The opinion of the court was delivered by: ARTHUR D. SPATT
In reviewing this case, the Court finds that the caption might more appropriately read the "Clash of the Titans." These two pharmaceutical giants have manufactured and produced some of the most reputable products sold, not only in this country, but around the world.
In particular, two brand names intimately connected to these companies are known to virtually every household in America -- EXCEDRIN and TYLENOL. These two products have come to be identified with what is often perceived to be a peculiarly national phenomenon -- the great American "headache" -- a multi-million dollar industry.
What makes this action both interesting and difficult is that the issues go to the heart of the free enterprise system -- the ability and the right to compete in the marketplace, a principle that historically has formed part of the foundation of our nation and its society. However, the right to compete is not unbridled.
This dispute concerning trademark and trade dress infringement focuses upon two individual products -- EXCEDRIN PM and TYLENOL PM -- which are part of the family of over-the-counter analgesics sold respectively by the plaintiff and defendant, recommended for nighttime application. The case is before the Court at this time to review the objections filed by both parties to the Report and Recommendation of the United States Magistrate Judge who, after conducting an evidentiary hearing on Bristol-Myers' request for a preliminary injunction on its trademark and trade dress infringement claims, recommended against the issuance of such an injunction.
The plaintiff Bristol-Myers Squibb Company ("Bristol-Myers") moves for a preliminary injunction, seeking to enjoin the defendant McNeil-P.P.C. Inc. ("McNeil") from using, selling, offering for sale, and distributing "analgesic products in any trade dress which 'simulates the trade dress of EXCEDRIN PM,'" and from any use of the packaging or the "PM" mark for analgesic products. The plaintiff also seeks an order directing defendant McNeil to recall all such products, packaging, and advertising bearing the TYLENOL PM trade dress and "PM" mark and to deliver up for destruction all packaging, labels, ads, and printing plates with the "PM" mark.
Before the Court at this time is the Report and Recommendation of United States Magistrate Judge Michael L. Orenstein, in which he declined to recommend the issuance of a preliminary injunction on the grounds that the plaintiff Bristol-Myers has failed to demonstrate (1) irreparable harm, and (2) either likelihood of success on the merits or sufficiently serious questions going to the merits, wherein the balance of the hardships would tip decidedly in favor of Bristol-Myers (RR at pp. 95-96).
Since objections were timely filed by both parties, the Court now undertakes a de novo determination of the matter. The Court further notes that upon the application of the plaintiff, the Court granted oral argument on the objections which was heard on October 4, 1991.
For the reasons set forth below, the Court confirms and adopts the Magistrate Judge's recommendation in part, but respectfully declines to accept the recommendation denying the plaintiff's application for a preliminary injunction, and, instead, grants the plaintiff's application. The following constitutes the Court's findings of fact and conclusions of law pursuant to Fed. R. Civ. P. 52(a) (see also Weitzman v. Stein, 897 F.2d 653, 658 [2d Cir. 1990]).
The factual background in this action is rather lengthy and complex and, in this decision, the Court recites only those facts relevant to the application for a preliminary injunction.
Bristol-Myers is a Delaware corporation with its principal place of business in New York City. For many years prior to this suit, Bristol-Myers has been engaged in the development, production and marketing of over-the-counter ("OTC") medicinal preparations, including such well-known brands as EXCEDRIN, EXCEDRIN PM, BUFFERIN, and NUPRIN. EXCEDRIN PM, the subject of this suit, is a dual relief product, a combined analgesic and sleep aid which Bristol-Myers has sold for more than twenty years. Bristol-Myers obtained its trademark for EXCEDRIN PM in June, 1990.
As a direct result of the apparent quality of its EXCEDRIN PM analgesic/sleep aid product, its extensive advertising and promotional activities, and its substantial sales of the product, Bristol-Myers has acquired an outstanding reputation and acceptance among the public for this product. In fact, it is conceded by the defendant McNeil that EXCEDRIN PM is currently the "largest selling analgesic/sleep aid product in the United States" (Answer, P7).
