Opinion
01 Civ. 2775 (DAB).
June 1, 2001
BRUCE S. MEYER, CHAD CHAMBERS, Weil, Gotschal Manges LLP, New York, NY., Attorney for Plaintiff.
STEVEN A. ZALESIN, ROBERT W. LEHRBURGER, NAOMI SCHRAG, Patterson, Belknap, Webb Tyler LLP., New York, NY., Attorneys for Defendant.
MEMORANDUM ORDER
Before the Court is both Plaintiff SmithKline Beecham Corporation's ("SmithKline") and Defendant J J Merck Consumer Pharmaceuticals Company's ("J J Merck") motions for preliminary injunctions to enjoin the other from continued dissemination of two television commercial advertisements alleged to be false and misleading in violation of Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) (1994).
Evidentiary hearings were held on April 25, April 26, May 1 and May 2, 2001 on SmithKline's claim and on May 22-24, 2001, on J J Merck's claim. For the reasons which follow, SmithKline's motion for a preliminary injunction is denied and J J Merck's motion is granted.
I. FACTUAL BACKGROUND
The following findings of fact, including those additional facts referred to in the Discussion, constitutes the court's findings of fact and conclusions of law pursuant to Federal Rule of Civil Procedure 52(a). The Court incorporates the record of the evidentiary hearings. For the purposes of this Opinion, references to the first set of hearings are denoted by "Tr." while references to the second set (May 22-24)are denoted by "Tr2.".
Plaintiff SmithKline manufactures and markets Tums, a popular non-prescription antacid that is used by millions of heartburn sufferers nationwide. Defendant J J Merck manufactures and markets Pepcid Complete, a competing non-prescription heartburn medication launched in December, 2000. (Tr. at 353.)
The Parties are generally in agreement as to the basic scientific facts underlying the mechanics of heartburn and its remedies. Specifically, heartburn is the burning sensation in the chest that is caused by a reflux, or a flowing back, of acidic gastric contents up into the esophagus and is a condition experienced by an estimated 34% to 44% of individuals in the U.S. population. (Tr. at 55-7, 93, 446; PX 47; PX 46.) An antacid is a chemical that neutralizes acid by interacting with the acid present in the stomach to reduce acidity. (Tr. at 51.) Unlike Tums, a calcium carbonate antacid, Pepcid Complete contains a combination antacid and an H2 Blocker known as Famotidine. Pepcid Complete both neutralizes existing gastric acid (via the antacid component) and enters the bloodstream to decrease the production of new acid in the stomach (via the H2 Blocker component). (Tr. at 51; O'Mullane Decl. ¶ 7.) It is generally accepted that antacids are inherently short-acting agents whose effects on stomach acidity last generally from 30 minutes to 2 hours, while Famotidine lasts longer in the system, up to 9 hours. (Tr. at 103-4, 461; DX BP.)
Neither product does anything to prevent reflux itself or control the frequency of reflux, since that is up to the individual patient, their lifestyle, how their stomach works, whether the muscle at the base of the esophagus is firm or infirm, etc. (Tr. at 129, 212, 444.) Moreover, because of the myriad possible causes of heartburn and the individuality of the sufferer, acid control in the stomach does not necessarily correlate to symptom relief. (Tr. at 52-3, 100-01, 212; PX 59.)
On October 17, 2000, the Food and Drug Administration ("FDA") approved the sale of Pepcid Complete for "relie[f] [of] heartburn associated with acid indigestion and sour stomach . . ." (Amburgey Decl. ¶ 6.) Soon thereafter, in December, 2000, J J Merck began selling Pepcid Complete as an over-the-counter ("OTC") heartburn remedy (Amburgey Decl. ¶ 7.)
On or about March 23, 2001, J J Merck began airing on nationwide network television the Pepcid Complete commercial, the "Car Wash Commercial". (Amburgey Decl. ¶ 8.) The Car Wash Commercial begins with a shot of a car wash accompanied by the sound of a running vacuum. The shot closes in on a rumpled, slovenly man vacuuming old food, several Tums tablets, and half- empty Tums rolls from the inside seat and floor of his car. As the man moves on to vacuum his dashboard, he picks up a slice of old pizza left amid scattered tablets and begins to eat it. The images of the man vacuuming tablets continue, and the voice of an announcer asks, "Ever notice how many Tums you have around because your heartburn keeps coming back?" The vacuuming sound then stops, and there is a shot of the man looking down the vacuum hose quizzically, at which point the vacuum explodes, covering the man and his car with a white residue. The Car Wash Commercial then cuts to a shot of the Pepcid Complete box, superimposed with the words "Fast" and "Seven times longer" while the announcer states, "There's a neater idea. New Pepcid Complete. It works as fast as Tums, but lasts seven times longer all in a chewable tablet." The Commercial closes with a shot of the man sitting in the front seat of his car, covered with white dust and Tums and trying to vacuum himself. An image of the Pepcid Complete box is then superimposed with the words "Just one and heartburn's done" as the announcer states, "New Pepcid Complete. Just one and heartburn's done." (Amburgey Decl. at Ex. A-1.)
On April 16, 2001, SmithKline began broadcasting the Tums commercial which is at issue in J J Merck's motion for a preliminary injunction ("Answers Commercial"). It opens with a woman standing in front of a Tums sign who asks, "Questions about Pepcid Complete? The answer's right here on the label." The camera zooms in on a portion of a bar graph which is part of the 5 Pepcid Complete label entitled "Onset of Relief". The woman points to one of the four bars on the graph marked "45" and states, "Pepcid Complete relieves less than half of the heartburn episodes within 30 minutes. Less than half." The other portions of the graph, as well as the key, is obscured. She then states, "So here's another question. Since nothing's faster than Tums, since Tums Ultra neutralizes twice as much acid as the antacid part of Pepcid Complete, and since the Pepcid costs four times as much, what's so complete about Pepcid Complete? I'd stick with Tums." (DX D.)
