Clearblue's pregnancy test gets the blues: recall ordered for false advertising

Church & Dwight Co. v. SPD Swiss Precision Diagnostics, GMBH, 2015 WL 4002468, No. 14–CV–585 (S.D.N.Y. July 1, 2015)

 

A good old-fashioned false advertising case about pregnancy tests!  Prior opinion, refusing to dismiss the claims as preempted in light of Pom Wonderful.

 

The parties are the leading makers of home pregnancy tests.  SPD launched the Clearblue Advanced Pregnancy Test with Weeks Estimator, which the FDA cleared for the intended use of telling a woman (1) whether she is pregnant and, if she is pregnant, (2) how many weeks have passed since she ovulated. The Weeks Estimator provides an estimate of “weeks” that is two weeks less than the standard convention: Doctors estimate pregnancy duration (gestational age) based on how many weeks have passed since a woman’s last menstrual period (LMP)—not weeks since ovulation.  (As my kids noticed when we discussed this case, you therefore start out two weeks pregnant—and we agreed that a test that could detect pregnancy at one week would be very, very useful, albeit unlikely in the Muggle world.)

 

The court didn’t need to decide when pregnancy begins “as a biological matter.” It only needed to determine “whether SPD’s advertising communicates the message that the Weeks Estimator provides an estimate of weeks pregnant that is consistent with a doctor’s estimate of weeks pregnant and, if so, whether this message is false.”  After a two-week bench trial, the court agreed with C&D that SPD’s advertising was false, and found SPD’s deception to be intentional and egregious, although C&D failed to prove a breach of the parties’ prior settlement agreement.

 

A bit of biology review: a typical menstrual cycle lasts 28 days; the time from LMP to ovulation is generally two weeks, but variance in this phase can be significant. The time from ovulation to the next menstrual period is two weeks, subject to much less variance.  Sperm must fertilize an egg within 24 hours of ovulation, and the resulting blastocyst must travel to the uterus and implant in the lining of the uterus.  Implantation occurs 6-9 days after ovulation. Once implantation occurs, the blastocyst begins secreting human chorionic gonadotropin (hCG), a hormone that signals to a woman’s body that she is pregnant and prevents menses.  Home pregnancy tests detect the presence or absence of hCG in urine.

 

Tradition dictates the use of the date of LMP as the start of pregnancy, on average 40 weeks before estimated date of delivery at full term (38 weeks after fertilization).  Ultrasounds can now provide a more accurate measure of gestational age, but those are generally done 8-10 weeks after LMP, and the LMP is usually the only piece of data available in early pregnancy, so it’s still the most commonly used method for estimating gestational age and assigning a due date. Regardless of the reasons for adhering to this convention, it remains “universal.”  Indeed, even when professionals use other methods, such as ultrasound, to determine gestational age, they still convert it to LMP-based dating when communicating both to patients and to other medical professionals.  Ultrasound machines are programmed to automatically use LMP to express an estimate of gestational age.  And even when a woman doesn’t remember her LMP or her memory is inconsistent with the ultrasound, doctors will still assign her a LMP two weeks prior to conception as determined by the ultrasound.  The same thing happens with IVF.

 

This single convention makes sense because it allows everyone involved to communicate easily.  Also, pregnant women traditionally relied on doctors for an estimate of pregnancy duration.  (Interesting definition of tradition, but okay.) “SPD’s suggestion that women could figure this out on their own based on their ‘own awareness of when they ovulated, had intercourse, and other relevant facts; combined with knowledge drawn from ‘myriad sources of information in books and on the internet regarding pregnancy dating,’ is unpersuasive and does not change the fact that historically doctors have been the authoritative source of information for women to find out how many weeks pregnant they are.” The FDA even required SPD to state on all product advertising: “Only your doctor can provide a reliable estimate of gestational age and only your doctor can monitor pregnancy progression.”

