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. e du/thir dc ir c uit_2000/24Filed February 8, 2000

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 98-6502

WARNER-LAMBERT COMPANY,

Appellant,

v.

BREATHASURE, INC.,

ON APPEAL FROM THE

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW JERSEY
Civil No.: 98-cv-01940 District Court Judge: Honorable John W. Bissell

Argued: May 21, 1999

Before: McKEE, RENDELL, Circuit Judges and GARTH, Senior Circuit Judge

(Filed: February 8, 2000)

Thomas C. Morrison, Esq. (Argued) Eugene M. Gelernter, Esq. Kathleen H. Dooley, Esq. Shanley & Fisher, P.C. Patterson, Belknap, Webb & Tyler, LLP
1133 Avenue of the Americas New York, NY 10036

Attorneys for Appellant

Joel M. Wolosky, Esq. (Argued) Sharon H. Stern, Esq. Parker, Chapin, Flattau & Klimpl, LLP
1211 Avenue of the Americas New York, NY 10036

Mark I. Peroff

Trademark and Patent Counselors of America, P.C. 915 Broadway New York, NY 10010Attorneys for Appellee

OPINION OF THE COURT

McKEE, Circuit Judge.

Warner-Lambert Company sued BreathAsure, Inc. under S 43(a) of the Lanham Act based upon Warner-Lambert 's belief that the trade names, "BreathAsure" and "BreathAsure-D," for certain of defendant's breath fresheners constituted a false and misleading claim that gave BreathAsure an unfair advantage in the sale of those products, and injured Warner-Lambert in the sale of its breath freshening products. On the third day of the ensuing trial, BreathAsure stipulated that scientific evide nce established that its "BreathAsure" products were no t effective against bad breath. As a result, the Dist rict Court permanently enjoined BreathAsure from continuing to advertise that those products were effective. Howev er, the court refused to enjoin use of the trade names

"BreathAsure" or "BreathAsure-D" because the court

concluded that Warner-Lambert had not demonstrated that it was likely to be harmed by the continued use of those product names. This appeal followed.1 For the reaso ns that follow, we will reverse.

___________________________________________________ ______________

1. "We review the District Court's conclusions of l aw in a plenary fashion, its findings of fact under a clearly erron eous standard, and its decision to grant or deny an injunction for abuse o f discretion." American Telephone & Telegraph Co. v. Winback and Conserve P rogram, Inc., 42 F.3d 1421, 1427 (3d Cir. 1994), cert. denied, 514 U .S. 1103 (1995) (quoting Johnson & Johnson-Merck Consumer Pharmaceu ticals, Inc. v. Rhone-Polenc Rorer Pharmaceuticals, Inc., 19 F.3d 1 25, 127 (3d Cir. 1994)).

2

I.

Warner-Lambert is a leading manufacturer of several well-known breath freshening products, including Ce rts, Clorets, Listerine, and Dentyne. Those products are in the form of gum, mints, and mouthwash. BreathAsure, Inc

. also markets several breath freshening products, in cluding BreathAsure and BreathAsure-D, which are the subjec ts of this dispute. BreathAsure's breath freshening produ cts are capsules that are swallowed. For several years prio r to this lawsuit, BreathAsure, heavily promoted its BreathAs ure products as being effective against bad breath. The theme of much of the advertising was that the capsules wo rked effectively at the source of bad breath and were, t herefore,superior to products that simply masked or covered bad

breath such as gum, mints and mouthwash. One such a d contained a series of photographs depicting food, a couple appearing to share a tender moment, and a package o f BreathAsure. The following captions appear beneath those images: "if you eat and we all do," "and you want t o get close," "you need BreathAsure the internal breath freshener," "BreathAsure for the confidence of clea n fresh breath." The label on the package of BreathAsure in this ad read: "The internal Breath Freshener All-Natural", and a banner across the front of the packaging proclaimed :"lasts & lasts & lasts." Much of defendant's advertising t ells the reader to "stop masking bad breath" with products t hat "just cover-up bad breath." Another of defendant's advertisements contained an image of a woman with t he bottom of her sweater pulled up over her navel and the legend: "Fight the problem at its source" with a do tted arrow pointing to the woman's stomach. Plaintiff's Exhibit

101J.

