Advertiser Liability for "Implied" Claims in Lanham Act False Advertising Cases

Miller, Randall K. The IP Litigator : Devoted to Intellectual Property Litigation and Enforcement16. 5 (Sep/Oct 2010): 43-50. Turn on hit highlighting for speaking browsers Hide highlighting

Abstract (summary)
Translate AbstractTranslate Competitor lawsuits for false advertising under the Lanham Act are on the rise. The Lanham Act provides a private right of action to a company whenever its competitor disseminates a false or misleading description of products or services. The Lanham Act's prohibition on false or misleading statements was enacted to stop the kind of unfair competition that consists of lying about goods or services. Courts must ensure that implied claims are reliably attributed to the advertising statement. An advertiser cannot be liable for general consumer confusion that is not caused by the advertising or for advertising that is simply "misunderstood." In litigation, a challenger can allege an implied claim without a survey under the necessary implication doctrine, but to do so effectively will require a tight fit between the actual words and images used in the ad copy and the proffered implied claim.

Full Text

Translate Full textTranslate Turn on search term navigationTurn on search term navigation

How does advertising work? The question doesn't have a simple answer. One thing we do know is that advertising may communicate a number of messages in a number of areas simultaneously.1 Competitor lawsuits for false advertising under the Lanham Act are on the rise.2 The stakes in these cases are serious, with advertisers increasingly subject to injunctions and damage awards especially for advertising claims that were never expressly stated. These are known as "implied claims" and they have taken center stage in competitor Lanham Act false advertising cases. The most sweeping injunctions - halting famous multimedia and multimillion dollar ad campaigns involve not what an ad says, but the implication it communicates. At a basic level, an advertiser's job is to communicate with tools far beyond the literal words of the ad copy and create a barrage of feelings, moods, and claims. For example, Budweiser commercials imply to young men that if they drink Budweiser, they will have zany friends, fun times, and the admiration of runway models. This is the advertising outcome even though the written copy of the advertising does not contain words that make these claims expressly. A Lanham Act violation occurs when the implication - even though not made in haec verba3 goes beyond puffing and asserts a material statement about product attributes, capable of measurement as true or false. The makers of Splenda could not overtly claim that Splenda is "more natural" and therefore "less dangerous" compared to Equal, both products are, in fact,

"artificial" sweeteners created by a synthetic chemical process. But Splenda's "Made from Sugar" slogan and visual images of "nature" were used to imply that very claim, and this purpose and effect was revealed to the jury through McNeil's internal marketing department memos and market research.4 When is an advertiser subject to liability for a claim that it never made expressly? When accused of making a false implied claim, advertisers frequently dispute that the ad makes the implied claim; but, when the court finds that an implied claim exists, an advertiser must be prepared to defend its truth. Lanham Act false advertising cases thus require a two-step inquiry: (1) what are the claims (both literal and implied) conveyed by the advertising; and (2) are those claims false.5 This article focuses on the first step of this process, and in particular, describes the legal process courts use to identify implied claims. This article (1) reviews the basic Lanham Act standards; (2) identifies the differences between express and implied claims; (3) discusses how implied claims are proven; (4) provides a summary table of cases where implied claims have been demonstrated; and (5) offers observations about the rules for proving and defending against liability for implied claims in Lanham Act false advertising cases. Lanham Act Basics The Lanham Act provides a private right of action to a company whenever its competitor disseminates a false or misleading description of products or services. The Lanham Act's prohibition on false or misleading statements was enacted "to stop the kind of unfair competition that consists of lying about goods or services."6 The statute provides that any person who uses "in connection with any goods or services . . . any false description or representation, including words or other symbols tending falsely to describe or represent the same . . . shall be liable in a civil action by any person . . . who believes that he is or is likely to be damaged by the use of such false description or representation."7 To prove a violation, a plaintiff must demonstrate that: 1. The defendant made a false or misleading statement; 2. That actually deceives or is likely to deceive a substantial segment of the advertising audience; 3. On a subject material to the decision to purchase the goods; 4. Touting goods entering interstate commerce; and 5. That results in actual or probable injury to the plaintiff.8 The Lanham Act applies broadly to any statement disseminated into interstate commerce, including verbal statements by sales representatives,9 print advertising, radio advertising, broadcast advertising, Web site statements, and point of sale materials.10 Defenses include truth i.e., that it is not "false or misleading" under the Lanham Act);11 lack of standing (only competitors may sue);12 regulatory preemption or primary jurisdiction,13 unclean hands,14 and puffing/immateriality (i. e. , that the statement is a matter of opinion that cannot be measured as true or false, obvious parody, or similar types of fluff claims that are not likely to influence purchasing decisions).15 Implied Claims - Foundations