A. SmithKline's Motion for a Preliminary Injunction
Plaintiff SmithKline seeks to enjoin the Car Wash Commercial on the basis of four claims SmithKline asserts are literally false and/or misleading: (i) that Tums users take multiple doses of Tums because their heartburn "keeps coming back"; (ii) that Tums is "garbage" or ineffective and worthless to consumers; (iii) that Pepcid Complete always provides adequate relief with a single tablet, such that redosing is unnecessary; and (iv) that Pepcid Complete may be properly used to prevent future episodes of heartburn.
At the hearing on April 25, 2001, SmithKline indicated that they were alleging primarily only two allegedly false claims: first, that with Tums you must continuously redose because your heartburn keeps coming back; and secondly, that there is an exaggerated difference portrayed between Tums and Pepcid Complete. (Tr. at 8.)
1. The Clinical Studies
In support of its falsity claims, SmithKline advances six JJ Merck clinical studies involving four treatment groups (Pepcid Complete, an antacid, a placebo, and Famotidine, the H-2 Blocker only component of Pepcid Complete) relating to relief of heartburn symptoms. The universe from which the subjects were drawn in the studies were those individuals who experienced recurring heartburn at rates higher than typical heartburn sufferers. (Tr. at 214-5; 472.) Two of the six studies were 8-hour studies gauging percentage of episodes adequately relieved for greater than 7 hours and that required "rescue" medication. (PX 7, 9.) As both SmithKline's expert, Dr. Mark Feldman and J J Merck's expert, Dr. James Freston, testified, both studies showed a statistically significant higher success rate in terms of recurrence of heartburn symptoms with Pepcid Complete than with the comparative antacid utilized. These two studies were the so-called "pivotal" studies that led the FDA to approve Pepcid Complete for OTC use. (Tr. at 482.)
Statistical significance in conventional scientific studies defines a probability value of 0.05 or less as significant, that is, the likelihood that the results could have occurred by chance is 5% or less. (Tr. at 72-3.) With respect to Study 127 (PX 9), 70% of the heartburn episodes in the FACT (i.e. Pepcid Complete) group were controlled for seven hours or longer versus 58.5% in the antacid group and 51.4% in the placebo group. The difference between the Pepcid Complete equivalent and the antacid represented a p-value of 0.001, or "highly significant" as the likelihood that the observed difference was due to chance is less than one in a thousand. (PX 9 at 44; Tr. at 483-4.) Results also showed that the antacid group took rescue medication (to alleviate the return of symptoms) at a rate of 36% over the 23.4% of the Pepcid Complete group, also a statistically significant difference. (PX 9 at 52.)
The studies utilized antacids with 21 milliequivalents neutralizing capacity while two regular Tums tablets have a neutralizing capacity of 20 milliequivalents. Moreover, the major ingredient of the tested antacid was calcium carbonate, the same as in Tums. Dr. Feldman testified, and this Court adopts, that, accordingly, it is very unlikely that there would have been substantial differences between results with this antacid and with Tums. (Tr. at 61.)
Of the remaining four, two showed no statistically significant differences in recurrence of heartburn between the two treatments (PX 4, 5) and the two nighttime studies showed borderline significance (PX 3,6). (Tr. at 60-61.) SmithKline's expert Dr. Feldman concluded that the mean difference of 7% between the superior ability of Pepcid Complete versus the antacid was "modest", a characterization contradicted by Dr. Freston. (Tr. at 76, 470, 547.) But Dr. Feldman also concluded that based on the sum of the data from the studies, to the extent there was a difference between the antacid and placebo, it was confined to the initial onset period from 1 to 2 hours and that Pepcid Complete is "clinically significantly better than antacids in terms of providing long-lasting heartburn relief." (Tr. at 121-3.) Moreover, Dr. Feldman testified that such a superiority is a clinically significant advantage that JJ Merck should be able to tell the public about. (Tr. at 122.)
Q: If I modified my question to say after two hours Pepcid Complete is used to provide long-lasting relief and antacids are no better than placebos in that regard, then we agree?
A: I'd have to see the context of the commercial, but if it's worded in the way you just said it, I think it probably would be a fair statement that would accurately reflect the studies.
See Feldman, Tr. at 123.
J J Merck's expert, Dr. Freston, further testified that a segment of the population self-medicates with OTC products and commonly has recurrent heartburn attacks, although he related that there were no current broad-based epidemiological studies that could accordingly gauge the percentage of heartburn sufferers who actually experience recurrent heartburn episodes in a single day. (Tr. at 452-53; DX BN.)
Dr. Freston also testified as to a published abstract of a study conducted by researchers at SmithKline (Tr. at 462; DX BO), which gauged the comparative effect of antacids and famotidine on stomach Ph levels. As discussed supra, because acid control does not correlate strongly to symptom relief, the study's results as to the comparative impact of the different doses on Ph profiles are not relevant here.
Overall, SmithKline argues that the clinical studies conclusively show that the difference between the two products, where such a difference can actually be demonstrated, is an average of 7%, a modest difference at best. J J Merck argues first, that averaging the different studies is contrary to accepted scientific practice for combining different data (Tr. at 501), and there has been a proven statistically significant difference (at the most 11%) between the products that constitutes a very real therapeutic gain. (Tr. at 507-9.)
