Federal Court Decisions in the Advertising Law, Marketing Law and Commercial Speech Areas
Welcome to JLCom Publishing Co., LLC's Advertising Law Cases Area. This area contains the full text of federal court decisions in the advertising law, marketing law and commercial speech areas. The federal court decision below involves a sales method called detailing:
Sales Method Called Detailing - Federal Court Decision - Full Text
SCHERING CORPORATION v. PFIZER INC. and UCB PHARMA, INC.
98 Civ. 7000 (LMM), UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK, 2000 U.S. Dist. LEXIS 7071, May 23, 2000, Decided
May 24, 2000, Filed, As Corrected June 1, 2000
fn1 One of the surveys offered in evidence by Schering suggests that the average time taken by a Zyrtec detail is seven minutes. (Pl. Ex. 4 at S 181.)
____________________ In 1996, Schering brought an action against Pfizer and UCB in this Court alleging that the latters' sales representatives were telling physicians that ZYRTEC does not cause sedation, although in fact it causes a significant number of users to become drowsy. fn2 Prior to a scheduled preliminary injunction hearing, the parties entered into a written settlement agreement, dated April 4, 1996 (the "Settlement Agreement"), providing, in part, as follows: 2. a. Pfizer and UCB Pharma hereby agree that, in connection with their advertising and promotion of ZYRTEC in the United States, they will not claim, or allow those acting on their behalf to claim, either expressly or by implication, that: (1) ZYRTEC and/or its active ingredient cetirizine is nonsedating or essentially non-sedating; (2) ZYRTEC and/or cetirizine is as non-sedating as CLARITIN (loratadine), SELDANE (terfenadine), or HISMANAL (astemizole) or is comparable to CLARITIN, SELDANE or HISMANAL, or to the "second" generation of antihistamines currently on the market, in terms of its somnolence or sedation; (3) ZYRTEC's and/or cetirizine's discontinuance rate due to somnolence means that ZYRTEC and/or cetirizine is non-sedating or essentially non-sedating; (4) After a short period of time, ZYRTEC and/or cetirizine users who experience sedation develop tolerance to its sedating effect; (Settlement Agreement [Pl. Ex. 1] at 3-4.) Those restrictions were made applicable to, inter alia, "verbal statements made to doctors, nurses, pharmacists and other members of the health care community." (Id. at 2, P 1(iii).) The Settlement Agreement further provides, in part, that: [2.] b. Pfizer and UCB Pharma further agree that, in connection with their advertising and promotion of ZYRTEC in the United States, they will not claim expressly, or allow those acting on their behalf to claim expressly, that 1. ZYRTEC and/or cetirizine is a "low" sedating drug unless the [FDA] authorizes or permits such a claim. (Id. at 4-5.) Pfizer and UCB do not assert that the FDA has authorized or permitted such a claim. The Settlement Agreement further provides, in part, that: 8. Nothing in this Agreement shall prohibit any party from making truthful and non- misleading references to the labeling for CLARITIN and/or ZYRTEC and/or any other antihistamine. (Id. at 12.) ____________________
fn2 Schering Corp. v. Pfizer Inc. & UCB Pharma, Inc., 96 Civ. 1462 (LMM).
____________________ In the present action, Schering asserts two claims: in Count One of the complaint, that "defendants' statements to physicians and other health care professionals that ZYRTEC is non-sedating or essentially non-sedating violate the Settlement Agreement" (Cplt. P 29), and, in Count Two of the complaint, that "defendants' statements to physicians and other health care professionals are designed to convey and do in fact convey the false and misleading message that ZYRTEC is non-sedating or essentially non-sedating in violation of Section 43(a)(2) of the Lanham Act, 15 U.S.C. Section 1125(a)(2)." (Id. P 31.) fn3 ____________________
fn3 Schering presumably refers to Section 43(a)(1)(B) of the Lanham Act, 15 U.S.C. Section 1125(a)(1)(B). See 4 J. Thomas McCarthy, Trademarks and Unfair Competition Section 27:6, at 27-11 n.1 (4th ed. 1999).