In 1988, Bristol-Myers introduced a caplet form of the EXCEDRIN PM product. The packaging for this form is identical to that of the tablet packaging with the following exceptions: the outer carton and bottle label have a green background; at the lower right of the package, light blue caplets appear instead of tablets; and the caplets display the full EXCEDRIN PM trademark.
The defendant McNeil is a New Jersey Corporation with its principal place of business in Fort Washington, Pennsylvania. McNeil markets the leading line of analgesic products in the United States under the TYLENOL trademark. In mid-1991, McNeil introduced a pain reliever/sleep aid product which it named "TYLENOL PM." It has recently filed a federal trademark application for the TYLENOL PM mark (Answer, P22). McNeil also states that it has informed the trade of its projection for $ 50 million in sales of TYLENOL PM during its first year (Answer, P17).
Both EXCEDRIN PM and TYLENOL PM contain essentially the same ingredients, namely, 500 mg of acetaminophen. EXCEDRIN PM also contains 38 mg of diphenhydramine citrate while TYLENOL PM contains 25 mg of diphenhydramine HCL.
The outer carton of the TYLENOL PM caplets product is predominantly dark blue with a gradual fade to medium blue at the bottom of the carton. The trademark "TYLENOL" appears in white capital letters immediately followed by the yellow letters "PM". Below the product name line, the word "Caplets" appears in yellow next to the benefit line which states "For pain with sleeplessness." At the lower right hand portion of the carton, McNeil has depicted two light blue caplets, imprinted with the TYLENOL PM product name.
McNeil has also introduced a tablet variety of TYLENOL PM. Its carton is predominantly dark green with a gradual fade to teal green at the bottom. All other characteristics of the caplet package previously described are present in the tablet package. The only difference is the appearance of two tablets at the lower right hand corner; these tablets are also of a light blue color and show the name "TYLENOL" on one with "PM" on the other.
Bristol-Myers contends that McNeil is advertising, distributing and selling TYLENOL PM in a manner which "simulates the EXCEDRIN PM trade dress, in color, layout, design and other graphic elements, including prominent use of the letters PM on the packaging . . . thus usurping the distinctive trade dress and trademark long associated with Bristol's EXCEDRIN PM product." Bristol-Myers further contends that McNeil has done so with the "object and intent . . . to misappropriate the goodwill and consumer recognition" of EXCEDRIN PM (Complaint, PP21, 24).
Bristol-Myers filed its complaint on May 21, 1991, alleging the following causes of action: (1) trademark and trade dress infringement under the Lanham Act; (2) dilution of the EXCEDRIN PM trade dress and mark in violation of New York General Business Law § 368-d; (3) unfair competition and deceptive acts and trade practices in violation of New York General Business Law § 349; (4) misappropriation of Bristol-Myers' goodwill and consumer recognition for the EXCEDRIN PM trade dress and mark under New York law and the statutory and common law of other states; and (5) common law trade dress and trademark infringement in New York and other states.
In its Answer, McNeil asserted the following affirmative defenses: (1) Bristol-Myers' action is barred by the doctrines of waiver, laches and estoppel; (2) the complaint fails to state a cause of action; (3) the defendant's actions were taken in good faith, with no intention to violate any laws or rules; (4) the plaintiff has failed to enforce its claimed trade dress or trademark interest; and (5) McNeil's actions are protected by the doctrine of fair use.
The motion for a preliminary injunction was brought on by order to show cause, signed by this Court on May 21, 1991. Pursuant to 28 U.S.C. § 636(b)(1), the matter was referred to the United States Magistrate Judge, to conduct an evidentiary hearing and to issue a Report and Recommendation. The Magistrate Judge thereafter conducted a hearing which began on June 4, 1991 and extended intermittently over a period of twelve (12) days. The testimony resulted in a transcript in excess of 2,400 pages, with more than 16,000 pages of exhibits.