Though the clinical differences can indeed be characterized as modest in terms of absolute numbers, both Parties' leading experts in the field readily acknowledge that clinically documenting symptom relief for acid-related disorders is a difficult task due to the myriad of causes of heartburn, the variability among individuals as to acid tolerance, and the very high placebo rate which can indicate something both sides hint at — that heartburn does often go away by itself without any medication. (Tr. at 101, 215, 222, 223, 470, 476, 535, 656.) As both parties acknowledge, there is no major dispute as to the methodological integrity or results of the clinical studies, particularly regarding the clinical superiority of Pepcid Complete in providing longer-lasting relief than antacids. (Tr. at 641-2, 652-4.) Rather, as SmithKline frames the question, the dispute centers around the extent to which re-dosing is the experience of the average Tums user and the alleged burden upon J J Merck to disclose in its advertising that for whatever reason, re-dosing is the experience of only a small number of consumers.
2. Diary Studies
a. SmithKline Studies
SmithKline advances a GI Usage Diary Study which was prepared for business purposes to allow the company to determine how and why recent users of OTC heartburn remedies utilized different products. (Tr. at 145; PX 38.) The recent users were recruited from an original panel of 400,000 people who had used OTC stomach remedies, heartburn and acid products in the past months and were asked to complete a diary every week for eight weeks. (Tr. at 145.) The Study shows that 15.2% of Tums doses (defined as 2 tablets) were taken within 8 hours of another Tums dose while 13% of Pepcid AC doses were taken within 8 hours of another Pepcid AC dose. (Tr. at 152; P.Ex. 60.) The study did not however, differentiate between re-doses of Pepcid AC taken for prevention purposes rather than for relief of returning heartburn symptoms, and thus the Pepcid AC redosing percentage could be over-stated. (Tr. at 181-184.)
Pepcid AC rather than Pepcid Complete was in the study because the study was conducted in 1998, prior to the launch of Pepcid Complete. (Tr. at 151.) Pepcid AC does not provide immediate relief from heartburn since it contains no antacid, but only Famotidine, which takes 1-2 hours to start acting.
In addition, SmithKline presented a study done by SmithKline Beecham with respect to the recurrence of heartburn among users of Tums ("Starkey study", PX 37), which reflected that at the highest dose of Tums, only 6% developed recurrent heartburn, although as the testimony reflected, the Tums dose did not separate out from the placebo in any statistically significant way. (Tr. at 82, 456-8.) Ultimately, Dr. Feldman concluded that 2-8% of users experience recurrent heartburn and thus, it was "not typical for the average Tums user to redose during a short time frame" such as 6 to 8 hours. (Tr. at 83, 92.)
b. J J Merck Studies
The J J Merck Diary Study (Mediscope Study, DX AC), a 13- year continuous study in which groups of randomly selected consumers were asked to complete a usage diary for 4 weeks, found that using the most comparable analogy to 8 hours (i.e., 2 day parts), 33.3% of Tums users redose. (Tr. at 568.)
J J Merck also presented a study (Earnest Robinson Study, DX BN at 914) which showed that according to the data received from a questionnaire given to 155 subjects taking OTC medication for heartburn (i.e. frequent heartburn sufferers), there existed a baseline of people who averaged about two doses of Tums per day, a figure double that of people taking an H2 Blocker. (Tr. at 528-9.)
3. J J Merck Telephone Surveys
J J Merck also did a telephone survey of adults who had used Tums in the past 6 months which concluded that roughly 15% of Tums users "most of the time" or "fairly often" experience a return of symptoms within 12 hours of dosing. (Tr. at 255, 615, 627; Milward Brown telephone survey, DX AH.)
Another phone survey of 500 antacid users reflected, among other things, that roughly 94% of respondents suffered from heartburn once a day or less; that 16% of respondents took Tums three or more times per day; and that respondents took Tums for heartburn an average of 1.85 times per day. (Tr. 257-266; Bruno and Ridgeway survey, PX 10 at J1107.)
4. SmithKline Tracking Study
SmithKline also presented a tracking study designed to gauge advertising awareness and attitudes through a series of interviews with 600 people every quarter who were part of a representative group of OTC users. The so-called AAAU study showed that 46.3% "completely" agreed with a statement that Tums works every time, and 43.7% "somewhat" agreed. (Tr. at 156-160; PX 41-A.)
5. FDA standards and other advertising
J J Merck presents numerous incidents, either in testimony to the FDA or through other advertisements, of SmithKline's own assertion of the claim of an H2 Blocker's superiority over an antacid in terms of necessity for redosing. For instance, in September, 1993, at the FDA advisory committee meeting which considered whether they should approve SmithKline's Tagamet (product containing H2 blocker Cimetidine) for OTC sale, a SmithKline representative stated: "This then brings us to the proposal to use low dose Cimetidine as an over-the-counter medication for heartburn. It was recognized that many heartburn sufferers obtain insufficient relief from antacids primarily due to their brief sojourn in the stomach." (DX B.R. at 13.) When approving the OTC sale of Axid AR, another H2 Blocker, the FDA noted that the submitted data showed that 85% of patients in the manufacturer's clinical studies experienced recurring heartburn symptoms. (Lehrburger Decl. ¶ 2, Ex. A at 52, 75.)
Cimetidine, like Famotidine, is an H2 Blocker which prevents acid production in the stomach.
