Bristol-Myers Squibb Co. v. McNeil-PPC, Inc.
| Decision Date | 20 February 1992 |
| Docket Number | No. CV 91-1826 (ADS).,CV 91-1826 (ADS). |
| Citation | 786 F. Supp. 182 |
| Parties | BRISTOL-MYERS SQUIBB COMPANY, Plaintiff, v. McNEIL-P.P.C., INC., Defendant. |
| Court | U.S. District Court — Eastern District of New York |
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Milgram Thomajan & Lee, P.C., New York City, for plaintiff; Samuel D. Rosen, Lawrence I. Weinstein, Alfred T. Lee, Brendan J. O'Rourke, of counsel.
Patterson, Belknap, Webb & Tyler, New York City, for defendant; Gregory L. Diskant, Stephen P. Younger, of counsel.
In reviewing this case, the Court finds that the caption might more appropriately read the "Clash of the Titans." These two pharmaceutical giants have manufactured and produced some of the most reputable products sold, not only in this country, but around the world.
In particular, two brand names intimately connected to these companies are known to virtually every household in America — EXCEDRIN and TYLENOL. These two products have come to be identified with what is often perceived to be a peculiarly national phenomenon — the great American "headache" — a multi-million dollar industry.
What makes this action both interesting and difficult is that the issues go to the heart of the free enterprise system — the ability and the right to compete in the marketplace, a principle that historically has formed part of the foundation of our nation and its society. However, the right to compete is not unbridled.
This dispute concerning trademark and trade dress infringement focuses upon two individual products — EXCEDRIN PM and TYLENOL PM — which are part of the family of over-the-counter analgesics sold respectively by the plaintiff and defendant, recommended for nighttime application. The case is before the Court at this time to review the objections filed by both parties to the Report and Recommendation of the United States Magistrate Judge who, after conducting an evidentiary hearing on Bristol-Myers' request for a preliminary injunction on its trademark and trade dress infringement claims, recommended against the issuance of such an injunction.
The plaintiff Bristol-Myers Squibb Company ("Bristol-Myers") moves for a preliminary injunction, seeking to enjoin the defendant McNeil-P.P.C. Inc. ("McNeil") from using, selling, offering for sale, and distributing "analgesic products in any trade dress which `simulates the trade dress of EXCEDRIN PM,'" and from any use of the packaging or the "PM" mark for analgesic products. The plaintiff also seeks an order directing defendant McNeil to recall all such products, packaging, and advertising bearing the TYLENOL PM trade dress and "PM" mark and to deliver up for destruction all packaging, labels, ads, and printing plates with the "PM" mark.
Before the Court at this time is the Report and Recommendation of United States Magistrate Judge Michael L. Orenstein, in which he declined to recommend the issuance of a preliminary injunction on the grounds that the plaintiff Bristol-Myers has failed to demonstrate (1) irreparable harm, and (2) either likelihood of success on the merits or sufficiently serious questions going to the merits, wherein the balance of the hardships would tip decidedly in favor of Bristol-Myers (RR at pp. 95-96).1 Since objections were timely filed by both parties, the Court now undertakes a de novo determination of the matter. The Court further notes that upon the application of the plaintiff, the Court granted oral argument on the objections which was heard on October 4, 1991.
For the reasons set forth below, the Court confirms and adopts the Magistrate Judge's recommendation in part, but respectfully declines to accept the recommendation denying the plaintiff's application for a preliminary injunction, and, instead, grants the plaintiff's application. The following constitutes the Court's findings of fact and conclusions of law pursuant to Fed.R.Civ.P. 52(a) (see also Weitzman v. Stein, 897 F.2d 653, 658 2d Cir.1990).
The factual background in this action is rather lengthy and complex and, in this decision, the Court recites only those facts relevant to the application for a preliminary injunction.
Bristol-Myers is a Delaware corporation with its principal place of business in New York City. For many years prior to this suit, Bristol-Myers has been engaged in the development, production and marketing of over-the-counter ("OTC") medicinal preparations, including such well-known brands as EXCEDRIN, EXCEDRIN PM, BUFFERIN, and NUPRIN. EXCEDRIN PM, the subject of this suit, is a dual relief product, a combined analgesic and sleep aid which Bristol-Myers has sold for more than twenty years. Bristol-Myers obtained its trademark for EXCEDRIN PM in June, 1990.2
As a direct result of the apparent quality of its EXCEDRIN PM analgesic/sleep aid product, its extensive advertising and promotional activities, and its substantial sales of the product, Bristol-Myers has acquired an outstanding reputation and acceptance among the public for this product. In fact, it is conceded by the defendant McNeil that EXCEDRIN PM is currently the "largest selling analgesic/sleep aid product in the United States" (Answer, ¶ 7).
