Opinion
Case No. 2:99-CV-343K
December, 2000
FINDINGS OF FACT, CONCLUSION LAW AND ORDER
Contempt and Expedited Enforcement of the Preliminary Injunction and on defendant's Motion to Vacate the Preliminary Injunction. The matter came on for hearing on Wednesday December, 6 and Thursday December 7, 2000. The plaintiff was represented by Mr. Brett L. Foster and Mr. Ronald F. Price. The defendant was represented by Mr. Brian J. Molloy and Mr. Bryon J. Benevento. Evidence was taken and argument heard. The matter was taken under advisement. The court has considered all pleadings, memoranda, and other materials submitted by the parties. The court has further considered the law and facts relevant to the parties' motions. Now being fully advised, the court enters the following Findings of Fact, Conclusions of Law and Order.
On December 8, 1999, Judge Sam entered a Memorandum Decision granting plaintiff Basic Research's motion for a preliminary injunction (the "Memorandum Decision"). The Court gave effect to that decision in an Order dated February 3, 2000, which enjoined defendant Cytodyne Technologies (Cytodyne) from disseminating specific advertising claims (the "Order"). On July 18, 2000, Cytodyne filed a Motion to Vacate the Preliminary Injunction on the grounds that the Order has not only been complied with, but is unnecessary and moot because the circumstances changed even before the Order was entered. On September 21, 2000, and in apparent response to Cytodyne's Motion to Vacate, Basic Research filed its second Motion for Contempt and sought Expedited Enforcement of Preliminary Injunction Restraints.
A. The Preliminary Injunction
Basic Research and Cytodyne both distribute weight control products. Basic Research sells products called Thermogenics Plus, Quick Start, Stimulant Free and ECA Stack. Cytodyne sells, among other products, Xenadrine RFA-1 (Xenadrine). The parties' products compete directly in a highly competitive market for weight control products. They advertise in the same or similar media, target much of the same market and audience, and distribute their product through the same or similar channels of distribution.
The complaint in this action alleged that Cytodyne made false and misleading advertising claims based on eight general scientific studies or clinical trials in violation of section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a). After oral argument without an evidentiary hearing, Judge Sam found that Cytodyne's advertising claims for Xenadrine, which relied on the eight identified studies (the "generic studies"), were literally false, and granted, in part, plaintiff's Motion for Preliminary Injunction. Judge Sam issued the Memorandum Decision setting forth his "Factual Findings" and "Legal Conclusions" on December 8, 1999. He entered the Order on February 3, 2000. The factual findings and legal rationale of the Memorandum Decision provide the basis for the subsequent Order and, together guide the Court's consideration of the current motions.
The only advertising claims before the Court at the preliminary injunction hearing were claims found in four specific advertisements attached to the complaint and similar, if not the same, advertisements attached to the plaintiff's motion. Plaintiff also complained about the 1st Xenadrine label. That label had been replaced by the time the Court heard the motion, so the Court considered the then current, or third, Xenadrine label in its ruling. The precise language of the advertising claims at issue is set forth in full in the Court's Memorandum Decision. (Mem. Dec. at p. 2-8.) All of the advertising claims at issue made a claim of test proven superiority or cited to one or several generic studies. Based on the evidence before him, Judge Sam found that Cytodyne's claims of "test proven superiority or effectiveness" were literally false:
Specifically, Judge Sam considered Exhibits A through E to the Complaint as well as plaintiff's exhibits 1-4 submitted at the Preliminary Injunction Hearing.
The referenced advertisements and the original Xenadrine label make claims of test proven superiority or effectiveness. The advertisements suggest that the referenced scientific studies and/or clinical trials have proven Xenadrine, at the dosage recommended, to be effective or better than other products in various ways. Based on a review of the advertisements and the sworn declarations submitted by the parties, the court concludes for purposes of the present motion that the referenced studies do not support defendant's claims. Defendant's advertising claims referred to earlier, thus, are facially false.
