OPINION OF THE COURT
SCIRICA, Circuit Judge.
This dispute arises from an advertising war between major competing producers of over-the-counter antacid remedies. Plaintiff/appellant Johnson & Johnson-Merck Consumer Pharmaceuticals Company ("Johnson-Merck") alleges that television commercials by defendant/appellee Rhone-Poulenc Rorer Pharmaceuticals, Inc. ("Rorer"), about its product Extra Strength Maalox Plus ("ESMP"), are misleading advertising in violation of section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) (1988). Johnson-Merck produces and markets a competing product, Mylanta Double-Strength ("Mylanta II"), and claims its sales suffered as a result of the misleading advertising.
Key to the controversy is Rorer's description of ESMP as "the strongest antacid there is" in television commercials promoting ESMP tablets and liquid. Johnson-Merck contends the claim misleads consumers into thinking that ESMP is superior as a treatment for acid indigestion.
The district court held a five-day evidentiary hearing on Johnson-Merck's motion for a preliminary injunction. Because the record developed in the hearing was so extensive, the court, with the agreement of the parties, converted its Memorandum and Order on the motion into one on the merits of the case and entered final judgment.
Johnson-Merck appeals, contending the advertisements should have been enjoined if it showed that Rorer either intended to or in fact did mislead consumers. Johnson-Merck claims it proved both at the hearing. Specifically, Johnson-Merck maintains the trial court erred in failing to evaluate its evidence of Rorer's intent to mislead and in misevaluating its key evidence that the commercials did mislead consumers.
The district court had jurisdiction based on a federal question arising under the Lanham Act. 28 U.S.C. § 1331. We have jurisdiction under 28 U.S.C. § 1291. We review the district court's conclusions of law in a plenary fashion, its findings of fact under a clearly erroneous standard, and its decision to grant or deny an injunction for abuse of discretion. Castrol Inc. v. Pennzoil Co., 987 F.2d 939, 943 (3d Cir.1993); Sandoz Pharmaceuticals Corp. v. Richardson-Vicks, Inc., 902 F.2d 222, 226 (3d Cir.1990).
A. Acid Neutralizing Capacity and Effectiveness of Antacids
Over-the-counter ("OTC") antacids are designed to provide symptomatic relief from acid indigestion by neutralizing excess acid in the stomach or esophagus. However, the test on which advertisers rely for claims of strength does not measure the operation of antacids in the human body (in vivo testing); rather, it measures their operation in glass beakers of acid in the laboratory (in vitro testing).
In the 1970's, the Food and Drug Administration adopted a laboratory test for acid neutralizing capacity ("ANC") which defines OTC antacids for purposes of labeling and measures their strength. The test determines how much acid is neutralized in a glass beaker by a single dose of antacid over a fifteen-minute period. The ANC test does not measure an antacid's capacity to neutralize acid in vivo, which depends on other factors in addition to ANC,
When liquid ESMP and Mylanta II are compared in vitro, ESMP has a higher ANC rating; when they are compared in tablet form, Mylanta II's ANC rating is higher. However, in vivo tests, conducted by both parties to demonstrate the relative effectiveness of the two brands of antacid, show no advantage for either brand in the human body. The district court found that "[n]ot one of the in vivo studies, performed by either side, demonstrated any statistically or clinically significant difference in the ability of Mylanta II or ESMP to relieve symptoms of acid indigestion."
B. Commercial Claims
Rorer began airing television commercials in July 1989, claiming that ESMP is "the strongest antacid there is," or "the strongest antacid I can [could] buy."
The Firefighter commercial which aired on NBC and CBS in the summer of 1991 showed a fireman saying, "To survive in today's world, you have to follow certain basics. You have to work, and you have to eat. And both play havoc with your stomach. That's why I take Maalox." The screen then showed liquid ESMP, with the voice saying, "Maalox is the strongest antacid there is." Superimposed on the screen was the text, "Dose for Dose Based on Lab Tests." The screen showed the fireman again, who went on to say, "And who knows more about stomach problems than Maalox? You know it's a funny thing. I started taking Maalox because the doctor told me it was strongest. I keep on taking it because my stomach tells me it's fast." The screen then showed Maalox again, with the text superimposed, "The doctor told me it was strongest. My stomach tells me it's fast."
