McNeil-PPC, Inc. v. Bristol-Myers Squibb Co.

• Decision Date: 17 December 1990
• Docket Number: No. 90 Civ. 5669(JMC).,90 Civ. 5669(JMC).
• Citation: 755 F. Supp. 1206
• Parties: McNEIL-P.P.C., INC., Plaintiff, v. BRISTOL-MYERS SQUIBB COMPANY, INC., Defendant.
• Court: U.S. District Court — Southern District of New York

755 F. Supp. 1206

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

No. 90 Civ. 5669(JMC).

United States District Court, S.D. New York.

December 17, 1990.

Patterson, Belknap, Webb & Tyler by Gregory L. Diskant, New York City, for plaintiff.

Skadden, Arps, Slate, Meagher & Flom by Kenneth A. Plevan, New York City, for defendant.

MEMORANDUM AND ORDER

CANNELLA, District Judge:

Plaintiff's request for injunctive relief under the Lanham Act is granted. 15 U.S.C. § 1125(a) (1988).

BACKGROUND

Defendant Bristol-Myers Squibb Company, Inc. "Bristol-Myers" is one of the leading sellers of over-the-counter "OTC" internal analgesics. For approximately thirty years, the company has been marketing Excedrin, an analgesic containing 250 milligrams "mg." aspirin, 250 mg. acetaminophen "APAP" and 65 mg. of caffeine per tablet. In May 1990, Bristol-Myers introduced Aspirin Free Excedrin "AF Excedrin", an OTC analgesic containing 1000 mg. APAP and 130 mg. caffeine in a two tablet dose.

McNeil-P.P.C., Inc. "McNeil" manufactures Tylenol and is the market leader in OTC analgesics. In 1989, McNeil's adult Tylenol products had a 22.9% share of the market, while its closest competitor, Advil, had only a 10.2% share of the market. Extra-Strength Tylenol "ES Tylenol" contains 1000 mg. APAP in a two tablet dose. The only difference between AF Excedrin and ES Tylenol is that AF Excedrin contains caffeine.

On August 30, 1990, Bristol-Myers launched an aggressive television advertising campaign for AF Excedrin. The advertising directly compares AF Excedrin with ES Tylenol and asserts that AF Excedrin works better than ES Tylenol. Before Bristol-Myers began its television advertising campaign, it distributed promotional materials to drug retailers which also asserted AF Excedrin's superiority over ES Tylenol. Bristol-Myers plans to spend approximately $10 million on its commercial advertising for AF Excedrin. A storyboard of one commercial currently appearing on a national television network is reprinted below:

COPYRIGHT MATERIAL OMITTED

McNeil commenced the instant action on September 4, 1990, alleging that Bristol-Myers' advertising for AF Excedrin is false. McNeil amended its complaint to add an allegation that the advertising conveys a false message to consumers as to the magnitude of difference between AF Excedrin and ES Tylenol. McNeil contends that Bristol-Myers' advertisements and promotional materials for AF Excedrin violate section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) (1988) and sections 349 and 350 of the New York General Business Law, N.Y.Gen.Bus.Law §§ 349, 350 (McKinney 1988).¹ McNeil seeks a preliminary and permanent injunction (1) enjoining Bristol-Myers from claiming in its advertisements that (A) AF Excedrin relieves headache or other pain better than ES Tylenol or (B) scientific tests establish that AF Excedrin relieves headache or other pain better than ES Tylenol and (2) directing Bristol-Myers to recall advertisements or promotional materials which claim that AF Excedrin is superior to ES Tylenol.

Pursuant to Rule 65(a)(2) of the Federal Rules of Civil Procedure, the Court consolidated a hearing on McNeil's motion for a preliminary injunction with a trial on the merits.² The following opinion constitutes the Court's findings of fact and conclusions of law on plaintiff's motion for injunctive relief.

DISCUSSION

I. Standards Governing Injunctive Relief Under Section 43(a) of the Lanham Act

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

Any person who shall affix, apply, or annex, or use in connection with any goods or services, ... any false description or representation ... and shall cause such goods or services to enter into commerce ... shall be liable to a civil action ... by any person who believes that he is or is likely to be damaged by the use of any such false description or representation.

15 U.S.C. § 1125(a) (1988). To establish a violation of section 43(a) the plaintiff has the burden of proving by a preponderance of the evidence that an advertisement is literally false, or that it has a tendency to mislead or deceive. See Coca-Cola Co. v. Tropicana Prods., Inc., 690 F.2d 312, 314-15, 317-18 (2d Cir.1982); Johnson & Johnson v. Carter-Wallace, Inc., 631 F.2d 186, 192 (2d Cir.1980); American Home Prods. Corp. v. Johnson & Johnson, 577 F.2d 160, 165-66 (2d Cir.1978). A merchant's description of its product may be false or misleading in either the description of the product itself or in its comparison to a product manufactured by a competitor. See McNeilab, Inc. v. American Home Prods. Corp., 848 F.2d 34, 38 (2d Cir.1988).

