbott products consistently gain the support of only a plurality of doctors. Second, consumers reasonably interpret the "1st Choice of Doctors" claim to mean that doctors base their choices on professional judgments about the relative quality of the products. The surveys that Abbott offers in support of the claim were not designed to elicit a doctor's exercise of professional judgment as distinct from a "top of the head" product or advertising recall. Because the other equitable factors also weigh in favor of injunctive relief, the court grants Mead Johnson's motion for preliminary injunction and will enjoin continued misleading advertising using the "1st Choice of Doctors" claim for Abbott's Similac brand. The relief will not extend, however, to Abbott's soy-based brand Isomil, as to which Mead Johnson has not shown the claim is misleading.

The facts in the case are voluminous, including evidence of numerous market research surveys of doctors and consumers who buy infant formulas. The evidence may be more readily understood if the court first lays out the legal framework that applies to Mead Johnson's motion for a preliminary injunction under the Lanham Act claim.

I. Preliminary Injunction Standard

In another recent Lanham Act case involving these same parties, the Seventh Circuit set forth its definitive standard for deciding motions for preliminary injunctions:

As a threshold matter, a party seeking a preliminary injunction must demonstrate (1) some likelihood of succeeding on the merits, and (2) that it has "no adequate remedy at law" and will suffer "irreparable harm" if preliminary relief is denied. If the moving party cannot establish either of these prerequisites, a court's inquiry is over and the injunction must be denied. If, however, the moving party clears both thresholds, the court must then consider: (3) the irreparable harm the non-moving party will suffer if preliminary relief is granted, balancing that harm against the irreparable harm to the moving party if relief is denied; and (4) the public interest, meaning the consequences of granting or denying the injunction to non-parties.

The court, sitting as would a chancellor in equity, then "weighs" all four factors in deciding whether to grant the injunction, seeking at all times to "minimize the costs of being mistaken." We call this process the "sliding scale" approach: the more likely it is the plaintiff will succeed on the merits, the less the balance of irreparable harms need weigh towards its side; the less likely it is the plaintiff will succeed, the more the balance need weigh towards its side.

Abbott Laboratories v. Mead Johnson & Co., 971 F.2d 6, 11-12 (7th Cir.1992) (vacating denial of preliminary injunction where Abbott showed likelihood of succeeding on merits and court should have presumed irreparable harm from deceptive comparative advertising) (citations omitted).

II. Likelihood of Success on the Merits

Section 43(a) of the Lanham Act provides in relevant part:

(1) Any person who, on or in connection with any goods or services, ... uses in commerce ... any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which —

* * * * * *

(B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person's goods, services, or commercial activities,

shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.

15 U.S.C. § 1125(a). This provision of the Lanham Act has become the principal legal vehicle for one competitor to challenge another's advertising as false, misleading, and/or deceptive.

The prohibitions of Section 43(a)(1)(B) apply "with equal force to (1) statements which are literally false and (2) statements which, while literally true or ambiguous, convey a false impression or are misleading in context, as demonstrated by actual consumer confusion." Abbott Laboratories, 971 F.2d at 13 (collecting cases); accord, BASF Corp. v. Old World Trading Co., 41 F.3d 1081, 1089 (7th Cir. 1994); Sandoz Pharmaceuticals Corp. v. Richardson-Vicks, Inc., 902 F.2d 222, 228-29 (3d Cir.1990); Avis Rent A Car System, Inc. v. Hertz Corp., 782 F.2d 381, 386 (2d Cir.1986); Vidal Sassoon, Inc. v. Bristol-Myers Co., 661 F.2d 272, 277 (2d Cir. 1981).²

Mead Johnson has not tried to frame its case in terms of "literal falsity." As explained in detail below, the claim "1st Choice of Doctors" is deeply — and almost ingeniously — ambiguous. As a result, Mead Johnson must prove first what messages consumers actually receive when they are exposed to the "1st Choice of Doctors" claim. In the advertising business, these received messages are often called the "takeaway." Mead Johnson must prove next that the messages are false or misleading.

Mead Johnson contends that Abbott's "1st Choice of Doctors" claim is misleading because it conveys two false messages to consumers: first, that a substantial majority of doctors prefer Abbott's products over Mead Johnson's and other competitors' products, and second, that doctors prefer Abbott's products because they are medically superior for infants. Mead Johnson contends the first message is false because market surveys of physicians show consistently that fewer than half of physicians have a preference for Abbott's products over competitors' products, and that a significant proportion of physicians have no preference among the competing products. Mead Johnson contends the second message is false because the available medical evidence shows that both Abbott's and Mead Johnson's products provide excellent nutrition to infants, and neither has been shown to produce clinically better results than the other.

Abbott correctly concedes that its "1st Choice of Doctors" claim implies the existence of market research to support the claim. Abbott Br. at 17; see also C.B. Fleet Co. v. SmithKline Beecham Consumer Healthcare, L.P., 131 F.3d 430, 436 (4th Cir.1997) (whether claim of superiority implies survey or tests results to support claim is a question of fact). The "1st Choice of Doctors" claim plainly implies the existence of supporting survey data. The parties have presented a large quantity of evidence, especially concerning doctors' views on competing infant formula products. In evaluating Mead Johnson's likelihood of success on the merits, the court addresses that evidence as follows: (1) the infant formula market and the parties' products; and (2) marketing of infant formulas, focusing especially on the role of doctors in the marketing. The court then turns to: (3) Abbott's use of the "1st Choice of Doctors" claim in its advertising; (4) the evidence of consumers' perceptions of the claim; and (5) the evidence of market research among physicians relevant to the claim.

1. Infant Formulas: The Market and the Products

Each year approximately 3.8 to 3.9 million babies are born in the United States. About 3.4 million of them will be fed significant amounts of infant formula in their first year of life. III Tr. 172. Plaintiff Mead Johnson and defendant Abbott manufacture and sell roughly 90 percent of all the infant formula sold in the United States. I Tr. 26. Total annual sales in the market are greater than $2 billion. See Ex. 506 at D04492; see also Ex. 14.

Defendant Abbott Laboratories operates its Ross Division, which manufactures and sells a family of infant formula products. The flagship brand is Similac, which is sold in a version "with iron" and a version with "low iron." Abbott also sells Isomil, a soy-based formula used for infants who do not tolerate milk products, as well as other specialty infant formulas.

Plaintiff Mead Johnson manufactures a competing family of infant formulas. Its...