43. All of S.C. Johnson's personal repellent products contain DEET. DEET is the most commonly used active ingredient in insect repellents.
44. S.C. Johnson has never offered a non-DEET personal repellent to the public.
XII. EFFICACY TESTS: APPLICATION AMOUNT
45. For products applied directly to the skin, a relevant element in both laboratory and field tests may be the amount of test substance applied to a test subject's skin.
46. In the late 1980's, Avon retained Insect Control and Research of Baltimore, Maryland ("ICR") to conduct insect repellency tests of Skin-So-Soft bath oil.
47. In conducting its laboratory and field tests of various personal repellents, S.C. Johnson generally applies approximately 1 gram, or 1.54 mg Ö, of the test repellent to the forearm (wrist to elbow) of each test subject.
48. When Avon conducted a field study of Skin-So-Soft bath oil in December 1995 in the Everglades, approximately 2 mg Ö was applied to each of the test subjects.
XIII. EFFICACY TESTS: FIRST CONFIRMED BITE
49. The term "first confirmed bite," in reference to mosquito repellents, refers to a bite followed by another bite within a thirty minute period. The first bite is the confirmed bite; the second bite is the confirming bite.
XIV. EFFICACY TESTS: MOSQUITO DENSITIES
50. In order to obtain reliable results, mosquito repellency field tests must be conducted where there is sufficient mosquito density.
51. Variables such as weather conditions, mosquito biting habits, and differences in attractiveness of people to mosquitoes play a role in whether or not a person is bitten by a mosquito at any given point in time.
OFF! SKINTASTIC FOR CHILDREN
52. In 1993, S.C. Johnson test-marketed a product labelled as "OFF! Skintastic for Children" in the Northeast United States.
53. S.C. Johnson discontinued OFF! Skintastic for Children at the end of 1994. In 1995, S.C. Johnson introduced "OFF! Skintastic for Kids" a spray product with 5% DEET, a lower percentage than the 7.5% DEET in OFF! Skintastic.
C. ADDITIONAL FACTUAL FINDINGS
Based on the testimony presented and the exhibits admitted at trial, I make the following additional factual findings pursuant to Fed. R. Civ. P. 52.
XV. THE REPELLENCY FOLKLORE
54. SSS was the best selling insect repellent in 1992, 1993, and 1994. (Causey Decl
55. The average user of SSS as an insect repellent uses the product as a repellent for an average of 6.5 years. (TX
203 at 176.)
56. Consumers perceive SSS to be an effective repellent and use it as such.
57. Consumer surveys conducted by S.C. Johnson indicate that consumers believe that SSS lasts approximately as long as chemical based repellents, somewhere between three and four hours. (Wind Decl. P 39; TX 165, 166 at 2-4, 199 at 1058, 200 at 003326.) SSS is sold on store shelves next to insect repellents (TX 19).
XVI. AVON'S AMBIGUOUS RESPONSE TO THE REPELLENCY FOLKLORE
A. Avon's Official Policy Regarding SSS
58. The marketing of SSS as an insect repellent is contrary to Avon's official policy.
a. Since the 1980's, it has been Avon's official policy to respond to consumer inquiries about the repellency power of SSS with a statement to the effect that "Avon markets this product solely as a moisturizing bath product and there is no ingredient or combination of ingredients in Skin-So-Soft that could be considered an insect repellent." (See e.g. TT
at 962, 993-996; Baron Decl. passim ; TX 420 at 0001898, 0001901, 0001906.)
b. "1-800" Teletech operators who were hired to take customer orders for Avon were provided with a "help screen" in the early 1990's instructing them to inform callers that "there is no ingredient or combination of ingredients in Skin-So-Soft that could be considered an insect repellent. Skin-So-Soft is a bath oil and all the ingredients in the product are approved cosmetic ingredients." (TT 992-993; TX 418.)
c. Avon has consistently responded to inquiries from sales representatives about the marketing of SSS by informing them that SSS should not be marketed as an insect repellent. (See e.g. TX 382, 384, 385, 386.)
d. For at least the last fifteen years, all Avon representatives have received a guide to working for Avon entitled "Managing Your Avon Business." The manual states that "only approved performance or ingredient claims . . . are allowed in promoting and advertising Avon products." In the next sentence, the manual states "For example: 'Avon Skin-So-Soft is the world's # 1 bath oil.' (Any other claim is unofficial and not approved.)" (TX 9 at 0113935; TT 922, 941-942, 951.)
e. At least some Avon employees have received warnings from Avon that SSS is not to be marketed as an insect repellent (Merritts Decl. P 10; Rodriguez Decl. P 9) and at least some Avon managers have given Avon sales representatives explicit instructions not to market SSS as an insect repellent (Penninger Decl. PP 14-15; Rodriguez Decl. P 9).
f. Maria Penninger, currently Vice President of Avon's Southeast Operating Business Unit and an employee of Avon for over thirteen years, also testified that she has received numerous communications, both written and oral, from Avon senior management that SSS should only be promoted as a bath oil and not as an insect repellent, and, consequently, orally informed sales representatives and district managers that SSS should only be promoted for its authorized use. (TT 919-920.) Ms. Penninger has taken "a very aggressive stance" in telling district managers and representatives not to promote SSS as an insect repellent. (TT 930.)
g. Barbara Merritts was told by her District Manager not to promote SSS as an insect repellent when she was a sales representative, and was present at sales meetings when other sales representatives received the same instruction. (TT 939-941.)
h. Avon has also informed some retailers that SSS should not be marketed as a repellent. (See e.g. TX 391, 394, 397, 401, 407.)
i. Avon has also consistently informed those conducting consumer opinion surveys about insect repellency that Skin-So-Soft is not an insect repellent. (See e.g. TX 387, 395, 396, 400.)