The Minty Tablets commercial which aired on ABC and NBC in August 1991 started with pictures of a bottle of ESMP liquid. The superimposed text stated, "Dose for Dose Based on Lab Tests of Acid Neutralization," while an announcer said, "Extra Strength Maalox Plus, the strongest antacid there is, ..." The picture changed to show a bottle of ESMP tablets as the announcer continued, "... now comes in tablets. New Extra Strength Maalox Plus Tablets." The screen showed Tums and Rolaids tablets as the announcer went on to say, "Maalox strength is stronger than Tums; Maalox strength is stronger than Rolaids." A woman's voice said, "My doctor told me it's the strongest," as the screen showed ESMP tablets. The woman then appeared, saying, "My stomach tells me it's fast." The remaining pictures were of bottles of ESMP tablets as the announcer's voice said, "Extra Strength Maalox Plus, now in Minty Tablets." Both the announcer and a superimposed text said, "Your doctor will tell you they're strongest. Your stomach will tell you they're fast."
Neither commercial was being aired in the form described at the time of the hearing. The Firefighter commercial had been dropped and the Minty Tablets commercial was running in modified form without the claim, "Your doctor will tell you they're strongest." At the hearing, counsel for Rorer represented that it intended to continue its advertising campaign for ESMP using the claim "the strongest antacid there is," but agreed it would not use the claim that a doctor told, or would tell, someone that ESMP was strongest without further substantiation. Therefore, the district court did
Johnson-Merck maintained Rorer's claim that ESMP products are strongest was false or misleading or both. It argued that Rorer's claim in its Minty Tablets advertisement that ESMP tablets are the strongest was literally false because Mylanta II tablets have a higher ANC rating than ESMP tablets. The district court, however, found that the Minty Tablets commercial explicitly compared ESMP tablets not with Mylanta II tablets but with the leading antacid tablets, Tums and Rolaids, each of whose ANC was lower than that of ESMP tablets. The court concluded that Mylanta II tablets were not within the scope of comparison in the commercial and therefore the advertisement was not literally false. Slip op. at 24-25. Johnson-Merck did not pursue this issue on appeal.
Johnson-Merck also asserted, and continues to assert on appeal, that the commercials are misleading. It contends that it met its burden of proof in two ways: first, it presented evidence that Rorer intended to mislead the public into thinking "strongest" meant strongest in providing relief; and second, it commissioned consumer surveys that it claims show Rorer succeeded in misleading the public. It argues the district court made an error of law in failing to consider its evidence on intent to deceive or mislead and clearly erred in finding it had not met its burden of proof.
A. The Lanham Act
Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) (1988), creates a cause of action for false or misleading description or representation of a product.
U.S. Healthcare, Inc. v. Blue Cross of Greater Phila., 898 F.2d 914, 922-23 (3d Cir.1990), cert. denied, 498 U.S. 816, 111 S.Ct. 58, 112 L.Ed.2d 33 (1990) (quoting Max Daetwyler Corp. v. Input Graphics, Inc., 545 F.Supp. 165, 171 (E.D.Pa.1982)). A plaintiff must prove that the claim is false or misleading, not merely that it is unsubstantiated. Sandoz, 902 F.2d at 228.
If a plaintiff proves a challenged claim is literally false, a court may grant relief without considering whether the buying public was misled. Sandoz Pharmaceuticals Corp. v. Richardson-Vicks, Inc., 735 F.Supp. 597, 600 (D.Del.1989), aff'd, 902 F.2d 222 (3d Cir.1990). A determination of literal falsity rests on an analysis of the message in context. Id. If a plaintiff does not prove the claim to be literally false, he must prove that it is deceptive or misleading, which depends on the message that is conveyed to consumers. U.S. Healthcare, 898 F.2d at 922. Public reaction is the measure of a commercial's impact. Sandoz, 902 F.2d at 228-29; American Brands, Inc. v. R.J. Reynolds Tobacco Co., 413 F.Supp. 1352, 1357 (S.D.N.Y.1976). As the district court noted, the success of the claim usually turns on the persuasiveness of