J J Merck also points to similar statements, unqualified by any reference to a "small percentage", made on the Tums and TagamentHB (SmithKline's version of an H2 Blocker) websites and other advertisements as to the reduced likelihood of redosing with H2 Blockers over antacids. (DX CD, CG, CJ, CI, CK.)
As acknowledged by SmithKline Marketing Director Michael Amburgey in his cross-examination on the Tums website, DX CD:
"Q: So you tell the consumer the benefit of [the H2 Blocker] is that it's effect lasts for several hours so heartburn is less likely to come back, correct?
A: Correct.
Q: And that's on Tum's website right now?
A: Yes. And we agree for a small percentage of users heartburn does come back and these products, H2 Blockers, offer a benefit to antacid."
Amburgey, Tr. at 374-75.
And on the Tagamet HB brochure, DX CK:
"Q: And what consumers were told [in the Tagamet HB brochure] is antacids neutralize acid quickly and their benefits last about 30 minutes to two hours. This means you may have to take them frequently. Right?
A: That's what it says, yes.
Q: And the reason you told them that is because you wanted them to start thinking about taking an acid reducer such as Tagemet HB which would not require frequent remedication, right?
A: May not have to require. "May" is an important word.
Q: May not?
A: Yes."
Amburgey, Tr. at 381.
II. DISCUSSION
A. Preliminary Injunction StandardIt is well-settled that a party seeking preliminary injunctive relief under the Lanham Act must show (1) that it will suffer irreparable harm if relief is denied, and (2) either (a) a likelihood of success on the merits or (b) sufficiently serious questions going to the merits to make them fair ground for litigation and a balance of hardships tipping decidedly in proponent's favor. See Procter Gamble Co. v. Chesebrough-Pond's, Inc., 747 F.2d 114, 118 (2d Cir. 1984); Coca-Cola Co. v. Tropicana Prods., Inc., 690 F.2d 312, 314-15 (2d Cir. 1982);United States v. Siemens Corp., 621 F.2d 499, 505 (2d Cir. 1980).
B. Lanham Act Standards
Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) (1988), pursuant to which SmithKline brings its claims, provides that
Any person who, on or in connection with any goods or services . . . uses in commerce any . . . false or misleading description of fact, or false or misleading representation of fact, which — *
* * * * *
(2) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person's goods, services, or commercial activities, shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.
The Second Circuit has held that for a false advertising claim to succeed under § 43(a), the proponent must demonstrate that the statement in the challenged advertisement is false, either by proving that: (1) the advertisement is literally false as a factual matter, or (2) although the advertisement is literally true, it is likely to mislead or confuse customers. See Johnson Johnson Merck v. SmithKline Beecham, 960 F.2d 294, 297 (2d Cir. 1992).
In addition to proving falsity, the proponent must also show that the opponents misrepresented an "inherent quality or characteristic" of the product, a requirement essentially of materiality. Nat'l Basketball Assn v. Motorola, Inc., 105 F.3d 841, 855 (2d Cir. 1997). The Court is to assess the falsity when considering the advertisement "in its entirety and not engage in disputatious dissection. The entire mosaic should be viewed rather than each tile separately." Id. at 385.
Where the advertising claim is shown to be literally false, the court may enjoin the use of the claim without reference to 17 extrinsic evidence as to the "advertisement's impact on the buying public."McNeil-P.C.C., Inc. v. Bristol-Myers Squibb Co., 938 F.2d 1544, 1549 (2d Cir. 1991) (quoting Coca-Cola, 690 F.2d at 317) (citations omitted). Where, as here, a proponent contends that the challenged advertisement is literally false, it bears the burden of proving this to a "likelihood of success" standard. Castrol, Inc. v. Quaker State Corp., 977 F.2d 57, 62 (2d Cir. 1992). A Court may also enjoin an ad which is implicitly false, i.e. literally truthful but nonetheless misleading, only if the court can determine that the ad is confusing or deceiving as tested by extrinsic evidence of public reaction. See Coca-Cola at 317.
Where the proponent of a motion for a preliminary injunction demonstrates a likelihood of success in showing literally false the opponent's comparative advertisement which mentions proponent's product by name, irreparable harm is presumed for the purposes of a preliminary injunction. See Castrol, 977 F.2d at 62.
C. Assessing the Scientific Evidence
In the context of the Lanham Act, in order to assess the objectivity of a study or a survey, and thus its probative value, a court must determine, inter alia,: whether the proper universe 18 was examined and the representative sample was drawn from that universe; whether the survey's methodology and execution were in accordance with generally accepted standards of objective procedure and statistics in the field of such surveys; whether the questions were leading or suggestive; whether the data gathered was accurately reported; and whether persons conducting the survey were recognized experts. See, e.g., SmithKline Beecham v. J J-Merck, 906 F. Supp. at 181-82; Bernstein, David H., Current Developments in False Advertising Law, 579 PLI/Pat 433, 442 (Nov/Dec 1999).
In the instant case, J J Merck's Diary Mediscope study does not withstand scrutiny. There is no way you can get there from here. Looking at DX AF (the consumer survey and instructions) and PX 110C (th re-dosing analysis), there is no correlation between the columns to support the "Doses" column created by Charles Martin on PX 110C. At no time were the consumers given an opportunity on their survey to indicate that the number of tablets taken within any day part constituted a "dose". Nor were they given any instruction on what either "unit" or "dose" meant. They were asked to indicate the number of units taken during a given day part, but the dosage recommended on the Tums products' labels were two tablets per dose. Thus, when Mr. Martin converted the 2 tablets taken in 3 day parts into 6 doses instead of 6 tablets, he effectively double counted the presumed actual doses. Such a failing in the methodology thus could as much as halve the study's estimated redosing for Tums users. Ultimately, the study is indeterminate and its results unreliable.
