McNeil-P.C.C., Inc. v. Bristol-Myers Squibb Co., NEIL-P

Citation938 F.2d 1544
Decision Date16 July 1991
Docket NumberNEIL-P,No. 1451,D,BRISTOL-MYERS,1451
PartiesMcC.C., INC., Plaintiff-Appellee, v.SQUIBB COMPANY, Defendant-Appellant. ocket 91-7064.
CourtUnited States Courts of Appeals. United States Court of Appeals (2nd Circuit)

Barry H. Garfinkel, New York City (Kenneth A. Plevan, Miriam L. Siroky, Steffi R. Kipperman, Skadden Arps, Slate, Meagher & Flom, New York City, Thomas O. Henteleff, Kleinfeld, Kaplan and Becker, Washington, D.C., James L. Posner, Judith L. Sykes, Nancy M. Louden, Bristol-Myers Squibb Co., New York City, of counsel), for defendant-appellant.

Gregory L. Diskant, New York City (Stephen P. Younger, Steven A. Zalesin, Lisa C. Cohen, Patterson, Belknap, Webb & Tyler, New York City, Robert J. Trainor, Johnson & Johnson, New Brunswick, N.J., of counsel), for plaintiff-appellee.

Before PRATT, MINER and ALTIMARI, Circuit Judges.

ALTIMARI, Circuit Judge:

The dispute in the underlying action centers upon an advertising campaign launched by defendant-appellant Bristol-Myers Squibb Company ("Bristol-Myers"), proclaiming that Aspirin-Free Excedrin ("AF Excedrin"), an over-the-counter ("OTC") analgesic it manufacturers, relieves pain better than Extra-Strength Tylenol ("ES Tylenol"), an OTC analgesic manufactured by plaintiff-appellee McNeil-P.C.C., Inc. ("McNeil"). Believing that Bristol-Myers' comparative claim of superiority was false, McNeil commenced an action in the United States District Court for the Southern District of New York pursuant to Section 43(a) of the Lanham Act, 15 U.S.C. Sec. 1125(a) (1988), seeking preliminary and permanent injunctive relief enjoining Bristol-Myers from making its superiority claim.

The district court (John M. Cannella, Judge ), consolidated the hearing on McNeil's motion for a preliminary injunction with the trial on the merits. See Fed.R.Civ.P. 65(a)(2). Following a three-day bench trial, the district court ruled that McNeil had met its burden of proving the falsity of Bristol-Myers' advertising claim by demonstrating that Bristol-Myers' own test data established that AF Excedrin did not outperform ES Tylenol to a statistically significant degree. See McNeil-P.C.C., Inc. v. Bristol-Myers Squibb Co., 755 F.Supp. 1206, 1219 (S.D.N.Y.1990). Accordingly, the district court permanently For the reasons set forth below, the judgment of the district court is affirmed.

enjoined Bristol-Myers from making its superiority claim. Bristol-Myers appeals from this judgment, contending, among other things, that the district court erred by improperly allocating and applying the burden of proof. Additionally, Bristol-Myers challenges several of the district court's factual findings.

BACKGROUND

Defendant-appellant Bristol-Myers and plaintiff-appellee McNeil are direct competitors in the market for OTC analgesics. Bristol-Myers sells Excedrin pain relievers. McNeil, the market leader in OTC analgesics, sells Tylenol products, including ES Tylenol. A two-tablet dose of ES Tylenol contains 1000 milligrams ("mg.") of acetaminophen. In the Spring of 1990, Bristol-Myers began marketing AF Excedrin, a two-tablet dose of which contains 1000 mg. of acetaminophen and 130 mg. of caffeine. Thus, the only difference between AF Excedrin and ES Tylenol is that AF Excedrin contains caffeine.

To market its new pain reliever, Bristol-Myers began a comprehensive advertising campaign. Initially, Bristol-Myers sent promotional literature to drug retailers and other trade professionals that touted AF Excedrin's superiority over ES Tylenol. The advertisement proclaimed that "in doctor supervised clinical studies ... [AF] Excedrin was shown to provide greater headache relief" than ES Tylenol. According to the advertisement, AF Excedrin "works better" than ES Tylenol because AF Excedrin contains caffeine, which "acts as an analgesic adjuvant--boosting the effect of the acetaminophen to provide greater headache relief." Bristol-Myers subsequently directed its promotional efforts at the general public. On August 30, 1990, Bristol-Myers commenced a television advertising campaign. Its television commercial featured a headache sufferer who explained that she used to take ES Tylenol, but then tried AF Excedrin and discovered that AF Excedrin "works better." Id. at 1209. Unlike the trade advertising, this commercial did not refer to clinical studies or to caffeine's adjuvancy as the basis of the superiority claim.