902 F.2d at 228-29.
B. Intent to Deceive or Mislead
Johnson-Merck contends its evidence shows Rorer intended to convey a message of superior relief by making the claim that ESMP is the strongest antacid. It cites a decision by the United States Court of Appeals for the Second Circuit, Johnson & Johnson-Merck Consumer Pharmaceuticals Co. v. Smithkline Beecham Corp., 960 F.2d 294 (2d Cir.1992), which adopts a presumption for Lanham Act cases shifting the burden of proof to the defendant when a plaintiff has presented evidence of defendant's intent to deceive the public. Johnson-Merck argues that it has presented evidence of Rorer's intent to deceive or mislead and asks us to adopt the burden-shifting presumption and require the district court to consider its evidence on intent.
As evidence of intent to mislead, Johnson-Merck introduced Rorer's strategy document for ESMP.
In addition, Johnson-Merck cited the testimony of Patricia Bowman, Senior Brand Manager for Maalox liquids from October 1988 through August 1990. On direct examination, Johnson-Merck asked her whether another ESMP commercial called "Date," first aired in July 1989, was intended to convince consumers that ESMP provided superior relief:
Ms. Bowman also testified about a memorandum to her from Ann Bernheim, an advertising executive responsible for the ESMP account, listing the "Communication Objectives" for commercials introducing new flavors of ESMP liquid. The memo stated:
When questioned on the meaning of the memo, Ms. Bowman insisted that "it was never an intent to communicate superior relief," and explained the references to "superior relief" and "strongest antacid" in this way:
In responding to the meaning of "halo effect," Ms. Bowman said:
Although Ms. Bowman tried to distinguish "intent to communicate" and attempted "halo effect," we see this as a distinction without a difference. One can intend to create a misleading halo effect.
While acknowledging that "there was conflicting testimony regarding the original ESMP copy strategy," Rorer insists that it changed its copy strategy in 1990 to a promise of "fast relief" or "instant relief" supported by the "strongest antacid" claim, and that thereafter, the commercials, including the Firefighter and Minty Tablet commercials "were indisputably the product of a strategy that did not intend to promise consumers superior relief." That is "indisputably" true only in the sense that the copy strategy documents changed so that the "consumer promise" was no longer stated to be superior relief. From this record, we are not convinced that Rorer no longer intended or expected to communicate the halo effect of superior relief to which Ms. Bowman referred.
Ann Bernheim testified that Rorer lawyers had made clear to the advertising agency that it could not claim superior relief. Therefore, Rorer knew when it began running the "strongest antacid" commercials that it could not properly make such an explicit claim in the commercials. The intent to communicate or to promise superior relief appeared only in its internal documents, and that was purged in 1990.
For us to accept Rorer's contention that after 1990 its strategy changed so that the claim of "strongest antacid" was no longer intended to promise the consumer superior or strongest relief, but instead was intended to promise only "fast" or "instant" relief, would take us into an Alice-in-Wonderland world of meaning. We cannot see how the change of stated consumer promise in copy strategy documents and the addition of a claim of fast relief altered the halo effect of superior relief that attached to the phrase "strongest antacid there is" and that Ms. Bowman's testimony clearly shows was intended. Rorer's rewriting of its intent is therefore unconvincing. But even if we agree that Johnson-Merck has presented evidence of Rorer's intent to mislead, this alone is insufficient to qualify for the burden shifting presumption set forth in Smithkline Beecham.
As the United States Court of Appeals for the Second Circuit stated:
Smithkline Beecham, 960 F.2d at 298-99 (quoting Resource Developers, Inc. v. Statue of Liberty-Ellis Island Foundation, Inc., 926 F.2d 134,
Painting a picture of the industry, Rorer asserts that "every major antacid brand historically has made comparative strength claims based on ANC test data," including Mylanta, Tums and Rolaids. Before Johnson-Merck acquired Mylanta in early 1990, Stuart, Mylanta's former owner, advertised: "Try Double Strength Mylanta-II with nearly double the acid neutralizing power of any leading brand. That's real relief, with the double strength difference." It also advertised, "Introducing Mylanta-II Roll Packs. For double strength antacid relief wherever you are." Indeed, the names of both products here refer to strength, and suggest superior relief: Extra-Strength Maalox Plus and Mylanta Double-Strength.