Similarly, studies that failed to show any statistical significance between the active ingredient (such as the antacid) and the placebo must be discounted. For instance, as Dr. Freston testified, SmithKline's Starkey study, discussed supra at 12, did not reflect a statistically significant separation of the Tums dose from the placebo; indeed, it could not pass scientific muster either in its methodology or from the "bizarre results" which did not coincide with the best studies in peer reviewed literature. See Tr. at 460.
Moreover, while both Parties' experts attacked the methodology of each other's myriad diary, telephone, and tracking surveys as either utilizing, for example, improperly leading questions or insufficient screening mechanisms, the other surveys do not substantially contradict each other or the claim that both sides agree upon: for whatever reason, it is a minority of people who experience the need to redose after taking Tums because their heartburn comes back. Rather, SmithKline objects to the absence of a disclosure to people viewing the ad that it is a "tiny percentage of people who might have this experience." Tr. at 22.
Because the studies utilized different methodologies, direct comparisons are difficult, but some general observations can be made. For instance, the discrepancy between the parties' interpretation of the clinical studies as to the difference between Pepcid Complete and the antacid for relief in 8 hours was minor, with SmithKline alleging a 7% difference and J J Merck alleging a 10% difference. As to the other studies, J J Merck's figure of an average dosing for frequent heartburn sufferers of twice a day (Earnest Robinson study)is not inconsistent with SmithKline's showing of a mean of 1.85 times per day a respondent took Tums for heartburn (Bruno and Ridgeway survey at J1107). Nor is SmithKline's figure that 15.2% of Tums doses were taken within 8 hours of another Tums dose (SmithKline Usage Diary Study) inconsistent with J J Merck's telephone survey number of roughly 15% of Tums users who typically experience a return of symptoms within 12 hours of dosing (Milward Brown survey).
Notably, this minority nevertheless represents an approximate 5-6 million people (assuming approximately 15% of the estimated 60 million Tums users redose), an impressive market share which both companies have and continue to compete fiercely for with their respective H2 Blocker product ad campaigns.
D. SmithKline's Claims
SmithKline argues that the visual and spoken statements in the Car Wash Commercial expressly claim that Tums users regularly experience recurrent heartburn and thus must take multiple doses of Tums to relieve their heartburn. This claim, Plaintiff argues, is false and misleading because it misstates the experience of the vast majority of heartburn sufferers who take Tums. See Pl.'s Mem. Law at 2.
One dose is defined for the purposes of this opinion based upon the recommended number of tablets appearing on the products' own labels. Thus, for Tums regular, that consists of two tablets (DX S) and for Pepcid Complete one dose is equivalent to one tablet.
This, despite the fact that the Tums label instructs consumers to: "Chew two to four tablets as symptoms occur. Repeat hourly if symptoms return or as directed by a physician." See DXS.
As a threshold matter, J J Merck responds that because the commercial contains no explicit statement as to any repeated dosing necessary for the majority of Tums users and in fact, the man depicted "is anything but typical of most consumers", the claim is correctly characterized as one of implied falsity, and that consequently, SmithKline's lack of extrinsic evidence as to consumer reaction is fatal to its petition for a preliminary injunction. See Def.'s Mem. Law at 6. Plaintiff responds by citing to "the doctrine of necessary implication" for claims of literal falsity, and argues that pursuant to the Second Circuit's recent decision in S.C. Johnson Son, Inc. v. Clorox Co ., 241 F.3d 232 (2d Cir. 2001), the legally relevant fact is that the ad does not disclose that it is not the typical experience of most Tums users. See Pl.'s Reply at 11.
While it is certainly true that courts considering Lanham Act challenges base literal falsity determinations upon the explicit claims made by an advertisement, courts may also consider any claims the advertisement conveys by "necessary implication" through visual images or visual images combined with an audio message. See S.C. Johnson Son, Inc. v. Clorox Co ., 241 F.3d at 237 (rejecting argument that the district court should have found not literal falsity but implied falsity where "the Goldfish advertisement depicts a literal falsity that requires no proof by extrinsic evidence: that Slide-Loc bags always leak when filled with water and held upside down."); Coca- Cola Co ., 690 F.2d at 318 (reversing district court's finding of no literal falsity where "the visual component of the ad makes an explicit representation that Premium Pack is produced by squeezing oranges and pouring the freshly-squeezed juice directly into the carton. This is not a true representation of how the product is prepared. Premium Pack juice is heated and sometimes frozen prior to packaging."); see also Gillette Co. v. Wilkinson Sword, Inc ., 1989 W.L. 82453 (S.D.N.Y. 1989) (holding that consumer survey evidence is not required when the allegedly false claim is a "necessary implication" of the explicit language in the advertisement); Tambrands, Inc. v. Warner-Lambert Co ., 673 F. Supp. 1190, 1193-4 (S.D.N.Y. 1987) (finding that advertising claims which necessarily implied pregnancy test took 10 minutes for results was literally false); Cuisinarts, Inc., v. Robot- Coupe Int.'l Corp ., 1982 WL 121559 at *2 (S.D.N.Y. June 9, 1982) (holding that a court may grant relief under literal falsity not only when a false claim is literally stated in haec verba, but also when claims are false by necessary implication).