On August 5, 1991, the Magistrate Judge issued his Report and Recommendation, finding that although the trade dress for EXCEDRIN PM had acquired secondary meaning, Bristol-Myers failed to demonstrate either likelihood of confusion or sufficient bad faith necessary to create a "presumption" of likelihood of confusion, and failed to show that it would suffer irreparable harm absent an injunction (RR at pp. 71, 93-94). The following Recommendation was made to the Court:
"after giving serious consideration to each of the Polaroid factors and after a careful weighing of all the evidence presented, plaintiff's application under 15 U.S.C. § 1125(a) for a preliminary injunction is denied.
Based on the foregoing discussion of the law and facts, I find that the plaintiff has failed to demonstrate a) irreparable harm, and b) either likelihood of success on the merits or sufficiently serious question going to the merits wherein the balance of the hardships tips decidedly in Bristol's favor. Accordingly, I recommend that the application for a preliminary injunction be denied" (RR at pp. 71-72, 95-96).
The plaintiff thereafter filed timely objections to the Report and Recommendation on August 23, 1991. Essentially, Bristol-Myers took exception to the following findings of the Magistrate Judge: (1) no imitative intent on the part of McNeil; (2) absence of actual confusion; (3) rejection of Bristol-Myers' two consumer surveys showing "extensive actual confusion" in regard to the source and sponsorship of McNeil's products; (4) "PM" is a"descriptive" rather than a "suggestive" mark; and (5) although Bristol-Myers trade dress has secondary meaning as required under the New York "anti-dilution" statute, Bristol-Myers failed to produce sufficient evidence of predatory intent.
The defendant McNeil also filed timely objections on August 23, 1991. While agreeing with the ultimate conclusion of the Magistrate Judge, McNeil contends that he erred in finding that the EXCEDRIN PM trade dress had acquired "secondary meaning." The defendant also objects to certain subsidiary findings relating to the absence of confusion, although it readily accepts the finding of the Magistrate Judge that there was a lack of actual confusion.
In a related issue, McNeil states that although the "Magistrate Judge did not have occasion to reach additional arguments made by McNeil with respect to irreparable injury premised upon Bristol's unexcused delay in instituting this action and on certain other issues . . . McNeil preserves its arguments in the event it is necessary that they be reached" (Objections of Defendant McNeil-P.P.C. Inc. at p. 4).
Before turning to the merits of the application, at the outset, the Court examines the applicable standards in reviewing the Report and Recommendation of the Magistrate Judge and with regard to the motion for a preliminary injunction.
A. Review of the Report and Recommendation of the Magistrate Judge
Pursuant to 28 U.S.C. § 636(b)(1), any party may file written objections to the Report and Recommendation of the Magistrate Judge within ten days after being served with a copy (see also Fed. R. Civ. P. 72[a]). Failure to object results in a waiver (see Small v. Secretary of Health and Human Servs., 892 F.2d 15, 16 [2d Cir. 1989] [per curiam]). Once objections are filed, however, the district court is required to make a de novo determination as to those portions of the Report and Recommendation to which objections were made (see 28 U.S.C. § 636[b]; Grassia v. Scully, 892 F.2d 16, 19 [2d Cir. 1989]). Although the district court may "receive further evidence or recommit the matter to the magistrate with instructions" (28 U.S.C. § 636[b]), a de novo determination does not require the recalling of witnesses (see United States v. Raddatz, 447 U.S. 667, 676, 65 L. Ed. 2d 424, 100 S. Ct. 2406 ). Rather, in making such a determination, the district court may, in its discretion, review the record and hear oral argument on the matter (see Pan Am. World Airways, Inc. v. International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of Am., 894 F.2d 36, 40 n.3 [2d Cir. 1990]).
Objections to the Report and Recommendation having been timely filed, the Court reviewed the record and thereafter granted the parties' request for oral argument.
On October 4, 1991, the date of oral argument, the parties transformed the courtroom into a would-be supermarket and typical pharmacy aisle to reflect a certain "planogram"
related to the placement of analgesic products. The Court accepted several additional exhibits for filing. In this regard, the Court notes that neither party requested an opportunity to present additional testimony, nor does the Court believe that additional proof is necessary to resolve the present application. Accordingly, the Court bases this de novo determination entirely upon the record below, the oral argument of October 4, 1991, and the submissions by the parties.
