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

• Decision Date: 21 August 1992
• Docket Number: 1492,NEIL-P,BRISTOL-MYERS,D,Nos. 1387,s. 1387
• Citation: 24 USPQ2d 1161,973 F.2d 1033
• Parties: , 24 U.S.P.Q.2d 1161 SQUIBB COMPANY, Plaintiff-Appellee, Cross-Appellant, v. McP.C., INC., Defendant-Appellant, Cross-Appellee. ocket 92-7212, 92-7260.
• Court: U.S. Court of Appeals — Second Circuit

Page 1033

973 F.2d 1033

61 USLW 2160, 24 U.S.P.Q.2d 1161

BRISTOL-MYERS SQUIBB COMPANY, Plaintiff-Appellee, Cross-Appellant, v. McNEIL-P.P.C., INC., Defendant-Appellant, Cross-Appellee.

Nos. 1387, 1492, Docket 92-7212, 92-7260.

United States Court of Appeals Second Circuit.

Argued April 30, 1992.

Decided Aug. 21, 1992.

Gregory L. Diskant, New York City (Stephen P. Younger, Lisa C. Cohen, Mary E. Mulligan, Patterson, Belknap, Webb & Tyler, of counsel), for appellant.

Lawrence I. Weinstein, New York City (Alfred T. Lee, Samuel D. Rosen, Brendan J. O'Rourke, Milgrim Thomajan & Lee, of counsel), for appellee.

Before: MESKILL, Chief Judge, NEWMAN, Circuit Judge, and ZAMPANO, ^* District Judge.

MESKILL, Chief Judge:

This is an appeal from a preliminary injunction entered in the United States District Court for the Eastern District of New York, Spatt, J., in an action brought under section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), and various state unfair competition laws. The preliminary injunction prevents the appellant, McNeil-P.P.C., Inc. (McNeil) from marketing its product, "Tylenol PM," in the trade dress that it had been using prior to the injunction. Also before us is a cross-appeal by Bristol-Myers Squibb Company (Bristol) from the denial of preliminary injunctive relief preventing McNeil from using the term "PM" in connection with a combination analgesic/sleep aid.

As in any case under section 43(a) of the Lanham Act, the ultimate question here is whether, because of the challenged markings, consumers are likely to be confused as to the origin or sponsorship of goods. Because we believe that the district court erred in finding that the "Tylenol PM" trade dress was likely to cause confusion among purchasers due to its similarity to Bristol's "Excedrin PM" trade dress, we reverse the preliminary injunction. Because we agree with the district court's denial of Bristol's request preliminarily to enjoin McNeil's use of the term "PM," we affirm as to the cross-appeal.

Affirmed in part and reversed in part.

BACKGROUND

Bristol is a major pharmaceutical company that produces and markets "Excedrin," Although there have been some alterations over the years, the packaging of "Excedrin PM" has remained fairly constant. That packaging consists of an outer carton with a solid deep blue background, white lettering for the name "Excedrin PM," which appears on a single line, with "Excedrin" in lower case lettering except for the initial "E" and "PM," which are in capital letters. In the lower right portion of the face of the box is a depiction of two light blue tablets, each marked "PM." In 1988, Bristol introduced a caplet form of "Excedrin PM." The trade dress for this caplet form is similar to that of the tablet form except that the background is a solid dark green and there is a depiction of two caplets each displaying the full name "Excedrin PM." On both packages the word "Excedrin" occupies approximately one-third of the total face of the package.

                a nationally known over-the-counter analgesic pain reliever.   Since 1968 Bristol has manufactured and distributed "Excedrin PM," a product that combines an analgesic with a sleep aid
                

McNeil is also a major pharmaceutical company. Among McNeil's products is "Tylenol," which, like "Excedrin," is a nationally famous over-the-counter analgesic. In 1991 McNeil introduced "Tylenol PM," which, like "Excedrin PM," is a combination analgesic/sleep aid. Although there are slight differences in the composition of the two products, it is undisputed that those differences are not material and that the two products are functionally interchangeable. Like "Excedrin PM," "Tylenol PM" comes in two forms: tablet and caplet.

The packaging for the tablet form of "Tylenol PM" consists of a box with a green background that shifts from dark green at the top of the box to light green at the bottom and the name "Tylenol" in white capital letters with "PM" in yellow capital letters on the same line. In addition, the package depicts two tablets on the lower right face of the package, one of which is imprinted with the word "Tylenol" and the other of which is marked "PM." The trade dress for the caplet form of "Tylenol PM" resembles that of the tablet form except that the background fades from dark to light blue rather than green and two caplets, each of which reads "Tylenol PM," are depicted instead of the tablets. On both forms of the "Tylenol PM" trade dress, the word "Tylenol" occupies approximately one-third of the total area of the face of the package.