The doctrine of "necessary implication" involves a finding that a claim, as communicated by the visual and verbal representations of the advertisement, is literally false. In such cases, no reference need be made to consumer reaction and thus, is distinct from a finding of implied falsity, where the claim is literally true but deemed misleading.
As the Eighth Circuit elaborates:
a claim is conveyed by necessary implication when, considering the advertisement in its entirety, the audience would recognize the claim as readily as if it had been explicitly stated. This is not to say, however, that all messages implied by an advertisement will support a finding of literal falsity by a factfinder: The greater the degree to which a message relies upon the viewer or consumer to integrate its components and draw the apparent conclusion, however, the less likely it is that a finding of literal falsity will be supported. Commercial claims that are implicit, attenuated, or merely suggestive usually cannot fairly be characterized as literally false.United Indus. Corp. v. Clorox , 140 F.3d 1175, 1181 (8th Cir. 1998). Similarly, a factfinder might conclude that the message conveyed by a particular advertisement remains so balanced between several plausible meanings that the claim made by the advertisement is too uncertain to serve as the basis of a literal falsity claim, though even in that case it could still form the basis for a claim that the advertisement is misleading. See id . at 1182; Abbott Labs. v. Mead Johnson , 971 F.2d 6,14 (7th Cir. 1992).
Keeping these principles in mind, courts should use logic and common sense to determine the literal meaning of an advertisement. See S.C. Johnson Son, Inc. v. Clorox , 930 F. Supp. 753, 781 (E.D.N.Y. 1996) (citing cases). Moreover, relevant to any such determination is both the intended audience of the commercial and the intended product usage. See id .; SmithKline Beecham v. Johnson Johnson-Merck , 906 F. Supp. 178, 186 (S.D.N.Y. 1995) (finding intended users of drug product-OTC rather than prescription purchasers-was relevant in assessing literal meaning of advertising claim).
Reading the text of the Car Wash Commercial in the context of the visual images, the Court finds that the commercial necessarily implies that Tums is a heartburn remedy that requires redosing at a rate higher than Pepcid Complete. The juxtaposition of the visual image of numerous Tums tablets with the statements of "ever notice how many Tums you have around because your heartburn keeps coming back?" and the "neater idea" of Pepcid Complete's tag line "Just one and heartburn's done" makes an unmistakable reference to the allegedly multiple Tums doses as compared to those of Pepcid Complete necessary for a consumer to experience heartburn relief. In other words, Pepcid Complete is advertised to suggest that its use provides consumers with relief with less redosing than with Tums.
And indeed, the clinical scientific studies support the truth of this claim of the primary difference between the two products. See discussion supra at 9-11. Though the differences are minor in absolute numbers, they are statistically significant (that is, replicable and not the result of chance), are recognized as such by the FDA, and are the bases of claims which have been made repeatedly by both companies in the advertising of their own H2 Blockers. As such, this Court finds that Pepcid Complete is allowed to advertise their comparative product advantage. See, e.g. American Express Travel Related Servs. Co. v. Mastercard Int'l Inc ., 776 F. Supp. 787, 790 (S.D.N.Y. 1991) (finding comparative advertising permissible where a difference is truthful); Nikkal Industries, Ltd. v. Salton , 735 F. Supp. 1227, 1235 (S.D.N.Y. 1990) ("The evidence suggests that the [product] was a slightly better performer . . . but this was an advantage that Defendant could have exploited through its advertising . . ."). See also Mead Johnson Co. v. Abbott , 201 F.3d 883, 885 (7th Cir. 2000) ("If the difference is statistically significant . . . then the claim is true and properly may be made to distinguish this [product] from others that are less effective.").
Nor does the admittedly exaggerated depiction of a heartburn sufferer in the Car Wash Commercial make it literally false under the Lanham Act, as it constitutes mere non-actionable "puffing". See, e.g., American Express , 776 F. Supp. at 790 ("The exaggeration used by defendants to convey the message that it is more difficult for an American Express Card holder to find a location where he can get cash with his card is mere `puffing.'"); 4 J. Thomas McCarthy, McCarthy on Trademark and Unfair Competition § 27.38 (4th ed. 1996) (defining puffery as "exaggerated advertising, blustering, and boasting upon which no reasonable buyer would rely").
There is not, moreover, any literal claim in the Car Wash commercial as to the "typicality" of redosing for "typical" Tums consumers as argued by SmithKline. The depiction of the slob amid dozens of Tums could be making a claim as to types of people whose eating habits are conducive to multiple heartburn episodes, not re-dosing for one episode. The ad could also depict the tendency of heartburn sufferers to keep many tablets within hand's reach. Thus, a representation that a typical Tums user constantly must remedicate with hundreds of tablets is far too attenuated from the Commercial's depiction of a slob's arsenal of Tums to form the basis of a claim of literal falsity, including that by necessary implication. Nor is it just a mere reference 27 to the label instructions of recommended dosage as argued by J J Merck. See D. Mem Law at 14. When viewed in its entirety, the legally operative assertion of the Car Wash Commercial is one of the comparative need to re-dose with antacids than with Pepcid Complete, which is true.
Similarly, there is no literal representation of Tums or the Tums user as garbage or that Pepcid Complete is appropriately used for prevention. Indeed, the slob in question eats old pizza off his own dashboard, an explicit indication that he considers the Tums and other objects carelessly scattered about in his car to be of value.