____________________ Schering sought a preliminary injunction with respect to the statements it claimed were being made by representatives of Pfizer and UCB to physicians, and this Court denied the preliminary injunction sought because it found that the five surveys offered by Schering to prove violation of the Settlement Agreement and the Lanham Act were inadmissible, and that the other evidence offered by Schering, standing alone, was insufficient to support the relief sought. See Schering Corp. v. Pfizer Inc. & UCB Pharma, Inc., 1999 U.S. Dist. LEXIS 2980, 98 Civ. 7000 (LMM), 1999 WL 144291 (S.D.N.Y. Mar. 11, 1999). As noted, the Court of Appeals remanded. See 189 F.3d at 240. 3. In its decision denying Schering's motion for a preliminary injunction, this Court excluded from evidence five surveys offered by Schering. Those surveys are the following: 1. A survey conducted by DTW Marketing Research Group, Inc. ("DTW") for Schering in the first half of 1998 (Pl. Ex. 4) (hereinafter "DTW Survey No. 1"). DTW Survey No. 1 is described by the Court of Appeals at 189 F.3d at 222. 2. A second survey conducted by DTW for Schering in the first half of 1998 (Pl. Ex. 5) (hereinafter "DTW Survey No. 2"). DTW Survey No. 2 is described by the Court of Appeals at 189 F.3d at 222-23. 3. A survey conducted by Clark, Martire & Bartolomeo ("CMB") for Schering in the second half of 1998 (Pl. Ex. 3) (hereinafter "CMB Survey"). The CMB Survey is described by the Court of Appeals at 189 F.3d at 223. 4. A survey conducted by Market Measures, Inc. ("MMI") for Pfizer fn4 in the second half of 1998 (Pl. Ex. 49) (hereinafter "MMI FasTape Survey"). The MMI FasTape Survey is described by the Court of Appeals at 189 F.3d at 223. ____________________
fn4 Where appropriate herein, the Court's references to Pfizer include UCB.
____________________ 5. A survey conducted by Scott-Levin, a division of PMSI Scott-Levin, Inc. ("Scott-Levin") in the second half of 1998, purchased by Schering (Pl. Exs. 73 & 74) (hereinafter "Scott-Levin Survey"). The Scott-Levin Survey is described by the Court of Appeals at 189 F.3d at 223. 4. The Court of Appeals concluded that the Scott-Levin Survey is admissible under Fed. R. Evid. 803(3) "for the limited purpose of showing what Zyrtec representatives were implying in the detailings," Schering, 189 F.3d at 239, and that the MMI FasTape Survey is admissible "both to show these implications under Rule 803(3), and as a party admission under Rule 801(d)(2)." Id. at 240. The Court of Appeals remanded for a determination "whether any of the surveys are sufficiently trustworthy and necessary to be admitted under Rule 807 to show literal falsehoods in violation of the Settlement Agreement and Section 43(a)(2) of the Lanham Act." fn5 Id. The weight to be accorded the evidence was left to this Court. Id. ____________________
fn5 See n.3, supra.
____________________ The Court must thus consider, in light of the Court of Appeals' opinion, first, the admissibility of the surveys, and, second, the weight to be given them. 5. The MMI FasTape and Scott-Levin surveys are, in the first place, admitted pursuant to Fed. R. Evid. 803(3) "for the limited purpose of showing what Zyrtec representatives were implying in the detailings," Schering, 189 F.3d at 239, in accordance with the Court of Appeals' opinion. The MMI FasTape survey is also admitted pursuant to Fed. R. Evid. 801(d)(2), in accordance with the Court of Appeals' opinion. fn6 ____________________
fn6 For the same reason, the Gengler analysis (Pl. Ex. 50) is admitted pursuant to Fed. R. Evid. 801(d)(2).
____________________ 6. The Court next considers the admissibility under Fed. R. Evid. 807 of the DTW Surveys Nos. 1 and 2, the CMB Survey and the Scott-Levin Survey. fn7 ____________________
fn7 The Court does not consider separately the admissibility of the MMI FasTape Survey under id., since the Court of Appeals has already held that it is admissible (and this Court has thus already admitted it), not only under id. 803(3) "for the limited purpose of showing what Zyrtec representatives were implying in the detailings," Schering, 189 F.3d at 239, but also "as a party admission under Rule 801(d)(2) to show what the representatives were actually saying." Id. at 240. Since the MMI FasTape Survey is admitted under Rule 801(d)(2), it is, by definition, not hearsay, and therefore need not be admitted under an exception to the hearsay rule.