The National Advertising Division of the Better Bus iness Bureau investigated defendant's advertising and con cluded
that defendant's claim that BreathAsure and BreathA sureD were effective breath fresheners was not supporte d by any reliable scientific evidence. Accordingly, it
recommended that defendant discontinue or substanti ally modify its ads for its breath fresheners.2 App. 13 3, A.138- 39, A.185, A.189.

___________________________________________________ ______________

2. Warner-Lambert now represents without contradict ion that the scientist whose studies defendant relied upon in op posing the National

3

Based upon the unsupported claims made in advertisi ng that BreathAsure and BreathAsure-D were effective b reath fresheners, Warner-Lambert filed the instant compla int under S 43(a) of the Lanham Act, 15 U.S.C.S 1125(a)
, seeking to permanently enjoin BreathAsure from advertising that its BreathAsure products are effec tive breath fresheners. Warner-Lambert also sought a permanent injunction against use of the name "BreathAsure" based upon its contention that the na me itself communicates a false and misleading message. Warner-Lambert did not seek monetary damages. Despi te BreathAsure's claims that its capsules are superior to products that merely mask bad breath, evidence prod uced during the instant litigation established that bad breath originates in the mouth, not in the stomach. Theref ore, Warner-Lambert maintains that effective breath fres hening products must either mask offensive oral odors, or attack
bacteria in the mouth. A.180.On the third day of the bench trial on Warner-Lambe rt's

complaint, BreathAsure stipulated that "[s]cientifi c studies presented in this case demonstrate that BreathAsure and BreathAsure-D are not effective in reducing bad bre ath . . . ." BreathAsure also consented to an injunctio n prohibiting it from advertising that its capsules w ere effective breath fresheners. However, BreathAsure continued to resist any injunction against the use of the trade names "BreathAsure" and "BreathAsure-D," and
insisted that those names did not violate the Lanha m Act.

At the completion of the bench trial, the District Court issued an oral opinion in which it held that the tr ade names misrepresented the products' qualities. The c ourt
stated:

The Court determines that the name Breath A sure, particularly given its contemplated future u se for defendant's products, is indeed deceptive an d a

___________________________________________________ ______________

Advertising Division's recommendation that the adve rtising be modified
or discontinued has since disavowed his own studies insofar as they supported defendant's claim that an ingestible caps ule could combat offensive breath odor. See Br. for Appellant at 9.

4

misrepresentation of the products' qualities . It implies
assurance where there is no basis for it. It relates to breath; and, together with a residuum of pas t ads, although discontinued, will inform the marke t and prospective consumers that it is designed to enhance breath quality and limit offensive odors. Wh ile discontinuance of the ads that are the subje ct of the consent injunction here is and will be signi ficant, particularly in terms of any likelihood of f uture injury to the plaintiff, that residual impact will be enough to generate product recognition, particularly w hen the
name Breath Asure continues to be used.

Said somewhat otherwise, I do not accept th e testimony of [defendant's main witness] that in all likelihood the future use of Breath Asure, a lone or in connection with otherwise benign description s, could itself lead to a multiple number of conclusi ons as to what the product is . . . . Breath Asure's c ampaign over the last six years has been successful in pr oducing sufficient recognition for the term Breath A sure that its continued use in the market will present to the public once again a product with assurance of breat h quality. Accordingly, Breath Asure is deceptive, advi sing theconsumer that there is a sound basis for ass urance

that this product will freshen or destroy od ors in ones breath when there is inadequate support for such a claim. That element of the claim remaining i n this case by the plaintiff has been established.

A.13-14.