When an advertising claim is alleged to be false, the court may grant relief based on its own findings without reference to the consumer's reaction to the advertisement. See Coca-Cola Co., 690 F.2d at 317; American Home Prods. Corp., 577 F.2d at 165. Plaintiff is not entitled to relief merely by showing that the clinical tests or other evidence relied on by the defendant to support its superiority claim are unpersuasive. See Procter & Gamble Co. v. Chesebrough-Pond's Inc., 747 F.2d 114, 119 (2d Cir.1984). Rather, plaintiff must adduce evidence that the advertisement is false. See id. A claim of test proven superiority may be deemed false if it is shown that the clinical research purportedly supporting the representation was not sufficiently reliable to permit the reasonable conclusion that the research established the claim made. See id. Similarly, "representations found to be unsupported by accepted research or which are contradicted by prevailing authority or research, may be deemed false on their face and actionable under section 43(a) of the Lanham Act." Alpo Petfoods, Inc. v. Ralston Purina Co. 720 F.Supp. 194, 213 (D.D.C.1989), aff'd in part, rev'd in part on other grounds, 913 F.2d 958 (D.C.Cir. 1990).

It is well settled that section 43(a) of the Lanham Act encompasses more than literal falsehoods. See, e.g., American Home Prods. Corp., 577 F.2d at 165. To determine whether a statement that is literally true is misleading the court's reaction is not determinative; rather, the court must consider whether the message that is conveyed to the public is beyond its literal meaning and misleading or deceptive. See Avis Rent A Car System, Inc. v. Hertz Corp., 782 F.2d 381, 386 (2d Cir.1986); American Home Prods. Corp., 577 F.2d at 165-66. In making its decision, the court first considers the literal meaning of the advertisement and then as the finder of fact decides whether the evidence shows that the public is likely to be mislead. See American Home Prods. Corp. v. Johnson & Johnson, 654 F.Supp. 568, 590 (S.D.N.Y. 1987); McNeilab, Inc. v. American Home Prods. Corp., 501 F.Supp. 517, 525 (S.D.N. Y.1980). The extent to which consumers are deceived need not be established to support the finding that an advertisement tends to mislead, all that is required is a "qualitative showing to establish that a not insubstantial number of consumers received a false or misleading impression from it." McNeilab, Inc., 501 F.Supp. at 528. Surveys may be used to demonstrate the meaning an advertisement has to the target audience, but whether the survey is of probative value depends on its fundamental fairness and objectivity. See American Home Prods. Corp., 654 F.Supp. at 590.

To obtain injunctive relief under the Lanham Act, a party must demonstrate a "likelihood of deception or confusion on the part of the buying public" as a result of the product's false or misleading description. See Burndy Corp. v. Teledyne Indus. Inc., 748 F.2d 767, 772 (2d Cir.1984). It is well settled that such a likelihood of confusion sufficiently establishes both the requisite irreparable harm and likelihood of success on the merits typically required for the issuance of injunctive relief. See, e.g., Hasbro, Inc. v. Lanard Toys, Ltd., 858 F.2d 70, 73 (2d Cir.1988); Home Box Office, Inc. v. Showtime/Movie Channel, Inc., 832 F.2d 1311, 1314 (2d Cir.1987); Standard & Poor's Corp. v. Commodity Exchange, Inc., 683 F.2d 704, 708 (2d Cir. 1982). Irreparable harm is generally presumed for Lanham Act violations because a false comparison to a specific product reduces the consumers' incentive to purchase that product. Thus, a competitor in the relevant market may obtain permanent injunctive relief by showing a likelihood of competitive injury resulting from the false advertising. See Johnson & Johnson, 631 F.2d at 190-91.

McNeil's entitlement to injunctive relief depends on whether McNeil is able to show by a preponderance of the evidence that AF Excedrin does not relieve headache pain better than ES Tylenol. More specifically, since both AF Excedrin and ES Tylenol contain the same amount of APAP, McNeil must demonstrate that the presence of caffeine in AF Excedrin fails to make AF Excedrin superior to ES Tylenol in relieving headache pain.

II. The Food and Drug Administration's Review of Caffeine's Effectiveness as an Analgesic Adjuvant

The Food and Drug Administration the "FDA" reviews OTC drugs for safety and effectiveness. The FDA recognizes that APAP is an effective analgesic. In addition, it is well settled by the FDA that caffeine acting alone is not effective in relieving headache pain. See 42 Fed.Reg. 35482 (1977). However, the FDA has not reached a conclusive determination regarding caffeine's effectiveness as an analgesic adjuvant.³ The FDA's review of OTC drugs is conducted in four stages. In the first stage, the FDA appoints an advisory panel of independent scientists who analyze existing data and make recommendations to the FDA in the form of monographs, which set forth the drug's safety and effectiveness. See 21 C.F.R. § 330.10(a)(1)-(5) (1990). Next, the FDA reviews the monographs and makes them available for public comment. See id. § 330.10(a)(6). In the third stage the FDA publishes a tentative final monograph and affords the public an opportunity to...