____________________ "To be admissible under the residual exception [now found in Rule 807 fn8 ], the evidence must fulfill five requirements: trustworthiness, materiality, probative importance, the interests of justice and notice." Parsons v. Honeywell, Inc., 929 F.2d 901, 907 (2d Cir. 1991); see also Schering, 189 F.3d at 231. ____________________
fn8 Rule 807 is a combination of former Rules 803(24) and 804(b)(5), and cases under the former Rules may be used to interpret Rule 807. 5 Jack B. Weinstein & Margaret A. Berger (Joseph M. McLaughlin, gen. ed.), Weinstein's Federal Evidence ("Weinstein, Evidence") Section 807.02  &  (2d ed. 2000).
____________________ In its original, now vacated and remanded, decision, this Court found that the materiality and probative importance requirements were satisfied. Schering Corp. v. Pfizer, Inc., 1999 U.S. Dist. LEXIS 2980, No. 98 Civ. 7000, 1999 WL 144291, at *4 (S.D.N.Y. Mar. 16, 1999). The Court adheres to that determination. Further, Pfizer has not challenged the admission of the surveys on notice grounds. The Court of Appeals has remanded for reconsideration of the trustworthiness and interests of justice requirements, and also, under the rubric "necessity," this Court's findings regarding reasonable alternatives to surveys. 189 F.3d at 238. As to the necessity issue, this Court finds that, if survey evidence "trustworthy enough to be admitted under the residual hearsay rule," Schering, 189 F.3d at 237, is available, then, given the large number of persons surveyed, Rule 807(B) is satisfied, i.e., survey evidence is more probative than the testimony of a very much smaller number of persons that a party could reasonably be expected to bring to court, or whose deposition testimony could be presented in court. fn9 "Necessity does not mean total inaccessibility of firsthand evidence. Great practical inconvenience or the need for extended trial time or the expense of more conventional methods of proof will support use of survey evidence." 5 Weinstein, Evidence, Section 901.11[a] (footnote omitted). ____________________
fn9 That is not to say that the presentation of a reasonable number of the persons surveyed at trial or by deposition would not add to the weight of the survey evidence. For instance, the Court of Appeals said that "the physicians polled presumably would have been poised to look for and remember [somnolence level] information in a detailing." Schering, 189 F.3d at 236 (emphasis added). The record is, however, devoid of any firsthand information about how physicians themselves actually regard, behave during, or react to, detailings.
____________________ As to the interests of justice requirement, this Court's finding that it would not be in the interests of justice to admit the surveys was rooted, principally, in the prohibition of Fed. R. Evid. 803(3) against the admission of "a statement of memory or belief to prove the fact remembered . . . ." Id. 803(3). The Court of Appeals, however, has held that that provision is not relevant to the Rule 807 analysis, Schering, 189 F.3d at 232, and the Court therefore concludes that there is no reason to exclude the surveys in the interests of justice, if they are sufficiently trustworthy. Pfizer argues that, under the Court of Appeals' opinion, "the threshold is lower for admissibility, with survey methodology, flaws and applicability to the litigation going principally to weight rather than admissibility." (Def. Mem. at 14 n.9.) Pfizer argues, against admissibility, that "the survey data were not designed to, and cannot, answer the issue posed in this case, i.e., whether a prohibited message was delivered by Pfizer, and hence should not be admitted into evidence." (Def. Mem. at 14.) This is because, Pfizer argues, the surveys cannot "distinguish whether the physicians' responses were the result of a permitted or prohibited message." (Def. Prop. Concl. P 17.) Thus, Pfizer suggests, "a physician correctly informed that FDA considers the side effects associated with Zyrtec (including drowsiness) to be 'mild or moderate' could reasonably conclude that Zyrtec is 'nonsedating' or 'essentially nonsedating,' rather than 'sedating.'" (Def. Prop. Find. P 39.) The Court disagrees with the argument. The surveys in question clearly asked the physicians surveyed, in substance, either what was said, or what was the main message conveyed, by the ZYRTEC detailer. Those questions go to the principal factual issue in this case, unlike the irrelevant survey question considered by the court in Conopco, Inc. v. May Dept. Stores Co., 46 F.3d 1556, 1564 n.9 (Fed. Cir. 1994). It is, of course, always possible that a