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P&G v. CHESEBROUGH-POND'S INC.

June 11, 1984

THE PROCTER & GAMBLE COMPANY, Plaintiff, against CHESEBROUGH-POND'S INC., Defendant; CHESEBROUGH-POND'S INC., Plaintiff, against THE PROCTER & GAMBLE COMPANY and BENTON & BOWLES, INC., Defendants.


The opinion of the court was delivered by: GOETTEL

GOETTEL, D.J.:

Advertising is a pervasive part of modern life. We are confronted with it wherever we turn. Most of us do not take advertising too seriously. *fn1" Those who do are the advertisers themselves, particularly when their competitors make comparative claims of superiority which may influence consumer purchases.

 In these actions, two of the nation's largest consumer product manufacturers, The Procter & Gamble Company ("P&G") *fn2" and Chesebrough-Pond's Inc. ("Chesebrough"), *fn3" have sued one another. Each alleges that the other's comparative advertising claims concerning certain products are false. *fn4" Filed just a few business hours apart, the two actions have been consolidated, and evidentiary hearings lasting more than seven days have been held to consider the parties' cross-motions for preliminary injunction.

 The following opinion constitutes the Court's findings of fact and conclusions of law on these cross-motions.

 FACTS

 The Skin Lotions

 The products involved are skin lotions, which are referred to by the parties as "hand and body lotions" to distinguish them from facial lotions. They are consumer products sold in stores throughout the country and shipped in interstate commerce. No prescription is necessary for their purchase and no restriction has been placed on their usage.

 Two of these skin lotions figure prominently in this litigation. Chesebrough's product, Vasoline Intensive Care Lotion ("VICL"), has a leading sixteen percent share of the skin lotion market, and P&G's product, Wondra, commands just over five percent of the market. *fn5" Recently, a "new and improved" formulation of the latter product ("New Wondra" or "Wondra V") has been marketed and extensively advertised. *fn6"

 These and the other skin lotions are designed to counter dry, rough skin, a condition which has a number of causes. Experts consider one of the causes to be genetic. Another is exposure to water, wind, and sun. A third is contact with detergents, particularly those for clothing and dishes. *fn7"

 To counter dry, rough skin, the lotions work on the basis of one or both of two methods. The first is occlusivity, whereby an impermeable layer prevents the loss of water from the skin. Petroleum jelly, lanolin (from sheep's oil), and other relatively greasy substances are effective in creating such an impermeable layer. The second method relies upon the use of a humectant, a chemical that permeates to the stratum corneum of the skin and there attracts and holds water. The most commonly used humectant is glycerin, an ingredient of skin lotion for more than fifty years. *fn8" Indeed, the claimed improvement in New Wondra was the addition of more glycerin.

 Glycerin and the effective occlusive agents tend to be greasy, however, and the consumers who use these products, overwhelmingly women, customarily reject products that look or feel greasy. The manufacturer's task, therefore, has been to create a product that contains the effective agents of occlusive or humectant products yet rubs into the skin easily and leaves no greasy coat. *fn9" In the latter respect, the products are more cosmetic than medicinal.

 Although there are approximately 100 brands of skin lotion besides Chesebrough's VICL and P&G's Wondra, only VICL has a substantial position in the market. Each of the other Chesebrough skin lotions -- Intensive Care Extra Strength ("VICL Extra Strength"), Intensive Care Herbal and Aloe, and Vasoline's Dermatology Formula Lotion ("VDL") -- has a relatively small market share, so that the four Chesebrough products together command only about 25% of the market.

 VICL is Chesebrough's most heavily promoted product.In its advertising, Chesebrough claims that "no leading lotion beats" VICL. Following the reformulation of Wondra (known as Wondra V within the company, but called New Wondra for advertising purposes) and the completion of certain consumer tests discussed more fully below, P&G began intensive advertising of New Wondra in the summer of 1983. These advertisements proclaim that New Wondra is more effective because of its additional glycerin and that clinical tests have established that New Wondra relieves dry skin better than any other leading lotion. *fn10"

 Thus, with P&G claiming that its product is superior to all other lotions and Chesebrough claiming that nobody's product is better than VICL, we have a situation in which at least one of the advertising claims most logically be wrong. Looking to the Court to determine which claim is misleading, each party contends that, it is being injured by the other's advertising and that because the injury cannot be concretely measured, the harm is irreparable.

 Consumer Product Testing

 Both companies have conducted extensive tests to support their advertising claims. The evidence presented at the hearings in this matter concerned primarily the propriety and accuracy of the testing methods employed by each company. The methods range from small-scale tests, often done with expert panels who give subjective responses to the use of the product, to large-scale clinical tests in which numerous consumers participate. In between are various other types of tests, including one known as the Kligman regression, which is named after a doctor at the University of Pennsylvania who has been active in attempting to make testing methods more scientific. *fn11"

 While it is generally agreed that a fairly large-scale clinical test offers the best opportunity for demonstrating differences in efficacy, maintaining controlled laboratory conditions when conducting such tests is very difficult. Questions also arise in determining who should be included in the test population. Should it be composed primarily of adult women, who are the major users of the product, or should it be drawn from the population at large? Should the participants be lotion users and persons with an existing problem (such as "dishpan hands")? In this regard, it seems fairly obvious that participants in the test must start with some degree of rough, dry skin if there is to be any possibility of improvement. Also, because the tests used are relatively crude, it is generally agreed that those with fairly extensive problems make better subjects because the differences in improvement are more likely to be measureable. Nonetheless, it is also essential to exclude people who have rough, dry skin that is caused by skin diseases, rather than by the more common, everyday causes. Finally, the parties also agree that large-scale clinical tests are best conducted on a "double blind" basis (meaning that neither the subject nor the grader knows which product has been applied), *fn12" and that, where the subjects are using different products, an attempt should be made to classify the subjects by initial skin condition, age, and detergent exposure, so that every product is tested against a relatively random sample.

 What the real controversy in this case concerns is the means used to evaluate the condition of the skin at the start of the testing and at the various grading points thereafter. No reliable mechanical or electrical tests for accomplishing this exist. The evaluation, therefore, must be made visually. *fn13" Toward this end, the manufacturers employ "graders." These are persons who are trained and schooled in evaluating skin condition by sight and touch. In their grading, they assign numerical values to the condition of the skin, using various scales ("parametric systems"), some of which set forth verbal descriptions of the equivalent skin condition at various points on the scale. The graders need not be dermatologists or even doctors, but a dermatologist is necessary for the initial screening in order to eliminate potential subjects who have specific skin diseases.

 Both companies employed dermatologists as graders in their large-scale clinical tests. Having heard considerable testimony concerning the grading process, the Court is convinced that a skilled grader can determine with reasonable accuracy the relative condition of a subject's skin and compare it to that of other people. The Court also concludes, however, that the numerical designations do not necessarily correspond to the verbal descriptions on the scale. Moreover, although the graders are internally consistent, which is to say that one of them will give approximately the same score to all skin having the same condition, that score will not ...


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