Church & Dwight Co., Inc. v. SPD Swiss Precision Diagnostics, GmbH

843 F.3d 48, 2016 U.S. App. LEXIS 23612, 2016 WL 7131177
CourtCourt of Appeals for the Second Circuit
DecidedSeptember 9, 2016
Docket15-2411-cv
StatusPublished
Cited by72 cases

This text of 843 F.3d 48 (Church & Dwight Co., Inc. v. SPD Swiss Precision Diagnostics, GmbH) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Church & Dwight Co., Inc. v. SPD Swiss Precision Diagnostics, GmbH, 843 F.3d 48, 2016 U.S. App. LEXIS 23612, 2016 WL 7131177 (2d Cir. 2016).

Opinion

LEVAL, Circuit Judge:

In an exceptionally well argued case, Defendant SPD Swiss Precision Diagnostics GmbH, a marketer of over-the-counter pregnancy test kits, appeals from the judgment of the United States District Court for the Southern District of New York (Nathan, /.), in favor of Plaintiff Church & Dwight Co. Inc., a leading competing marketer of over-the-counter pregnancy test kits. After a bench trial, the district court found Defendant liable for false advertising, in violation of Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a). The pregnancy tests of both Plaintiff and Defendant detect pregnancy by the presence in the woman’s urine of the hormone human chorionic gonadotropin (“hCG”), which is produced upon the implantation of a fertilized egg in a woman’s uterus. In August 2013, following a Food and Drug *53 Administration (“FDA”) approval process, Defendant released its new product, the Clearblue Advanced Pregnancy Test with Weeks Estimator (the “Product”). Defendant’s Product, in addition to telling the woman whether she is pregnant, is the first such product to also furnish information as to how long (how many weeks) she has been pregnant, which it does by measuring the amount of hCG in her urine.

Plaintiffs claims focus on how Defendant’s Product packaging characterized the advancement of pregnancy. The information communicated by Defendant’s Product was the number of weeks passed since the woman’s ovulation. (An egg is ripe and capable of fertilization only for twenty-four hours following ovulation. 2 Implantation of the fertilized egg in the uterine lining, which causes the release of hCG, occurs between six and nine days after ovulation.)

For a number of reasons — partially historical, partially because of the desirability of conformity — the metric commonly used by the médieal profession to describe how long a woman has been pregnant (notwithstanding its obvious literal inaccuracy) speaks in terms of the number of weeks elapsed not since ovulation, fertilization, or implantation of the egg, but since the woman’s last menstrual period (the “LMP”). A pregnant woman’s LMP normally occurs approximately two weeks pri- or to her ovulation. Thus, the medical profession’s conventional formula to describe how many weeks a woman has been pregnant yields a number two weeks higher than the number furnished by the Product, which measures weeks since ovulation. It is an uncontested given in this litigation that, when the Defendant’s Product and the woman’s doctor are in complete agreement in estimating how long the woman has been pregnant, the Product would announce a number of weeks that is about two weeks lower than what the doctor would say. 3

The gist of Plaintiffs claim is that, in informing the user as to how long her pregnancy had been in effect, Defendant’s Product communicated the false impression that it uses the same metric and gives the same number of weeks of pregnancy as a medical professional would do.

The district court ruled in favor of Plaintiff. It found, among other things, that Defendant had advertised falsely in its packaging at the time of the Product launch (the “Launch Package”) and launch advertising, and also in .the revised packaging that Defendant substituted after the FDA had expressed concerns about the Launch Package (the “Revised Package”). The court relied on different theories as between the messages associated with Launch Package and those accompanying the Revised Package. For the Launch Package and its accompanying advertising, the court found, among other things, that these materials unambiguously implied a false message that the Product gives the duration of a pregnancy in terms that are consistent with the metric used by doctors to estimate weeks-pregnant. For the Revised Package, the court relied on survey evidence to support a finding that Defendant communicated a misleading message.

The district court imposed an injunction on Defendant. The court’s order, among other things, prohibited Defendant from distributing the misleading materials and from using specified phrases. The order *54 also required Defendant to issue various corrective notices and advertising acknowledging that it had been found to have engaged in false advertising.

We affirm the district court’s judgment. We agree with the district court that Plaintiffs Lanham Act claim is not precluded by the Food, Drug, and Cosmetic Act, 21 U.S.C. §§ 301 et seq. (“FDCA”). We find no error in the court’s finding of falsity in Defendant’s Launch Package and advertising messages associated with it by reason of their unambiguous implication that Defendant’s Product measures weeks-pregnant in a manner that is consistent with the measurement used by doctors. Nor do we find fault in the district court’s finding, based on survey evidence, that the message communicated by the Revised Package was impliedly false. We also find no error in the district court’s findings that the falsity was material and injurious to Plaintiff. Finally, we hold that the court did not abuse its discretion in issuing the injunction.

BACKGROUND

I. Parties

Plaintiff and Defendant are leading manufacturers of home, over-the-counter pregnancy tests and direct competitors in the U.S. market. Plaintiff uses the brand name “First Response,” while Defendant uses the “Clearblue” brand. Plaintiffs First Response products have generally led the home pregnancy test market, and Defendant’s Clearblue products have been Plaintiffs closest competitor.

II. Background Biology and Medical Conventions

The issues raised in this case involve the biology of the reproductive cycle and, re-latedly, the medical conventions used by doctors to measure and describe the duration of pregnancy. The district court described these issues with a clarity on which we cannot improve. We set forth the district court’s explanation here:,

The Reproductive Cycle
[[Image here]]
The typical menstrual cycle lasts 28 days and is marked by two key events: the menstrual period and ovulation. The latter is the release of a ripe egg (or ovum) from the ovary. The time from [LMP] to ovulation, known as the follicular phase of the menstrual cycle, is generally two weeks, but variance in the length of the follicular phase can be “significant.” The time from ovulation to the next menstrual period, known as the luteal phase of the menstrual cycle, is two weeks and is subject to much less variance than the follicular phase.
For a successful pregnancy to proceed, the following steps must take place. First, either through sexual intercourse or assisted reproductive technology, sperm must fertilize an egg within 24 hours of ovulation because a ripe egg can survive outside the ovary for only about 12 to 24 hours. [4]

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Bluebook (online)
843 F.3d 48, 2016 U.S. App. LEXIS 23612, 2016 WL 7131177, Counsel Stack Legal Research, https://law.counselstack.com/opinion/church-dwight-co-inc-v-spd-swiss-precision-diagnostics-gmbh-ca2-2016.