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Novartis Consumer Health, Inc. v. Johnson & Johnson-Merck Consumer Pharmaceuticals Co.

January 3, 2001

NOVARTIS CONSUMER HEALTH, INC.,
PLAINTIFF,
V.
JOHNSON & JOHNSON-MERCK CONSUMER PHARMACEUTICALS CO..
DEFENDANT.



The opinion of the court was delivered by: Bassler, District Judge

FOR PUBLICATION

OPINION

Plaintiff Novartis Consumer Health, Inc. ("Novartis") and Defendant Johnson & Johnson-Merck Consumer Pharmaceuticals Co. ("J&J") are fierce competitors in the over-the-counter antacid industry. Novartis seeks what it normally promises to provide --fast and effective relief; Novartis moves *fn1 pursuant to Fed. R. Civ. P. 65 for a preliminary injunction to prevent J&J from using the designation "Night Time Strength" on the new addition to its line of Mylanta antacid products. For the following reasons, Novartis's motion for preliminary injunctive relief is granted.

This Opinion contains the Court's findings of fact and conclusions of law pursuant to Rule 52 of the Federal Rules of Civil Procedure. To the extent that any of the findings of fact might constitute conclusions of law, they are adopted as such. Conversely, to the extent that any conclusions of law constitute findings of fact, they are adopted as such.

I. BACKGROUND

A. Procedural History

On October 31, 2000, Novartis filed a complaint against J&J 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., *fn2 J&J's advertisements regarding Mylanta Night Time Strength ("MNTS") and the name of the product itself are false and misleading. After filing suit, on December 8, 2000, Novartis filed this motion for preliminary injunction in accordance with Appendix N of the New Jersey Federal Practice Rules ("Local Rules"). Neither party requested that discovery or an evidentiary hearing *fn3 be conducted prior to the Court ruling on this motion. The Court heard oral argument on Novartis's motion on December 18 and 19, 2000.

B. Antacids Generally

The parties produce over-the-counter ("OTC") drugs that treat heartburn. Novartis produces and markets the Maalox brand of antacids while J&J produces and markets the Mylanta brand. To understand Novartis's objections to the labeling, packaging, and advertising of J&J's new antacid, some brief background on heartburn and how antacids function is helpful.

Heartburn is caused by stomach acid that backs up, or "refluxes," into the esophagus. Acid reflux and heartburn are most likely to occur shortly after a meal, when the stomach produces a high volume of acid to begin the digestion process, and during the night. Heartburn occurs more frequently at night because acid more easily refluxes into the esophagus when a person is lying down; moreover, during sleep, the body naturally secretes acid, thereby raising stomach pH. A May 2000 study conducted by the Gallup Organization for the American Gastroenterological Association revealed that nearly eight out of ten heartburn sufferers (79%) experience symptoms at night and that seven out of ten (70%) claim that night time discomfort is either "severe" (42%) or "moderate" (28%). (See Gallup Organization study, "Understanding Heartburn in America," attached as Ex. J to Gleber Decl.) Because millions of Americans suffer from heartburn at night and as a result experience disrupted sleep patterns, the producers of OTC heartburn remedies vigorously compete to capture sales among night time heartburn sufferers.

The market for OTC drug products offers three types of heartburn remedies. Unlike stomach acid blockers *fn4 or rafting agents, *fn5 antacids work by quickly neutralizing excess acid already present in the stomach. While antacids provide fast relief, the disadvantage is that the effects wear off within 30-60 minutes as the antacid has no effect on the production of new stomach acid. Therefore, if additional stomach acid is produced, another dose of antacid must be ingested.

The "strength" of an antacid is measured by the product's ability to neutralize acid in a beaker over a 15 minute period (in vitro). This acid neutralization capacity ("ANC") does not, however, represent an antacid's effectiveness in the human body (in vivo) or its ability to relieve the symptoms of acid reflux. In the human body, other factors such as rate of gastric emptying, the stomach's rate of secretion of acid, and the degree to which the antacid mixes with gastric contents all bear on the antacid's efficacy. See Johnson & Johnson-Merck Consumer Pharmaceuticals Co. v. Rhone-Poulenc Rorer Pharmaceuticals, Inc., 19 F.3d 125, 127 (3d Cir. 1994) ("Rorer"). Concluding that the public would confuse the ANC as a measure of effectiveness, the FDA, excluded such information from product labels. Id.