Also in evidence are past Pepcid AC ads which ran without any legal objection from SmithKline. See PX 72-76. SmithKline accordingly sought to distinguish these ads from the instant Carwash commercial on the bases that they do not show Tums explicitly, and do not make numerous redosing claims. See Tr. at 362. However, upon being confronted with the explicit content of the Pepcid AC commercials which do mention Tums by name and do refer to the experience of redosing with Tums, SmithKline's marketing director, Mr. Amburgey testified, "I would say there is one important perspective here, that is, that each of these people [in the past Pepcid AC ads] are giving testimony of their own experience for that individual situation of heartburn, which 28 is different from the current ad that we have an issue with in that it uses what we call in advertising a Voice of God announcer who is trying to make a point about the typical or expected experience that you would have with Tums." Tr. at 395. As discussed supra , the notion that a disembodied voice without more somehow functions to transform this commercial from an "individual situation" of a slob with heartburn to that of a typical or expected experience for all consumers is wholly unpersuasive.
Mr. Amburgey goes on to testify that additional differences have to do with the portrayal of the Tums brand product and user as trash and the exaggeration as to the number of Tums tablets versus those of Pepcid Complete required to get relief. See Tr. at 399. For the reasons discussed supra, these distinctions do not function to render the Carwash Commercial literally false.
SmithKline's reliance on S.C. Johnson is similarly unavailing. The Second Circuit found in S.C. Johnson, in which the disputed commercial depicted a demonstration between two competing plastic bags which were filled with water and turned upside down, that the commercial was literally false because it "falsely depicts the risk of leakage for the vast majority of [competitor] bags tested." 241 F.3d at 235. From this, SmithKline argues that the Car Wash Commercial engages in a similar falsity by impermissibly exaggerating the frequency with which multiple doses of Tums occur and thereby "does not reflect the experiences of typical Tums users." However, the impermissible exaggeration in S.C. Johnson occurred, as the district court pointed out, where "a demonstrative commercial . . . which does not deal with any kind of normal consumer usage, should have the demonstration accurate." 2000 WL at *2. In contrast, the Car Wash commercial did not contain any such demonstration presented as a purportedly accurate scientific test, nor does it contain any assertion whatsoever as to typicality.
Accordingly, the claims in the Car Wash Commercial are appropriately analyzed as ones of literal falsity and the burden upon SmithKline of proving this to a "likelihood of success" standard has not been met. The presumption of irreparable harm does not attach and the preliminary injunction motion is denied.
D. J J Merck's Counterclaims
J J Merck seeks to enjoin the Answers Commercial (described supra at 5-6) on the basis of an alleged claim that Tums works faster than Pepcid Complete in providing heartburn relief, which J J Merck argues is both literally and impliedly false. Importantly, J J Merck is not challenging the so-called "parity" claim of "Nothing's faster than Tums", nor the claims appearing at the end of the commercial regarding the acid 30 neutralizing capacity of Tums Ultra or the four-fold cost of Pepcid.
The latter claims are apparently subject to a separate proceeding before the National Advertising Division of the Council of Better Business Bureaus. See Tr. at 22-23.
SmithKline does not argue that a claim depicting Tums as faster than Pepcid Complete for heartburn relief would be false; rather, SmithKline argues that there is no comparative claim made by the Answers commercial. See Mem. Law in Opp. at 10, ftn 3. Thus, the only issue in question is whether the Tums as faster message is in fact conveyed by the Answers Commercial.
1. Implied Falsity
In considering a claim of implied falsity, a district judge cannot determine whether the advertisement is deceptive based "solely upon his or her own intuitive reaction." Johnson Johnson Merck v. SmithKline Beecham , 960 F.2d 294, 297 (2d Cir. 1992). Thus, the success of a party's implied falsity claim usually turns on the persuasiveness of a consumer survey/expert witness testimony addressing the question "What does the person to whom the advertisement is addressed find to be the message?"
It is a two-step analysis, which requires as a threshold showing from the Plaintiff that a statistically significant part of the commercial audience holds the false belief allegedly communicated by the challenged advertisement. Johnson Johnson v. SmithKline , 960 F.2d 294, 298 (2d Cir. 1992); R.J. Reynolds Tobacco Co. v. Lowe's Theatres, Inc ., 511 F. Supp. 867, 876 (S.D.N.Y. 1980) (statistical significance where 23% of consumers surveyed were misled). Only then does the Court consider factors to establish whether the consumers were likely to be misled (e.g. commercial context, defendant's prior advertising history, and the sophistication of the audience). Id . At this juncture, bad faith and/or deliberate conduct by the defendant gives rise to a presumption that customers were in fact deceived. Johnson Johnson , 960 F.2d at 298-99.
In addition to the general criteria for assessing a survey's reliability discussed supra, the Second circuit has held that the evidentiary value of a consumer survey's results rests upon the underlying objectivity of the survey itself, which in turn depends upon many factors, inter alia: whether the survey is properly filtered to screen out those who got no message from the advertisement, whether the questions are directed to the real issues, and whether the questions are leading or suggestive. See American Home Products Corp. v. Johnson Johnson , 654 F. Supp. 568, 590 (S.D.N.Y. 1987). Moreover, "[T]he purpose of a control study is to identify the portion of the survey population that held extrinsic beliefs prior to viewing the advertisement." Johnson Johnson Merck Consumer Pharms. Co. v. SmithKline Beecham Corp ., 960 F.2d 294, 301 (2d Cir. 1992).