 

The Weeks Estimator, unlike other pregnancy tests, provided an estimate of the number of weeks since fertilization, because hCG levels rise rapidly and predictably during early pregnancy and because fertilization occurs within 24 hours of ovulation, so that the date of fertilization provides a proxy for the date of ovulation. Depending on her hCG level, a pregnant woman who used the Weeks Estimator would see “1–2,” “2–3,” or “3” on the screen—meaning, she was pregnant and it had been 1–2, 2–3, or 3 weeks since ovulation.

 

Because home pregnancy tests are Class II medical devices, SPD needed 510(k) preclearance for the Weeks Estimator.  Initially, the FDA objected that the “weeks indicator feature may provide misleading information to lay population of users” largely because “the output of this test is not aligned with gestational aging done by healthcare professionals (i.e., it will under-estimate gestational age by an average of 2 weeks).” The FDA required SPD to modify the “Indications for Use” statement on product packaging to include:

 

This test cannot be used to determine the duration of pregnancy or to monitor the progression of pregnancy. Your doctor determines how many weeks pregnant you are based on the first day of your last menstrual period and ultrasound results. This test provides a different estimate that can not be substituted for a doctor’s determination of gestational age.

 

SPD wanted to call the product “Conception Indicator,” but the FDA rejected that and accepted “Weeks Estimator.” The FDA also requested that SPD remove the statement “Also Tells You How Far Along You Are” from every area of the box. After some additional back-and-forth, the FDA issued a Clearance Letter for the Weeks Estimator. Among other things, the FDA instructed SPD (1) not to express the product’s results as “weeks pregnant” and (2) to express the results only as “the number of weeks that may have passed since ovulation.”

 

SPD then launched what was touted as the largest ad campaign in this product category. “Despite FDA’s warnings, internal SPD marketing documents described the ‘communication idea’ for this campaign as: ‘Clearblue Advanced Digital Pregnancy Test with Weeks Estimator gives women the reassurance of knowing much more of their pregnancy because it is the only test that can also tell you how far along you are.’”  The launch advertising consistently communicated the message that the product estimated “weeks pregnant,” “weeks along,” and similar ideas, “while downplaying (or omitting) the message that the product provides an estimate of weeks since ovulation or that the product’s estimate of ‘weeks’ does not align with how a doctor would express an estimate of weeks pregnant.”

 

The product launched with a box that was on store shelves from August 2013 to February 2014. It showed four images of screens stating, respectively, “Pregnant // 1–2 Weeks”; “Pregnant // 2–3 Weeks”; “Pregnant // 3  Weeks”; “Not Pregnant.” The word “ovulation” didn’t appear anywhere on the front or back of the box.

 

The side panel contained a small-print, cramped version of the full FDA-required Indications for Use statement, which said in part, “This test cannot be used to determine the duration of pregnancy or to monitor the progression of pregnancy. Your doctor determines how many weeks pregnant you are based on the first day of your last menstrual period and ultrasound results. This test provides a different estimate that cannot be substituted for a doctor’s determination of gestational age.”

 

From August to December, SPD ran a TV ad that aired thousands of times on at least 65 different networks and was projected to reach millions of women aged 18–49 each month.  It showed two women talking:

 

1st Woman: I’m pregnant.

2nd Woman: Really?

1st Woman: Two weeks.

2nd Woman: You already went to the doctor?

1st Woman: Not yet, but I took this new Clearblue test. It’s like two tests in one.

2nd Woman: Oh my God, I think I’m going to cry!

 

As the first woman says “It’s like two tests in one,” an image of the Weeks Estimator appears on screen with the digital screen prominently displaying “Pregnant // 1–2 Weeks.*” After the next line, the commercial cuts to an image for two seconds showing three large digital screens (containing the words “Pregnant // 1–2 weeks,” “Pregnant // 2–3 weeks,” and “Pregnant // 3  weeks”) in an arc over an image of the product with the phrase “ESTIMATED WEEKS SINCE OVULATION (UP TO 3 )” in grayish blue font below the arc and above an image of the product. A voiceover says: “The new Clearblue pregnancy test also estimates how many weeks. Weeks Estimator. Only from Clearblue.” Beginning at 6 seconds into the ad, small white font appears at the bottom of the screen stating:

 

*Word ‘weeks’ on display is for illustration only. For home use only. Always consult a doctor if you suspect you are pregnant and to confirm, date and monitor pregnancy. Not for multiple pregnancies. Estimates weeks since ovulation up to 3  weeks. Do not use to monitor pregnancy progress or duration.