The court also found that "[t]he [Warner-Lambert an d BreathAsure] products are in competition in a gener al sense in the breath freshener market." App. at A-25

. However, despite finding that defendant's claims fo r its products were misleading, the court refused to enjo in the
use of the two trade names. The court based its ref usal upon two cases decided by the Court of Appeals for the
Second Circuit: Johnson & Johnson v. Carter-Wallace , 631 F.2d 186 (2d Cir. 1994), and Ortho Pharmaceutical Corporation v. Cosprophar, Inc., 32 F.3d 690 (2d Ci r. 1994). The court refused to presume injury to Warner-Lambe rt based upon defendant's deceptive product name and i ts

5

finding that Warner-Lambert and BreathAsure were in "competition in a general sense." Instead, the cour t
concluded that Warner-Lambert had not met its burde n of establishing the likelihood of future injury from c ontinued use of the product name. The court reasoned that

BreathAsure and BreathAsure-D

are in competition [with Warner-Lambert's pr oducts] in a general sense in the breath freshener mark et. But BreathAsure, in this Court's view and as est ablished in this record, I determine is essentially a ni che production in light of the manner in which i t's consumed and the problems which it is suppos ed to address. It's in a niche essentially where t he plaintiff's products don't go both physically and otherw ise.

This continues to support the Court's deter mination that the greater likelihood of the side by s ide marketing of BreathAsure and the plaintiff's products is that consumers will, as they have in the past, ad d BreathAsure as a compliment to the plaintiff 's products, not a substitute, thereby lessenin g any injury to the plaintiff.

A.25-6.

The court relied upon the following in reaching its findings: (i) sales trends for the BreathAsure prod ucts had decreased in recent years; (ii) Warner-Lambert's sa les of Listerine, Certs, and Dentyne had increased; (iii) Warner-Lambert had not called any consumer witnesses to te stify

that they had switched from using Warner-Lambert's breath-freshening products to BreathAsure's product s; (iv) Warner-Lambert had not presented consumer surveys indicating the future impact of BreathAsure product s on Warner-Lambert's sales; and (v) inasmuch as BreathA sure's products were "niche products" that were not used i n the same manner as Warner-Lambert's products, there was no basis to conclude that consumers were likely to swi tch products rather than simply use "BreathAsure" to supplement Warner-Lambert's products.

On appeal, Warner-Lambert contends that the Distric t Court was clearly erroneous in its findings, and th at it

6

erred in not satisfying the necessary burden to enj oin use

of those trade names.

II.

Our analysis must necessarily begin with Section 43(a)(1)(B) of the Lanham Act which provides in rel evant part:

(a)(1) Any person who, on or in connection w ith any goods or services . . . uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any . . . false or misleading description of fact, or false or misleading representation of fact, which --

. . . (B) in commercial advertising or promo tion, misrepresents the nature, characteristics, qualities, or geographic origin of his or he r . . . goods, services, or commercial activit ies,

shall be liable in a civil action by any per son who believes that he or she is or is likely to b e damaged by

such act.

15 U.S.C. S 1125(a)(1)(B). To establish a Lanham Ac t claim based on a false or misleading representation of a product the plaintiff must show:

1) that the defendant has made false or misl eading statements as to his own product [or another 's];

2) that there is actual deception or at leas t a te ndency to deceive a substantial portion of the inte nded audience;3) that the deception is material in that it is li kely to

influence purchasing decisions;

4) that the advertised goods traveled in int erstat e commerce; and

5) that there is a likelihood of injury to t he pla intiff in terms of declining sales, loss of good will, etc.

Johnson & Johnson-Merck Consumer Pharmaceuticals Co . v. Rhone-Poulenc Rorer Pharmaceuticals, Inc., 19 F.3d 125,

7

129 (3d Cir. 1994)(quoting U.S. Healthcare, Inc. v. Blue Cross of Greater Philadelphia, 898 F.2d 914, 922-23 (3d Cir. 1990)). However, "[i]f a plaintiff proves a ch allenged claim is literally false, a court may grant relief without considering whether the buying public was misled." Johnson & Johnson-Merck, 19 F.3d at 129. See also C astrol, Inc. v. Pennzoil Co., 987 F.2d 939, 943 (3d Cir. 19 92).

