BIRCH, Circuit Judge:
In this interlocutory appeal, 1-800 CONTACTS, Inc. ("1-800") argues that the district court erred when it issued a preliminary injunction forbidding 1-800 from making certain statements about the products and services of Johnson & Johnson Vision Care, Inc. ("J&J"). The district court based its injunction on the conclusion that three of the advertisements used by 1-800 included false statements about J&J, and as such violated § 43(a) of the Lanham Act, codified at 15 U.S.C. 1125(a).
Both J&J and 1-800 are in the contact lens business. J&J manufactures lenses, including those under the well-known ACUVUE ® brand; 1-800 sells lenses, including ACUVUE, over the phone and the internet. J&J argues that three of 1-800's advertisements make statements about J&J or about ACUVUE that are literally false. The first advertisement at issue is a letter sent by 1-800 to its customers recommending CIBA Vision's Focus Dailies, a 1-day lens, over J&J's ACUVUE, a 2-week lens. In this letter (the "Focus Dailies letter"), 1-800 cites a study published by a trade journal named Contact Lens Spectrum ("CLS study") which identified a five to one consumer preference for Focus Dailies over ACUVUE. The second advertisement, also a letter, was sent by 1-800 to customers who requested J&J lenses that were not in stock at the time of the customer's order. This letter (the "Exclusive Deal letter") explains that 1-800's inability to process the customer's order was due to J&J's policy of distributing contacts exclusively to eye doctors, rather than to retailers like 1-800. The third advertisement is a four-page pamphlet about Focus Dailies (the "Focus Dailies pamphlet") that was sent out with the Exclusive Deal letter. The pamphlet cites the five to one preference for Focus Dailies and compares the qualities of the lens against those of "competing lenses." R1-33, Ex. G at 3.
J&J brought suit against 1-800, alleging false advertising under § 43(a) of Lanham Act and under multiple state law provisions across the country. J&J moved for a preliminary injunction, which the district court granted. 1-800 now appeals the injunction.
Only if the district court abused its discretion will we reverse the grant of a preliminary injunction. Am. Bd. of Psychiatry & Neurology, Inc. v. Johnson-Powell, 129 F.3d 1, 2-3 (1st Cir.1997). We review the district court's findings of fact under the clearly erroneous standard. Id. at 3. The facts found by a district court are "clearly erroneous when, although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed." Univ. of Georgia Athletic Ass'n v. Laite, 756 F.2d 1535 (11th Cir.1985) (internal quotations omitted). The clearly erroneous standard is appropriate in cases, such as this one, in which the evidence is primarily documentary; the fact that the district court's decision was not a function of credibility determinations does not affect the standard of review. Anderson v. City of Bessemer City, 470 U.S. 564, 574, 105 S.Ct. 1504, 1511-12, 84 L.Ed.2d 518 (1985). Lastly, our review of the district court's application of law is de novo, premised on the understanding that "[a]pplication of an improper legal standard ... is never within a district court's discretion." Johnson-Powell, 129 F.3d at 3.
For a district court to grant a preliminary injunction, the movant must establish: (1) a substantial likelihood of success on the merits of the underlying case, (2) the movant will suffer irreparable harm in the absence of an injunction, (3) the harm suffered by the movant in the
Our analysis begins and ends with the five elements J&J needed to establish the likelihood of success. First, J&J needed to prove that 1-800's ads were false or misleading. This element is satisfied if the challenged advertisement is literally false, or if the challenged advertisement is literally true, but misleading. Johnson & Johnson * Merck Consumer Pharms. Co. v. Smithkline Beecham Corp., 960 F.2d 294, 297 (2d Cir.1992). It is clear that the district court found each of the three advertisements to be either false or misleading, but it is unclear into which category the court placed the ads.
The category is relevant; once a court deems an advertisement to be literally false, the movant need not present evidence of consumer deception. Am. Council of Certified Podiatric Physicians and Surgeons v. Am. Bd. of Podiatric Surgery, Inc., 185 F.3d 606, 614 (6th Cir. 1999). If the court deems an ad to be true but misleading, the movant — even at the preliminary injunction stage — must present evidence of deception.
There is one additional point to consider before we begin our analysis: the
A. The Focus Dailies Letter
The Focus Dailies letter states that "Focus Dailies are preferred 5 to 1 over Acuvues." R1-33, Ex. A (emphasis omitted). The letter elaborates that 84% of participants in a recent study preferred Focus Dailies, finding them to be more comfortable, more convenient, and easier to handle than ACUVUE lenses. Id. The district court found that the Focus Dailies Letter "misrepresented to consumers the superiority of Focus Dailies" by failing to "make it clear to the consumer that the study was comparing modalities (i.e. length of time wearing the lens, one day wear versus two week wear) and not the quality of lenses with the same modality." R1-38-4.
As the common law of false advertising has developed, several circuits have determined that the nature of a plaintiff's burden in proving an advertisement to be literally false should depend on whether the defendant's advertisement cites consumer testing. See, e.g., C.B. Fleet Co. v. SmithKline Beecham Consumer Healthcare L.P., 131 F.3d 430, 435 (4th Cir.1997); Rhone-Poulenc Rorer Pharms. Inc. v. Marion Merrell Dow, Inc., 93 F.3d 511, 514-15 (8th Cir.1996); Castrol, Inc. v. Quaker State Corp., 977 F.2d 57, 62 (2d Cir.1992). If an advertisement cites such testing, the advertisement is labeled as an "establishment" claim. BASF Corp., v. Old World Trading Co., 41 F.3d 1081, 1090 (7th Cir.1994). To prove an establishment claim literally false, the movant must "prove that these tests did not establish the proposition for which they were cited." Quaker State Corp., 977 F.2d at 63. We find this method of evaluating such advertisements to be analytically sound, and adopt the reasoning for use in the Eleventh Circuit.