 

Other launch advertising was similar, with unqualified use of “weeks” and a prominent uniqueness/value message, such as “Knowing more helps you prepare for the exciting future ahead—78% of women surveyed said they believe it is important to know how far along they are.”  Mentions of ovulation were absent (as in web banners) or buried.  A celebrity spokesperson appeared as a guest on the television show “The Doctors” to promote the Weeks Estimator; she said: “I am the new spokesperson for Clearblue. It’s the pregnancy test. I am. I can’t wait to use it ... because it actually estimates how many weeks of pregnancy you’re in.” SPD argued that she spoke “off script” and was not authorized to make this statement, but internal emails revealed that SPD’s marketing firm was “beyond pleased with how well this pitched placement delivered.”

 

After C&D complained, the FDA reached out to SPD with concerns, noting it had informed SPD “not [to] talk about weeks pregnant” and “[p]lacing ‘weeks’ in the result window is the same as saying weeks pregnant.”  SPD proposed adding language to the TV ad’s disclaimer and removing dialogue about a doctor’s visit. The FDA found these changes insufficient for failing to “clearly state that the device can only estimate weeks since ovulation (and not weeks of pregnancy),” among other things. The FDA required SPD to take the ad down in 6 days.  SPD revised the product’s package and made a number of other changes to its ads.

 

The revised package, which hit stores in February 2014, put a gray strip in the top right-hand corner stating: “Only Test That // Estimates Weeks // Since Ovulation*.”  The asterisk apparently referred to the side panel Indications for Use. The digital screens used the words “Pregnant // 1–2”; “Pregnant // 2–3”; “Pregnant // 3 ”; and “Not Pregnant,” but the phrase “Weeks Along” was below them. 

 

SPD’s TV ad was replaced with an internet-only ad with the dialogue:

 

1st Woman: I have something to tell you: I’m pregnant!

2nd Woman: Really?

1st Woman: I took this Clearblue test. It’s like two tests in one.

Voice over: Only Clearblue tells you if you are pregnant and estimates how many weeks since ovulation.

2nd Woman: Oh my God, I think I’m going to cry!

Voice over: Weeks estimator, only from Clearblue.

 

The commercial cut to the image of the digital screens with “Pregnant // 1–2,” “Pregnant // 2–3,” and “Pregnant // 3 ” in an arc over an image of the product with the phrase “ESTIMATED WEEKS SINCE OVULATION (UP TO 3 )” in grayish blue font below the arc and above the product. Then it cut to an image of the Revised Package in the center of the screen with “Weeks Estimator” in large, pink lettering jumping out of the box, distracting the eye from the rest of the packaging. The commercial ended with the full Indications for Use statement on screen for 15 seconds, but that was the only disclaimer.  Other advertising was revised similarly.

 

The court found intentional deception, which is presumed to be effective.  “Time and again, SPD’s staff recognized and understood that the Weeks Estimator’s result did not align with how doctors express pregnancy duration and that this misalignment could confuse consumers. Rather than clarify its product advertising, SPD’s staff sought to exploit the confusion.”  In what is perhaps a lesson on witness preparation as well as on what judges dislike, the court commented:

 

SPD’s witnesses acknowledged at trial—often with considerable reluctance—the existence of the LMP convention. After one such longwinded explanation, the Court pointedly asked Dr. Joanna Pike, SPD’s Senior Global Pregnancy Product Manager, “If someone says to you or you read somewhere I am four weeks pregnant without any further explanation, what would you assume that means?” Dr. Pike, withdrawing deeper into her chair, provided a convoluted answer before finally acknowledging that “I think in general you may—you may—this, it is time since LMP because it is widely used,” which she hesitantly admitted was “[t]he truth.” The truth it was.

