Warner-Lambert Co. v. BreathAsure, Inc.

• Citation: 204 F.3d 87
• Decision Date: 08 February 2000
• Docket Number: No. 98-6502.,98-6502.
• Parties: WARNER-LAMBERT COMPANY, Appellant, v. BREATHASURE, INC.
• Court: U.S. Court of Appeals — Third Circuit

204 F.3d 87

WARNER-LAMBERT COMPANY, Appellant, v. BREATHASURE, INC.

No. 98-6502.

United States Court of Appeals, Third Circuit

Argued May 21, 1999.

Filed February 8, 2000.

Thomas C. Morrison, (Argued), Eugene M. Gelernter, Kathleen H. Dooley, Shanley & Fisher, P.C., Patterson, Belknap, Webb & Tyler, LLP, New York City, for appellant.

Joel M. Wolosky, (Argued), Sharon H. Stern, Parker, Chapin, Flattau Klimpl, LLP, New York City, Mark I. Peroff, Trademark and Patent Counselors of

America, P.C., New York City, for appellee.

BEFORE: McKEE, RENDELL, Circuit Judges and GARTH, Senior Circuit Judge.

OPINION OF THE COURT

McKEE, Circuit Judge.

Warner-Lambert Company sued BreathAsure, Inc. under § 43(a) of the Lanham Act based upon Warner-Lambert's belief that the trade names, "BreathAsure" and "BreathAsure-D," for certain of defendant's breath fresheners constituted a false and misleading claim that gave BreathAsure an unfair advantage in the sale of those products, and injured Warner-Lambert in the sale of its breath freshening products. On the third day of the ensuing trial, BreathAsure stipulated that scientific evidence established that its "BreathAsure" products were not effective against bad breath. As a result, the District Court permanently enjoined BreathAsure from continuing to advertise that those products were effective. However, the court refused to enjoin use of the trade names "BreathAsure" or "BreathAsure-D" because the court concluded that Warner-Lambert had not demonstrated that it was likely to be harmed by the continued use of those product names. This appeal followed.¹ For the reasons that follow, we will reverse.

I.

Warner-Lambert is a leading manufacturer of several well-known breath freshening products, including Certs, Clorets, Listerine, and Dentyne. Those products are in the form of gum, mints, and mouthwash. BreathAsure, Inc. also markets several breath freshening products, including BreathAsure and BreathAsure-D, which are the subjects of this dispute. BreathAsure's breath freshening products are capsules that are swallowed. For several years prior to this lawsuit, BreathAsure, heavily promoted its BreathAsure products as being effective against bad breath. The theme of much of the advertising was that the capsules worked effectively at the source of bad breath and were, therefore, superior to products that simply masked or covered bad breath such as gum, mints and mouthwash. One such ad contained a series of photographs depicting food, a couple appearing to share a tender moment, and a package of BreathAsure. The following captions appear beneath those images: "if you eat and we all do," "and you want to get close," "you need BreathAsure the internal breath freshener," "BreathAsure for the confidence of clean fresh breath." The label on the package of BreathAsure in this ad read: "The internal Breath Freshener All-Natural", and a banner across the front of the packaging proclaimed: "lasts & lasts & lasts." Much of defendant's advertising tells the reader to "stop masking bad breath" with products that "just cover-up bad breath." Another of defendant's advertisements contained an image of a woman with the bottom of her sweater pulled up over her navel and the legend: "Fight the problem at its source" with a dotted arrow pointing to the woman's stomach. Plaintiff's Exhibit 101J.

The National Advertising Division of the Better Business Bureau investigated defendant's advertising and concluded that defendant's claim that BreathAsure and BreathAsure-D were effective breath fresheners was not supported by any reliable scientific evidence. Accordingly, it recommended that defendant discontinue or substantially modify its ads for its breath fresheners.² App. 133, A.138-39, A.185, A.189.

Based upon the unsupported claims made in advertising that BreathAsure and BreathAsure-D were effective breath fresheners, Warner-Lambert filed the instant complaint under S 43(a) of the Lanham Act, 15 U.S.C.S 1125(a), seeking to permanently enjoin BreathAsure from advertising that its BreathAsure products are effective breath fresheners. Warner-Lambert also sought a permanent injunction against use of the name "BreathAsure" based upon its contention that the name itself communicates a false and misleading message. Warner-Lambert did not seek monetary damages. Despite BreathAsure's claims that its capsules are superior to products that merely mask bad breath, evidence produced during the instant litigation established that bad breath originates in the mouth, not in the stomach. Therefore, Warner-Lambert maintains that effective breath freshening products must either mask offensive oral odors, or attack bacteria in the mouth. A.180.