Justification for Holding Advertisers Liable for Implied Claims, and Limitations The Lanham Act prohibits the use of any "false or misleading" representation of fact,16 and therefore reaches "implied" claims. "A statement is misleading when, although literally true, it implies something that is false."17 "Were it otherwise, clever use of innuendo, indirect intimations, and ambiguous suggestions could shield the advertisement from scrutiny precisely when protection against such sophisticated deception is most needed."18 Courts have long recognized that the indirect claims made by advertising (whether those claims are determined by surveys, context, or other means) cannot escape scrutiny based on literal truth. As Judge Learned Hand said, "[t]here is no surer way to misread any document than to read it literally,"19 and this famous formulation applies in Lanham Act false advertising cases.20 The Lanham Act is more than a "codification of the common law action for deceitful advertising;" instead, it creates a "statutory tort of broader scope, which requires neither proof of literal or obvious falsehood, nor of intent to deceive."21 In evaluating implied falsehood cases, the court must first determine the existence of an implied claim, and then evaluate the implied claim against "reality." In Schering Corp. v. Pfizer, Inc. ,22 then Judge (now Justice) Sotomayor summarized the difference between literal and implied falsehood claims as follows: [P]lain tiffs alleging a literal falsehood are claiming that a statement, on its face, conflicts with reality, a claim that is best supported by comparing the statement itself with the reality it purports to describe. By contrast, plaintiffs alleging an implied falsehood are claiming that a statement, whatever its literal truth, has left an impression on the listener that conflicts with reality. This latter claim invites a comparison of the impression, rather than the statement, with the truth.23 Implied claims often reflect an advertiser's attempt to slightly exaggerate or broaden a claim beyond that which can be substantiated. For example, an advertiser imply "overall" superiority24 based on proof of superiority only on one narrow product attribute. Another type of implied claim involves telling a "half- truth" which is facially truthful, as far as it goes, but leaves out important information and makes the affirmative statement misleading.25 The Lanham Act reaches all of those statements that are "affirmatively misleading, partially incorrect, or untrue as a result of failure to disclose a material fact."26 In literal falsehood cases, litigants battle, often with scientific evidence, over the truthfulness of the claim itself. For example, when Tyson advertised its chicken products as "raised without antibiotics," the parties in the Lanham Act case presented competing scientific evidence regarding whether the "ionophores" Tyson fed its chickens met the scientific definition of an "antibiotic."27 The case also involved an implied claim: survey data demonstrated that consumers interpreted "raised without antibiotics" to convey an implied claim that Tyson chicken was "safer" than competing chicken products.28 Courts must ensure that implied claims are reliably attributed to the advertising statement. An advertiser cannot be liable for general consumer confusion that is not caused by the advertising or for advertising that is simply "misunderstood."29 Plaintiffs in Lanham Act cases must be held to their burden not only to ensure that a statutory violation is supported by reliable proof, but also to avoid encroaching upon constitutionally protected commercial speech. Truthful and non-misleading commercial speech is entitled to First Amendment protection and also "serves to inform the public of the availability, nature, and prices of products and services, and thus

performs an indispensable role in the allocation of resources in a free enterprise system ... in assuring informed and reliable decisionmaking."30 A plaintiff can prove the existence of a "claim" made by an advertisement several ways, including by (1) relying on the "face" of the advertisement (the literal words and images)31; (2) arguing that certain claims are "necessarily implied" from an advisement;32 and (3) presenting extrinsic evidence such as survey results demonstrating an implied claim based on audience interpretation.33 Implied Claims Proven by Surveys A common method for proving an implied claim is to use a survey to "demonstrate, by extrinsic evidence, that the challenged [statements] tend to mislead or confuse consumers."34 The survey allows the plaintiff to prove that the advertising statement "actually conveyed the implied message and thereby deceived a significant portion of the recipients."35 Surveys are admissible as present sense impressions of consumer reaction to advertising36 but only may be accorded weight when designed according to established scientific principles.37 Essentially, the survey must use: (1) a sample of consumers designed to represent the target audience for the product; (2) survey questions that are not unduly suggestive/leading;38 and (3) fair coding and statistical reporting.39 Surveys should typically employ "controls"40 to ensure that the deception allegedly measured can be causally connected to the challenged advertising (as opposed to some other influence).41 Finally, to identify an actionable claim, the survey should measure a "not insubstantial" portion level of deception in the intended audience, which after the control results are subtracted from the test results, should be at least 15 to 20 percent or higher.42 Cases involving implied claims proven by surveys include the Splenda and Listerine cases, discussed below. Claims That Are "Necessarily" Implied (Survey Not Needed) Under the necessary implication doctrine, even if a statement is facially truthful (based on the express words used), a claim may still be false under the necessary implication doctrine if " 'the audience would recognize the claim as readily as if it had been explicitly stated.'"43 A statement may be false "by 'necessary implication,' despite the fact that the false statement was not made 'in haec verba.'"44 For example, the slogan "One pill. 24 hours. Zero heartburn" necessarily conveys a message that Prilosec starts working immediately - but this is false because Prilosec does not begin working until five hours after ingestion.45 The practical effect of the necessary implication doctrine is that it permits a plaintiff to prove falsity (by implication) without extrinsic evidence such as a survey of how the target audience would interpret the claim.46 Surveys are expensive; when a plaintiff can prove express falsity or falsity by necessary implication, they can escape this "onerous task."47 In Castrol Inc. v. Pennzoil Co.,48 for example, the court held it did not need a survey to determine that an advertisement claimed superior motor oil performance,49 asserting that courts "interpret the meaning of an advertisement without reference to consumer evidence" when the implication is both necessary and unambiguous.50 A court may find that a claim is false by necessary implication by its own analysis of the advertising in context and without extrinsic evidence so long as the necessarily implied claim is the "practical, grammatical, [and] syntactical equivalent" of the literal words used.51 The court also typically must find that the implication is "unambiguous;" ambiguity can sometimes defeat a necessary implication claim,52 but not always.53 Many courts treat "necessary implication" as a type of literal falsity (even though it is