Both the earlier Mylanta advertising and the Maalox advertising have tried to exploit the consumer confusion the FDA feared between the results of ANC tests and symptom relief. The advertisements tout the ANC strength, promise symptom relief, and invite consumers to make the connection. Although there is evidence of intent to mislead, it is of a kind regrettably pervasive throughout the antacid industry and does not reach the egregious proportions that would warrant a presumption shifting the burden of proof. Therefore, we need not decide whether to adopt the Smithkline Beecham presumption in case of clear and egregious conduct. In this case, the district court's failure to consider Johnson-Merck's evidence as to Rorer's intent was not error.
C. Consumer Surveys
Johnson-Merck concedes that liquid ESMP has a higher ANC rating than liquid Mylanta II; that is, it is stronger in laboratory tests. The claim that ESMP is the "strongest antacid there is" is therefore not literally false.
Johnson-Merck offered five consumer surveys, which it asserts show that consumers bought the claims of superior relief. The district court focused on two surveys, the Firefighter and Minty Tablets commercials, which it considered most relevant to the case.
In each survey, researchers travelled to busy shopping malls and searched out men and women who had, within the previous six months, used an antacid product in either tablet or liquid form.
In initial surveys, consumers were asked to identify the product advertised and then asked what, if any, message they had gotten from the commercial: for example, "What ideas did the advertiser try to get across about [the product] in the commercial?" This open-ended question was followed by one or more "probes," such as, "What other ideas did they try to get across?" or, simply, "What else?" "Anything else?" On occasion, interviewers followed the initial question with numerous probes.
In some surveys, the researcher showed consumers the commercial a second time and asked the meaning of a particular statement, such as: "In the commercial you just saw, they said Maalox is the strongest antacid there is. What does that mean to you?" The researcher then asked, "According to the commercial you just saw, what do you think Maalox is the strongest at doing?" Slip op. at 16-17.
Not surprisingly, the parties' experts differed in their interpretations of the survey results. Rorer's expert, Dr. Seymour Lieberman, criticized Exhibits 43A and 43B, which contained verbatim consumer responses in a survey of a Minty Tablets commercial.
In the end, Dr. Lieberman considered valid only answers to open-ended questions, such as "what ideas did the advertiser try to get across," which were not prompted by repeated probes. And even for those questions he considered valid, he found only a few responses linked comparative strength with comparative relief. He did not characterize responses such as ESMP works "well," or "fast," or is a "good" product as comparative responses. Nor did he equate speed with relief and he thereby discounted statements like "works faster." He also distinguished and discounted the response "works best" from those linking relief with strength. His assessment of the Minty Tablets survey, the survey Johnson-Merck contends comprises its key evidence, was that only 7.5% of the responses linked strength to superior relief
Johnson-Merck's expert, Dr. Susan S. McDonald, criticized Dr. Lieberman's restrictive analysis of the surveys. Dr. McDonald found that well over half the responses in the Minty Tablets survey reported a comparative relief claim. She reached this result by interpreting responses of "faster," "stronger," and "strongest," as well as responses of "better" and "best," to refer to greater relief. Dr. McDonald did not criticize or discredit responses to repeated probes. Interpreting the consumer responses in this way, Dr. McDonald found in the Minty Tablets survey that over 110 out of 200 consumers, or over 60%, responded in terms of comparative relief. Nonetheless, the district court found Dr. Lieberman's evaluation of the Minty Tablets surveys represented in Exhibits 43A and 43B more persuasive than Dr. McDonald's, although it did not accept all of his criticisms of them.