survey respondent may give an unresponsive answer (i.e., the physician asked what the detailer said may, in response, state what he or she, the physician, thinks is the case, rather than what the detailer said), but that is not the result of the survey questions, which are clear enough to minimize the suggested problem. Detailing, of course, by its nature involves a person-to-person conversation, however brief it may be, and it is not surprising that some of the physicians surveyed at times reported not only what the detailer said to them, but also what the physician said to the detailer. Comments by the physician, however, are in most cases identifiable as such, as a review, for instance, of the verbatim survey responses cited in Pfizer's Proposed Finding 84 (relating to the CMB Survey), which are contained in Defendants' Exhibit 33, confirms. In any event, as to any unresponsive answers, most, if not all, should be readily identifiable, and once identified, can be recoded out of the survey results. Pfizer also argues that Schering's survey expert, Mr. Bartolomeo, was biased, and that his bias is reflected not only in the opinions to which he testified, but in his coding of the survey results, and that Schering's counsels' participation in the coding also affects the trustworthiness of the surveys' results. These arguments are not persuasive because, if for no other reason, Pfizer has had access to the underlying responses which Mr. Bartolomeo, with the assistance of Schering's counsel, coded, so that, if responses were improperly coded, Pfizer has not been prevented from recoding them. fn10 ____________________
fn10 Needless to say, the Court recognizes that Mr. Bartolomeo was a partisan witness, and takes that into account throughout.
____________________ The Court finds that both of the DTW Surveys, the CMB Survey and the Scott-Levin Survey are sufficiently trustworthy to be admitted under Fed. R. Evid. 807: none of them are affected by methodological flaws sufficiently serious to render them untrustworthy, and they are subject to only relatively minimal risks of faulty perception and memory. They are admitted under Rule 807. 7. Before considering the weight to be given the surveys admitted pursuant to Fed. R. Evid. 801(d)(2) and 807, it will be useful to describe them. The DTW Survey No. 1 (Pl. Ex. 4) surveyed, during the period March 30 through June 5, 1998, 78 physicians selected at random from a list of the highest antihistamine prescribers in the United States, and asked, in substance, what the ZYRTEC detailers said about the product. 14.1% of the physicians reported that they were told, in substance, that ZYRTEC was non-sedating. The DTW Survey No. 2 (Pl. Ex. 5) surveyed, during the period March 30, 1998 through April 28, 1998, 98 physicians, and also asked, in substance, what the ZYRTEC detailers said about the product. 16.4% of the physicians reported that they were told, in substance, that ZYRTEC was non-sedating. The CMB Survey (Pl. Ex. 3) surveyed, during the period July 23 through September 17, 1998, 200 physicians who prescribed antihistamines, and asked, in substance, what the ZYRTEC detailers said about the product. 14.5% of the physicians reported that they were told, in substance, that ZYRTEC was non-sedating. The MMI FasTape Survey (Pl. Ex. 49) surveyed, during the period July 7, 1998 through July 12, 1998, 74 physicians detailed by ZYRTEC representatives, and asked, in substance, what the "main message" of the ZYRTEC detailers was. 20.3% of the physicians reported a message that ZYRTEC was non-sedating. The Pfizer Executive Summary - Zyrtec Sedation FasTape Study, dated August 17, 1998 (Pl. Ex. 50), reflects the understanding of a Pfizer market research specialist of what the MMI FasTape Survey showed: "The fifth and less appropriate message being communicated by Zyrtec representatives concerns their claim of Zyrtec causing little or no sedation to allergic rhinitis patients. Specifically, physicians report one third of Zyrtec sales representatives mentioning low/non sedation with respect to Zyrtec's side effect profile and mechanism of action." (Pl. Ex. 50 at 2.) fn11 ____________________
fn11 "Schering's preliminary injunction motion is focused on the non-sedating messages and does not seek relief with respect to these 'low sedation' claims." (Pl. Prop. Findings P 63 [discussing CMB Survey].) In describing the surveys above and below, the Court, while aware of the thrust of Schering's argument as to "low sedation" messages (id.), has described the percentages of physicians reporting "no sedation" messages, as coded by Schering, not including "low sedation" messages.