B. Standard for the Issuance of a Preliminary Injunction:
In order to obtain a preliminary injunction in the Second Circuit, it is well established that the movant must "clearly" establish the required elements set forth in the familiar recitation of the rule as follows:
"a party seeking a preliminary injunction in this circuit must establish both possible irreparable harm and either (1) a likelihood of success on the merits or (2) sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly in the movant's favor."
Jackson Dairy, Inc. v. H.P. Hood & Sons, Inc., 596 F.2d 70, 72 (2d Cir. 1979) (per curiam); see Warner Bros. v. Gay Toys, Inc., 658 F.2d 76, 78-79 (2d Cir. 1981) [Jackson Dairy standard applies in trademark infringement cases]; see also Western Publishing Co. v. Rose Art Indus., Inc., 910 F.2d 57, 59 (2d Cir. 1990); LeSportsac, Inc. v. K Mart Corp., 754 F.2d 71, 74 (2d Cir. 1985).
A showing of probable irreparable harm is usually considered the single most important requirement (see Reuters Ltd. v. United Press International, Inc., 903 F.2d 904, 907 [2d Cir. 1990] [citations omitted]), and an applicant must establish more than a mere "possibility" of irreparable harm, namely, "that it is likely to suffer irreparable harm if equitable relief is denied" ( JSG Trading Corp. v. Tray-Wrap, Inc., 917 F.2d 75, 79 [2d Cir. 1990]).
As to the "likelihood of success" element, the movant "need not show that success is an absolute certainty. He need only make a showing that the probability of his prevailing is better than fifty percent" ( Abdul Wali v. Coughlin, 754 F.2d 1015, 1025 [2d Cir. 1985]).
However, in the particular area of trademark infringement, "assuming that a particular mark warrants protection under the Lanham Act, the requisite likelihood of success on the merits and irreparable harm can both be established by showing a 'likelihood that an appreciable number of ordinarily prudent purchasers are likely to be misled, or . . . simply confused, as to the source of the goods in question'" ( Western Publishing Co. v. Rose Art Indus., Inc., supra, 910 F.2d at p. 59 [citations omitted]).
The issuance of a preliminary injunction, of course, is considered an extraordinary equitable remedy, hence the requirement that entitlement be "clearly" shown (see Berrigan v. Norton, 451 F.2d 790, 793 [2d Cir. 1971]; see also 11 C. Wright & A. Miller, Federal Practice & Procedure § 2948 [1973 & Supp. 1990] [collecting cases]).
With these basic principles in mind, the Court now turns to the merits of the application for a preliminary injunction.
Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), provides a statutory remedy for trademark or trade dress infringement and unfair competition to a party injured by a competitor's false designation of origin of its product, whether or not the aggrieved party has a registered trademark ( LeSportsac, Inc. v. K Mart Corp., supra, 754 F.2d at p. 75). Section 43(a) provides an additional remedy for the false or misleading or deceptive advertisement of facts. In short, the Lanham Act provides civil redress to one damaged by unfair competition through false or misleading advertising and/or trademark or trade dress infringement (see generally Bauer, A Federal Law of Unfair Competition: What should be the Reach of Section 43(a) of the Lanham Act?, 31 UCLA L. Rev. 671, 685-703  [broad overview of scope and limitations of Lanham Act]). Section 43(a), as amended, provides in relevant part as follows:
"(a) Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any . . . false or misleading description of fact, or false or misleading representation of fact, which --
(1) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person, or
(2) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities . . . of his . . . goods, services or commercial activities,
shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act."
In order to succeed in this action, Bristol-Myers must show that (1) its trademark or trade dress has acquired secondary meaning, and (2) there is a likelihood of confusion as to the source of the product.
ii. Trademark Infringement: Secondary Meaning
As to subdivision (1), eligibility for protection under the Lanham Act depends upon the nature of the mark infringed. In Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 9-11 (2d Cir. 1976), the Second Circuit set forth the following classifications to determine eligibility for trademark status and the degree of protection accorded: (1) generic [ineligible for protection]; (2) descriptive [eligible for protection with proof of secondary meaning]; (3) suggestive [eligible for protection without proof of secondary meaning]; and (4) arbitrary or fanciful [eligible for protection without proof of secondary meaning and "with ease of establishing infringement"]. However, "categorizing a mark is a 'slippery business' and necessarily turns on 'the particular context of the mark's use, the context of its time of use, and the context of its group of users'" ( Western Publishing Co. v. Rose Art Indus., Inc., supra, 910 F.2d at p. 60 [citation omitted]).