On appeal, Johnson-Merck claims the district court clearly erred in evaluating the survey evidence, which Johnson-Merck contends shows a majority of consumers understood the "strongest antacid" claim meant "strongest" relief, and that those misled far exceeded the "substantial portion of the intended audience" we have said is required under the Lanham Act. U.S. Healthcare, 898 F.2d at 922. Johnson-Merck contends the district court failed to discuss explicitly what it regards as its key piece of evidence, Exhibit 43A, consumers' verbatim responses in a survey of a Minty Tablets commercial. Johnson-Merck claims Exhibit 43A's initial question, "What ideas did the advertiser try to get across about Maalox tablets in the commercial?" was open-ended, meeting all Dr. Lieberman's criticisms, and the answers prove that consumers were misled by the "strongest antacid there is" claim. Johnson-Merck also alleges that Dr. Lieberman mischaracterized the answers to the first open-ended question as using primarily non-comparative words ("gives relief," "is strong," "it works") when in fact a substantial number of responses used comparative or superlative words ("works better," "works faster," "it's the best").
As the district court noted, "The probative value of a consumer survey is a highly fact-specific determination and a court may place such weight on survey evidence as it deems appropriate." Weight Watchers Int'l, Inc. v. Stouffer Corp., 744 F.Supp. 1259, 1272 (S.D.N.Y.1990), citing Universal City Studios, Inc. v. Nintendo Co., 746 F.2d 112, 118 (2d Cir.1984); Coca-Cola Co. v. Tropicana Products, Inc., 690 F.2d 312, 317 (2d Cir. 1982). A survey is not credible if it relies on leading questions which are "inherently suggestive and invite guessing by those who did not get any clear message at all." Slip op. at 25, citing American Home Products Corp. v. Johnson & Johnson, 654 F.Supp. 568, 581 (S.D.N.Y.1987).
The court agreed with Dr. Lieberman that a well-designed consumer survey first asks "communication" questions to see what messages the viewer got and to "filter" or separate those viewers who received certain messages from those who did not. In the next step, the survey asks those who received a particular message, such as the message that Maalox is the "strongest antacid" there is, "comprehension" questions to determine what the viewers thought the message meant. The court noted that distortions can occur at either stage.
Slip op. at 27-29.
Although not mentioning Johnson-Merck's Exhibit 43A by name, the district court discussed extensively the survey in that exhibit and Dr. Lieberman's evaluation of the questions and responses in the survey. The court also relied in part on the testimony of the survey's designer, A. Spencer Bruno, but not on that of Dr. McDonald, in its finding that an insufficient number of the responses linked strength with comparative relief to show that a substantial percentage of consumers were misled.
With respect to the survey evidence as a whole, the district court accepted most, but not all, of Dr. Lieberman's criticisms. It agreed with him that only a few of the survey questions were probative, and that decision was within the sound discretion of the district court. In evaluating responses to the
Dr. Lieberman's professional opinion was that the consumer surveys were seriously flawed and had not proved that ESMP's commercials misled consumers. Interestingly, his personal opinion was that consumers understood the claim in the Maalox commercials, "strongest antacid there is," to refer to the product's ability to give them relief. Even if we were inclined to agree with his personal opinion, Dr. Lieberman's personal opinion is not the legal standard by which the courts must determine whether consumers were misled. Sandoz, 902 F.2d at 228-29. If Rorer's commercials do mislead consumers into thinking that ESMP promises superior relief, well-designed consumer surveys will show that they do. Absent such evidence, neither the district court nor this court can conclude that consumers were misled.
The district court's finding that the consumer surveys in this case did not prove that a substantial number of consumers were misled was not clear error. Because the district court did not err in its finding that plaintiff had not sustained its burden of proving that defendant's advertising was deceptive or misleading, we need not reach the issues of damages or the denial of the injunction.
For the foregoing reasons, the district court's findings of fact are not clearly erroneous, it was correct in rejecting Johnson-Merck's legal claims, and it did not abuse its discretion in failing to issue an injunction. The judgment of the district court will be affirmed.
ALITO, Circuit Judge, dissenting.