____________________ The Scott-Levin Survey (Pl. Exs. 73 & 74) surveyed, during the period March through August 1998, 716 physicians, and asked, in substance, what the "main message" of the ZYRTEC detailers was. 15.6% of the physicians reported a message that ZYRTEC was non-sedating. 8. Pfizer advances a number of reasons why the surveys are entitled to no weight. (Def. Mem. at 17-21.) a. The Court has already considered, above, the issue of Mr. Bartolomeo's bias. (Id. at 18.) The Court finds that Pfizer has not shown that his bias has affected the coding in a way that would justify giving the surveys no weight. b. Pfizer next argues that the surveys are flawed in that they do not include "a 'control,' which is an 'indispensable' component of surveys used to make causal conclusions." (Def. Mem. at 18 (quoting Johnson & Johnson * Merck Consumer Pharms. Co. v. SmithKline Beecham Corp., 960 F.2d 294, 301 (2d Cir. 1992)).) A control is not required in the case of every survey. In Johnson & Johnson, the issue was whether the defendant's "challenged [television] commercials communicated a false or misleading message with respect to the safety of aluminum-based antacids." 960 F.2d at 297. The plaintiff argued that "even though the content of the challenged commercials [was] literally true, [the commercials] prey[ed] upon a publicly held misperception that the ingestion of aluminum causes Alzheimer's disease." Id. The plaintiff's theory of recovery was one of "implied falsehood," id., so that it had to demonstrate, "by extrinsic evidence, that the challenged commercials tend[ed] to mislead or confuse consumers." Id. The plaintiff had introduced a survey, of persons who had viewed one of the defendant's commercials, which focused on what the commercial "communicated" to the viewer. Id. at 299. It was in this context that Johnson & Johnson noted that "the purpose of a control study is to identify the portion of the survey population that held extrinsic beliefs prior to viewing an advertisement - for example, the unsubstantiated belief that aluminum causes Alzheimer's disease," and that "a control would likely be indispensable proof in an action premised on [the plaintiff's] theory." Id. at 301. The court added that "without such evidence it would be hard to imagine how a plaintiff could ever convincingly establish that there was, in the first instance, a public misperception for the defendant to exploit." Id. Here, on the other hand, Schering seeks admission of the surveys under Rule 807 to establish something quite different than the state of mind of consumers, as was the case in Johnson & Johnson. Insofar as the surveys are offered under Rule 807, they are offered as proof of what ZYRTEC detailers said to physicians or what the "main message" was that the detailers conveyed. The surveys are not offered under Rule 807 to establish "causal conclusions" (Def. Mem. at 18), nor to uncover "extrinsic beliefs prior to [the detailing]." Johnson & Johnson, 960 F.2d at 301. The Court finds that the lack of a "control" is not a ground for giving the surveys no weight. c. Pfizer argues that the physicians' responses are ambiguous -- they report "what they said or know (rather than what the sales representative said" -- and so are entitled to no weight. (Def. Mem. at 19.) This argument is considered above, in connection with admissibility, and, for the reasons there discussed, the court finds that it is not a ground for giving the surveys no weight. d. Pfizer argues that "the majority of the proffered surveys failed to employ sufficient mechanisms to ensure that the physician's participation in the survey occurred reasonably soon after the detailing session." (Def. Mem. at 19.) This flaw, according to Pfizer, affects both of the DTW Surveys (Def. Prop. Find. P 91), the MMI FasTape Survey (id. P 102) and the Scott-Levin Survey. (Id. P 106.) It seems clear that, the longer the time between the detailing and the physician's response to the survey, the greater the risk of faulty memory, particularly if, as Pfizer plausibly argues, "the imperfections of human memory are likely to be exacerbated when the question relates to a fleeting, relatively unimportant interaction in the life of a busy physician." (Id. P 121 [citing testimony of Dr. Ross].) On the other hand, in the case of the DTW Surveys, the physicians were instructed to fill out the questionnaires within a day of the detailing, and in the case of the MMI FasTape Survey, the physicians were instructed to telephone in their responses immediately after the detailing; in the case of the Scott-Levin Survey, however, the physicians reported weekly. There is no evidence that any substantial number of physicians responded to the DTW Surveys or the MMI FasTape Survey later than instructed, although the Court must assume that, in the normal