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American Home Products Corp. v. Barr Laboratories Inc.

argued: November 17, 1987.


Appeal from the United States District Court for the District of New Jersey, D.C. Civil No. 86-1275.

Author: Seitz


SEITZ, Circuit Judge.

The plaintiff, American Home Products Corporation (AHP), appeals a judgment of the district court in favor of defendants Barr Laboratories (Barr) and L. Perrigo Company (Perrigo). This court has jurisdiction under 28 U.S.C. § 1291 (1982).


AHP manufactures a 200-milligram tablet of the analgesic ibuprofen and markets it under the brand name "ADVIL." The ADVIL tablet is brown and has a glossy coating; the word "Advil" is printed on the tablet in small black letters. As of late 1986, ADVIL accounted for approximately seventy percent of the market for over-the-counter ibuprofen.

In September 1986, defendant Barr began manufacturing a 200-milligram ibuprofen tablet virtually identical in color and size to ADVIL. Unlike ADVIL, Barr's tablet has a dull finish and has the marking "I-2" impressed into the surface in comparatively large characters. Barr's tablet is also shaped somewhat differently than ADVIL. Defendant Perrigo packages and markets Barr's tablets throughout the country under numerous retail brand names, many of which are the "house brand" labels of various retailers. These tablets generally sell for half the price of ADVIL.

In April 1986, in anticipation of efforts by defendants to market a tablet similar in appearance to ADVIL, AHP commenced this action in district court, alleging violation of section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) (1982).*fn1 AHP sought an order preliminarily and permanently enjoining defendants from manufacturing or selling their brown ibuprofen tablet. The district court held hearings on the issues of fact raised by AHP's request for preliminary relief. After the hearings, the district court ordered that trial on the merits be advanced and consolidated with the motion for preliminary injunctive relief, in accordance with Federal Rule of Civil Procedure 65(a)(2). The court then determined that AHP was not entitled to relief under section 43(a) because it had failed to establish a liklihood of confusion as to the respective sources of ADVIL and defendants' tablet. See American Home Prods. Corp. v. Barr Laboratories, Inc., 656 F. Supp. 1058 (D.N.J. 1987). Accordingly, the court granted judgment in favor of defendants. This appeal followed.


Section 43(a) provides in pertinent part:

Any person who shall affix, apply, or annex, or use in connection with any goods or services, or any container or containers or goods, a false designation of origin, or any false description or representation . . . shall be liable to a civil action . . . by any person who believes that he is or is likely to be damaged by the use of any such description or representation.

15 U.S.C. § 1125(a) (1982). To establish a violation of section 43(a) for unprivileged imitation of product appearance, a plaintiff must show (1) that the imitated feature is non-functional, (2) that the imitated feature has acquired a "secondary meaning," and (3) that consumers are likely to confuse the source of plaintiff's product with that of defendant's product. American Greetings Corp. v. Dan-Dee Imports, Inc., 807 F.2d 1136, 1141 (3d Cir. 1986). In the present case, the district court did not address the first two factors, but rather rested its holding entirely on the finding that there was no likelihood of confusion.

At the threshold we must determine the standard of appellate review applicable to a trial court's findings as to likelihood of confusion or lack thereof. This is an issue over which the courts of appeals have disagreed in the past. See Elby's Big Boy of Steubenville, Inc. v. Frisch's Restaurants, Inc., 459 U.S. 916, 74 L. Ed. 2d 182, 103 S. Ct. 231 (1982) (White, J., dissenting from denial of certiorari). Some courts have reviewed findings concerning likelihood of confusion under the "clearly erroneous" standard applicable to questions of fact, see, e.g., Keebler Co. v. Rovira Biscuit Corp., 624 F.2d 366, 377 (1st Cir. 1980), while other courts, characterizing likelihood of confusion as a question of law, have engaged in de novo review of such findings, see, e.g., Blue Bell, Inc. v. Jaymar-Ruby, Inc., 497 F.2d 433, 435 n.2 (2d Cir. 1974). To the extent that the latter approach rests on the perception that appellate courts are in as good a position as trial courts to evaluate evidence of likelihood of confusion, the validity of this approach has been largely undermined by the 1985 amendment to Federal Rule of Civil Procedure 52(a).*fn2 See Scandia Down Corp. v. Euroquilt, Inc., 772 F.2d 1423, 1427-29 (7th Cir. 1985), cert. denied, 475 U.S. 1147, 106 S. Ct. 1801, 90 L. Ed. 2d 346 (1986). This amendment made clear that a district court's conclusions cannot be regarded as pertaining to a "question of law" - and thus reviewed de novo - merely because they are based on evidence that is theoretically susceptible of independent evaluation by an appellate court. Rule 52(a) now requires appellate courts to apply the clearly erroneous standard to all findings of fact, "whether based on oral or documentary evidence." Even before the recent amendment to Rule 52(a), decisions of this court applied the clearly erroneous standard to findings on likelihood of confusion, see CIBA-GEIGY Corp. v. Bolar Pharmaceutical Co., 747 F.2d 844, 851 (3d Cir. 1984), cert. denied, 471 U.S. 1137, 105 S. Ct. 2678, 86 L. Ed. 2d 696 (1985); Freixenet, S.A. v. Admiral Wine & Liquor Co., 731 F.2d 148, 151 (3d Cir. 1984), and we adhere to that approach here. Under the clearly erroneous standard, a finding of fact may be reversed on appeal only if it is completely devoid of a credible evidentiary basis or bears no rational relationship to the supporting data. See Krasnov v. Dinan, 465 F.2d 1298, 1302 (3d Cir. 1972).

Turning to the merits, we do not believe the district court's finding of no likelihood of confusion was clearly erroneous. The court was plainly correct in finding that there was little chance of confusion at the point of sale. The boxed and bottled Perrigo uses to package its tablets are easily distinguishable from ADVIL's packaging. None of the brand names under which Perrigo sells its product is confusingly similar to the name ADVIL. Although much of AHP's point-of-sale advertising prominently pictures the brown ADVIL tablet, Perrigo's ...

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