Schering-Plough HealthCare Products, Inc. v. Neutrogena Corp.

Citations: 642 F. Supp. 2d 304; 2009 U.S. Dist. LEXIS 68799; 2009 WL 2407207Docket: Civ. 09-268-SLR

Court: District Court, D. Delaware; August 5, 2009; Federal District Court

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Schering-Plough HealthCare Products, Inc. filed a lawsuit against Neutrogena Corporation on April 21, 2009, in the United States District Court for the District of Delaware, alleging false and misleading advertising in violation of the Lanham Act and the Delaware Deceptive Trade Practices Act (DTPA). Both companies are in the sunscreen manufacturing industry. Neutrogena responded with an answer and counterclaims asserting similar allegations against Schering-Plough. A preliminary injunction motion by Schering-Plough was filed on April 22, 2009, and a hearing took place on May 28, 2009, after which the court denied the motion.

The case includes a discussion of sunscreen technology, particularly the effects of ultraviolet (UV) rays, which are classified into UVA and UVB categories. While UVB rays are known to cause skin cancer, UVA rays contribute to skin damage. The parties dispute whether a sunscreen's Sun Protection Factor (SPF) rating accounts for protection against UVA rays; Schering-Plough's expert argues it does, whereas Neutrogena's expert contends it does not. They agree that a Protection Factor (PFA) can measure UVA protection. Additionally, Schering-Plough's products offer UVA and UVB protection without the proprietary formulation "Helioplex," which Neutrogena uses to stabilize avobenzone, a chemical effective against UVA rays.

Plaintiff owns the Coppertone® brand, including the Coppertone Sport® line introduced in 1992. Defendant manufactures the Neutrogena Ultimate Sport® line, launched in late 2008, and began advertising it in March and April 2009. The defendant's initial in-store display featured a Helioplex® illustration that purported to show the comparative benefits of sunscreen with and without Helioplex, depicting UVB rays being reflected while UVA rays penetrated the skin without Helioplex. Plaintiff claims this illustration is misleading, asserting that its products also provide UVA protection without Helioplex. The defendant later altered its display, removing the Helioplex® illustration from the front panel and replacing it with a phrase highlighting "superior sun protection" while including the illustration in a pamphlet attached to the display.

Additionally, in April 2009, the defendant launched a print advertisement claiming its products offer the "best line of sport sun protection." Plaintiff contests this assertion, arguing that its products provide equal or superior UVA and SPF protection. The print ad features a bar graph comparing the Neutrogena Ultimate Sport® line to Coppertone Sport®, suggesting that Neutrogena's protection is significantly superior. The advertisement claims that Helioplex technology ensures the highest combined UVA/UVB protection across Neutrogena's entire line, reinforcing the statement of it being the best sun protection option.

Plaintiff claims the bar graph in the advertisement is inaccurate, not to scale, and irrelevant to product effectiveness, rendering the advertisement misleading. In response, the defendant denies these allegations and asserts four counterclaims, alleging that the plaintiff has made false claims in advertisements for Coppertone NutraShield® and Coppertone Sport® spray, violating Section 43(a) of the Lanham Act and the Deceptive Trade Practices Act (DTPA). Specifically, the plaintiff's advertisement for NutraShield® claims it is the only product with Dual Defense®, offering advanced UVA/UVB protection and antioxidants, which the defendant contests as false since other products provide similar benefits. The defendant also alleges that the plaintiff's commercials falsely state that a significant portion of Neutrogena Ultimate Sport® spray consists of chemical propellant and that Coppertone Sport® offers superior protection compared to Neutrogena's products. The defendant's claims are supported by comparisons made in two television advertisements. 

For injunctive relief, traditional equity rules apply, requiring the moving party to demonstrate: (1) a likelihood of success on the merits; (2) irreparable harm if relief is denied; (3) that relief will not cause greater harm to the nonmoving party; and (4) that public interest favors relief. The burden of proof lies with the movant, and absence of key requirements such as likelihood of success or irreparable harm precludes the granting of an injunction.

Section 43(a) of the Lanham Act addresses false advertising, establishing liability for using false descriptions or representations in connection with goods or services, allowing civil action for those believing they may be harmed by such representations. Two theories of recovery exist: (1) advertisements that are literally false on their face, and (2) those that, while literally true, may mislead consumers based on context. Literal falsity requires an objective determination by the court, and only unambiguous messages can be deemed literally false, whether explicitly stated or implied. Conversely, implicitly false advertisements should be evaluated based on public reaction regarding their misleading tendencies.