In Parkway Baking Co. v. Freihofer Baking, Co., 255 F.2d 641, 649 (3d Cir. 1958) we held that a plaintiff se eking damages under S 43(a) must establish customer relia nce but need not quantify loss of sales as that goes to the measure of damages, not plaintiff's cause of action . 255 F.2d at 648. Significantly for our purposes here, w e also

stated:

[i]n cases of injunction, however, there see ms to be no requirement that purchasers actually be dece ived, but only that the false advertisements have a te ndency to
deceive. This seems to be the result desired by Congress in that Section 43(a) confers a rig ht of action upon any person who `believes that he is or is likely to be damaged' by defendant's practices. While it would be going too far to read the requirement of customer reliance out of this section so far as damag es are concerned, we believe that this is a recogni tion that, as with most equitable relief by way of injunct ion, Section 43(a) may be asserted upon a showing of like lihood of damage without awaiting the actuality.

Parkway Baking Co., 255 F.2d at 649 (emphasis added ).

Here, Warner-Lambert first argued that the District Court applied the wrong standard of proof in determining if it had established the necessary "likelihood of injury." W arnerLambert argues that, having found that the "BreathA sure" product name was deceptive and that the parties' pr oducts compete, the District Court necessarily should have
concluded that Warner-Lambert had a reasonable basi s tobelieve that it was likely to be injured if the def endant

continued referring to its products as "BreathAsure ." The District Court refused to infer a likelihood of inj ury, and instead required the plaintiff to present "some per suasive evidence" of likely damage.

8

The District Court compared the proof presented by Warner-Lambert here with the proof presented by the plaintiffs in Ortho and Carter-Wallace and conclude d that Warner-Lambert's failure to produce evidence of dec lining market share, consumer surveys or evidence of consu mers using defendant's products instead of Warner-Lamber t's,
was fatal to Warner-Lambert's claim insofar as Warn erLambert sought to enjoin defendant's use of its tra de
names. See A.22-24. The court stated:

[l]et us take a look at some of the methods of proof employed in Johnson & Johnson.3 Now, surely they're
not exclusive and the mere failure of all or some of them to be present in the case at bar is not itself fatal. But they are indicative at least of the type of evidence upon which this claim might be sustained tha t are
absent here.

A.22. The court then referred to the consumer surve ys, and consumer testimony that was introduced in Johnson & Johnson v. Carter-Wallace. The court concluded,"[t] here is no probative, certainly not adequate probative, evi dence of consumer surveys once again to indicate a likely da mage or impact upon either the sales or market shares of th e plaintiff's products by the continuation of the def endant's product merely aided by the trade name Breath Asure ."
A.24.

Similarly, the court referred to Ortho as follows:

The Ortho case also emphasized such things a s the absence of market studies and direct competi tive advertising, and the conclusion that people would not necessarily switch as opposed to merely supp lementing their repertoire of products. So those simil arities between the deficient proofs in Ortho and th e deficiencies of the present proofs exist.

___________________________________________________ ______________

3. The District Court referred to Johnson & Johnson v. Carter-Wallace, 631 F.2d 186 (2d Cir. 1980) as "Johnson & Johnson," and "J&J." However, we refer to it here as "Johnson & Johnson v. Carter-Wallace" or "Carter-Wallace" so as to distinguish it from our h olding in Johnson &
Johnson-Merck v. Rhone-Poulenc Rorer Pharmaceutical s, 19 F.3d 1125 (3d Cir. 1994).9

A.24-5. Inasmuch as the District Court based its an alysis on Johnson & Johnson v. Carter-Wallace and Ortho, r ather than our holding in Parkway Baking, we will discuss those two opinions of the Second Circuit Court of Appeals . We believe the District Court misconstrued the import of the analysis in both of those cases.