course, some did. In the case of the weekly reporting arrangement of the Scott-Levin Survey, obviously, some of the physicians were no doubt reporting as much as four or five days after the detailing. Despite the noted possible memory problems, they are minimal, and the Court finds that they are not a sufficient ground to give no weight to the surveys. e. The Court, after examination of the questions asked in the DTW Surveys and the CMB Survey, challenged by Pfizer as leading, finds that they are not leading in any way that affects the trustworthiness of the surveys' results. The Court cannot see, for instance, that suggesting the term "sedation," as opposed to "drowsiness" or "somnolence," changes the meaning of the physicians' responses. This argument is not a ground for giving the surveys no weight. f. Pfizer argues that the DTW Surveys and the MMI FasTape Survey are not "projectable" (Def. Mem. at 21), and are, for that reason, entitled to no weight. Projectability refers to the ability to project a sample of a relevant universe or population of individuals to the entire universe or population. Projectability is significant when a survey seeks to determine state of mind as, for example, where secondary meaning is the issue. Thus, in Bank of Texas v. Commerce Southwest, Inc., 741 F.2d 785 (5th Cir. 1984), cited by Pfizer (Def. Prop. Concl. P 51), the question was whether the name ("Bank of Texas") of the plaintiff, "a neighborhood bank in northeast Dallas," 741 F.2d at 786, had acquired secondary meaning in all of Dallas County. Id. The Court found insufficiently probative a survey of a "population taken from an area surrounding Bank of Texas, and comprising only a portion of the City of Dallas," 741 F.2d at 789, because of "the survey designer's admission that the results of the survey [could not] be assumed to be representative of all of Dallas County", id., although it was plaintiff's burden to prove "secondary meaning in the entire county." Id. The survey, in other words, was not "projectable" to the relevant universe, the population of the entire county. Here, the relevant universe is, quite simply, physicians: Schering seeks to establish that Pfizer is (through the detailing representatives) telling physicians that ZYRTEC is non-sedating or essentially non-sedating, or something that implies that ZYRTEC is non-sedating or essentially non-sedating. There is no argument that the relevant universe is any particular subset of physicians, nor any dispute that all of the persons surveyed were physicians. Thus, by definition, the persons surveyed were representative of the universe of physicians. There is, accordingly, no issue of projectability, and lack of projectability is not a ground for giving the surveys no weight. * * * For the foregoing reasons, the Court concludes that there is no reason to give any of the surveys no weight. 9. The foregoing does not mean that there are not factors that diminish the weight of the surveys. As discussed above in Section 8d of this Memorandum and Order, there remains an issue whether all of the physicians have accurately remembered the detail. Even the briefest cross-examination could have brought out facts -- such as the time elapsed between the detail and the physician's reporting of the detail, the number of details the physician had had on the day in question, and factors that might have distracted the physician during the detail -- which would have assisted in the evaluation of the weight of the surveys. fn12 As the Court of Appeals recognized, had Schering brought "even a small subset of the surveyed physicians into court, a process that would have allowed for their cross-examination," that "would have greatly assisted the court in determining what weight to give the surveys overall." Schering, 189 F.3d at 230. Schering's election not to follow the Court of Appeals' suggestion in this regard does lessen the weight to be given the surveys. ____________________
fn12 See also n. 9, supra.
____________________ One factor, on the other hand, adds weight to the individual surveys, and that is the substantial consistency of the results of all five surveys. 10. Although the survey evidence presented in this case does not carry the weight that cross-examined testimony of the detailed physicians would posses, or even that the survey evidence would possess if accompanied by the cross-examined testimony of some physicians, the five surveys possess sufficient weight to support a showing that a minority of the ZYRTEC detailers, during the period March through August, 1998, were telling physicians, during detailing visits, that ZYRTEC was non-sedating or essentially non-sedating. fn13 ____________________
fn13 The percentages vary, survey to survey. See Section 7 of this Memorandum and Order, above. The total is certainly less than 20 percent.