C. Facts

In March 2000, J&J announced the introduction of its new product Mylanta Night Time Strength ("MNTS"), which it then began shipping in June. MNTS has more active ingredient per teaspoon than other antacids. Its ANC rating is roughly 7% higher than "Maximum Strength" Maalox. MNTS has 500 milligrams of each of aluminum hydroxide and magnesium hydroxide while Maximum Strength Maalox has 500 milligrams of aluminum hydroxide and 450 milligrams of magnesium hydroxide. MNTS's ANC rating is also higher than all other antacid products. (Albrecht Decl., at ¶ 11.)

In August 2000, J&J launched a national advertising campaign in support of MNTS. In nationally disseminated television commercials, J&J claimed that MNTS was "made just for" night time heartburn, that it was "the strongest antacid you can get," and that it was "something strong enough to get rid of even your toughest nighttime heartburn." The announcer then stated, "go ahead, enjoy your night," while the words "New Mylanta Nighttime" [sic] appear on the screen. The disclaimer "does not contain sleep aid" also briefly appeared on the screen, allegedly in letters that were minuscule relative to size of the "The Strongest Antacid."

Novartis asserts that J&J disseminated false claims regarding MNTS in other promotional materials as well. For example, on or about August 20, 2000, J&J published a "free standing insert" print advertisement in Sunday newspapers nationwide touting MNTS as the "solution for heartburn at its worst" and as having been "specially formulated for Night Time heartburn." In tiny letters, the lower left-corner of the advertisement stated "[d]oes not contain a sleep aid." (Gleber Decl., at ¶ 10, Ex. E.) Further, J&J's website purportedly boasted that MNTS "is the first and only antacid formulated specially to relieve your toughest Night Time heartburn" and promised that the product would deliver a restful night's sleep, because "[y]ou may know you have to be up early the next day, but your stomach doesn't." (Gleber Decl., at ¶ 9.)

Shortly after the national advertising campaign commenced, Novartis expressed its objections to J&J over MNTS's name and advertising claims and also challenged J&J's television commercial before the three major networks. In response to the network challenges, J&J decided to revise its television commercial and web site to eliminate many of the disputed claims and advised Novartis and the television networks in early October of its impending revisions. (Miller Decl., at ¶¶ 28-29.) The current television commercial for MNTS pictures a woman sitting down on a couch after dinner. The announcer states, "what a time for really tough heartburn. Good thing there's something just as tough." MNTS is then described as, "the strongest antacid you can get," and that it is "made strong to work on even tough nighttime heartburn . . . fast." As the commercial closes, the woman has her eyes closed and her head tilted back on the sofa.

The new website states, "Do you experience your heartburn at night? 76% of heartburn sufferers say they do. If you do, here is great news for you! Introducing MYLANTA(TM) Nighttime [sic] Strength. MYLANTA(TM) Nighttime [sic] Strength begins neutralizing acid on contact. In fact, no other antacid is faster or stronger. And MYLANTA(TM) does not contain a sleep aid so you can sleep naturally at night. MYLANTA(TM) NightTime Strength works on even your tough nighttime heartburn."

Although J&J argues that Novartis's motion, filed in November, addresses only the original discontinued ads, Novartis maintains that any edited advertising that still features the product name cannot cure what amounts to consumer fraud.

II. DISCUSSION

A. Standard for Preliminary Injunction

Whether or not a court should grant a preliminary injunction is committed to the sound discretion of the trial court. Penn Galvanizing Co. v. Lukens Steel Co., 468 F.2d 1021, 1023 (3d Cir. 1972). But a court must always be mindful that an injunction is "an extraordinary remedy which should be granted only in limited circumstances." Instant Air Freight Co. v. C.F. Air Freight, Inc., 882 F.2d 797, 800 (3d Cir. 1989).