In Carter-Wallace, plaintiff manufacturer of Baby O il and Baby Lotion sued defendant manufacturer of "NAIR" - a depilatory product that was aggressively advertised as containing "baby oil." The District Court granted a defense motion to dismiss following a bench trial based upo n its conclusion that plaintiff had failed to prove "dama ge or the likelihood of damage." 631 F.2d at 189. On appeal, the Court of Appeals for the Second Circuit had to deci de "[j]ust what that burden is and what evidence will satisfy it. . . ." Id. The court began by analyzing the historical bac kground of the Lanham Act and Congress' intent to broaden t he scope of liability that had previously existed for commercial torts. The court concluded that the language of the statute requires, both as a matter of standing, and as an e lement of the substantive offense, that a plaintiff seekin g only injunctive relief establish something more than a " mere subjective belief that he is . . . likely to be dam aged," but that the plaintiff "need not quantify the losses ac tually borne." Id. Rather, the court reasoned that the bur den under S 43(a) actually lay "between those two extre mes." Id. The court's analysis was based upon the language of the Lanham Act, which provides a cause of action for "a ny person who believes that he or she is or is likely to be damaged" by the forbidden act. 15 U.S.C. S 1125(a). The court held that,

despite the use of the word `believes,' some thing more than a plaintiff 's mere subjective belief t hat he is injured or likely to be damaged is required before he will be entitled even to injunctive relief . . . . The statute demands only proof providing a reaso nable basis for the belief that the plaintiff is l ikely to be damaged as a result of the false advertising

.

Carter-Wallace, 631 F.2d at 189-90.

Thus, under Carter-Wallace, a plaintiff must prove that it has a reasonable basis for believing that it is lik ely to suffer

10

injury, and that a causal nexus between the injury and thefalse name or advertisement. The court in Carter-Wa llace

concluded that the District Court had set the bar t oo high by requiring the plaintiff " `to prove the existenc e of some injury caused by' the defendant" as that demands"pr oof of actual loss and specific evidence of causation." Th e court reasoned that "[p]erhaps a competitor in an open ma rket could meet this standard with proof short of quanti fied sales loss, but it is not required to do so." Id. a t 190. The Court of Appeals concluded "[t]he correct standard is whether it is likely that Carter's advertising has caused or will cause a loss of [plaintiff's] sales, not wheth er [plaintiff] has come forward with specific evidence that [defen dant's] ads actually resulted in some definite loss of sale s." Id.

However, in Carter-Wallace, the plaintiff was conte nding that the defendant's representation that NAIR conta ined baby oil improperly suggested that NAIR was a Johns on & Johnson product. Johnson & Johnson also claimed tha t
the defendant's claims that NAIR could moisturize a nd soften skin was false, and that those false claims were impacting on the sale of Baby Oil. However, since B aby Oil was not a hair removal product there was an issue a s to whether the defendant's product adversely impacted the sale of plaintiff 's Baby Oil. Johnson & Johnson at tempted to address that concern by introducing consumer tes timony to establish that users of NAIR relied upon that pr oduct's purported skin moisturizing qualities in refraining from using Baby Oil. Thus, the contest there was between a hair removal product with baby oil as an additive that p urported to moisturize skin, and the manufacturer of Baby Oi l - which was clearly not a hair removal product. That is not analogous to our situation because the plaintiff an d defendant here both manufacture purported breath freshening products.4

___________________________________________________ ______________

4. Moreover, the procedural posture in Carter-Walla ce is different from that in the present case. In Carter-Wallace, the Di strict Court had not
yet

considered whether defendant's advertising was fals e or misleading, as
that was an issue to be resolved on remand. Instead , the District Court's dismissal was "granted on the ground that (Johnson) failed to carry its burden of proving damages or the likelihood of dama ge." Carter-Wallace, 631 F.2d at 188-89. By contrast, in the instant cas e the District Court had already found BreathAsure's advertising to be m isleading.

