Opinion
Civ. No. 00-5361 (WGB).
January 17, 2001
Bruce P. Keller, Esq., David H. Bernstein, Esq., Michael R. Potenza, Esq., DEBEVOISE PLIMPTON, New York, NY.
Joseph Hayden, Jr., Esq., DECOTIIS, FITZPATRICK, GLUCK, HAYDEN COLE, LLP, Glenpointe Centre West, Teaneck, NJ, Attorneys for Plaintiff.
Steven A. Zalesin, Esq., Joshua A. Goldberg, Esq., PATTERSON, BELKNAP, WEBB TYLER LLP, New York, NY.
Francis X. Dee, Esq., CARPENTER, BENNETT MORRISSEY, Three Gateway Center, Newark, NJ, Attorneys for Defendant.
OPINION
Plaintiff Novartis Consumer Health, Inc.'s ("Novartis") and Defendant Johnson Johnson-Merck Consumer Pharmaceuticals Company ("JJ") produce competing over-the-counter ("OTC") drugs that treat heartburn. Novartis produces and markets the Maalox brand of antacids while JJ produces and markets the Mylanta brand. JJ's newest addition to its line of OTC antacids is Mylanta Night Time Strength ("MNTS").
By Opinion and Order dated December 22, 2000, this Court granted Novartis's application for a preliminary injunction against JJ's designation of "Night Time Strength." In so ruling, the Court found that MNTS antacid conveyed three false messages: (1) MNTS is more effective than other antacids at relieving nighttime heartburn symptoms; (2) MNTS is specially formulated to relieve nighttime heartburn; and (3) MNTS provides all night relief.
Accordingly, the Court enjoined JJ from: (1) marketing and disseminating MNTS under that name; (2) using the designation "Night Time" or "Night Time Strength" on any antacid product; (3) otherwise claiming, either explicitly or implicitly, that Mylanta Night Time Strength is specially formulated for night time heartburn, provides all night relief, and/or possesses a strength that correlates with its efficacy.
JJ now seeks a stay of that Order pending its appeal to the Court of Appeals. In the alternative, JJ requests an increase in the amount of the security bond posted by Novartis as a condition of the preliminary injunction. The request for an increased bond is still being briefed by the parties. Therefore, the Court will make a determination on that motion at a later date.
The Court did not receive the moving and opposition papers regarding this stay application until January 10, 2001. Nevertheless, on January 16, 2001, the day after a court holiday and prior to the issuance of this Opinion, JJ filed before the Third Circuit an emergent application for a stay.
For the following reasons, JJ's motion for a stay pending appeal is denied.
For a more detailed background, the parties are referred to the Court's December 22, 2000 Opinion.
On October 31, 2000, Novartis filed a complaint against JJ alleging that, in violation of section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) and the New Jersey Consumer Fraud Act, N.J.S.A. § 56:8-1, et seq., JJ's advertisements regarding Mylanta Night Time Strength ("MNTS") and the name of the product itself are false and misleading. On December 8, 2000, Novartis filed a motion for preliminary injunction. After hearing oral argument on Novartis's motion on December 18 and 19, 2000, the Court issued its December 22, 2000 Opinion and Order.
II. DISCUSSION
A. Standard for Stay Pending Appeal
To grant a stay pending appeal, the court must determine: (1) whether the movant is likely to succeed on the merits of the appeal; (2) whether the movant will be irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure the other parties interested in the proceedings; and (4) whether the stay will harm the public interest. Hilton v. Braunskill, 481 U.S. 770, 776 (1987).
These factors are nearly identical to those that the Court considered in ruling on the preliminary injunction application: (1) the likelihood that the moving party will succeed on the merits; (2) the extent to which the moving party will suffer "irreparable harm" without injunctive relief; (3) the extent to which the nonmoving party will suffer irreparable harm if the injunction is issued; and (4) the public interest. Clean Ocean Action v. York, 57 F.3d 328, 331 (3d Cir. 1995); American Tel. Tel. Co. v. Winback and Conserve Program, Inc., 42 F.3d 1421, 1426 (3d Cir. 1994). Consequently, the parties raise in this application essentially the same arguments as those previously presented to the Court on Novartis's motion. JJ offers no new circumstances to support its application for a stay pending appeal. Therefore, granting JJ's motion for stay would effectively be a reconsideration and reversal of the Court's December 22nd decision.