clearly an "implication" from the express words used), but facial falsity and necessary implication are alternative arguments that must be evaluated separately.54 The only other instance when a court may find implied falsity without extrinsic evidence of consumer reaction is when there is evidence of a clear intent to deceive.55 Cases involving claims that are false by necessary implication include the Prilosec, Mylanta, and N ico Derm cases, discussed below. Illustrations of Implied Claims Proven by Surveys Listerine - "Just As Effective As Floss" In Mc Neil- P P C, Inc. v. Pfizer, Inc. ,56 the court enjoined a national advertising campaign asserting that " Listerine 's as effective as floss at fighting plaque and gingivitis. Clinical studies prove it."57 Pfizer had clinical data indicating that Listerine was equivalent to dental floss in controlling mild to moderate plaque and gingivitis.58 The literal wording of Pfizer 's advertising was limited to these endp oints, and the ads also "contained cautionary language and disclaimers telling consumers to 'floss daily,' urging them to consult their dentists, and noting that '[t]here's no replacement for flossing.'"59 However, McNeil's survey showed that that approximately 26 to 31 percent60 of consumers interpreted the advertising to convey a far broader "replacement" message, that is, that one "can replace floss with Listerine" and receive all of the same benefits.61 Once the court determined the existence of this implied replacement claim, it was easy to find that this implied claim was false, because floss offers consumers numerous benefits that Listerine does not, such as removal of food particles between teeth, which "rinsing cannot dislodge."62 In evaluating the implied claim, the court made a two-step inquiry: (1) what is the implied message that consumers "take away from the advertisements;" and (2) is that implied claim (ascertained in step 1) true or false. Most of the debate in the case centered on step 1. Pfizer emphasized that the words of the advertising were limited to plaque and gingivitis, rather than claiming overall equivalence, and that the ad expressly included cautionary language including "[t]here's no replacement for flossing."63 The court found that the "few words of disclaimer are lost when the ads are considered as a whole"64 and that the ads also contained visual images both in the print ads and hang tags65 and in the television commercial66 consistent with an overall equivalence claim. The court issued a sweeping injunction that ordered Pfizer to stop all advertising, remove all in-store displays; to remove all Listerine bottle "neck hangers," and to "cover (by sticker) on all Listerine bottles the shoulder label."67 Splenda - "Made from Sugar" In Merisant Co. v. McNeil Nutritionals, LLC,68 plaintiff Merisant (maker of no calorie sweetener Equal) argued that McNeil's slogan for Splenda - "Made from Sugar" - implied that Splenda was "natural" and not "artificial."69 During the jury trial, Merisant argued that McNeil knew it could not advertise Splenda "directly" or "overtly" as "natural" because "that is just blatantly false."70 Instead, McNeil determined that it would be "a little more crafty" and use its "made from sugar" slogan to "send[| the same message to consumers"71 by implication. Merisant proved this theory by using McNeil's internal marketing department records, market research, and advertising agency documents showing that McNeil used the slogan to imply the "natural" "not artificial" message, and that the efforts were successful in shaping consumer belief.72