____________________ 11. In order to obtain a preliminary injunction, Schering must show "(a) that it will suffer irreparable harm if relief is denied, and (b) either (1) a likelihood of success on the merits or (2) sufficiently serious questions going to the merits to make them fair ground for litigation and a balance of hardships tipping decidedly in [its] favor." Castrol, Inc. v. Quaker State Corp., 977 F.2d 57, 62 (2d Cir. 1992). 12. Considering first Schering's claim for breach of the Settlement Agreement, the Court finds that Schering has shown a likelihood that it will succeed on the merits: statements by ZYRTEC detailers to physicians that ZYRTEC is non-sedating or essentially non-sedating have been shown by the surveys to have been made, and such statements clearly violate the Settlement Agreement. Similarly, Schering has shown that it is likely to succeed on its claim for violation at 15 U.S.C. Section 1125(a)(1)(B). The surveys show that ZYRTEC detailers have told physicians that ZYRTEC is non-sedating or essentially non-sedating. Pfizer does not suggest any basis upon which it is permitted to do that, nor is it possible to see how it could, given the content of the FDA approved package insert for ZYRTEC. The statements "misrepresent the nature, characteristics, [or] qualities . . . of [Pfizer's] goods . . . ." Id. Such literally false statements are violations of the Lanham Act. McNeil-P.C.C., Inc. v. Bristol-Myers Squibb Co., 938 F.2d 1544, 1548-49 (2d Cir. 1991). 13. Schering has also made a sufficient showing of irreparable harm. The harm presumably contemplated by Schering is that, as a result of what the ZYRTEC detailers have told them about ZYRTEC, some physicians will prescribe ZYRTEC instead of CLARITIN for certain patients. Schering has not introduced evidence of any instance in which that has occurred. Schering argues, however, that the ZYRTEC detailers, in describing ZYRTEC as non-sedating or essentially non-sedating, are engaged in false comparative advertising, so that there is a presumption of irreparable harm. Castrol, 977 F.2d at 62; McNeilab, Inc. v. American Home Prods. Corp., 848 F.2d 34, 38 (2d Cir. 1988). The MMI FasTape Survey, in evidence under Fed. R. Evid. 801(d)(2), i.e., as a party admission, see Schering, 189 F.3d at 238, notes that "Zyrtec representatives appear more apt to target another product than do the other representatives [of CLARITIN and ALLEGRA]." (Pl. Ex. 49 at .) "A larger percentage of physicians detailed on Zyrtec note product comparisons (62%) -- most often to Claritin (80%), followed by Allegra (39%) -- than do those physicians who received a Claritin (45%) or Allegra presentation (53%)." (Id.) The MMI FasTape Survey thus shows that detailers are making literally false statements in the context of a comparison of ZYRTEC with CLARITIN. fn14 Irreparable injury is therefore presumed. ____________________
fn14 ZYRTEC printed materials available to detailers for distribution to physicians contain advertising specifically mentioning CLARITIN. (See Def. Exs. 55 & 59.)
____________________ 14. Pfizer argues that "Schering's delay in asking for injunctive relief evidences a lack of urgency on its part, and therefore . . . militates against a finding of irreparable harm." (Def. Mem. at 22 (citing, inter alia, Citibank, N.A. v. Citytrust, 756 F.2d 273, 276-77 (2d Cir. 1985)).) The Settlement Agreement was entered into on April 3, 1996. On June 19, 1998, Schering's general counsel wrote to Pfizer and UCB reminding them of the Settlement Agreement, recounting some information indicating that ZYRTEC was being detailed as non-sedating or essentially non-sedating, and requesting that Pfizer and UCB cease and desist. (Pl. Exs. 25 & 26.) By letter dated July 2, 1998, Pfizer responded that it had been unable to identify instances of violation of the Settlement Agreement. The present action was filed on October 5, 1998, and Schering sought a preliminary injunction almost immediately (after expedited discovery). The Court does not regard the delay argued by Pfizer to be of the sort that would bring the case within the Citibank doctrine. The facts regarding what takes place during a detail are not (as this case itself demonstrates) easy to get at, and Schering's efforts, first to resolve the matter, and, second, to assemble more evidence, do not indicate, in this Court's view, the lack of a "sense of urgency." Citibank, 756 F.2d at 277. 15. For the reasons set forth above, Schering is entitled to a preliminary injunction that will prevent ZYRTEC detailers from telling physicians that ZYRTEC is non-sedating or essentially non-sedating. fn15 ____________________
fn15 The parties have spilled a great deal of ink over the question whether Schering has or has not asserted a claim based on implied falsehood. The Court does not reach this question. An implied falsity claim -- that "while the advertisement is literally true it is nevertheless likely to mislead or confuse consumers," Johnson & Johnson * Merck Consumer Pharms. Co. v. Smithkline Beecham Corp., 960 F.2d 294, 297 (2d Cir. 1992) -- requires that a plaintiff show not only the residual belief into which the consumer was misled, but what the literally true message was that misled the consumer. Id. at 298. The Court finds that there is not (or, at least, there has not been pointed out to the Court) sufficient evidence from which to decide such a claim, if Schering has asserted it. The surveys do not seem to have been designed to elicit both of the necessary facts, and any findings in this regard would be speculation. The Court notes that the calling of at least some physicians would be particularly useful in deciding an implied falsehood claim.