Historically, EXCEDRIN PM has been sold in light blue tablet form with a distinctive trade dress encompassing the package layout and design as well as the labels on the inner bottles. That unique trade dress includes: an outer carton with deep blue background; white lettering for the EXCEDRIN PM trademark displayed on the upper half of the carton, with the prominent use of the "PM" letters immediately following the EXCEDRIN name; yellow and white lettering for the other wording on the carton; depiction of the light blue tablets at the lower right-hand portion of the carton; the benefit line with the phrase "FOR PAIN WITH ACCOMPANYING SLEEPLESSNESS"; a plastic bottle inside the carton with a label essentially repeating the distinctive EXCEDRIN trade dress of the outer carton; and light blue tablets imprinted with the letters "PM".
In 1988, Bristol-Myers introduced a caplet form of the EXCEDRIN PM product. The packaging for this form is identical to that of the tablet packaging with the following exceptions: the outer carton and bottle label have a green background; at the lower right of the package, light blue caplets appear instead of tablets; and the caplets display the full EXCEDRIN PM trademark.
The defendant McNeil is a New Jersey Corporation with its principal place of business in Fort Washington, Pennsylvania. McNeil markets the leading line of analgesic products in the United States under the TYLENOL trademark. In mid-1991, McNeil introduced a pain reliever/sleep aid product which it named "TYLENOL PM." It has recently filed a federal trademark application for the TYLENOL PM mark (Answer, ¶ 22). McNeil also states that it has informed the trade of its projection for $50 million in sales of TYLENOL PM during its first year (Answer, ¶ 17).
Both EXCEDRIN PM and TYLENOL PM contain essentially the same ingredients, namely, 500 mg of acetaminophen. EXCEDRIN PM also contains 38 mg of diphenhydramine citrate while TYLENOL PM contains 25 mg of diphenhydramine HCL.
The outer carton of the TYLENOL PM caplets product is predominantly dark blue with a gradual fade to medium blue at the bottom of the carton. The trademark "TYLENOL" appears in white capital letters immediately followed by the yellow letters "PM". Below the product name line, the word "Caplets" appears in yellow next to the benefit line which states "For pain with sleeplessness." At the lower right hand portion of the carton, McNeil has depicted two light blue caplets, imprinted with the TYLENOL PM product name.
McNeil has also introduced a tablet variety of TYLENOL PM. Its carton is predominantly dark green with a gradual fade to teal green at the bottom. All other characteristics of the caplet package previously described are present in the tablet package. The only difference is the appearance of two tablets at the lower right hand corner; these tablets are also of a light blue color and show the name "TYLENOL" on one with "PM" on the other.
Bristol-Myers contends that McNeil is advertising, distributing and selling TYLENOL PM in a manner which "simulates the EXCEDRIN PM trade dress, in color, layout, design and other graphic elements, including prominent use of the letters PM on the packaging ... thus usurping the distinctive trade dress and trademark long associated with Bristol's EXCEDRIN PM product." Bristol-Myers further contends that McNeil has done so with the "object and intent ... to misappropriate the goodwill and consumer recognition" of EXCEDRIN PM (Complaint, ¶¶ 21, 24).
Bristol-Myers filed its complaint on May 21, 1991, alleging the following causes of action: (1) trademark and trade dress infringement under the Lanham Act; (2) dilution of the EXCEDRIN PM trade dress and mark in violation of New York General Business Law § 368-d; (3) unfair competition and deceptive acts and trade practices in violation of New York General Business Law § 349; (4) misappropriation of Bristol-Myers' goodwill and consumer recognition for the EXCEDRIN PM trade dress and mark under New York law and the statutory and common law of other states; and (5) common law trade dress and trademark infringement in New York and other states.
In its Answer, McNeil asserted the following affirmative defenses: (1) Bristol-Myers' action is barred by the doctrines of waiver, laches and estoppel; (2) the complaint fails to state a cause of action; (3) the defendant's actions were taken in good faith, with no intention to violate any laws or rules; (4) the plaintiff has failed to enforce its claimed trade dress or trademark interest; and (5) McNeil's actions are protected by the doctrine of fair use.
The motion for a preliminary injunction was brought on...
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