B. Avon's Promotion of the Repellency Folklore
59. Although the promotion of SSS as an insect repellent is contrary to Avon's official policy, Avon has profited from the use of SSS as an insect repellent and some segments of Avon management have sought to exploit SSS' popularity as an insect repellent by encouraging sales representatives to market it as such.
a. Avon management considers insect repellency to be a brand equity of SSS (TX 137, 144, 145; TT 838-839, 1062), monitors registered insect repellents as competition for SSS (TX 68-72), and has sought to gain marketing benefits from the recall of chemical based repellents, such as S.C.Johnson's Deep Woods OFF! (TX 68-72).
b. At least some members of Avon management have endorsed the idea of reinforcing "SSS's positive word-of-mouth by communicating that it is more than an ordinary bath oil" and, in 1989, Avon's Manager of Advertising, Ron Muckstadt, "instructed two creative teams to pursue advertising" along these lines. (TX 23; TT 970.)
c. A draft "Divisional Managers Speech" which was apparently prepared for an Avon sales meeting refers to SSS as "the ultimate bathing and bug experience." (TX 53.)
d. I find that this draft speech, in combination with other evidence of management identification of SSS as an insect repellent, is indicative of a culture within Avon that has sought to exploit the popularity of SSS as an insect repellent. This conclusion is reinforced by the fact that Avon's Public Relations Department has never initiated public relations to dispel the notion that SSS is an effective repellent. (TT 963.)
C. The Lists of Uses
60. Avon sales representatives have used a number of promotional materials to promote SSS as a repellent. These include buttons, flyers, tee-shirts and business cards bearing the words "Avon" or "Skin-So-Soft" and depicting a dead insect inside a circle with a red line through it. (TX 14, 16, 17.)
61. However, the primary promotional material used by Avon's sales representatives to market SSS as a repellent are lists of uses for SSS that identify insect repellency as one such use. (TX 18.)
a. Many of the lists appear to be homemade insofar as they are handwritten or unprofessionally typed and contain spelling errors. (See e.g. TX 18 at 0001777, 0001778-0001779, 0000220-0000221, 0117590, 0117592.)
b. Some of the lists also bear disclaimers explaining that the lists are not authorized by Avon. (TX 18 at 0114697.)
62. However, the Court finds that the strong degree of similarity among the lists, and the variety of locations in which they have appeared, suggest that they are not simply the spontaneous and independent creations of Avon sales representatives.
a. Indeed, Avon has admitted that certain Avon employees, including two District Managers, Jan Schaffer and Brenda Beginski, have, on occasion, provided certain Avon sales representatives with materials in which the use of the Skin-So-Soft Bath Oil as a repellent was described. (TX 231 at 12; TX 237 at 49.)
b. Avon has also admitted that it is aware that some of its sales representatives have violated Avon policy by promoting Skin-So-Soft Bath Oil as an insect repellent. (TX 231 at 14.)
c. By the Court's count, the parties have submitted approximately 110 versions of the lists, though some of these appear to be duplicates. (TX 18.)
d. The lists generally identify approximately 30 uses for SSS including use as a shower moisturizer, a suntan oil, a massage oil and an insect repellent. Insect repellency is almost always use # 8 on the lists. (TX 18.)
e. The majority of lists state that SSS is a "good insect repellent." Some of the lists state that it is an "excellent insect repellent," others state only that is an insect repellent, and still others state only that Avon consumers have used it as an insect repellent. (TX 18.)
f. Some versions of the lists include a reproduction of the "Eighth Wonder of the World" ad. (TX 33-38.)
g. It is not clear how frequently the lists were distributed.
h. Maria Penninger, currently Vice President of Avon's Southeast Operating Business Unit and an employee of Avon for over thirteen years, however, testified that when she was a District Sales Manager in North Carolina in 1983, she saw a list of alternative uses about ten times in one year. (Penninger Decl. PP 1, 3, 13.) In eight years as a Division Sales Manager for the geographic area covering mid-west Tennessee and a part of Mississippi, she had occasion to see such lists about 50 times. (Penninger Decl. P 13; TT 912.)
63. Evidence before the Court, however, does not support the conclusion that the use of the lists has been widespread.
a. In a survey prepared for this litigation by S.C. Johnson, only 1 of 121 respondents identified a list as the source of their perception that SSS is an effective insect repellent, suggesting that the lists have not been disseminated very widely. (TT 1217.)
b. Although it is not clear where each list was created or where it was distributed, the lists submitted to the Court indicate creation/or distribution in the following limited locations:
(1) Atlanta, Georgia (TX 18 at 0001775 bears an Atlanta fax legend);
(2) Charlotte, North Carolina (TX 18 at 0001773 invites the customer to contact an Avon representative in Charlotte area code);
(3) New York City (TX 18 at 0001774 and 0001880 bear Manhattan fax legends);