The Delaware Deceptive Trade Practices Act (DTPA) prohibits false or misleading representations that may confuse or mislead consumers, without requiring proof of competition or actual confusion among parties. The plaintiff asserts that satisfying the Lanham Act's requirements also fulfills the DTPA's standards.

The plaintiff seeks to enjoin the defendant from using the Helioplex® illustration, claiming it implies that sunscreens lacking Helioplex® do not protect against UVA rays. The defendant argues that their products provide similar UVA protection and that the illustration emphasizes the significance of UVA protection. The defendant contends that the advertisement is not literally false and that no specific comparisons to other brands are made. Additionally, they argue that even if the plaintiff proved literal falsehood, it would not automatically warrant a presumption of irreparable harm.

Both parties conducted independent PFA testing on their respective sunscreen products. The defendant's testing included various formulations of its Ultimate Sport line, yielding an average PFA score of 30.2. The plaintiff's products, specifically the Coppertone Sport line, were reported to have an average PFA score of 16.7 based on in vivo testing of the top ten selling products. This indicates a 40% difference in average PFA scores between the two brands. The plaintiff did not provide results from its independent PFA testing to support its claims. However, plaintiff's testing showed an average PFA score of 22.9 for Neutrogena Ultimate Sport and an average of 16.4 for Coppertone Sport, suggesting a nearly 30% lower average PFA for Coppertone compared to Neutrogena. The document also mentions the SPF values of the products, with the average SPF for Coppertone Sport at 38.5 and for Ultimate Sport at 64, resulting in a 40% SPF differential between the two lines. It is unclear whether the testing included confirmation of the SPF values for the products in question.

Appa reports that the average SPF for ten tested Coppertone Sport® products from the plaintiff is 41, compared to 37 for the ten products tested by the defendant. The plaintiff claims that using the defendant's calculations shows its products provide 40% less overall UVA/UVB protection than represented. The plaintiff argues that the defendant's scientific comparison is misleading, as consumers do not apply multiple products simultaneously to achieve an average protection level. Additionally, the plaintiff contends that the defendant's print advertisement is scientifically flawed, citing double-counting of UVA protection in a bar graph that separates UVA and SPF, despite SPF already encompassing UVA protection. Agin emphasizes that SPF indicates protection from both UVA and UVB radiation. The plaintiff provides documentary evidence to support these claims, including FDA comments indicating that SPF is primarily a measure of UVB protection and does not fully account for UVA-related skin damage. The defendant counters that the bar graph accurately reflects product performance, asserting that it does not equate SPF solely with UVB and that SPF and PFA measure different biological endpoints. The defendant also cites FDA comments and other publications that support SPF as a valid measure of UVB protection. Currently, sunscreen labels must display an SPF value, which measures UVB protection, but no standard exists for UVA protection. Appa further explains that the bar graphs accurately represent proportional differences in SPF and PFA scores in relation to UV protection efficacy.

Literal falsity liability occurs when a commercial statement is either explicitly false or literally true but misleading enough to deceive consumers. A court assesses the claims made in an advertisement for clarity and determines their veracity. A message is deemed "literally false" only if it is unambiguous, and the likelihood of such a finding decreases with the complexity of the message that requires consumer interpretation. 

In the current case, the plaintiff argues that the defendant's advertisements falsely imply that sunscreens "without Helioplex" do not protect against UVA/UVB rays. The court finds that the illustrations on the packaging and in-store displays, which compare products with and without Helioplex, are not unambiguous. The packaging includes images showing skin protection with and without sunscreen but does not make explicit comparisons to specific competitors' products. The accompanying text does not affirmatively state that competitors' sunscreens lose UVA protection over time. While the plaintiff claims that the ads imply a lack of UVA protection for other products, the illustrations can also be interpreted to indicate that using sunscreen with Helioplex provides better protection than using no sunscreen at all. As such, the possibility of multiple interpretations means the message cannot be deemed literally false, and thus, injunctive relief is not justified.

The plaintiff asserts that Neutrogena Ultimate Sport®'s claims of being the "best line of sport sun protection" are literally false under the Lanham Act. However, the court finds these claims to be mere puffery, which is not actionable as it lacks specific misrepresentations about product characteristics. The court notes that terms like "sport sun protection" are vague compared to measurable terms like SPF or PFA. The plaintiff's lack of evidence to the contrary and the admission that "best" varies in meaning further support the court's conclusion that the statements are not literally false.