B. Likelihood of Success on the Merits
In its previous Opinion, the Court found that Novartis is likely to succeed on the merits. Specifically, the Court concluded that the "Night Time Strength" name and advertising is literally false because it necessarily implies false claims of superior efficacy and special nighttime formulation. Based on the results of Novartis's consumer survey, which the Court determined was reliable, the Court also found that there was sufficient consumer confusion to show that under the Lanham Act, the "Night Time Strength" name tends to deceive or mislead a substantial portion of the intended audience.
Having found that Novartis is likely to succeed on the merits, for the same reasons noted in its December 22, 2000 Opinion, the Court finds that JJ is not likely to succeed on the merits of its appeal.
C. Irreparable Harm
JJ argues that if it is preliminarily enjoined from using the designation "Night Time Strength," in addition to losing the value of what it spent to bring MNTS to market, JJ would have to relaunch its product under a new name and incur the related expense pending completion of this litigation. Moreover, regardless of the outcome, JJ claims it would be commercially unfeasible for it ever to return to the original MNTS name. The Court previously considered this argument in examining the balance of hardships. See December 22, 2000 Op., at 39-40.
JJ, however, contends that the Court in fact disregarded this injury to JJ by stating that it was "self-imposed" because JJ had engaged in false advertising. JJ argues that this "assumes" that Novartis will succeed on the merits. The Court did not "assume," but rather, relied on a finding that it had specifically made. In contrast, JJ assumes that it will prevail on appeal when it argues that without the entry of a stay pending appeal, effectively forcing JJ to spend considerable money to relaunch its product under a new name and to abandon the original product name would be improper.
D. Harm to Novartis
For the Court to now conclude that Novartis would not suffer irreparable injury if a stay were granted would completely reverse this Court's December 22, 2000 ruling that Novartis would suffer immediate irreparable injury absent a preliminary injunction. JJ claims that the Court ought to undo its prior decision because the Court committed an error of law when it found that Novartis need only show a reasonable basis for believing that Novartis is likely to suffer irreparable injury, rather than specific evidence that the challenged claim actually resulted in some definite loss. It claims that these findings might support a permanent injunction, but not a preliminary injunction. The Court disagrees with JJ. See Coca-Cola Co. v. Tropicana Products, Inc., 690 F.2d 312, 316 (2nd Cir. 1982) (noting that on motion for preliminary injunction, Lanham Act plaintiff "need not even point to an actual loss or diversion of sales" but "must submit proof which provides a reasonable basis" for belief that he or she is likely to be injured as a result of false advertising); Stiffel Co. v. Westwood Lighting Group, 658 F. Supp. 1103, 1115 (D.N.J. 1987) ("moving party carries its burden of demonstrating irreparable harm when it offers `proof providing a reasonable basis for the belief that . . . [it] is likely to be damaged as a result of the false advertising'" (citations omitted)).
E. Public Interest
Because JJ has not shown that it is likely to succeed on an appeal, it is in the public interest to prevent the continued dissemination of false advertising regarding an OTC antacid.
III. CONCLUSION
For the reasons noted herein, JJ's motion for a stay pending appeal is denied.
An appropriate Order follows.
ORDER
This matter having come before the Court on Defendant's motion for a stay pending appeal; and
The Court having considered the submissions of the parties; and
The Court having decided this matter without oral argument pursuant to Fed.R.Civ.P. 78; and
For the reasons set forth in the Court's Opinion issued this day; and
For good cause shown;
It is on this 17th day of January, 2001 ORDERED that Defendant's motion for a stay pending appeal is denied.