Because McNeil believed that Bristol-Myers' "works better" claim was false, and therefore violated section 43(a) of the Lanham Act, 15 U.S.C. Sec. 1125(a), McNeil commenced the underlying action seeking preliminary and permanent injunctive relief enjoining Bristol-Myers from making that claim. The district court consolidated the preliminary injunction hearing with the trial on the merits. See Fed.R.Civ.P. 65(a)(2). Since the only difference between AF Excedrin and ES Tylenol is that AF Excedrin contains caffeine, the district court noted that, in order to prevail on its Lanham Act claim, McNeil had to demonstrate by a preponderance of the evidence that "the presence of caffeine in AF Excedrin fails to make AF Excedrin superior to ES Tylenol in relieving headache pain." Id. at 1211.

To meet its burden of proof, McNeil relied on expert statistical analyses of two studies performed by Bristol-Myers in 1988 and 1989 that directly compared the efficacy of AF Excedrin and ES Tylenol in relieving headache pain ("AF Excedrin studies"). According to McNeil, a proper analysis of the AF Excedrin studies' data demonstrated that AF Excedrin did not outperform ES Tylenol to a statistically significant degree and therefore Bristol-Myers' superiority claim was false. Bristol-Myers countered that the data from the AF Excedrin studies indeed showed that AF Excedrin relieved headache pain significantly better than ES Tylenol.

Before evaluating the parties' contentions concerning the results of the AF Excedrin studies, the district court considered the relevance of other studies offered by Bristol-Myers to rebut McNeil's assertion that Bristol-Myers' superiority claim was false, namely: (1) Bristol-Myers' studies comparing original formula Excedrin with ES Tylenol ("Excedrin studies"), (2) a study conducted by Whitehall Laboratories comparing Anacin, which contains aspirin and caffeine, with aspirin ("Whitehall study"), and (3) a "meta-analysis study" that analyzed the results of thirty The district court agreed with McNeil's view and found that these other studies were not germane to Bristol-Myers' "works better" claim in the instant case. The Excedrin studies compared Excedrin, containing 500 mg. of aspirin, 500 mg. of acetaminophen, and 130 mg. of caffeine, with ES Tylenol. Based on expert testimony and documentary evidence, the district court concluded that studies testing the adjuvant effect of caffeine on a combination of analgesics, such as the aspirin and acetaminophen contained in Excedrin, were not relevant to determining caffeine's interaction with and effect on acetaminophen alone. Id. at 1213. Accordingly, the court found that the results of the Excedrin studies were not relevant to whether caffeine acted as an adjuvant in AF Excedrin, which contains only acetaminophen. For similar reasons, the district court rejected the results of the Whitehall study.

clinical studies involving the adjuvant effect of caffeine on a variety of analgesics. Bristol-Myers contended that these studies established the validity of its superiority claim. McNeil argued that the studies were not pertinent to determining whether AF Excedrin outperformed ES Tylenol.

The district court also determined that the results of the meta-analysis study were not relevant because it was based on doses of caffeine and analgesic that were beyond OTC levels. Moreover, evidence at trial showed that only seven out of the thirty studies incorporated into the meta-analysis concerned acetaminophen. Judge Cannella therefore accorded the meta-analysis little or no weight.

Because the district court found these other studies not pertinent to the dispute in the instant action, the key factual inquiry at trial became whether the AF Excedrin studies demonstrated AF Excedrin's superiority over ES Tylenol. The AF Excedrin studies were "crossover" studies. As explained by the district court, "[i]n a crossover study the patients take one study drug in 'period one' and another study drug in 'period two.' " Id. at 1214. The principal advantage of such studies is that each patient receives and evaluates the efficacy of both study drugs, thereby serving " 'as his [or her] own control.' " Id. Inherent in crossover studies, however, is the danger of a "carryover" effect, whereby the physical or psychological effects of a drug in period one carry into and distort the test results in period two. Id. at 1215. If carryover is present in a crossover study, the experts substantially agreed that only the period one data is reliable. Id. at 1216.

At trial, the parties agreed that an analysis of both the period one and period two data from the AF Excedrin studies showed that AF Excedrin relieved pain better than ES Tylenol to a statistically significant degree. However, McNeil argued that the AF Excedrin studies were distorted by psychological carryover, thereby invalidating the period two results. According to McNeil, a proper analysis of the period one data--the only reliable data--revealed no significant difference between the two analgesics. Consequently, McNeil contended that AF Excedrin and ES Tylenol were equivalent pain relievers and that Bristol-Myers' claim of superiority was therefore false.

The parties vigorously contested whether the AF Excedrin studies were tainted by carryover and presented the court with conflicting expert testimony regarding the proper statistical test for ascertaining the presence of carryover. McNeil's experts, Professor Nan Laird, an expert in biostatistics, and Professor Michael G....

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