In this case, the goal of the CLS study "was to evaluate the overall patient preference of Focus Dailies one day contact lenses as compared to two-week replacement Acuvue lenses." R1-33, Ex. B at 1. The CLS study concluded that a significant
It is true that the CLS study includes two variables: brand and modality. Modality is not a constant, and to that extent the design of study was imperfect.
B. The Exclusive Deal Letter
1-800 sent the Exclusive Deal letter to 1-800 customers who requested J&J contacts that were out of stock at the time of the customer's order. The letter explains 1-800's inability to fill the order, stating that J&J "has cut off our supply of some of their products, including yours, in order to force you to buy them from an eye doctor instead of from us." R1-33, Ex. F.
As mentioned previously, the fact that the district court did not require evidence of consumer confusion leads us to the conclusion that the district court found 1-800's statements to be literally false. See Am. Council, 185 F.3d at 614. Review of the facts, however, reveals that both of 1-800's statements are true: (1) J&J had cut off 1-800's supply, and (2) 1-800 was able to
In addition, the district court found that the Exclusive Deal letter was literally false because J&J contracted with "eye care practitioners" rather than with "eye doctors" as stated in 1-800's advertising material. R1-58-1-2. According to the district court, the category of "eye care practitioner" is broader than the category "eye doctor." Id. at 2. Although there is a strong argument that 1-800's advertisement is better construed as underinclusive, rather than as literally false, we need not reach that conclusion. Instead, we reverse based on the district court's application of the law.
To succeed on a claim of false advertising, the plaintiff must establish that "the defendant's deception is likely to influence the purchasing decision." Cashmere & Camel Hair Mfrs. Inst. v. Saks Fifth Ave., 284 F.3d 302, 311 (1st Cir.2002) (internal quotations omitted). A plaintiff may establish this materiality requirement by proving that "the defendants misrepresented an inherent quality or characteristic of the product." Nat'l Basketball Ass'n v. Motorola, Inc., 105 F.3d 841, 855 (2d Cir. 1997) (internal quotations omitted). The materiality requirement is based on the premise that not all deceptions affect consumer decisions. In Motorola, for example, the Second Circuit concluded that Motorola's advertisement that its SportsTrax device provided sports information "direct from each arena" was literally false, but irrelevant to consumer decisions. Id. Consumers were interested in the fact that statistics were updated quickly, and did not make purchasing decisions based on whether data was collected firsthand or though broadcasts. Id. J&J's argument fails because J&J did not prove that 1-800's use of the term "eye doctor" was material to consumer decisions.
The plaintiff must establish materiality even when a the court finds that the defendant's advertisement is literally false. Cashmere & Camel Hair, 284 F.3d at 312 n. 10; S.C. Johnson & Son, Inc. v. Clorox Co., 241 F.3d 232, 238 (2d Cir.2001). The district court appears to have conflated the element of consumer deception with the element of materiality. R1-38-6 ("[T]he Court now turns to whether or not the deception was material. While J&J has the ultimate responsibility for proving that the deception did in fact affect consumers' purchasing decisions ... J&J ... only need show that the statements had the tendency to deceive consumers."). Such conflation is not without precedent; it appears that the Fifth Circuit blurred the boundary between the two elements in its recent Pizza Hut decision. See Pizza Hut, 227 F.3d at 497.
We note that 1-800 sent the Exclusive Deal letter along with the Focus Dailies pamphlet. The letter was sent to explain 1-800's inability to fill a customer's order, and the pamphlet was sent to provide the customer with an alternative. Beyond this link, our analysis of the Exclusive Deal letter is not informed by the Focus Dailies pamphlet.
C. The Focus Dailies Pamphlet
The Focus Dailies pamphlet is an advertisement, highlighting the advantages of the lens: comfort, convenience, and cost. The district court found that the pamphlet, considered along with the Focus Dailies letter, made "false comparative claims." R1-38-7. This language, coupled with the fact that the district court did not require proof of consumer confusion, see Am. Council, 185 F.3d at 614, leads us to understand that the district court found the advertisement to be literally false.
We begin with the language of the pamphlet. The cover cites a five to one consumer preference for Focus Dailies, but does not name a competing product. R1-33, Ex. G at 1. In fact, neither "Johnson & Johnson" nor "Acuvue" appear anywhere in the pamphlet. The other three pamphlet pages explain that the lens is comfortable due to thin edges and high water content, and reasonably priced due to cost-efficient production.
J&J's false advertising claim is based on 1-800's comparison of Focus Dailies to ACUVUE. Because the Focus Dailies pamphlet does not cite "Acuvue" or "J&J," we turn to context to determine whether a consumer might imply a comparison of the two products. The district court analyzed the Focus Dailies pamphlet within the context of the Focus Dailies letter. These two advertisements were not paired by 1-800; there would be no reason for consumers to see them together.
The district court erred in its application of the law. The Focus Dailies letter cannot be considered literally false because J&J did not disprove 1-800's establishment claim. To make its case, J&J needed to prove that the cited study did not
VACATED AND REMANDED.
15 U.S.C. § 1125(a)(1)(B).