Tuesday, July 20, 2010

Too much in the sun: Neutrogena fails to win reconsideration

Schering-Plough Healthcare Products, Inc. v. Neutrogena Corp., 2010 WL 2788240 (D. Del.)

After Neutrogena had the opportunity to submit extra evidence relevant to its motion for reconsideration, the court denied the motion. Reminder: the falsity here is using the term Helioplex® in advertising for Neutrogena’s new Ultra Sheer Dry-Touch Sunblock SPF 100k sunscreen when that product, for a long time, didn’t have Helioplex® as Neutrogena had defined it in advertising. Neutrogena submitted ads that ran during the period in which its products didn’t contain the chemical DEHN; none of them had information about the chemical formula of Helioplex. Neutrogena also said, without evidence, that the ad that explicitly disclosed Helioplex’s ingredients, including DEHN, was meant for skin care professionals and not consumers.

Motions for reconsideration are to correct manifest errors of law or fact or to present newly discovered evidence. The standard was not met here. The new evidence in the form of an internet ad was from a site last updated on April 20, 2010, and the court granted partial summary judgment on liability on May 18; Neutrogena should have presented the evidence already, and in any event the ad didn’t address the chemical formula.

The court reiterated its conclusion that “consumer reaction is immaterial when the asserted advertisement is literally false.” The case law states that a court facing a literally false claim may grant relief without considering whether the public was misled. “Therefore, once plaintiff proves literal falsity of an advertisement, the court may presume all other elements of the § 43(a) claim. Although no case has specifically stated that all remaining elements of the § 43(a) claim may be presumed upon a showing of literal falsity, perhaps this can be attributed to the rarity of an advertiser promulgating literally false statements to consumers.” The presumption of injury also relieved Schering Plough of the need to demonstrate actual injury. “Indeed, it would be extremely difficult to prove monetary damages in the majority of cases where more than two competitors are locked in a struggle for consumers.” And in any event Schering Plough was seeking an injunction, so there was no (eBay) problem with a presumption. (Side note on my own personal hobby horse: note the implications of the court’s correct statement on the difficulty of proof for standing inquiries conducted on motions to dismiss; this is another reason why Conte Bros. as interpreted by Burger King is a serious mistake.)

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