McNeil defended the implied claim by denying that the claim existed and focused instead on the literal words used, emphasizing that cane sugar is one of the initial Splenda building materials before "it is modified at the atomic level" as part of a chemical process to create Splenda.73 "That is why McNeil says that ... Splenda is made from sugar. It never says it is sugar."74 McNeil asserted that the phrase "made from sugar" is "true," "unambiguous,"75 and therefore "not susceptible" to proof that the slogan is misleading under the Lanham Act.76 Merisant survived summary judgment, argued to the jury that McNeil should not "be able to mislead consumers . . . that a product that is artificial is actually natural,"77 and asked the jury to award $176 million in ill-gotten profits.78 The case settled for an undisclosed payment after the jury requested a calculator and damage expert reports during deliberations, making clear that they would award money damages against McNeil.79 Illustrations of Claims Made by Necessary Implication Prilosec - 24 Hours Relief In Johnson & Johnson-Merck Consumer Pharmaceuticals Company v. Procter & Gamble Company,80 the court enjoined the slogan for Prilosec, "One Pill. 24 Hours. Zero Heartburn." The court concluded that the slogan necessarily implied that Prilosec starts providing heartburn relief immediately; in fact, Prilosec does not begin working until five hours after ingestion. It is literally true that the chemical function of Priloec begins immediately upon ingestion, but this is not the period of relief from heartburn.81 The court found that the slogan was false under the necessary implication doctrine and therefore did not require a survey or other extrinsic evidence of consumer reaction before issuing an injunction.82 The slogan was a "half-truth"83 and falsely overstated, by necessary implication, Pr iso lee's speed to relief. The court stated that "One Pill. 24 Hours. Zero Heartburn" simply does not equal "One Pill. Wait 5 hours. Only then Zero Heartburn for the next 24 hours."84 Nor did the court believe that consumers would understand the slogan to mean "the pill, once effective, provides 24 hour relief."85 "P&G chose its language and now must live with the consequences."86 Nicoderm - Sleep Disturbances In Pharmacia Corporation v. Glaxo SmithKline Consumer Health Care81 the court entered a preliminary injunction halting Nicotrol advertising that necessarily implied a benefit over competing product Nico Derm with regard to the sleep disturbance effects of the products. The parties made competing nicotine patches.88 Pharmacia's Nicotrol ad asserted that "Nicotrol was designed to let you sleep."89 The ad also mentioned Glaxo 's competing product, NicoDerm, and disparaged it by stating: "Trying to beat cigarettes? Having trouble sleeping? You're probably using NicoDerm. Just read their label," and a visual then highlights the phrase "sleep disturbances" in the NicoDerm label.90 The court held that even though the ad did not contain an express claim of comparative superiority ("it is true that [the ad] does not expressly state 'Nictotrol is better than NicoDerm when it comes to sleep disturbances'"),91 the ad necessarily implies this claim: [T]here is only one message consumers can take away from the statement 'Nicotrol was designed to let you sleep:' the unambiguous, necessarily implied claim that Nicotrol helps you sleep better than NicoDerm.92

The court went on to find the necessarily-implied claim was false because Pharmacia lacked head-to-head clinical data proving clinical superiority of Nicotrol over NicoDerm with regard to avoiding sleep disturbances.93 The court granted Glaxo 's motion for preliminary injunction. Mylanta Nighttime In Novartis Consumer Health, Inc. v. Johnson & JohnsonMerck Consumer Pharmaceuticals Company?4 the Third Circuit affirmed entry of a preliminary injunction stopping a national advertising claim - and the use of the product name itself - for the over-the-counter heartburn medication "Mylanta Night Time Strength."95 The court found that the product name "Night Time Strength" "necessarily conveys a message that the MNTS product is specially made to work at night."96 All agreed that Mylanta Night Time Strength had a strong formulation - it had "more active ingrethents per teaspoon than other antacids."97 However, while phrases, such as "extra strength" or "maximum strength" could have been used to tout this quality, "nighttime strength" connoted something different - "a time when the product would be effective."98 Nighttime heartburn is a specific consumer need: Heartburn "occurs more frequently at night because acid more easily refluxes into the esophagus when a person is lying down and because, during sleep, the body naturally secretes acid that raises the stomach pH levels."99 After finding that the "Night Time" name necessarily implied that the product was specially formulated for nighttime use, the court found that the claim was false because Johnson & Johnson could not substantiate that the product was specially designed to work at night. Summary Chart Exhibit 1 contains examples of cases and illustrates the survey and necessary implication paths toward proving the existence of an implied claim. As the chart demonstrates, implied claims and "necessary implication" claims are similar in that both approaches can identify an actionable implication that communicates something different from the literal words of the advertising copy. The difference is in how closely tied the implication is to the actual words such that a court can determine the implication without a survey. Conclusion As implied claims continue to dominate Lanham Act false advertising cases, both advertisers and advertising litigators should have in mind the lessons learned from recent Lanham Act false advertising decisions. From a planning perspective, advertisers should be aware of the implied claims that they are making and also know what implied claims are suggested to exist in their internal market research files. If internal documents discuss implied claims (as they did in the Splenda and Tyson cases), these documents could be discovered and used in litigation to show not only the existence of the implied claims, but also the advertiser's awareness and potential "intent to deceive" which can be used to establish liability without a survey. In addition, if advertisers find themselves adding disclaimers to counteract implied claims, such as the disclaimer in the Listerine case that "[t]here's no replacement for flossing," this could be a red flag that the implied claim exists and that the effectiveness of the disclaimer will be at issue. In litigation, a challenger can allege an implied claim without a survey under the necessary implication doctrine, but to do so effectively will require a tight fit between the actual words and images used in the ad copy and the proffered implied claim. The court will evaluate the " 'practical, grammatical, [and] syntactical' " relationship between the actual statement and the proffered implied claim, and determine whether the implication is unambiguous. If this is not

