Johnson & Johnson-Merck Consumer Pharmaceuticals Co. v. Rhone-Poulenc Rorer Pharmaceuticals, Inc.

• Decision Date: 15 March 1994
• Docket Number: JOHNSON-MERCK,No. 93-1349,RHONE-POULENC,93-1349
• Citation: 19 F.3d 125
• Parties: 1994-1 Trade Cases P 70,537, 30 U.S.P.Q.2d 1112 JOHNSON &CONSUMER PHARMACEUTICALS COMPANY, Appellant, v.RORER PHARMACEUTICALS, INC.
• Court: U.S. Court of Appeals — Third Circuit

Page 125

19 F.3d 125

1994-1 Trade Cases P 70,537, 30 U.S.P.Q.2d 1112

JOHNSON & JOHNSON-MERCK CONSUMER PHARMACEUTICALS COMPANY, Appellant, v. RHONE-POULENC RORER PHARMACEUTICALS, INC.

No. 93-1349.

United States Court of Appeals Third Circuit.

Argued Oct. 1, 1993.

Decided March 15, 1994.

John W. Nields, Jr. (argued), Gary H. Nunes, Howrey & Simon, Washington, DC, M. Kelly Tillery, Leonard, Tillery & Davison, Philadelphia, PA, Donna M. Malin, Johnson & Johnson, New Brunswick, NJ, for appellant.

Thomas A. Smart (argued), Andrea S. Christensen, Richard A. DeSovo, Kaye, Scholer, Flerman, Hays & Handler, New York City, Louis E. Bricklin, Bennett, Bricklin & Saltzburg, Philadelphia, PA, Pamela C. Ullman, Rhone-Poulenc Rorer Pharmaceuticals, Inc., Collegeville, PA, for appellee.

Before: SCIRICA, ALITO and ALDISERT, Circuit Judges.

OPINION OF THE COURT

SCIRICA, Circuit Judge.

This dispute arises from an advertising war between major competing producers of over-the-counter antacid remedies. Plaintiff/appellant Johnson & Johnson-Merck Consumer Pharmaceuticals Company ("Johnson-Merck") alleges that television commercials by defendant/appellee Rhone-Poulenc Rorer Pharmaceuticals, Inc. ("Rorer"), about its product Extra Strength Maalox Plus ("ESMP"), are misleading advertising in violation of section 43(a) of the Lanham Act, 15 U.S.C. Sec. 1125(a) (1988). Johnson-Merck produces and markets a competing product, Mylanta Double-Strength ("Mylanta II"), and claims its sales suffered as a result of the misleading advertising.

Key to the controversy is Rorer's description of ESMP as "the strongest antacid there is" in television commercials promoting ESMP tablets and liquid. Johnson-Merck contends the claim misleads consumers into thinking that ESMP is superior as a treatment for acid indigestion.

The district court held a five-day evidentiary hearing on Johnson-Merck's motion for a preliminary injunction. Because the record developed in the hearing was so extensive, the court, with the agreement of the parties, converted its Memorandum and Order on the motion into one on the merits of the case and entered final judgment. ¹ The district court found Johnson-Merck failed to meet its burden of proof with respect to claims that the advertising was false or misleading and with respect to damages. ²

Johnson-Merck appeals, contending the advertisements should have been enjoined if it showed that Rorer either intended to or in fact did mislead consumers. Johnson-Merck claims it proved both at the hearing. Specifically, Johnson-Merck maintains the trial court erred in failing to evaluate its evidence of Rorer's intent to mislead and in misevaluating its key evidence that the commercials did mislead consumers.

The district court had jurisdiction based on a federal question arising under the Lanham Act. 28 U.S.C. Sec. 1331. We have jurisdiction under 28 U.S.C. Sec. 1291. We review the district court's conclusions of law in a plenary fashion, its findings of fact under a clearly erroneous standard, and its decision to grant or deny an injunction for abuse of discretion. Castrol Inc. v. Pennzoil Co., 987 F.2d 939, 943 (3d Cir.1993); Sandoz Pharmaceuticals Corp. v. Richardson-Vicks, Inc., 902 F.2d 222, 226 (3d Cir.1990).

I.

A. Acid Neutralizing Capacity and Effectiveness of Antacids

Over-the-counter ("OTC") antacids are designed to provide symptomatic relief from acid indigestion by neutralizing excess acid in the stomach or esophagus. However, the test on which advertisers rely for claims of strength does not measure the operation of antacids in the human body (in vivo testing); rather, it measures their operation in glass beakers of acid in the laboratory (in vitro testing).