11

Moreover, BreathAsure's advertisements implicitly a imed at Warner-Lambert's products. Although BreathAsure' s ads never mentioned Warner-Lambert's products by name, they implicitly told consumers to stop "masking" bad bre ath withplaintiff 's products and start "attacking it at it s source"

with defendant's products. See Castrol, 987 F.2d at 946 ("there need not be a direct comparison to a compet itor for a statement to be actionable under the Lanham Act")

. Accordingly, the District Court's conclusion that c onsumers were equally as likely to adopt a belt and suspende rs approach and use BreathAsure's products to suppleme nt Warner-Lambert's is misplaced and is not supported by the analysis in Carter-Wallace. There, the court was ca reful to note that, although "likelihood of injury and causa tion will not be presumed, but must be demonstrated," plainti ff can demonstrate it with "proof providing a reasonable b asis for the belief that the plaintiff is likely to be damag ed as a result of the false advertising." Carter-Wallace, 6 31 F.2d at 190. Thus, Carter-Wallace does not support the Dist rict Court's refusal to enjoin use of the product name.

Similarly, we do not think the District Court's ana lysis is supported by the decision in Ortho. There, the plai ntiff manufactured two products designed to relieve the e ffects of sun-induced aging of human skin, and plaintiff s ued to enjoin defendant from advertising that the defendan t's products had an "anti-aging effect." Plaintiff 's p roducts were prescription drugs, and defendant manufactured overthe-counter cosmetics. Following a bench trial, the District Court granted defendant's motion to dismiss based u pon the court's conclusion that the plaintiff lacked st anding under the Lanham Act. The court held that plaintiff had not established a protectable interest in the ingredien ts of those of its own products that were purportedly threatene d by defendant's products. Thus, plaintiff had not estab lished that defendant's advertising was likely to cause in jury. See Ortho, 32 F.3d at 693. The Court of Appeals for the Second Circuit affirmed stating:

We hold that since [plaintiff's] products ar e not obviously in competition with [defendant's] [plaintiff] was required to submit proof demonstrating t hat consumers view [defendant's] cosmetics as a

12

comparable substitute for [plaintiff's] drug s. Because [plaintiff] failed to do so . . . we affirm the judgment of
the District Court.

Id. at 692. It was in that context that the court e xplained that a plaintiff 's subjective belief of injury was not sufficient to confer standing under the statute. Ho wever, the court also explained that the plaintiff need no t establish direct competition or lost sales. The court also st ated:

"[t]he likelihood of injury and causation wi ll not bepresumed, but must be demonstrated in some

manner." The type and quantity of proof requ ired to show injury and causation has varied from on e case to another depending on the particular circumst ances. On the whole, we have tended to require a more substantial showing where the plaintiff's pr oducts are not obviously in competition with defendant' s products,
or the defendant's advertisements do not dra w direct comparisons between the two.

Id. at 694 (internal citations omitted). Since defe ndant's over-the-counter cosmetics were not in direct compe tition with plaintiff 's prescription drugs, the court con cluded that plaintiff 's subjective belief of injury was not su fficient for standing purposes because there was no evidence tha t
consumers would view defendant's cosmetics as a substitute for plaintiff's prescription drugs. The court concluded, "[t]he missing link in [plaintiff's] pro of is evidence that [defendant's] advertising will have t he effect on consumers that [plaintiff] says it will -- in ot her words, that consumers will see [defendant's] cosmetics as substitutes for [plaintiff 's] drugs. In other case s, this link has been supplied by consumer surveys or consumer witnesses." Id. at 695. "Without such proof, it wou ld be just as reasonable to believe that consumers who buy [defendant's] products will also buy [plaintiff's] drugs or, alternatively, that the type of consumer who buys [defendant's] over-the-counter cosmetics is not the type who would seek out a prescription drug." Id. at 697. Th e District Court here found this language in Ortho persuasive in concluding that Warner-Lambert had to come forward with similar evidence to establish that BreathAsure prod ucts

13

competed with its products and did not merely suppl ement
them.