Shortly after "Tylenol PM" was introduced, Bristol filed this action before Judge Spatt in the United States District Court for the Eastern District of New York, seeking relief under section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), and on various state law grounds. Bristol moved for a preliminary injunction to prevent McNeil from using the term "PM" in connection with a combination analgesic/sleep aid and to prevent McNeil from marketing an analgesic/sleep aid in the "Tylenol PM" packaging described above.

Judge Spatt referred the matter to Magistrate Judge Orenstein pursuant to 28 U.S.C. § 636(b)(1)(B). The magistrate judge heard evidence and examined exhibits and the results of discovery. The magistrate judge filed a report in the district court in which he made certain findings of fact and ultimately recommended that the preliminary injunction be denied. Both parties made timely objections to various portions of the magistrate judge's report and the district court addressed the matter de novo pursuant to 28 U.S.C. § 636(b)(1).

The district court denied Bristol's request for an injunction preventing McNeil from using the term "PM" in connection with an analgesic/sleep aid, finding that "PM" in this context did not qualify for protection under section 43(a) of the Lanham Act. The district court granted, however, Bristol's request for an injunction with regard to the "Tylenol PM" trade dress because it found that Bristol had demonstrated that the similarities between the two packages were likely to cause consumer confusion 786 F.Supp. 182. Both parties appealed and a panel of this Court stayed the preliminary injunction pending appeal.

DISCUSSION

I. PRELIMINARY INJUNCTION

In order to obtain a preliminary injunction, the moving party must demonstrate both (1) irreparable harm in the absence of the requested relief, and (2) either (a) a likelihood that it will succeed on the merits of the action, or (b) a sufficiently serious question going to the merits combined with a balance of hardships tipping decidedly in favor of the moving party. See Jackson Dairy v. H.P. Hood & Sons, 596 F.2d 70, 72 (2d Cir.1979) (per curiam). In the context of a Lanham Act claim both the likelihood of success on the merits and the potential for irreparable harm in the absence of preliminary relief may be demonstrated by a showing that a significant number of consumers are likely to be misled or confused as to the source of the products in question. Western Publishing Co. v. Rose Art Industries, 910 F.2d 57, 59 (2d Cir.1990).

We have jurisdiction to review the grant or denial of a preliminary injunction pursuant to 28 U.S.C. § 1292(a)(1). We review a district court's decision whether to issue a preliminary injunction only for an abuse of discretion. Doran v. Salem Inn, 422 U.S. 922, 931-32, 95 S.Ct. 2561, 2567-68, 45 L.Ed.2d 648 (1975). "Applying legal standards incorrectly or relying upon clearly erroneous findings of fact may constitute an abuse of discretion." Haitian Centers Council v. McNary, 969 F.2d 1326, 1338 (2d Cir.1992) (citation omitted). We are not, however, limited to "reversing only when the lower court's action exceeds any reasonable bounds and to rubber-stamping with the imprimatur of an affirmance when it does not." Coca-Cola Co. v. Tropicana Products, 690 F.2d 312, 315 (2d Cir.1982) (citation omitted). Although our scope of review is limited, if we are left with " 'the definite and firm conviction that a mistake has been committed' " we will reverse the grant or denial of a preliminary injunction. See Standard & Poor's Corp. v. Commodity Exchange, 683 F.2d 704, 708 (2d Cir.1982) (quoting United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 542, 92 L.Ed. 746 (1948)). With these principles in mind, we turn to the parties' specific claims.

II. THE LANHAM ACT CLAIMS

Neither the "PM" designator nor the "Excedrin PM" trade dress is a registered trademark. Bristol, therefore, relies on that part of the Lanham Act that addresses unregistered marks. Section 43(a) of the Lanham Act prohibits any person from using

in connection with any goods ... or any container for goods, ... any word, term, name, symbol, or device, or any combination thereof ... which ... is likely to cause confusion, or to cause mistake, or to deceive ... as to the origin, sponsorship, or approval of his or her goods ... by another person.

15 U.S.C. § 1125(a). ¹ "[I]t is common ground that § 43(a) protects qualifying unregistered trademarks and that the general principles qualifying a mark for registration under § 2 of the Lanham Act are for the most part applicable in determining whether an unregistered mark is entitled to protection under § 43(a)." Two Pesos, Inc. v. Taco Cabana, Inc., --- U.S. ----, ----, 112 S.Ct. 2753, 2757, 120 L.Ed.2d 615 (1992) (citations omitted). As the words of the statute indicate, the central inquiry is whether the use of a marking is likely to cause consumer confusion.

Bristol makes two related claims under section 43(a). First, Bristol claims that the use by McNeil of the term "PM" in connection with its combination analgesic/sleep aid is likely to cause confusion as to the source, sponsorship or approval of "Tylenol Before we will address whether an allegedly infringing mark is likely to cause consumer confusion, the plaintiff must show that its trademark or trade dress is of the type that deserves...