Section 2(e) of the Lanham Act precludes the Registration of a mark which, when applied to the goods of the applicant is "merely descriptive" (see Abercrombie & Fitch Co. v. Hunting World, Inc., supra, at p. 10). However, this provision must be read in conjunction with § 2(f) which states the following:
Whether the "PM" mark has become distinctive and whether it is "descriptive" or "suggestive" is the crux of the first objection raised by Bristol-Myers.
The plaintiff asserts that the "PM" mark is suggestive while McNeil insists that it is descriptive at best. In discussing the Abercrombie classifications, the Magistrate Judge applied the analysis and noted the distinctions set forth in Worthington Foods, Inc. v. Kellogg Co., 732 F. Supp. 1417, 1435 (S.D. Ohio 1990):
"the district court focused on two factors that distinguish between descriptive and suggestive terms: (1) how much imagination a buyer must use to cull a direct message from the mark about the quality, ingredients or characteristics of the product or service; and (2) whether the trademark directly conveys a real and unequivocal idea of some characteristic, function, quality or ingredient of the product or service to a potential buyer who is not completely familiar with all aspects of the product (RR at p. 6, citing Worthington Foods, Inc. v. Kellogg Co., supra, at 1435).
The Magistrate Judge concluded that "a suggestive mark requires a 'multi-stage reasoning process' on the part of a buyer, while a descriptive mark entails a direct conveyance (id., citing Worthington, supra). In determining that the "PM" mark in the context of a pain reliever directly conveys the idea that the product is intended for nighttime use, the Magistrate found the "PM" mark to be descriptive rather than suggestive (RR at p. 7).
Needless to say, defendant McNeil agrees with this finding. However, plaintiff Bristol-Myers claims that the Magistrate erred, as a matter of law, in holding that "PM" is descriptive and not suggestive.
Claiming that "PM is a classic suggestive, if not fanciful mark," Bristol-Myers stresses that it takes "sequential thinking . . . to start with the letters PM, think through and reject their other possible meanings, to convert PM to 'p.m.' . . . and then to exclude many of the 12 hours of 'post-meridiem' [sic] time . . . in order to arrive at 'nighttime'" (Bristol-Myers Objections at p. 32). The Court disagrees.
Difficulty arises in drawing a line of demarcation between a "descriptive" and a "suggestive" mark. The waters in this case are no less murky. However, the Court takes some solace in the often-quoted response of Judge Learned Hand to the enigma of sorting out these categories:
"It is quite impossible to get any rule out of the cases beyond this: That the validity of the mark ends where the suggestion ends and description begins" ( Franklin Knitting Mills, Inc. v. Fashionit Sweater Mills, Inc., 297 F. 247 [S.D.N.Y. 1923], aff'd per curiam, 4 F.2d 1018 [2d Cir. 1923]).
Letters of the alphabett create their own unique trademark problems. Letters may be valid trademarks if they are entirely fanciful and arbitrary, if they have no connection with the article or any of its features, or if they are designed solely to indicate origin; they are not valid if they describe or refer to the article or its characteristics ( G. Heileman Brewing Co., Inc. v. Anheuser-Busch Inc., 676 F. Supp. 1436 [E.D. Wis. 1987], aff'd, 873 F.2d 985 [7th Cir. 1989] ["LA" mark -- without periods -- as brand name of low-alcohol beer determined to be descriptive mark and not a valid, legally protectible trademark]; Nature's Bounty, Inc. v. Basic Organics, 432 F. Supp. 546, 551 [E.D.N.Y. 1977] [term "B-100" held merely descriptive as applied to vitamins]; National Conference of Bar Examiners v. Multistate Legal Studies, Inc., 692 F.2d 478 [7th Cir. 1982], cert. denied sub nom. Multistate Legal Services Studies, Inc. v. Ladd, 464 U.S. 814, 104 S. Ct. 69, 78 L. Ed. 2d 83  [phrase "MULTISTATE BAR EXAMINATION" has common descriptive quality, and thus neither that phrase nor the abbreviation "MBE" is entitled to trademark protection]).