(Mem. Dec. at 11-12). In ruling that the plaintiff was entitled to a presumption of harm for purposes of the preliminary injunction, the Court further concluded that "[b]y falsely implying its test proven superiority and effectiveness, defendant has obtained a competitive advantage over plaintiff." Id. at 21.
In contrast to the conclusion that the advertisements that referenced specific generic studies were literally false, the Court concluded that the third Xenadrine Label made no claim of test proven superiority or effectiveness and did not enjoin use of that label. The relevant part of the third label states:
Xenadrine's advanced new thermogenic formula represents the most sophisticated natural weight loss technology advance. Its powerful E/C thermogenic combination has been proven effective in numerous scientific studies. (Emphasis added.)
Ex. D-16.) With respect to this label, the Court ruled that "[t]he 3rd Xenadrine Label makes no claims of test proven superiority or effectiveness. The reference to `E/C clinical studies' is vague and ambiguous. No viable evidence suggests to the court which specific studies are referenced." (Mem. Dec. at 12.) The Court further found "that `unspecified scientific literature' substantiates defendant's recommended dosage for Xenadrine." Id.
Unless otherwise noted, the Exhibits referred to were admitted at the hearing on December 6 and 7, and are designated P-# or D-#.
Similarly, the Court did not make any reference to the testimonials in the advertisements nor did it enjoin general promotional claims that did not reference the studies. For example, the advertisement found in Exhibit B to the Complaint advertised Xenadrine as "The Most Effective Fat- Burning Compound Available!" and included several testimonials. Those advertising claims, which were included in the advertisements before the Court along with the test proven claims, were not enjoined. (Ex. D-14.)
Consistent with the Memorandum Decision, the Order enjoined Cytodyne from including eleven specific claims in any advertisement, label or other promotional activity, which state they are test proven claims referencing the generic studies. (Order at ¶ 1; Mem. Dec. at 3-7.) Paragraph 2 of the Order enjoins Cytodyne from making any claims that are similar to the test proven claims set forth in paragraph 1. Paragraph 3 enjoins Cytodyne from citing the eight generic studies.
The Court rejects Basic Research's contention that paragraphs 1 and 2 of the Order enjoin Cytodyne from making any promotional claims, whether they are "test proven" claims or not. Such a reading ignores the factual findings and legal conclusions on which the Order is based. It also ignores the import of paragraphs 4 and 6 of the Order. Paragraph 4 specifically allows Cytodyne to "market Xenadrine's performance, benefits, superiority or efficacy providing there is `competent and reliable scientific evidence' establishing that the advertising claims for Xenadrine are true." (Order at ¶ 4(a)). The Court further allows Cytodyne to make "truthful advertising claims for Xenadrine." (Order at ¶ 6.) Thus paragraph 2 of the Order only prohibits Cytodyne from making the same or similar test proven claims and from citing to the same or other studies, unless the study or studies meet the criteria set forth in paragraph 4 of the Order.
Finally, there is no basis to conclude that Cytodyne was enjoined from making either general promotional claims that do not cite to specific studies (sometimes referred to as "puffery" or "puffing"), claims that have vague references such as the one in the third Xenadrine label, or testimonials regarding the product. Similar advertising claims were before the Court at the preliminary injunction hearing and were not the subject of the Court's ruling or the injunction order.
B. Cytodyne Advertisements After Entry of the Preliminary Injunction
Significantly, the Xenadrine ads had stopped citing to the generic studies before the Memorandum Decision or Order because the results of the product specific clinical trial had been released. Basic Research claims that Cytodyne's advertising claims, which replaced those that were before the Court at the preliminary injunction hearing, violate the terms of that Order. Some of the specific advertising claims at issue are the following:
Clinically Proven to Increase Fat-Loss by an Unprecedented 1700%. This brand new clinical study, presented at the annual scientific conference of The North American Association for the Study of Obesity clearly documents Xenadrine's amazing and incomparable fat-burning ability. According to the study, subjects who use Xenadrine experienced an incredible and unprecedented 1700% greater fat-loss than subjects using placebo.