possible, then the challenger will need a rigorously- designed survey to gauge the interpretation of the ad by a statistically significant sample of the target audience. In defending advertising litigation, lawyers should be prepared to fight both "steps" of the false advertising analysis: (1) disprove the existence of the alleged implied claim; and (2) develop scientific evidence to substantiate the implied claim in case the implication is found to exist. Defenders should evaluate the challenger's survey to look for indicators (e.g., leading questions, absence of effective controls, response inconsistency between openand close-ended questions) suggesting that the survey fails to reliably tie the alleged implied claim to the advertising itself (as opposed to some extraneous influence). Ultimately, the defender should remind the court that the advertiser has a constitutional right to tout its product's attributes, and this is an additional reason that the challenger must be held to its burden of proving alleged implied claims. Analyzing implied claims in Lanham Act false advertising cases is becoming increasingly sophisticated, and litigants and their experts should spend the time and resources necessary to tackle these tasks effectively, particularly considering that these cases are fast paced, with increasingly high stakes, that these cases. References 1. William Wells, John Burnett & Sandra Moriarty, Advertising: Principles & Practice 151 (Prentice Hall) (5th ed. 2000). 2. "Best Soup Ever? Suits Over Ads Demand Proof," Stephanie Clifford, NY Times, Nov. 22, 2009. 3. Latin for "in these words" (Black's Law Diet. 8th ed.); see Castrol, Inc. v. Pennzoil Co., 987 F.2d 939, 946 (2d Cir. 1993) ("I appreciate that the ad does not make that statement in haecverba. That is not necessary.") (quotations omitted). 4. Jury trial transcript, day 2, Merisant Co. v. McNeil Nutriti onals, LLC April 11, 2007 (Trial Transcript) at 48. 5. Johnson & Johnson* Merck Consumer Pharms. Co. v. Smith kline Beecham Corp., 960 F.2d 294, 298 (2d Cir. 1992). 6. Castrol, Inc. v. Pennzoil Co., 987 F.2d 939, 941 (3d Cir. 1993) (quoting U-Haul Int'l v. Jartran Inc., 681 F.2d 1159, 1162 (9th Cir. 1982)). 7. 15 U.S.C. 1125(a). 8. LG Electronics U.S.A., Inc. v. Whirlpool Corporation, 661 F Supp. 2d 940, 947-948 (ND. 111. 2009). 9. Schering Corp. v. Pfizer, Inc., 189 F3d 218 (2d Cir. 1999). 10. See, eg, Dyson, Inc. v. Oreck Corp., 647 F Supp. 2d 631, 633 (E.D. La. 2009) (suit regarding vacuum cleaner "infornerei als, in-store displays, demonstrations, and newspaper advertisements"); Sanderson Farms, Inc. v. Tyson Foods, Inc., 549 F Supp. 2d 708, 710 (D. Md. 2008) (suit regarding chicken "television commercials, radio spots, print ads, billboards, posters and other media"); McNeil-PPC, Inc. v. Pfizer Inc., 351 FSupp.2d 226, 231 (S.D.N.Y 2005)