The District Court synthesized the holdings of Cart erWallace and Ortho as follows:

How then in a nutshell do the rulings and pr inciples of

such cases as J&J and Ortho become translate d into a standard or analysis to be applied to the ca se at bar?
The Court determines that in this matter the plaintiff was required to show by at least some persua sive
evidence that Breath Asure alone in the futu re, even with the residual impact of prior ads to som e extent, will likely damage or injure the plaintiff i n the breath freshener market. And as mentioned before, t he plaintiff has not carried that burden.

A.22. However, as noted above, Ortho's discussion o fconsumer surveys was in the context of an inquiry i nto

whether plaintiff had standing to sue under S 43(a) . The standing inquiry was necessary because defendant's products and the plaintiff 's products were not in obvious competition in the marketplace.

Moreover, Parkway Baking establishes the standard f or the present appeal inasmuch as Warner-Lambert sough t only an injunction. As noted above, Carter-Wallace is distinguishable from the instant litigation. Howeve r, the analysis there is consistent with Parkway Baking in sofar as it applies to our inquiry. In Carter-Wallace the Co urt of Appeals stated: "the statute demands only proof pro viding a reasonable basis for the belief that the plaintif f is likely to be damaged as a result of the false advertising." C arterWallace, 631 F.2d at 190.

A showing of a reasonable belief of injury will usu ally be
sufficient to establish a reasonable likelihood of injury under S 43(a). Clearly, if a plaintiff can not esta blish that its subjective belief of future injury from the challen ged conduct is reasonable, plaintiff can hardly claim t o have shown a reasonable likelihood of injury. There must be some basis for the subjective belief in order to es tablish the reasonableness of that belief, and that basis will usually

14

equate with a showing of reasonable likelihood of f uture
harm under the statute.5

It is uncontested that BreathAsure's claim regardin g the efficacy of its ingestible capsules is without any scientific foundation. The District Court correctly concluded that claim was a deceptive misrepresentation that "impli es assurance where there is no basis for it." A.13. Th e permanent injunction that the District Court entere d states in part that: "Defendant BreathAsure, Inc. is perma nently enjoined from claiming, either directly or by impli cation, . . . with respect to BreathAsure or BreathAsure-D . . . that . . . it works. . . " (emphasis added). A.1. It did so be cause defendant's claims of breath assurance were literal ly false. Castrol, 987 F.2d at 944. ("If a defendant's claim is untrue, it must be deemed literally false"). The court also concluded that BreathAsure's breath freshener does compete wi th Warner-Lambert's breath fresheners "in general." Th at should have been sufficient to enjoin use of the mi sleading trade names under S 43(A), and the District Court s hould not have required Warner-Lambert to produce the kin d of consumer surveys required in Carter-Wallace and Ort ho. See Johnson & Johnson v. Rhone-Poulenc Rorer, 19 F. 3d 125 (3d Cir. 1994). In Rhone-Poulenc we stated:If a plaintiff proves a challenged claim is literally false,

a court may grant relief without considering whether the buying public was mislead . . . . If a p laintiff does not prove the claim is literally false, he m ust prove that it is deceptive or misleading, which depends on the message that is conveyed to consumers . . . . Public
reaction is the measure of a commercial's im pact . ..

___________________________________________________ ______________

5. We need not now decide if a reasonable belief wi ll always equate with a reasonable likelihood of injury as it is clear th at, under the circumstances before us now, Warner-Lambert establi shed the reasonableness of its belief of future injury if de fendant continued to be able to represent, through the use of its name, tha t its products provided purchasers with some assurance of fresher breath. T he circumstances
that establish the reasonableness of that belief al so establish the
likelihood of future harm from the defendant contin uing to use its name, thereby representing its products as effective brea th fresheners in the "side by side marketing of BreathAsure and the plai ntiff 's products. . .