The odds of attaining a solid mark status with an abbreviation are poor. (ROGER MILGRIM, § 9.04[B] MILGRIM ON TRADE SECRETS at 9-152 . Although one cannot claim an exclusive right to the use of a numerical or alphabetical system (RUDOLF CALLMANN, § 18.23 THE LAW OF UNFAIR COMPETITION, TRADEMARKS AND MONOPOLIES at 210 , descriptive marks are eligible for trademark status once they become well associated as a distinctive source of the product (MILGRIM at 9-148, § 9.04[b][i]).
A monopoly on letters of the alphabet cannot be secured by registration of a trademark. However, a manufacturer may not choose a single combination of letters that so closely approximates the combination of another producer, which, when used on goods of the same descriptive properties is likely to cause confusion ( Vitamin Corp. of America cv. American Home Products Corp., 35 C.C.P.A. 952, 166 F.2d 203 [Cust. & Pat. App. 1948]). Under trademark law, an abbreviation, like any other unregistered mark, will only be protected if it has acquired secondary meaning (see Continental Corrugated Container Corporation v. Continental Group, Inc., 462 F. Supp. 200, 204 [S.D.N.Y. 1978]).
A mark has acquired secondary meaning when it "has been used so long and so exclusively by one producer with reference to its article that, in that trade and to that branch of the purchasing public, the word or phrase has come to mean that the article was the first producer's trademark" ( G. Heileman Brewing Co. v. Anheuser-Busch Inc., supra, 676 F. Supp. at p. 1467 [citations omitted]). While the Court finds this principle directly applicable to "EXCEDRIN PM," it does not reach the same conclusion with regard to the "PM" designation standing alone. In addition, the Court agrees with the finding of the Magistrate Judge that Bristol-Myers has failed to meet the "heavy burden" of showing that the efforts undertaken to associate the "PM" indicator with one source have been effective (see 20th Century Wear v. Sanmark-Stardust, Inc., 815 F.2d 8, 10 [2d Cir. 1987]).
The Court concurs that the "PM" mark, standing alone,is not entitled to trademark protection. "Whether a single letter or group of letters always used as part of a composite mark functions separately as a mark depends upon the probable impact upon the consumer" (1 J. McCarthy, Trademarks and Unfair Competition, § 7.2, at 183 [2d ed. 1984]). On this record, there is insufficient evidence of consumers selecting Bristol-Myers' analgesic-plus-sleeping-aid solely by recognition of the "PM" designator or by instantaneous recognition of the source of the product on the same basis. Further, there is no evidence that Bristol-Myers has "ever marketed its product to the public as 'PM'" (RR at p. 11).
The Court therefore confirms and adopts the finding of the Magistrate Judge that the "PM" mark alone is not entitled to trademark protection.
iii. Trade Dress Infringement: Secondary Meaning
Aside from the infringement claim as to the use of the PM designator, the Court must also determine whether the packaging and advertising of the defendant's TYLENOL PM product constitutes trade dress infringement of the plaintiff's EXCEDRIN PM product. The Magistrate Judge found that the full EXCEDRIN PM trade dress met all of the criteria for an arbitrary or fanciful mark (RR at p. 8). The Court confirms and adopts that finding.
This Court recently had the opportunity to summarize the elements of a trade dress infringement action under the Lanham Act, as follows:
"In order to recover for a trade dress infringement under section 43(a), [plaintiff] must establish: (1) that its trade dress has acquired secondary meaning in the marketplace as to the source of the product; and, (2) that a likelihood of confusion exists between the source of the product -- or, more specifically, between the trade dress of [plaintiff] and [defendant]. This two-part analysis determines whether [plaintiff]: (1) has a protective interest; and, (2) whether that interest is being infringed.