(suit regarding Listerine television commercial, print ads and "hang tags" on the Listerine bottles). 11. 15 U.S.C. 1 1 25(a)(1). The defense of truth is examined only after the claim is identified, see Johnson & Johnson* Merck Consumer Pharmaceuticals Co. v. Smithkline Beecham Corp., 960 F2d 294, 298 (2d Cir. 1992) ("[generally, before a court can determine the truth or falsity of an advertisement's message, it must first determine what message was actually conveyed to the viewing audience."). 12. Foster v. Wintergreen Real Estate Co., 201 0 WL 325959, at *5 (4th Cir. 201 0) (citing Made in the USA Found, v. Phillips Foods, Inc., 365 F3d 278, 281 (4th Cir. 2004)) (repeating rule that consumer organizations lacked standing and collecting cases). 13. Cytyc Corp. v. Neuromedicai Systems, Inc., 12 F Supp. 2d 296, 301 (S.D.N.Y. 1 998) (FDA approval of claim for drug label defense in Lanham Act challenge to the same claim); but compare Sanderson Farms, Inc. v. Tyson Foods, Inc., 549 FSupp.2d 708 (D. Md. 2008) (USDA approval of "raised without antibiotics" claim for poultry products does not provide immunity from Lanham Act challenge to same claim). 14. Stokely-Van Camp, Inc. v. Coca-Cola Co., 646 F. Supp. 2d 510, 532-34 (S.D.N.Y. 2009) (ruling that the plaintiff, maker of Gatorade, is barred by the doctrine of unclean hands from enjoining its competitor from touting the benefits of "calcium and magnesium" in sports drinks when it previously used a similar claim in the market). 15. See, e.g.. Proctor & Gamble Co. v. Kimberly-Clark Corp., 569 F. Supp. 2d 796, 798 (E.D. Wis. 2008) (considering the so-called brick baby advertising campaign in which KimberlyClark claimed that its diapers were designed for "babies of the human variety" while suggesting that the competing diaper varieties were designed to fit "bricks;" the court found that the advertising was inactionable puffery); American Italian Pasta Co. v. New World Pasta Co., 371 F3d 387 (8th Cir. 2004); Pizza Hut, Inc. v. Papa John's Infi, Inc., 227 F.3d 89, 496 (5th Cir. 2000) (the advertising slogan "Better Ingrethents. Better Pizza," standing alone, was inactionable puffery). Statements that are "exaggerated advertising, blustering and boasting upon which no reasonable buyer would rely" are not actionable.Southland Sod Farms v. Stover Seed Co., 108 F3d 1134, 1145 (9th Cir. 1997) cing 3 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition 27.04[4][d] at 27-52 (3d ed. 1994)). 16. 15 U.S.C. 1125(a). 17. Mead Johnson & Co. v. Abbott Laboratories, 209 F3d 1032, 1034 (7th Cir. 2000). 18. American Home Products Corp. v. Johnson & Johnson, 577 F2d 160, 165 (2d Cir. 1978). 19. Giuseppi v. Walling, 144 F2d 608, 624 (2d Cir. 1944) (Hand, J, concurring), affd, 324 U.S. 244 (1945). 19. Giuseppi v. Walling, 144 F2d 608, 624 (2d Cir. 1944) (Hand, J, concurring), affd, 324 U.S. 244 (1945). 20. Avis Rent A Car System, Inc. v. Hertz Corp., 782 F2d 381 (2d Cir. 1986).

21. Procter & Gamble Co. v. Chesebrough-Pond's, Inc., 747 F 2d 114, 119 (2d Cir. 1984). 22. Schering Corp. v. Pfizer, Inc., 189 F3d 218 (2d Cir. 1999). 23. Id. at 229. 24. AstraZeneca LP v. Tap Pharmaceutical Products, Inc., 444 F Supp 2d 278 (D. Del. 2006) (advertisers claim of "better" interpreted as a global claim of superiority beyond the narrow product benefit proven); McNeil-PPC, Inc. v. Pfizer Ine, 351 F Supp. 2d 226 (S.D.N.Y 2005) (overall equivalence message beyond the narrow product benefit proven). 25. See, eg, Johnson & Johnson -Merck Consumer Pharms. Co. v. Procter & Gamble Co., 285 F Supp. 2d 389, 392 (S.D.N.Y. 2003) (holding that the slogan "One Pill. 24 Hours. Zero Heartburn" was a "half-truth" because the 24-hour period of relief started five hours after ingestion). 26. U.S. Healthcare, Inc. v. Blue Cross of Greater Philadelphia, 898 F2d 914, 921 (3d Cir. 1990). 27. Sanderson Farms, Inc. v. Tyson Foods, Inc., 547 F Supp. 2d 491 , 504 (D. Md. 2008) (finding that the claim "Raised Without Antibiotics" is literally false because Tyson feeds its chickens "ionophores," which, despite Tysons arguments to the contrary, are considered to be a type of "antibiotic" as a matter of science). 28. Tyson's internal market research showed that an implied "safety" claim was communicated, id. at 496, and the plaintiff's survey demonstrated the same thing, id. at 499. 29. In Mead Johnson & Co. v. Abbott Laboratories, 209 F3d 1032, amended on denial of reh'g, 201 F 3d 883 (7th Cir. 2000), the court considered the slogan "1st Choice of Doctors" for infant formula and a survey showing that 80 percent of consumers interpreted "1st" to mean "at least a majority" of doctors preferred the product at issue. Actually only a plurality of doctors expressed the preference. The court reversed the preliminary injunction, and held that as a matter of language and logic, "1 st" can mean a plurality. The survey did not reveal an implied claim, it only showed consumers who misunderstood objectively-defined words: Surveys cannot be "used to determine the meaning of words, or to set the standard to which objectively verifiable claims must be held." 30. Bates v. State Bar of Arizona, 433 U.S. 350, 364 (1977) (citations omitted); Central Hudson Gas & Electric Corp. v. Public Service Commission of New York, 447 U.S. 557, 561-562 (1980) ("[c]ommercial expression not only serves the economic interest of the speaker but also assists consumers and furthers societal interest in the fullest possible dissemination of information."). 31. See, eg, S.C. Johnson & Son, Inc. v. Clorox Co., 241 F3d 232, 240 (2d Cir. 2001) (affirming injunction regarding a literally false commercial for plastic bags that depicts rate of water leakage when the bag is held upside down; the "advertisement depicts a litera] falsity that requires no proof by extrinsic evidence").