"

Dist. Ct. at A.26.

15

the success of the claim usually turns on th e persuasiveness of a consumer survey. The fac tfinder must determine whether the public was, in fa ct,
misled.

19 F.3d at 129.

In Sandoz Pharmaceuticals v. Richardson-Vicks, Inc. , 902 F.2d 222, 227 (3d Cir. 1990) we explained that a pl aintiff
under the Lanham Act need not establish that a competitor's claims are false or misleading when th at is apparent from the advertising itself. Here, the Dis trict Court required Warner-Lambert to introduce the same kind of evidence that would have been required if Breath Asure's claims were not literally false. However, inasmuch as BreathAsure's claim that its capsules could assure fresh breath was literally false, Warner-Lambert did not have to introduce consumer testimony, marketing surveys or proof of lost profits to enjoin use of the BreathAsure tr ade name.

As noted above, the District Court found that BreathAsure and Warner-Lambert "are in competition in a general sense in the breath freshener market." A.25

. However, the court then seemed to eviscerate thatfi nding by also concluding that BreathAsure was a "niche pr oduct" that was as likely to be used to compliment or supp lement Warner-Lambert's products as to replace them. Howev er, we do not interpret the District Court's conclusion thatBreathAsure products are "niche products" as afindi ng

that those products do not compete with other breat hfreshening products.6 Rather, we conclude that the District Court correctly found that the parties' products do compete inasmuch as both are promoted as breath fresheners; the Warner-Lambert and BreathAsure products appear in c lose proximity to each other in stores; and BreathAsure' s own advertisements implicitly promoted BreathAsure as a superior alternative to Warner-Lambert's products.

We also conclude that the District Court's finding that the BreathAsure product name is "deceptive and a misrepresentation of the products' qualities" was n ot clearly

___________________________________________________ ______________

6. Indeed, the court here noted that plaintiff 's b reath fresheners and defendant's are marketed "side by side." See A.26.

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erroneous. The District Court recognized that the defendant's deceptive ads were likely to injure War nerLambert and properly enjoined defendant from contin uing to claim that its products were effective. The Dist rict Court, as previously noted, enjoined the defendant from ma king those claims "either directly or by implication." H owever, the court then embroidered a loop hole into the fab ric of the injunction by allowing the defendant to continue to refer to its products as "BreathAsure."

Inasmuch as the defendant's products compete with plaintiff 's products we can not reconcile the Dist rict Court's finding that the advertisements were likely to inju re Warner-Lambert with that court's concomitant refusa l to enjoin use of these deceptive trade names based upo n a belief that Warner-Lambert had not shown a reasonab le likelihood of injury from their continued use. Unde r Parkway Baking, there "seems to be no requirement t hat purchasers actually be deceived, but only that the false advertisements have a tendency to deceive." 255 F.2 d at 649. That tendency is evident here. Indeed, it is s urely not coincidence that defendant selected trade names sug gesting that those who use the products have assurance of f resh

breath.

Warner-Lambert demonstrated a reasonable likelihood of injury from the advertising that conveyed BreathAsu re's message, and Warner-Lambert's belief that it would be harmed if the defendant continued to refer to its p roducts as "BreathAsure" is just as reasonable. The name fa lsely

tells the consumer that he or she has assurance of fresher breath when ingesting one of the defendant's capsul es. That is not true. We therefore hold that the Distri ct Courterred in concluding that the plaintiff failed to es tablish the

likelihood of injury necessary to enjoin use of Bre athAsure's trade names, and that the District Court abused its discretion in refusing to enjoin use of those names

.

III.

Accordingly, we will reverse the order of the Distr ict Court insofar as it denies Warner-Lambert's request to enjoin defendant from using "BreathAsure" or

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"BreathAsure-D" or any similarly misleading trade n ame, and remand for the District Court to enter order co nsistent with this opinion.

A True Copy:

Teste:

Clerk of the United States Court of Appeals
for the Third Circuit

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