On the third day of the bench trial on Warner-Lambert's complaint, BreathAsure stipulated that "scientific studies presented in this case demonstrate that BreathAsure and BreathAsure-D are not effective in reducing bad breath. . . ." BreathAsure also consented to an injunction prohibiting it from advertising that its capsules were effective breath fresheners. However, BreathAsure continued to resist any injunction against the use of the trade names "BreathAsure" and "BreathAsure-D," and insisted that those names did not violate the Lanham Act.

At the completion of the bench trial, the District Court issued an oral opinion in which it held that the trade names misrepresented the products' qualities. The court stated:

The Court determines that the name Breath Asure, particularly given its contemplated future use for defendant's products, is indeed deceptive and a misrepresentation of the products' qualities. It implies assurance where there is no basis for it. It relates to breath; and, together with a residuum of past ads, although discontinued, will inform the market and prospective consumers that it is designed to enhance breath quality and limit offensive odors. While discontinuance of the ads that are the subject of the consent injunction here is and will be significant, particularly in terms of any likelihood of future injury to the plaintiff, that residual impact will be enough to generate product recognition, particularly when the name Breath Asure continues to be used.

Said somewhat otherwise, I do not accept the testimony of defendant's main witness that in all likelihood the future use of Breath Asure, alone or in connection with otherwise benign descriptions, could itself lead to a multiple number of conclusions as to what the product is . . . . Breath Asure's campaign over the last six years has been successful in producing sufficient recognition for the term Breath Asure that its continued use in the market will present to the public once again a product with assurance of breath quality. Accordingly, Breath Asure is deceptive, advising the consumer that there is a sound basis for assurance that this product will freshen or destroy odors in ones breath when there is inadequate support for such a claim. That element of the claim remaining in this case by the plaintiff has been established.

A.13-14.

The court also found that "the Warner-Lambert and BreathAsure products are in competition in a general sense in the breath freshener market." App. at A-25. However, despite finding that defendant's claims for its products were misleading, the court refused to enjoin the use of the two trade names. The court based its refusal upon two cases decided by the Court of Appeals for the Second Circuit: Johnson & Johnson v. Carter-Wallace, 631 F.2d 186 (2d Cir.1994), and Ortho Pharmaceutical Corporation v. Cosprophar, Inc., 32 F.3d 690 (2d Cir.1994). The court refused to presume injury to Warner-Lambert based upon defendant's deceptive product name and its finding that Warner-Lambert and BreathAsure were in "competition in a general sense." Instead, the court concluded that Warner-Lambert had not met its burden of establishing the likelihood of future injury from continued use of the product name. The court reasoned that BreathAsure and BreathAsure-D

are in competition with Warner-Lambert's products in a general sense in the breath freshener market. But BreathAsure, in this Court's view and as established in this record, I determine is essentially a niche production in light of the manner in which it's consumed and the problems which it is supposed to address. It's in a niche essentially where the plaintiff's products don't go both physically and otherwise.

This continues to support the Court's determination that the greater likelihood of the side by side marketing of BreathAsure and the plaintiff's products is that consumers will, as they have in the past, add BreathAsure as a compliment to the plaintiff's products, not a substitute, thereby lessening any injury to the plaintiff.

A.25-6.

The court relied upon the following in reaching its findings: (i) sales trends for the BreathAsure products had decreased in recent years; (ii) Warner-Lambert's sales of Listerine, Certs, and Dentyne had increased; (iii) Warner-Lambert had not called any consumer witnesses to testify that they had switched from using Warner-Lambert's breath-freshening products to BreathAsure's products; (iv) Warner-Lambert had not presented consumer surveys indicating the future impact of BreathAsure products on Warner-Lambert's sales; and (v) inasmuch as BreathAsure's products were "niche products" that were not used in the same manner as Warner-Lambert's products, there was no basis to conclude that consumers were likely to switch products rather than simply use "BreathAsure" to supplement Warner-Lambert's products.

On appeal, Warner-Lambert contends that the District Court was clearly erroneous in its findings, and that it erred in not satisfying the necessary burden to enjoin use of those trade names.

II.

Our analysis must necessarily begin with Section 43(a)(1)(B) of the Lanham Act which provides in relevant part:

(a)(1) Any person who, on or in connection with any goods or services . . . uses

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