In exercising its decision, the court must be convinced that all four of the following factors favor preliminary relief: (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).

B. Likelihood of Success on the Merits

1. Standard for False Advertising Under Lanham Act

Section 43(a) of the Lanham Act, as amended in 1988 and 1992, prohibits false advertising in interstate commerce. It provides in pertinent part:

(1) Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which . . .

(B) 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. 15 U.S.C. § 1125(a).

The plaintiff bears the burden of proving by a preponderance of the evidence: "1) that the defendant has made false or misleading statements as to his own product (or another's); 2) that there is actual deception or at least a tendency to deceive a substantial portion of the intended audience; 3) that the deception is material in that it is likely to influence purchasing decisions; 4) that the advertised goods traveled in interstate commerce; and (5) that there is a likelihood of injury to the plaintiff in terms of declining sales, loss of good will, etc." Rorer, 19 F.3d at 129 (citations omitted). A plaintiff "bears the burden of showing that a challenged advertisement is false or misleading, not merely that it is unsubstantiated by acceptable tests or other proof." Sandoz Pharmaceuticals Corp. v. Richardson-Vicks, Inc., 902 F.2d 222, 228 (3d Cir. 1990).

If a plaintiff proves that the challenged claims are literally false, *fn6 the court need not consider whether the buying public was misled before granting relief. Rorer, 19 F.2d at 129. "When the advertising claim is false, the court may grant relief on its own findings that the advertisements have a `tendency to deceive.'" W.L. Gore & Assocs., Inc. v. Totes Inc., 788 F. Supp. 800, 805 (D. Del. 1992) (citing Stiffel Co. v. Westwood Lighting Group, 658 F. Supp. 1103, 1111 (D.N.J. 1987)). In assessing whether a claim is literally false, "a court must analyze the message conveyed in full context." Castrol Inc. v. Pennzoil Co., 987 F.2d 939, 946 (3d Cir. 1993); Cuisinarts, Inc. v. Robot-Coupe Int.'l Corp., 1982 WL 121559, at *2 (S.D.N.Y. June 9, 1982) ("[I]n determining facial falsity the court must view the face of the statement in its entirety, rather than examining the eyes, nose, and mouth separately and in isolation from each other.") Therefore, a court may grant relief not only when a false claim is literally stated in haec verba, *fn7 but also when claims are false by necessary implication. See id. at 946-47; Tambrands, Inc. v. Warner-Lambert Co., 673 F. Supp. 1190, 1193-94 (S.D.N.Y. 1987) (noting that representations made by "necessary implication" can constitute false and misleading advertising). When an advertisement conveys a meaning that is unambiguous, a court need not consider whether the buying public was actually misled; conversely, where an advertisement is ambiguous, a court must look to consumer reaction. Castrol Inc., 987 F.2d at 947 (citing Cuisinarts, 1982 WL 121559, at *2).

If, however, the challenged advertisements are not literally false, the plaintiff must prove by a preponderance of the evidence, that the claim is deceptive or misleading, which typically is proven through a consumer survey. Sandoz, 902 F.2d at 228-29; Rorer, 19 F.3d at 129-30. The plaintiff must show how consumers actually react, rather than how consumers could react. Sandoz, 902 F.2d at 229.

2. Analysis

Here, Novartis maintains that the MNTS name, packaging and advertising includes, either explicitly or implicitly, four false claims:

(1) MNTS contains a sleep aid or other ingredient that causes drowsiness;

(2) MNTS is "specially formulated" for night time heartburn and is more effective than other antacids at relieving night time symptoms; and

(3) MNTS is an appropriate treatment for Gastroesophageal Reflux Disease ("GERD") because the "toughest" night time heartburn describes symptoms associated with GERD;

(4) MNTS provides all night long heartburn relief.

In response, J&J contends that Novartis acknowledges that the claims it challenges do not appear in haec verba in the ads, that the "necessary implication" doctrine does not apply because the cases that were decided on that doctrine involved ads that were susceptible to only one misleading interpretation, and finally, that ...


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