____________________ 16. In addition to arguing that Pfizer should be ordered to comply with the Settlement Agreement (a proposition with which the Court agrees), Schering argues that "Pfizer must be ordered to directly advise the medical community that ZYRTEC causes sedation and that it is, in that respect, different than other second generation antihistamines." (Pl. Mem. at 23.) As to this proposition, the Court disagrees, for several reasons. a. Schering argues, in substance, that the ZYRTEC detailers are being trained and directed to represent that ZYRTEC is non-sedating or essentially non-sedating. The Court finds that there is no convincing evidence that this is so. While some of the material on which ZYRTEC detailers are trained is susceptible to a reading that could lead the trainee to think that ZYRTEC is non-sedating or essentially non-sedating (see especially Pl. Ex. 43 at 8-9), there is no convincing evidence the ZYRTEC detailers are actually trained and directed to represent to physicians that ZYRTEC is non-sedating or essentially non-sedating. The inference that can be drawn from the surveys -- showing that during not more than 20 percent of the details did ZYRTEC detailers make such representations, during the period covered by the surveys -- is that the detailers are not being trained and directed to make them. b. Pfizer's declination to offer, post-remand, evidence of remedial measures is not evidence of "lack of remorse." (Pl. Mem. at 23.) As now Justice Thomas' opinion in ALPO Petfoods, Inc. v. Ralston Purina, Inc., 286 U.S. App. D.C. 192, 913 F.2d 958, 965-66 (D.C. Cir. 1990) (cited in Pl. Mem. at 23) explains, a failure to "recant" or "show remorse" is not a basis for a finding of willfulness. Further, given Schering's litigation position, Pfizer might well have thought that to put in evidence of remedial measures would be seized on by Schering as something in the nature of an admission of guilt. c. Schering's invocation of "important public health consequences" (Pl. Prop. Concl. P 11) is better addressed to the FDA, and not in a context of aggressive litigation. d. The specific relief requested, that Pfizer be required to advise physicians that ZYRTEC is sedating, could be interpreted to suggest, incorrectly, that the "FDA has established a classification scheme regarding sedation of antihistamines," which is untrue (See Def. Ex. 47.) 17. For the foregoing reasons, Pfizer and UCB, and their officers, agents, servants, employees, and attorneys (including all persons authorized to detail ZYRTEC on behalf of Pfizer and/or UCB), and those persons in active concert or participation with them who receive actual notice of this order by personal service or otherwise, are enjoined, during the pendency of this action, from stating or implying, in writing or orally, that ZYRTEC is non-sedating or essentially non-sedating. Pfizer and UCB are directed to notify, in writing, and as promptly as possible, but not later than seven days from the date hereof, all persons authorized to detail ZYRTEC for them or either of them, of the above injunction and that violation thereof may result in a finding of contempt. Schering is to post a bond in the amount of $150,000 pursuant to Fed. R. Civ. P. 65(c) not later than May 25, 2000. 18. The foregoing constitute the Court's findings of fact and conclusions of law on Schering's motion for a preliminary injunction. fn16 ____________________
fn16 The parties are to advise the Court in writing not later than 10 days from the date hereof of their suggestions as to the date upon which they believe discovery can be completed.
____________________ SO ORDERED. Dated: June 1, 2000 Lawrence M. McKenna U.S.D.J.
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