In my view, Johnson-Merck, the manufacturer of Mylanta II, has established that Rorer, the manufacturer of ESMP, made "misleading" statements, within the meaning of Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), in ESMP television commercials. A statement is "misleading" under Section 43(a) if it has "a tendency to deceive a substantial portion of the intended audience." U.S. Healthcare, Inc. v. Blue Cross, 898 F.2d 914, 922-23 (3d Cir.), cert. denied, 498 U.S. 816, 111 S.Ct. 58, 112 L.Ed.2d 33 (1990). Such a tendency must be demonstrated by evidence concerning the way in which consumers interpret the statement. See, e.g., Castrol, Inc. v. Pennzoil Co., 987 F.2d 939, 951 (3d Cir.1993) (Roth, J., dissenting); Sandoz Pharmaceuticals Corp. v. Richardson-Vicks, Inc., 902 F.2d 222, 229 (3d Cir.1990).
Rorer's commercials stated that ESMP is the "strongest antacid." This statement is not literally false with respect to liquid ESMP because liquid ESMP is superior to liquid Mylanta II at neutralizing acid in the laboratory. But as the district court found, ESMP is not "strongest" at providing relief for humans. In light of this finding, I believe that Johnson-Merck amply demonstrated that the statement at issue is "misleading."
Johnson-Merck proved, as the majority recognizes, that Rorer set out to deceive consumers into believing that ESMP is the "strongest" at providing relief to humans. Moreover, Johnson-Merck showed that when potential consumers were surveyed
The district court and the majority dismiss these striking survey results on the ground that asking what the advertisements said that ESMP is "strongest at doing" is leading or suggestive. The validity of this conclusion depends on whether a Section 43(a) plaintiff must show that an allegedly misleading statement in an advertisement would be misinterpreted by (a) a substantial portion of all those who view, hear, or read the advertisement, including those who do not pay attention to the statement; or (b) a substantial portion of those who do pay attention to the statement and attach some meaning to it.
If a Section 43(a) plaintiff must make what I have described as showing (a), then the district court and the majority are correct, because asking what the advertisements said that ESMP is "strongest at doing" does lead the person responding to pay attention to and interpret the statement. But holding that a Section 43(a) plaintiff must make showing (a) means that an advertiser may employ the following cynical strategy. The advertiser may deliberately set out to mislead the consuming public. The advertiser may pay considerable sums of money to an advertising agency to create advertisements containing misleading statements that the advertiser hopes will influence consumers. The advertiser may spend large amounts of money to broadcast, publish, or otherwise distribute these advertisements. Subsequently, when sued for violating the Lanham Act, the advertiser may rely on survey research showing that most of the consuming public, habituated to "tune out" much of the commercial advertising with which it is bombarded daily, cannot without prompting call to mind the misleading statement that the advertiser tried so hard and paid so dearly to get across. These survey results can be used to prove that the advertiser's statement was not "misleading" because most of the persons who viewed or read it did not pay attention to it. I cannot believe that the Lanham Act was meant to countenance such a result. Nor do I believe that such a result is required by any of our prior decisions.
In my view, a Section 43(a) plaintiff can prove that a statement is "misleading" by making what I describe above as showing (b), i.e., by showing that the advertiser's statement would mislead a substantial portion of those consumers who interpret it. If this understanding of Section 43(a) is correct, asking what the ads in this case said that
For these reasons, I would hold that Johnson-Merck has shown that Rorer's statement that ESMP is the "strongest antacid" is misleading. I also believe that Johnson-Merck satisfactorily proved that it is likely to have been damaged by this misleading statement.
In the "Minty Tablets" survey, the following additional questions were asked:
Johnson-Merck argues strenuously that even the answers to questions (2a), (2b), and (2c) of the "Firefighter" and "Minty Tablets" surveys, when properly interpreted, establish that Rorer's claim that ESMP is the "strongest antacid" is misleading to consumers. Because I believe that questions (3) and (4) of the "Firefighter" survey and questions (3a) and (3b) of the "Minty Tablets" survey were highly probative and were not leading or suggestive in a way that is legally significant, I do not find it necessary to address this argument.