32. See, eg, Johnson & Johnson -Merck Consumer Pharms. Co. v. Procter & Gamble Co., 285 F Supp. 2d 389 (S.D.N.Y 2003) ("24 hour" relief for heartburn medicine Prilosec necessarily implies that the drug starts working upon ingestion, not five hours later). 33. See, eg, McNeil-PPC Inc. v. Pfizer Ine, 351 F Supp. 2d 226 (S.D.N.Y. 2005) (survey respondents perceived an implied "replacement" message from ad touting clinical equivalence between Listerine and dental floss). 34. Proctor & Gamble Co. v. Ultreo, Inc., 574 F Supp. 2d 339, 345 (S.D.N.Y 2008). "The success of plaintiff's implied falsity claim usually turns on the persuasiveness of a consumer survey."Johnson & Johnson Merck Consumer Pharmaceuticals Co. v. SmithKline Beecham Corp., 960 F 2d 294, 297-298 (2d Cir. 1992). 35. William H. Morris Co. v. Group W, Inc., 66 F3d 255, 258 (9th Cir. 1995). 36. Schering Corp. v. Pfizer Inc., 189 F3d 218, 225 (2d Cir. 1999). 37. Shari Seidman Diamond, Reference Guide on Survey Research, in Federal Judicial Center, Reference Manual On Scientific Evidence 229 (2d ed. 2000). 38. CKE Rest. v. Jack In the Box, Inc., 494 F Supp. 2d 1139, 1144-1145 (CD. CaI. 2007); AstraZeneca v. Tap Pharmaceutical Products, Inc., 2006 WL 2338144 (D. Del. June 23, 2006) (excluding survey where leading closedended questions contributed to the higher rate of the "false" implied claim; in other words, the leading questions "caused" some of the responses coded as "deception."). 39. See abo Starter Corp. v. Converse, Inc., 170 F3d 286, 297 (2d Cir. 1999); Scott Fetzer Co. v. House of Vacuums, Inc., 381 F3d 477, 488 (5th Cir. 2004). 40. See 5 McCarthy on Trademarks 32:187 n. 3 (collecting authority); Johnson & Johnson* Merck Consumer Pharms. Co. v. SmithKhne Beecham Corp., 960 F2d 294, 297 (2d Cir. 1992). 41. "Controls are an essential feature of reliable survey evidence because they enable the surveyor to separate the wheat (the effect of the advertisement, alone, on the participant) from the chaff (the effect of the participant's prior knowledge and/or prior (mis) conceptions)." Pharmacia Corp. v. GlaxoSmithKline Consumer Healthcare, L.P., 292 F Supp. 2d 594, 601 (D. NJ. 2003) (citations omitted). 42. Sanderson Farms, Inc. v. Tyson Foods, Inc., 547 F Supp. 2d 491, 504 and n.ll (D. Md. 2008) (collecting cases); compare McNeil-PPC Inc. v. Pfizer Ine, 351 F Supp. 2d 226, 249 (S.D.N.Y 2005) (deception rates of 20 percent or more would suffice) (citation omitted). 43. Time Warner Cable, Inc. v. DIRECTV, Inc., 497 F3d 144, 158 (2d Cir. 2007). 44. Castrai Inc. v. Pennzoil Co., 799 F Supp. 424, 437 (D.N.J. 1992) (citations omitted), affd, 987 F2d 939 (3d Cir. 1993). 45. Johnson & Johnson-Merck Consumers Pharms. Co. v. Proctor & Gamble Co., 285 F Supp. 2d 389, 391-392 (S.D.N.Y. 2003), affd, 90 Fed. Appx. 8 (2d Cir. 2003).