In the 1970's, the Food and Drug Administration adopted a laboratory test for acid neutralizing capacity ("ANC") which defines OTC antacids for purposes of labeling and measures their strength. The test determines how much acid is neutralized in a glass beaker by a single dose of antacid over a fifteen-minute period. The ANC test does not measure an antacid's capacity to neutralize acid in vivo, which depends on other factors in addition to ANC, ³ nor does it provide information on an antacid's ability to relieve the symptoms of acid indigestion. Such information would be more useful to consumers than the results of laboratory studies, but the FDA concluded human testing would be too laborious. ANC information is provided to physicians, but because the FDA thought the consuming public might mistakenly take the ANC rating as a measure of effectiveness, it decided to exclude such information from product labels. It concluded that this "technical information on the consumer label could result more in confusion than enlightenment and could result in unwarranted consumer reliance solely upon this information as an indication of relative effectiveness." 38 Fed.Reg. 31264 (11/12/73). Ironically, the very information the FDA feared would mislead consumers has become the basis of advertising claims and is called upon to support such claims when they are challenged as false or misleading.

When liquid ESMP and Mylanta II are compared in vitro, ESMP has a higher ANC rating; when they are compared in tablet form, Mylanta II's ANC rating is higher. However, in vivo tests, conducted by both parties to demonstrate the relative effectiveness of the two brands of antacid, show no advantage for either brand in the human body. The district court found that "[n]ot one of the in vivo studies, performed by either side, demonstrated any statistically or clinically significant difference in the ability of Mylanta II or ESMP to relieve symptoms of acid indigestion."

The district court's conclusion that neither in vitro nor in vivo tests provides any basis for either antacid manufacturer to claim that its product is more effective at relieving symptoms is well supported, and neither party contests it. The dispute is over whether Rorer caused consumers to think that ESMP was more effective at relieving symptoms by making misleading claims of superior relief in its commercials, thereby violating the Lanham Act.

B. Commercial Claims

Rorer began airing television commercials in July 1989, claiming that ESMP is "the strongest antacid there is," or "the strongest antacid I can [could] buy." ⁴ Some commercials included the statements, "The doctor told me it was strongest," or "Your doctor will tell you they're strongest." Others contained weaker medical claims, such as "My doctor recommended it," or "Its doctor recommended formula neutralizes more, more than any leading antacid." The district court focused on two television commercials, first aired in 1991, the "Firefighter" commercial, which advertised ESMP liquid, and the "Minty Tablets" commercial, which advertised ESMP tablets. Although there were minor differences in these and other commercials aired at different times, the versions described below are typical of the advertisements objected to by Johnson-Merck.

The Firefighter commercial which aired on NBC and CBS in the summer of 1991 showed a fireman saying, "To survive in today's world, you have to follow certain basics. You have to work, and you have to eat. And both play havoc with your stomach. That's why I take Maalox." The screen then showed liquid ESMP, with the voice saying, "Maalox is the strongest antacid there is." Superimposed on the screen was the text, "Dose for Dose Based on Lab Tests." The screen showed the fireman again, who went on to say, "And who knows more about stomach problems than Maalox? You know it's a funny thing. I started taking Maalox because the doctor told me it was strongest. I keep on taking it because my stomach tells me it's fast." The screen then showed Maalox again, with the text superimposed, "The doctor told me it was strongest. My stomach tells me it's fast."

The Minty Tablets commercial which aired on ABC and NBC in August 1991 started with pictures of a bottle of ESMP liquid. The superimposed text stated, "Dose for Dose Based on Lab Tests of Acid Neutralization," while an announcer said, "Extra Strength Maalox Plus, the strongest antacid there is, ..." The picture changed to show a bottle of ESMP tablets as the announcer continued, "... now comes in tablets. New Extra Strength Maalox Plus Tablets." The screen showed Tums and Rolaids tablets as the announcer went on to say, "Maalox strength is stronger than Tums; Maalox strength is stronger than Rolaids." A woman's voice said, "My doctor told me it's the strongest," as the screen showed ESMP tablets. The woman then appeared, saying, "My stomach tells me it's fast." The remaining pictures were of bottles of ESMP tablets as the announcer's voice said, "Extra Strength Maalox Plus, now in Minty Tablets." Both the announcer and a superimposed text said, "Your doctor will tell you they're strongest. Your stomach will tell you they're fast."

Neither commercial was being aired in the form described at the time of the hearing. The Firefighter commercial had been dropped and the Minty Tablets commercial was running in modified form without the claim, "Your doctor will tell you they're strongest." At the hearing, counsel for Rorer represented that it intended to continue its advertising campaign for ESMP using the claim "the strongest antacid there is," but agreed it would not use the claim that a doctor told, or would tell, someone that ESMP was strongest without further substantiation. Therefore, the district court did not address the "doctor" claim. ⁵ Slip op. at 9.

Johnson-Merck maintained Rorer's claim that ESMP products are strongest was false or misleading or both. It argued that Rorer's claim in its Minty Tablets advertisement that ESMP tablets are the strongest was literally false because Mylanta II tablets have a higher ANC rating than ESMP tablets. The district court, however, found that the Minty Tablets commercial explicitly compared ESMP tablets not with Mylanta II tablets...