In order to establish that trade dress has acquired a secondary meaning, the plaintiff must show that the purchasing public associates goods designated by a mark with a particular source. "
( Tripledge Prods., Inc. v. Whitney Resources, Ltd., 735 F. Supp. 1154, 1161-62 [E.D.N.Y. 1990] [citations omitted; emphasis in the original]).
In the instant case, the Magistrate Judge found that EXCEDRIN PM's trade dress has acquired secondary meaning. The defendant McNeil takes strong exception to this finding and claims that none of the evidence presented by Bristol-Myers, "whether taken separately or as a whole meets the 'heavy burden of proof' required to show secondary meaning" (McNeil's Objections at p. 6, citing 20th Century Wear, Inc. v. Sanmark-Stardust, Inc., supra, 815 F.2d at p. 10).
Proving secondary meaning entails vigorous evidentiary requirements in accordance with the criteria established by the Second Circuit in 20 th Century Wear, Inc. v. Sanmark-Stardust, Inc., supra, 815 F.2d at p. 10 (see also Coach Leatherware Co. v. Ann Taylor, Inc., 933 F.2d 162, 168-69 [2d Cir. 1991]). In 20th Century, it was suggested that a plaintiff should attempt to offer evidence of consumer studies and successful advertising. Additionally, a finding that the defendant intentionally copied the plaintiff's mark "could also be persuasive, if not conclusive, evidence of consumer recognition and good will" (id.).
In sum, in order to establish that a trade dress has acquired secondary meaning, a plaintiff must show that the purchasing public associates goods designated by a mark with a particular source (20th Century Wear, Inc. v. Sanmark-Stardust, Inc., supra). As Judge Metzner stated, "the crux of the secondary meaning doctrine is that the mark comes to identify not only the goods but the source of the goods" ( Ralston Purina Co., v. Thomas J. Lipton, Inc., 341 F. Supp. 129, 133 [S.D.N.Y. 1972]). In this regard, proof of sales success, advertising expenditures, unsolicited media coverage of the product, consumer surveys, intentional copying of the product, and length and exclusivity of the product in the market should be offered and are relevant factors for the Court to consider (see 815 Tonawanda Street Corp. v. Fay's Drug Co., 842 F.2d 643, 648 [2d Cir. 1988], citing Thompson Medical Co. v. Pfizer, Inc., 753 F.2d 208, 217 [2d Cir. 1985]). The plaintiff need not establish all of the factors, and no one particular factor is dispositive; "the ultimate test is the success plaintiff achieves in popularizing its mark" ( Pan Am. World Airways, Inc. v. Panamerican School of Travel, Inc., 648 F. Supp. 1026, 1034 [S.D.N.Y. 1986], aff'd, 810 F.2d 1160 [2d Cir. 1986]).
The Second Circuit, in McGregor-Doniger Inc. v. Drizzle Inc., 599 F.2d 1126, 1132 [2d Cir. 1979], provided an incisive summary of "secondary meaning" in this context:
"Consideration of evidence of secondary meaning will almost always "work in favor of the senior user. Its mark, if registered, is presumptively distinctive. See Abercrombie & Fitch Co. v. Hunting World, Inc., supra, 537 F.2d at 11. Proof of secondary meaning, acquired perhaps through successful advertising, can only enhance the strength of its mark and thus enlarge the scope of the protection to which it is entitled. On the other hand, the owner of a distinctive mark need not introduce evidence of secondary meaning in order to gain protection for its mark against the confusing similarity of others. Thus, for example, the relatively small size of a user's advertising budget or sales volume will not diminish the strength of its valid mark, and the scope of protection accorded to that mark will not be narrowed because of such evidence. Mushroom Makers, Inc. v. R.G. Barry Corp., 580 F.2d 44, 48 [2d Cir. 1978]. Only if the junior user carries the burden of affirmatively demonstrating that a term is generic is the senior user stripped of protection. Abercrombie & Fitch Co. v. Hunting World, Inc., supra, 537 F.2d at 9-10; 15 U.S.C. § 1064(c) ( McGregor-Doniger Inc. v. Drizzle Inc., supra, 599 F.2d at 1132) (emphasis supplied).