46. "[Qonsumer survey evidence is not required when the allegedly false claim is a 'necessary implication' of the explicit language in the advertisement." SmithKhne Beecham Consumer Healthcare, L.P. v. Johnson & JohnsonMerck Consumer Pharmaceuticals Co., 2001 WL 588846, at *8 (S.D.N.Y. June 01, 2001) (citing Gillette Co. v. Wilkinson Sword, Inc., 1989 W.L. 82453 (S.D.N.Y. 1989)). 47. Cashmere & Camel Mfrs. Inst. v. Saks Fifth Ave., 284 F 3d 302, 314 (1st Cir. 2002) ("When a plaintiff demonstrates that a defendant has made a material misrepresentation that is literally false, there is no need to burden the plaintiff with the onerous task of demonstrating how consumers perceive the advertising"). 48. Castrai Inc. v. Pennzoil Co., 987 F2d 939, 946-947 (3d Cir. 1993). 49. The court determined the unambiguous and necessary implication of Pennzoil's statement that oil viscosity breakdown leads to engine problems, coupled with Pennzoil's claim that its oil is superior regarding viscosity breakdown, necessarily implies that Pennzoil's oil is superior in preventing engine problems compared to Castrol's product, even though this latter claim was not made expressly. Id. at 946-947. 50. Id. at 947. 51 . Cuisinarts, Inc. v. Robot-Coupe Int'l Corp., 1982 WL 1 21 559, at *2 (S.D.N.Y. June 19, 1982). 52. A '1iterally-false-by-necessary-implication claim must fail if the statement can reasonably be understood as conveying different messages." Zoller Labs., LLC v. NBTY, Inc., Ill Fed.Appx. 978, 983-84 (10th Cir. 2004) (collecting cases). 53. Clorox Co. PR. v. Procter & Gamble Commercial Co., 228 F 3d 24, 35-36 (1st Cir. 2000) ("Although this change may render the comparative claim of the advertisements more ambiguous, we nonetheless conclude that it remains reasonable to interpret these advertisements as making by necessary implication a superiority claim for Ace over chlorine bleach."). 54. See, eg, S.C. Johnson & Son, Inc. v. Clorox Co., 241 F3d 232, 240 (2d Cir. 2001) ("Because we affirm the injunction on the basis of literal falsity, we need not reach the issue of whether the district court erred in concluding as an alternative ground that Clorox's Goldfish II television commercial and print advertisement are false "by necessary implication" because consumers would necessarily believe that more viscous liquids than water would also leak rapidly from Ziploc Slide- Loc storage bags.") (emphasis added). 55. A "plaintiff need not rely on consumer survey evidence to prove an implied falsity claim if the plaintiff 'adequately demonstrates that a defendant has intentionally set out to deceive the public,' and the defendant's 'deliberate conduct' in this regard is of an 'egregious nature.' ... In these circumstances, "a presumption arises 'that consumers are, in fact, being deceived.'" Procter & Gamble Co. v. Ultreo, Inc., 574 F Supp. 2d 339, 346 (S.D.N.Y. 2008) (citing Resource Developers, Inc. v. Statue of Liberty- Ellis Island Found., Inc., 926 F2d 134, 140 (2d Cir. 1991)). 56. McNeil-PPC Inc. v. Pfizer, Inc., 351 F. Supp. 2d 226 (S.D.N.Y. 2005).

57. Id. at 231. 58. Id. at 235. 59. Id. at 254. 60. 31 percent of those who saw the television commercial and 26 percent of those who viewed the shoulder label. Id. at 244. 61. Id. at 252-53. 62. Id. at 255. 63. Id. at 252, 254. 64. Id. at 254. 65. "Print ads and hang tags featured an image of a Listerine bottle balanced on a scale against a white container of dental floss. " Id. at 231. 66. The television commercial showed "a narrow stream of blue liquid flowing out of a Cool Mint Listerine bottle, then tracking a piece of dental floss being pulled from a white floss container, and then swirling around and between teeth-bringing to mind an image of liquid floss." Id. 67. Case 1 :04-cv-07684-DC Document 16 Filed 01/10/2005. 68. Me iis ant Co. v. McNeil Nutritionals, LLC, 515 F. Supp. 2d 509 (E.D. Pa. 2007). 69. Id. at 523 (denying McNeil's motion for summary judgment). 70. Jury trial transcript, day 2, Merisant Co. v. McNeil Nutritionals, LLC, April 11, 2007 ("Trial Transcript"), at 50. 71. Id. 72. Id. at 48. 73. Id. at 78. 74. Id. at 79; see abo 84 ("McNeil never said in an advertisement or anywhere else that Splenda is real natural sugar) (emphasis added). 75. Merisant Co. at 525. 76. Id. at 525-526. 77. Trial Transcript, day 2, at 72. 78. Merisant Co. at 529.

79. Lynnley Browning, "Artificial Sweetener Makers Reach Settlement on Slogan," NY. Times, May 12, 2007, at C-3; James P. Miller, "Bitter Sweets Fight Ended," Chic. Trib., May 12, 2007, at 1. 80. Johnson & Johnson-Merck Consumer Pharmaceuticals Company v. Procter & Gamble Co., 285 F. Supp. 2d 389 (S.D.N.Y 2003). 81. Id. at 391. 82. Id. at 392. 83. Id. 84. Id. at 391. 85. Id. 86. Id. at 393. 87. Pharmacia Corp. v. GlaxoSmithKline Consumer Health Care, 292 F. Supp. 2d 611 (D NJ. 2003). 88. Id. at 615. 89. Id. at 615. 90. Id. 91. Id. at 618. 92. Id. 93. Id. at 619-620. 94. Novartis Consumer Health, Inc. v. Johnson & Johnson-Merck Consumer Pharmaceuticals Co., 290 F3d 578 (3d Cir. 2002). 95. Mat 585. 96. Id. at 589. 97. Id. at 584. 98. Id. at 589. 99. Id. at 583. AuthorAffiliation

Randall Miller is a partner at Arnold ? Porter, LLP. Mr. Miller represents both plaintiffs and defendants in Lanham Act false advertising cases. Please email Randall. Miller@aporter.com with questions. Copyright Aspen Publishers, Inc. Sep/Oct 2010