The study also found that subjects using Xenadrine reduced their total bodyweight by a remarkable 9% in a mere eight weeks. But it gets even better — lean body composition analysis of the subjects revealed that Xenadrine yielded 377% greater muscle sparing effects and left the subjects significantly leaner and more toned that the placebo group.
(Ex. D-23) (emphasis in original).
In addition to these objectively measurable claims, Cytodyne's advertisements include general promotional claims. For example, some of the following claims are made by Cytodyne in its more recent advertisements:
Never before has a natural dietary supplement been found to stimulate weight loss results of this extraordinary level. (D-24.)
Xenadrine stands alone as the most advanced weight-loss product ever created! (Ex. D-24). Xenadrine represents the most sophisticated natural diet supplement in the world. It is research-proven, medically approved, extremely effective, and 100% natural. Use it now and change the way you look and feel fast! (Ex. D-24.)
The advertisements at issue also include testimonials such as:
"This new study clearly demonstrates that Xenadrine is the most efficacious fat-loss technology available." Gerald I. Sugarman, M.D. (Ex. D-23.)
This new double-blind clinical trial clearly points towards the conclusion many athletes have already drawn: Xenadrine-RFA-1 is the most effective thermogenic fat-loss technology in the world. (Ex. D-23 at p. 2 citing comments from athletes on p. 4.)
Basic Research contends that these advertising claims also violate the Preliminary Injunction Order. Based on the following factual findings and legal conclusions, this Court finds that Cytodyne's current advertising claims do not violate the Order.
C. Findings of Fact
1. The Peak Wellness Study
Mr. Robert Chinery, the President of Cytodyne, testified that, before this litigation was filed, Cytodyne decided to commission a product specific, clinical trial on humans for Xenadrine and had entered into discussions with Carlon Colker, M.D., of Peak Wellness Laboratories to conduct such a study (the "Peak Wellness Study"). The written Confidentiality Agreement between Cytodyne and Peak Wellness was signed on May 10, 1999 (Ex. D-5), approximately two weeks before this action was commenced by Basic Research. The negotiations that led up to this agreement were started several months before any litigation between the parties.
The purpose of the Peak Wellness Study was to determine the effects of Xenadrine. The research protocol for the study was a randomized, double-blinded eight-week clinical trial, designed to evaluate the safety and efficacy of the ingredients of Xenadrine versus a placebo for reducing excessive body fat in otherwise healthy overweight adults. Xenadrine was the specific product tested. Thirty patients entered the study and twenty-five completed it. There were four "dropouts" in the experimental group and one "dropout" in the placebo group. The results of the study were analyzed by Dr. Quihu Shi, an independent and highly qualified and respected biostatistician. Basic Research does not dispute the appropriateness of the protocol or the accuracy of the statistical analysis performed by Dr. Shi.
An abstract of the Peak Wellness Study was published before the Order was entered in the January 2000 edition of Obesity Research (Ex. D-9), although the journal ultimately rejected the manuscript of the entire study for publication. The study was then submitted to Current Therapeutic Research, a well respected, peer-reviewed journal, and was published by that journal in April 2000. (Ex. D-10.) The current advertising claims at issue do not cite to the generic studies that are the subject of the injunction, but reference only the Peak Wellness Study. ( E.g. Ex. D-23.)
Basic Research claims that the Peak Wellness Study does not meet the standard set forth by the Court in the Order. Not only does Basic Research argue that the Peak Wellness Study is not reliable, Basic Research alleges that it was the product of fraud. Basic Research claims that Dr. Colker or Peak Wellness was Cytodyne's agent and suggests that the data was manipulated to give Cytodyne the results it wanted. Basic Research also alleges that Cytodyne and Peak Wellness deliberately destroyed documents after this litigation was commenced to "cover-up" their collusion to produce a favorable, albeit false, study.