In terms of advertising expenditures, Bristol-Myers presented evidence that it has expended in excess of $ 81 million in advertising and promoting EXCEDRIN PM over the past twenty years, with $ 10 million in advertising in each of the last three years (PX 4; RR at p. 13; OA at p. 5).
In addition, sales of EXCEDRIN PM have exceeded $ 300 million, with $ 44 million in 1990 alone (PX 4; RR at p. 11; OA at p. 5). McNeil characterizes these amounts as "trivial for a national brand" (McNeil Objections at p. 7) and stresses the uneven budgetary allotments for EXCEDRIN PM advertising from the years 1979-1989 (id. ; OA at p. 77).
In terms of public recognition of the product, the defendant asserts that Bristol-Myers is very familiar with how low consumer awareness is and cites Bristol-Myers' own research that only 2.4% of the fifty million nighttime analgesic purchasers are EXCEDRIN PM users (OA at p. 77; McNeil Objections at p. 8). The defendant relies upon a survey wherein a sample group of consumers was asked to identify all the pain relievers they could think of, without prompting, and only .8% mentioned EXCEDRIN PM. McNeil contrasts this statistic with a 78% identification of TYLENOL without prompting (DX 29 at pp. 37-38). However, the defendant acknowledges that the recognition factor increased dramatically to 87.9% when consumers were asked in a Gallup poll if they had ever heard of EXCEDRIN PM -- a result which McNeil explains as "probably due to the halo effect from parent Excedrin" (OA at p. 77; McNeil Objections at p. 8; DX 29, at p. 41). In this regard, the Court finds defendant's exhibit 18 particularly enlightening on the subject of sales and consumer recognition:
"Excedrin PM [is] the only competitor ($ 25 MM 1989 factory sales, % versus 1988). Notably, Excedrin PM represents a solid portion of the Excedrin franchise (14% of the Brand's unit share and 22% of dollar share)" (DX 18, 06539).
Having reviewed the evidence submitted by Bristol-Myers, the Court finds the testimony and documentary evidence sufficient to meet the standard articulated by the Second Circuit in Thompson Medical Co. v. Pfizer, Inc., supra, 753 F.2d at p. 217, with regard to advertising expenditures, consumer recognition and sales success (see Thompson Medical factors, infra, at p. 27).
One of the Thompson Medical factors which supports the finding of secondary meaning is the length and exclusivity of Bristol-Myers' use of the EXCEDRIN PM trade dress. From 1969 to 1990, Bristol-Myers has continuously and exclusively produced EXCEDRIN PM as an analgesic with a sleep aid and has been the only such product on the market. In addition, the Court finds that the survey evidence presented by Bristol-Myers (infra, Point IV[C][iv]), though problematic in terms of some of its methodology, does show evidence that EXCEDRIN PM has achieved secondary meaning in the marketplace.
The most persuasive Thompson Medical factor is the finding that McNeil has intentionally copied the EXCEDRIN PM trade dress (see Centaur Communications v. A/S/M Communications, 830 F.2d 1217, 1224 [2d Cir. 1987]; [see also 20th Century Wear, Inc. v. Sanmark-Stardust Inc., 815 F.2d 8, 10 [2d Cir. 1987][finding of intentional copying was persuasive, if not conclusive, evidence of consumer recognition and goodwill]. The evidence of imitative intent and intentional copying are discussed at length under the Polaroid factors (infra, Point IV[C][iv]).
Once the plaintiff has established that the trade dress -- here the EXCEDRIN PM trademark and packaging carton -- has acquired secondary meaning in the marketplace, the burden shifts to the defendant to show that the trade dress sought to be protected is "functional," and therefore is not covered under section 43(a) of the Lanham Act (see LeSportsac, Inc v. K Mart Corp., supra, 754 F.2d at p. 76). A "functional" feature is one that "is essential to the use or purpose of an article or . . . affects the cost or quality of the ...