 

Given their awareness of the convention, SPD employees recognized the resulting likelihood of confusion.  Dr. Pike wrote to her colleagues:

 

We should not suggest in U.S. that the product tells you ‘Weeks Pregnant’ when we have been constrained by FDA to say ‘weeks since ovulation’. Indeed, even outside of US, this product doesn’t tell you weeks pregnant—if you are 1–2 weeks by [the Weeks Estimator] then you are 3–4 weeks pregnant because the universal convention for dating pregnancy is from the LMP not from ovulation.... I think FDA would NOT approve if we used ‘Weeks Pregnant’ in any materials and we are very likely to also confuse consumers and might end up with challenge/complaint.

 

The court didn’t accept Dr. Pike’s explanation that she was conveying the FDA’s views, not her own.

 

Members of SPD’s U.S. Advisory Board also highlighted the likelihood of confusion. One Board member stated that it was “important not to contradict this clinician-defined measurement,” while another raised concerns about the digital display screens containing “Pregnant 1–2,” etc., noting: “Need to be clearer what this means, i.e. from time of conception NOT LMP, we are Not saying what we are doing.” Another indicated that they might change how pregnancy was counted, but that it would be an uphill battle.

 

The TV ad was the “most glaring example.”  An internal SPD PowerPoint described the ad as “Best Friends with the insight of knowing it before the doctor visit.”  SPD’s market research revealed that viewers believed the product could tell a woman how far along she was before she went to the doctor.  This necessarily implied that the product would provide the same estimate one would get from a doctor’s visit.

 

In another lesson about communicating risk, even internally, ClearBlue’s Worldwide Marketing Director, Ryan Daly, told his colleagues: “I know we are being told by some that the FDA will be waiting for this ad, but I really struggle with that given their setup ... they have a pharma ad division but none for [over-the-counter products]. Net, I view the risk as low.” The court interpreted this as a statement that “the likelihood of getting caught airing an ad that contravened FDA requirements was minimal because the FDA did not have resources to police advertising for over-the-counter products.” (Of course, the FDA ultimately did object, despite its lack of resources.)  Daly was, however, concerned that the networks would find the ad unsubstantiated because “some [networks] could get shy should they read the entire intended for use statement. So for this, I think we need to be very careful ... I want us to see everything that we plan to send the TV stations. Only give them what they ask for.”  So rather than give the networks the full Indications for Use statement—less than a page long— SPD gave the networks a substantially truncated version that omitted the warning: “Your doctor determines how many weeks pregnant you are based on the first day of your last menstrual period and ultrasound results. This test provides a different estimate that can not be substituted for a doctor’s determination of gestational age.” Daly could not explain how the ad communicated the message that the product’s estimate is different from a doctor’s estimate.

 

Again, the court was unconvinced by Daly’s explanation at trial that he was just concerned about overwhelming the networks with too much information. Among other things, SPD also used the truncated version of the Indications for Use as the “super” at the bottom of the screen.  The court also noted “his description of something referred to internally as the ‘Bedford puke,’ an apparent shorthand for the dangers of providing too much information to regulators and broadcasters,” as well as his minimization of the extent of advertising by saying that accused shelf trays were shipped only to a single retailer.  That retailer “just happened to be Target.”  

 

SPD’s employees also discussed creating a backup ad “that correctly identified a key problem with the ad”: “Back up plan is Best Friends with no mention of ‘knowing before doctor visit.’”  Clearblue’s Brand Manager Kirsten Suarez responded “Can we not wait to receive a letter [from C&D] and then edit? I’m guessing we’d have time between receipt of the letter and actual need to traffic in new copy/pull from the networks.” Again, the court was unpersuaded by her later explanation that she wanted to refer to a doctor to encourage women to get prenatal care.  “[T]hese communications show that SPD staff knew precisely what was false or misleading about the commercial, but they chose to air it anyway.”