Basic Research offered no evidence to support its claims of agency or collusion between anyone involved with the Peak Wellness Study. Indeed, all witnesses with personal knowledge of the study strongly disputed these allegations by Basic Research. There was nothing presented to the Court that would support such a finding or that even suggests that Basic Research's allegations are true. There was also no evidence that there was any improper destruction of documents. Peak Wellness, who is not a party to this action, followed its standard document retention policies for patient information and other documents upon completion of the study. Dr. Lefavi testified that this was a generally accepted procedure to protect patient confidentiality. All summary information, on which the statisticians relied, was made available to Basic Research.
The Court's Order requires any objectively measurable advertising claim made by Cytodyne to be supported by "competent and reliable scientific evidence." The Order defines "competent and reliable scientific evidence" to be "at least one (1) adequate and well controlled clinical trial conducted on human beings, evaluated in an objective manner by persons qualified to do so, using procedures generally accepted to yield accurate and reliable results." (Order at ¶ 4.)
Significantly, Basic Research offered no evidence that the protocol, methodology, design or implementation of the Peak Wellness Study is contrary to accepted standards for clinical trials involving dietary supplements. On the other hand, there is ample evidence that the study itself was an adequate and well controlled clinical trial on humans, evaluated in an objective manner by persons qualified to do so, and that it used procedures generally accepted to yield reliable results.
Furthermore, the testimony of Dr. Lefavi, Dr. Colker, Mr. Kalman and Dr. Shi all support the conclusion that the review process for a manuscript reporting the methodology and results of a research study prior to publication in a reputable journal is, in itself, a standard which further ensures that a study is competent and reliable. There is no evidence to suggest that Xenadrine should do its own "due diligence" of a study performed by an independent entity and published by a reputable journal, or should seek a second study to validate the results of the first one. This Court has no legal or factual basis to impose such additional requirements on Cytodyne. Cytodyne relied on the publication of the Peak Wellness Study in good faith and properly referred to it in its advertisements.
There is no dispute in this record that the protocol used by Peak Wellness — the randomized double-blinded clinical trial on humans — is appropriate for a study of a dietary supplement. What is disputed is the manner in which the results of the Peak Wellness Study are reported in Table II. (Ex. D-10). This dispute centers around the treatment of dropouts in the reported results. Basic Research's expert, a Ph.D. candidate at the University of Utah, Mr. Alder, testified that Table II did not appropriately report the results of the study because it inappropriately included dropouts in the baseline data. In other words, if the data included only those who completed the study and calculated the percent change in body fat only for the subjects who completed the study, that percent change would be a minus 8.59% decrease in body fat for the experimental group instead of the minus 16% change as reported in Table II. Thus, under Mr. Alder's analysis, the experimental group would have achieved 8.37 times the loss in body fat than the placebo group, as opposed to 17 times the loss of body fat as reported in Table II. Mr. Alder similarly recalculated the percent change in body weight for the experimental group as a minus 4.03% instead of the minus 9% reported in Table II. (Ex. P-39 compared to Ex. D-10 at p. 203).
At the heart of this dispute is the validity of what Cytodyne's experts refer to as the "intent to treat analysis." While Mr. Alder was generally familiar with this intent to treat analysis, he testified that he was not familiar with the standards used in human trials for dietary supplements. Dr. Shi, Dr. Lefavi and other experts testified that the "intent to treat" analysis is commonly used to analyze clinical trial data for dietary supplements. Dr. Shi testified that, under the intent to treat analysis, the researcher must report all observed data, including baseline data for dropouts. Dr. Lefavi, who has considerable experience in clinical trials for dietary supplements and weight loss, similarly testified to the appropriateness of this approach and stated that the rationale of the intent to treat analysis is to give the substance every opportunity to show its efficacy. Accordingly, it is a recognized and acceptable practice to report all observed data. Dr. Lefavi also testified that dropouts were appropriately included in the analysis. While it is true that, when dropouts are not included, the mean change in body fat will likely be higher if the people who dropped out had a high percentage of body fat as in this instance, it is also true that the mean change would have been lower if the dropouts had instead had lower percent of body fat. In other words, researchers use a consistent form of analysis and do not deviate based on a particular profile of the dropouts, which is itself a random, unexpected act that the researchers cannot predict. The protocol is a standard that is designed not for one study but is the standard used generally for clinical trials of dietary supplements and is designed to be consistent over time. The "profile" of the dropouts in any particular study does not affect the reliability of the data reported.