Regarding the bar graph in the print ad, the plaintiff claims it is false for two reasons: it allegedly double-counts UVA protection and inaccurately represents Neutrogena's SPF and UVA protection as significantly superior to Coppertone Sport. The court finds that SPF measures both UVB and UVA protection, and evidence suggests consumers primarily associate SPF with UVB protection, complicating the interpretation of the graph as unambiguously false. The conflicting expert testimonies about SPF's implications indicate that this issue requires further exploration during litigation. The absence of survey evidence from the plaintiff to support their claims leads the court to deny the request for injunctive relief.

Plaintiff alleges that the defendant's claim of approximately 100% more combined UVA/SPF protection for its Neutrogena Sport® line is literally false. The plaintiff offers a wider range of SPF options (SPF 15 to 70) compared to the defendant's (SPF 55 to 70). It is acknowledged that an SPF of 30 protects twice as long as SPF 15, leading to an average SPF difference of 40%. The PFA scores reveal a near 100% difference between the defendant's Ultimate Sport (30.2) and plaintiff's Coppertone Sport (16.7). The court finds no evidence or testimony from the plaintiff that contradicts the defendant's representation of the SPF and PFA differences.

The court evaluates whether the defendant's comparison of SPF and PFA scores, which results in a lower differential in UV rays blocked, constitutes a literal falsehood. It notes that the defendant has evidence showing that the plaintiff compares products by their PFA scores on its website. Consequently, the court concludes there is no literal falsehood in the defendant's comparison method.

Ultimately, the court determines that the plaintiff has not demonstrated a likelihood of success necessary for a preliminary injunction, thus denying the motion. The court refrains from addressing arguments regarding irreparable harm due to the lack of a demonstrated likelihood of success. An order denying the plaintiff's motion for a preliminary injunction is issued.

Plaintiff's complaint references a defendant's internet advertisement claiming that "new Neutrogena Ultimate Sport protection contains the best line of sport protection available with sunscreen fortifiers," though this claim is not cited in the plaintiff's post-hearing brief regarding falsehood. Defendant's initial answer included two counterclaims related to the plaintiff's NutraShield® product, while an amended answer added two counterclaims concerning the plaintiff's Sport® spray line. The plaintiff's NutraShield® television commercial asserts unique benefits of "dual defense" in sun protection and skin repair. Visual comparisons in advertising show differing coverage between the plaintiff's Sport® spray and the defendant's Ultimate Sport® spray, without direct comparison in another commercial that claims superior coverage over ordinary sprays.

The plaintiff sought to prevent the defendant from making claims that only products with Helioplex® offer UVA/UVB protection, asserting that "Neutrogena Ultimate Sport® is the best line of sport sun protection," or from misrepresenting the performance of Coppertone Sport® compared to Neutrogena Ultimate Sport®. Expert testimony during a preliminary injunction hearing addressed sunscreen effectiveness, the Helioplex® illustration, and a bar graph comparison between products. The plaintiff did not address the "best line" claim in subsequent submissions. The court notes ambiguity regarding specific products mentioned in the plaintiff's declaration and the record of in vivo SPF testing is unclear. Evidence presented at the hearing was not objected to by the defendant but has not been formally docketed. Additional references include a publication on UVA protection in sunscreens and a proposed amendment to regulations concerning sunscreen drug products.

Comments dated December 26, 2007, and December 20, 2007, reference docket no. 1978N-0038 and RIN No. 0910-AF43. An FDA publication titled "FDA Aims to Upgrade Sunscreen Labeling," dated August 23, 2007, is also noted. MedicineNet.com provides guidelines for summer safety, with content printed on May 20, 2009. An argument is made that a specific message is conveyed by necessary implication rather than direct statement. The defendant has removed in-store displays featuring "with/out Helioplex" illustrations; however, the plaintiff claims a new display with similar illustrations exists. The court's prior analysis regarding club packs applies to other uses of the illustrations. While the table in question is not deemed false on its face, it does not equate SPF solely with UVB. The court finds no ambiguity in the relative sizes of bar graphs presented. The plaintiff argues that the defendant's product comparisons are "meaningless," yet does not identify any literal falsehoods. The defendant counters that its advertising assures consumers of consistent UVA/UVB protection across its product line, a point to be further examined through consumer survey evidence. Additional reference includes content from Coppertone.com, printed on May 5, 2009.