 

Suarez made “other troubling statements about the Weeks Estimator’s advertising that suggest a deliberate attempt both to evade FDA limitations and convey a false message about the product.”  E.g., “One last thing, we can’t actually link together the weeks and pregnant in the way it was on the last couple. What you can say is the only test that estimates weeks, or the only test that also estimates weeks, then the consumer will see Pregnant 1–2 Weeks in the windows and put it together.” The court therefore concluded that SPD “knew that placing the word ‘pregnant’ in proximity to ‘weeks’ would suggest that the product provides an estimate of weeks pregnant,” just as the FDA then told it. 

 

Suarez recognized that SPD couldn’t say the product estimated “how far along” a woman was, but suggested including survey results indicating that women want to know how far along they are because “[w]e can’t say we’re doing it, just that women want to know.”  She responded to a suggested use of “Find out how far along you are,” with: “This is a tricky one, but the FDA doesn’t actually want us to say that. I think it can be phrased as a question as you had, or we need to use the ‘estimate weeks’ language.”  Further evidence that marketers know and take advantage of what Lanham Act jurisprudence often does not: there is no clear express/implied distinction, and it’s easy to set up a message that works at least as well, if not better, than an express claim.

SPD also understood that consumers didn’t have a good understanding of ovulation.  As Suarez stated, “Trust me, it doesn’t really make sense to [consumers]. … [T]hey don’t have a knowledge of the right days, poor understanding of the details, etc. and it’s not common vernacular of how we would talk anything.”  That’s why SPD didn’t want to use “ovulation” other than as absolutely required.  (I still don’t get why they didn’t just add 2 to their estimate, like everybody else.) A summary of a meeting between SPD employees and its outside marketing firm included the observation that “[o]verall lack of consumers’ understanding of ovulation may cause confusion. Need to address the reason why [healthcare providers] use different method without saying it is wrong or suggesting that Weeks Estimator takes the place of seeing [a healthcare provider].”

 

SPD “repeatedly suggested that it had tried in vain to include a conversion chart on the outside of the product’s packaging that would mitigate consumers’ confusion regarding how the product’s estimate of weeks differs from a doctor’s estimate of weeks pregnant.” SPD first said that the FDA had forbidden it from doing this, then that it understood the FDA’s instructions as requiring removal “of all performance information concerning the estimation of weeks function, including the Conversion Chart.” Then SPD said that this determination required a “deep” read of the FDA clearance letter. 

 

“Because SPD often overstated other instances of the FDA and broadcasters ‘requiring’ or ‘mandating’ as opposed to ‘permitting’ or ‘allowing’ certain conduct, the court didn’t credit SPD’s explanation, and the court’s own reading of the clearance and hold letters didn’t indicate that the FDA intended to prohibit SPD from including the conversion chart on the outside of the box.  Plus, SPD often pushed back against the FDA on other changes, but didn’t ask it to clarify about the conversion chart or argue to the FDA that the conversion chart would aid consumer understanding.  In any event, SPD’s own people were concerned about confusion even when the conversion chart was on the outside of the package.

 

The court also noted that “SPD’s intentional deception extended to other aspects of its advertising not directly relevant here, such as touting the fact to U.S. retailers that 15% of European purchasers of the product had used the product to track their pregnancy despite the FDA’s explicit restrictions on making such statements.”

 

C&D scored a hat trick: the ads were unambiguous and literally false; even if the ads were ambiguous, SPD’s intentional deception gave rise to a presumption of consumer confusion; and C&D presented evidence of consumer confusion.