The consumer survey presented by J J Merck ("DuPont Survey" DX EC) purporting to gauge the misleading message conveyed to consumers, suffers from a fatal flaw as to the first factor, in that there were no controls in place to assure the accuracy of the results. A control is a way of measuring and rooting out whatever error potential, or "noise" exists, that is, something other than what is being measured in the first place. See Tr2. at 82, 171. One type of "noise" common to such surveys is preexisting beliefs about what an ad in a particular category is going to communicate. See Tr2. at 98. Another type is the multiple claims made by a single advertisement, some of which are objectionable and some of which are not, which need to be controlled for, in order to be able to determine exactly which claim is responsible for misleading the consumer. See Tr2. at 174.
Given the years of advertising around Tums and Pepcid AC, the probable brand heritage for the faster action of Tums versus Pepcid AC (Tr2 at 180), and the high likelihood of confusion between the well-established Pepcid AC product and the newly launched Pepcid Complete, the DuPont Survey effectively failed to account for customers' preconceptions about the products 33 advertised. Indeed, despite the fleeting calcium message in the Answers Commercial, the relatively high percentage of people (21.2%) who believed the main message of the commercial to be about calcium would seem to indicate that preconceptions were an issue here. See Tr2. at 111. Further, as even Dr. DuPont acknowledged, there is nothing in the survey data that would allow any determination as to whether the faster message came not from the graph representation, but purely from the unchallenged portion of the commercial (i.e., the parity claim that "Nothing's faster than Tums.") See Tr2. at 95-98, 175.
Dr. DuPont's testimony that a control was simply impractical in this context does not function to alleviate concerns regarding the survey's methodology and is belied by both Dr. Rappeport's testimony and other treatises indicating the industry's acceptance and utilization of such controls in advertising surveys. Tr2. at 97, 172; Federal Judicial Council Guide, PX 132 at 257 ("A survey with an imperfect control group generally provides better information than a survey with no control group at all, but the choice of the specific control group requires some care and should influence the weight that the survey receives.").
As the burden rests squarely upon J J Merck to produce a competent consumer survey, its argument as to the failing of SmithKline to do so is unavailing.
Accordingly, the DuPont survey's results are unreliable and are not probative of the effect of the Answers commercial on consumers. Without a persuasive consumer survey, J J Merck's claim as to any implied falsity necessarily fails.
2. Literal Falsity
As discussed supra, a commercial need not state in haec verba a claim in order to support a finding of literal falsity; rather, the claim can be the necessary implication of the visual and auditory images of the commercial taken in its entirety. See discussion supra at 22-25. The operative question is whether the initial frames of the Answers Commercial which purported to tell consumers that Pepcid Complete's own label remedied less than half of heartburn episodes within 30 minutes, while omitting, if not affirmatively concealing, the fact that antacids did even worse according to the same study, renders the commercial literally false.
SmithKline urges this Court to view the commercial in its constituent parts, and argues the fifth frame's statement of "So here's another question . . ." clearly separates the graph claim 35 with the succeeding parity claim. See Tr2. at 284. J J Merck argues that the first part of the commercial referencing the Pepcid Complete graph is false on its face and a false establishment claim.
The Court finds that the necessary implication of the visual image of the announcer standing in front of a Tums sign while she delivers the message repeatedly that Pepcid Complete relieves less than half of the heartburn episodes, without revealing that Pepcid Complete in fact performed better than the antacid to a statistically significant degree, conveys the unambiguous and concededly false claim that Tums provides for faster relief than Pepcid Complete. See, e.g., E.R. Squibb Sons, Inc. v. Stuart Pharm ., 1990 WL 159909, at *18 (D.N.J. October 16, 1990) (finding material omission in selective reporting of study's results regarding competitor medication rendered ad literally false); Philip Morris v. Loew's Theaters, Inc ., 511 F. Supp. 855, 856-7 (S.D.N.Y. 1980) (holding that incomplete citation to study data to make own product appear superior rendered advertisement false on its face).
In fact, the fingers of the woman in the Answers Commercial holding the graph actually conceals the key to the bar graph which reveals that the antacid did worse, at 41%.
The graph on the Pepcid Complete insert was drawn from Clinical Study 110 (PX 7), which showed that Pepcid Complete was a statistically significantly superior antacid (p-value at 0.042) utilizing the whole time period of 0 to 120 minutes rather than individual time points. See Tr. at 137-139.
It bears commenting that although a chart purporting to represent scientific evidence is present in the Commercial, the claim is not a false establishment claim as discussed by this Court in Glaxo Warner-Lambert OTC G.P. v. Johnson Johnson-Merck Consumer Pharm. Co., 935 F. Supp. 327, 329 (S.D.N.Y. 1996) and by the Second Circuit in Castrol, Inc. v. Quaker State Corp., 977 F.2d 57, 62 (2d Cir. 1992). Unlike a typical establishment claim, J J Merck does not seek to attack the reliability of the underlying clinical study (indeed, it is their own study), but rather to attack the Commercial's false representation of those results. It is equally irrelevant here as to whether the study does or does not establish the proposition that 45% of heartburn episodes were relieved within 30 minutes by Pepcid Complete. Rather, what is at issue is the Commercial's depiction of Tums as faster than Pepcid Complete through a selective display of the study's results.
Accordingly, J J Merck has established a probable success on the merits. This Court finds that the test for the issuance of preliminary relief has been met. The presumption of irreparable harm has attached, and there is no persuasive evidence to the contrary.
III. CONCLUSION
For the foregoing reasons, SmithKline's motion for a preliminary injunction of the Car Wash Commercial is denied. J J Merck's motion for a preliminary injunction of the Answers Commercial is granted and SmithKline is accordingly preliminarily enjoined from airing the Answers Commercial.
SO ORDERED.
Dated: New York, New York June 1, 2001
DEBORAH A. BATTS United States District Judge 38