Applying the intent to treat analysis, Table II accurately reports the data, which is then accurately reported in Cytodyne's ads. For example, the study and table report a minus 16% change in body fat for the experimental group and a 1% increase for the placebo group. These numbers accurately represent the data under the intent to treat analysis. Comparing the two groups gives a 17 times differential, which can be accurately described as 1700%. Similarly, the claim of a 9% is supported by the study's data. Finally, Cytodyne's 377% muscle-sparing claim is also supported by the study which states that the "experimental group fat-free mass decreased by 0.92 kg during the 8 weeks, whereas in the placebo group the decrease was 3.47 kg.," which is a difference of 3.77 times, expressed by Cytodyne as 377%. (Ex. D-10 at p. 203).
During discovery, it was determined that one number had been accidentally transposed in the table of data provided to Dr. Shi that would affect this latter calculation of 377%. Cytodyne has represented to the Court that it will change its future ads to reflect the correct number.
Significantly, Basic Research's expert confirmed that the data reported in Table II is accurate and that the calculations in the percent change column are correct. Although Basic Research suggested that using percentages to express the results of the study tends to exaggerate the results, the reporting of a differential between groups in percentages is mathematically correct and is commonly found in product advertisements. For example, Basic Research uses the same reporting technique in its advertisement for ThermoGenics, which claims that subjects using ingredients found in its product "experienced a significant decrease in overall body weight — an incredible 830% greater than the group who followed the diet and exercise program alone!" (Ex. D-26.)
Basic Research also contends that Table II incorrectly compares baseline data, which includes dropouts, with completion data, which is smaller group of individuals who completed the study. Basic Research offers its own statistical analysis, which looks only at those subjects who completed the study. Under this analysis, no individual subject in the study achieved the results claimed by Cytodyne and indeed all subjects in the study reported percentage changes in weight and body fat less than those reported in the study and advertised by Cytodyne. However, even under Basic Research's analysis (and as reported in Table 2.5 of Dr. Shi's report. Ex. D-12), the mean change from baseline to week eight for only those subjects who completed the study actually shows agreater loss of body fat than is claimed in the Xenadrine ads. The subjects taking Xenadrine reported a minus 1.93 percent loss, while the placebo group reported a minus 0.05 percent loss, a 38.6 times difference with a very high statistically significant result. Even Mr. Alder acknowledged the correctness of this data.
The testimony supports Cytodyne's position that including all baseline data is not only an appropriate way of reporting the data, but is the preferred methodology in randomized clinical trials. Evidence presented by Basic Research similarly supports this conclusion. Basic Research introduced the deposition of Dr. Weintraub, the editor in chief of Current Therapeutic Research, and comments from the reviewers of that journal that stated that "if dropouts received the drug, they must be included in the tables." (Ex. P-35.) Dr. Weintraub specifically referred to the intent to treat analysis, which is exactly what is reflected in Table II. Thus, even though it is a somewhat unexpected result for none of the subjects completing the study in this case to achieve the results reported under the intent to treat analysis, the results in any particular case do not vitiate the appropriateness of the analysis or the reliability of that analysis. Accordingly, this Court finds that the percent change data reported in Table II accurately report the study data and the differentials reported by Cytodyne as percentages are similarly true and are reported consistently with the standards for reporting the results of a clinical trial of this nature.