 

The literal falsity here was by necessary implication.  “Considered together, the name of the product (‘Clearblue Advanced Pregnancy Test with Weeks Estimator’) and the digital screens (‘Pregnant // 1–2 Weeks,’ etc.), without any clarification, necessarily imply that the product tells a woman whether she is pregnant and, if she is pregnant, how many weeks pregnant she is.” Further, the product was an OTC test marketed to women for use before they see a doctor.  “[I]n the context of a home pregnancy test that also provides an estimate of ‘weeks,’ the overriding message to consumers is that this is an estimate of weeks pregnant that is consistent with a doctor’s estimate of weeks pregnant.”  This unambiguous message was false.

 

The presence of the full Indications for Use statement on the side of the package did not change the package’s literal falsity.  “[T]he entire statement is 206 words long, separated into four paragraphs, and printed in minuscule font. Stacey Feldman, C&D’s Vice President of Marketing for Women’s Health and Personal Care, credibly testified that in her experience very few consumers will read the Indications for Use statement on the side panel.” Many courts have disregarded a footnote or disclaimer in fine print, and this one couldn’t fix the literal falsity.  Nor did the package insert fix the problem; along with being in fine print, it was only available after a consumer bought the product, and many consumers wouldn’t review it, especially because of the extensive ad campaign to which they’d already been exposed.

 

C&D also met the standard for showing implied falsity because of the deliberate deception. The burden shifted to SPD to show that confusion was unlikely, but SPD didn’t.

 

Indeed, C&D had evidence of both actual confusion and likelihood of confusion. An April 2014 CBS affiliate news report reported that an expectant mother who had purchased the Launch Package believed the product provided an estimate of weeks pregnant that was consistent with how her doctor would estimate weeks pregnant. The woman became concerned, wondering if her “baby was not developing correctly,” when her doctor told her that she was further along in her pregnancy than the estimate provided by the product.  SPD knew about this story, but chose to do nothing to address the confusion.  However, the court disregarded 310 non-US complaints made to SPD’s consumer care line; only 17 of the remaining 30 showed a mistaken belief that the product estimated pregnancy duration the same way a doctor would. This was a small percentage of the nearly 1.9 million Weeks Estimators sold in the US over the relevant period, but that fact didn’t favor SPD either, “because many deceived consumers may not even know about the care line or may not be inclined to call it.”

 

C&D also presented a consumer survey concluding that roughly 20% of consumers thought that the product’s estimate of weeks was the same as a doctor’s estimate of weeks pregnant.  The export, Hal Poret, conservatively “assumed that a respondent was deceived only if that respondent answered both that the Product estimates the number of weeks a woman is pregnant and that the Product’s estimate of weeks is the same as a doctor’s,” but even so this was a substantial number of consumers.

 

The revised package and ads didn’t help.  Even disregarding the issue of whether consumers understood the added references to “ovulation,” they were still implicitly false.  SPD’s past intentional deception mattered, even though “an advertiser who has learned the error of its ways and has modified its advertising accordingly should not be forever held to account for prior instances of bad conduct.” Still, “evidence of prior intentional deception may be probative of whether subsequent corrections were sincerely implemented.”  SPD added “since ovulation” to the package, but it wasn’t prominent, consistent with SPD’s dislike of the term.

 

Regardless, Poret’s surveys also showed that between 16-17.3% of consumers were still confused by the revised package, which was enough for deception.

 

The court’s analysis of the other ads proceeded similarly. In the TV ad, for example, “[t]he dialogue between the two women only further augments this unambiguous message when the first woman states that she knows she is two weeks pregnant despite not having gone to the doctor yet because she used the Weeks Estimator. This exchange communicates to the viewer that the woman received the same estimate of weeks pregnant from the product that she would have received had she gone to the doctor—which is false.”  The super was of no use, not only because SPD intentionally omitted clarifying language, but also because it was “in small, whitish font that blends in to the white background such that even the Court failed to notice it upon first viewing.”

 

After falsity, materiality was simple, given SPD’s marketing.

 

Injury: with literal falsity, no further extrinsic evidence of injury to the plaintiff is required. Moreover, C&D provided evidence showing a logical causal connection between SPD’s false advertising and its own sales position. C&D’s market share in terms of dollar sales for its First Response product had been steadily growing for over a decade. Clearblue’s market share, by contrast, went from approximately 16 dollar share points at the beginning of 2012 to 12.5 dollar share points in August 2013.  After SPD’s extensively advertised launch, Clearblue gained significant market share while First Response lost it.  C&D’s expert credibly testified that this sharp change couldn’t be attributed to any product feature other than the central weeks estimator.  SPD’s internal marketing documents agreed, as did C&D’s market research.

 

SPD argued that C&D should have conducted “rigorous” regression analysis to control for independent variables.  This argument would be more appropriate in the damages phase; C&D only needed to show a “logical causal connection” and need not “come forward with specific evidence that [defendant’s] ads actually resulted in some definite loss of sales.”

 

The court noted that, “at $2.6 million in annual sales per dollar share point, even the loss of just one dollar share point is significant in terms of revenue.”  Plus, it was likely that C&D’s countervailing response, such as offering rebates, mitigated the decline in its market share.  SPD’s expert posited that the Weeks Estimator’s exciting new feature grew the market as a whole, meaning that C&D’s dropping market share was less harmful, but “[e]ven if the whole pie grew because of the new product, but C & D’s share of that pie grew at a smaller rate than it would have in the absence of SPD’s false advertising, C & D would still have lost sales on account of the false advertising.”

 

A finding of false advertising here also furthered the policy of having the Lanham Act and the FDCA complement each other, “allowing the expertise, perspective, and resources of market competitors to augment those of the FDA.”  SPD was willing to take the risk here given its perception of limited FDA resources—a fact that also came up in Pom Wonderful.  The trial confirmed Pom Wonderful’s statement that “competitors who manufacture or distribute products have detailed knowledge regarding how consumers rely upon certain sales and marketing strategies. Their awareness of unfair competition practices may be far more immediate and accurate than that of agency rulemakers and regulators.”  The FDA didn’t have the benefit of C&D’s surveys and additional evidence, revealing additional confusion.

 

On to permanent injunctive relief.  Irreparable injury/inadequacy of damages: The parties compete directly, and there’s a logical link between SPD’s false advertising and harm to C&D. Moreover, SPD’s disputes about C&D’s need to control for numerous independent variables in establishing its damages “demonstrates the difficulty of fully quantifying the loss of market share that C & D suffered as a result of its direct competitor’s false advertising.” 

 

Plus, both parties position themselves as “innovators” in the market.  SPD’s internal marketing documents revealed that the TV ad produced a “halo effect” for the Clearblue brand overall.  “[I]t is difficult if not impossible to quantify the harm to C & D caused by SPD’s falsely advertising its product as possessing an innovative feature that it did not in fact possess.”  Further, false advertising in a product category “may cause harm to that category as a whole. Consumers who purchase the Weeks Estimator and then learn that it does not actually estimate weeks pregnant the way a doctor does may lose confidence in home pregnancy tests as a whole and may question innovative features offered by other brands.” Thus, it would be hard to measure C&D’s loss of market share, goodwill, and brand equity.

 

Balance of hardships: SPD had no protectable interest in its false advertising.  Public interest: greater clarity in advertising certainly wouldn’t harm the public interest.

 

Thus, SPN was permanently enjoined from “communicating—either literally or impliedly—that the Weeks Estimator provides an estimate of weeks pregnant that is the same as a doctor’s estimate of weeks pregnant.”  The parties were to meet and confer to see if they could agree on specific language for the order.  The appropriate language would extend to messages conveyed, not to specific pieces of advertising.  SPD was required to recall all initial and revised packages currently on store shelves; this was a burdensome requirement, but appropriate in light of the nature of the product and the degree of SPD’s intentional deception.  The court would also consider ordering a corrective advertising campaign “to explain the difference between the product’s estimate of weeks since ovulation and a doctor’s estimate of pregnancy duration based on weeks since LMP.”