Basic Research asserts that not only is the analysis flawed, but that there are other technical errors in the Peak Wellness Study that make it unreliable. For example, there appears to be a mistake in the reported level of statistical significance. It is reported as p 0.05 when in actuality p = 0.0534. While there was some inconclusive testimony on the effect of rounding, Mr. Kalman testified that it should have been reported as p ~ 0.05. A similar mistake was made with reporting the inclusion criteria for body mass index (BMI). The Peak Wellness Study reports that "healthy, physically active adults with a body mass index (BMI) of 27kg/m2 were eligible to participate," when in fact there were individuals with a BMI of 27 kg. Thus the report should have indicated that the mean BMI was ~ 27 kg.
While these technical errors may hint at some sloppiness in expressing the results of the study, there is no basis to conclude, and no evidence was submitted, to establish that they relate to the integrity of the study itself. In other words, whatever errors there may be in how the results of the study were expressed in the published article do not undermine the fact that the Peak Wellness Study was a well-controlled clinical trial on humans, evaluated in an objective manner by persons qualified to do so, using procedures generally accepted to yield accurate and reliable results. Basic Research offered no evidence disputing these conclusions, nor did it offer any evidence to suggest that these errors were in any way material to the results as ultimately reported in Table II and by Cytodyne in its advertisements. Moreover, any discrepancy in the p value or the inclusion criteria ( 27 kg) have nothing to do with any advertising claims by Cytodyne.
Could the study have been better? Yes. Could the information from the study have been presented more clearly? Yes. However, the court finds that the study is on a par with most studies in this industry, which industry is somewhat free-wheeling to say the least. Furthermore, the court finds that the customs, practices and standards of this industry are very relevant to the issues before it.
Finally, Basic Research attempted to attack the credibility of the Peak Wellness Study by introducing the comments of reviewers who reviewed the study for Obesity Research, the journal that rejected the full study for publication. There is no question that, as part of the independent peer review of the study, reviewers for both Obesity Research and Current Therapeutic Research made comments for the authors of the study to consider. Some of those comments on their face appear to be critical of the study. The reviewers, however, did not appear in Court and Cytodyne had no opportunity to cross-examine them. Moreover, it is evident from the testimony that the peer review process involves some give and take between the journal reviewers and the author. Mr. Kalman, one of the study's authors testified that he agreed with some of the comments from Obesity Research and incorporated them into the version of the study submitted to Current Therapeutic Research. Mr. Kalman disagreed with other comments. Fundamentally, the comments of the reviewers are not probative of the competency and reliability of the Peak Wellness Study.
Based on the evidence relating to the Peak Wellness Study and the nature of "intent to treat" analysis in the context of clinical trials of diet supplements, this Court finds that Cytodyne's advertisements which make claims of Xenadrine's performance, benefits superiority or efficacy and cite to the Peak Wellness Study are based on competent and reliable scientific evidence as defined in the Preliminary Injunction Order.
2. Promotional advertising or "puffing"
Basic Research also asserts that Cytodyne's general promotional claims violate the terms of the Order. As already noted, the Order only enjoins "test proven" superiority claims. Non-specific promotional claims are not enjoined so long as they are otherwise legal under the Lanham Act. The law recognizes the reality of marketing and a company's need to boast or puff itself to the public.
Many of the advertising claims that Basic Research argues are enjoined by the Court's order fall into this category of "puffing." For example, Cytodyne's advertisements states that "Xenadrine stands alone as the most advanced weight-loss product every created!" and "Xenadrine represents the most sophisticated natural diet supplement in the world." (Ex. D-24.)
Cytodyne's general promotional claims are not significantly different than those used by others in the industry. For example, Basic Research's advertisements for ThernmoGenics Plus state that it is "The Most Powerful Permanent Long-Term Weight Loss Compound Available . . . Period," (Ex. D-29) or that it is "The Most Powerful No Caffeine, No Ephedra 100% Stimulant -Free Rapid Weight Loss Compound Available . . . Period." (Ex. D-30.) Similarly, Thermbuterol, a product not produced by either of the parties to this case, claims that its thermogenic fat burner is "the strongest thermogenic fat burning energizer available." (D-35.)
These advertisements, and others like them, are exaggerations or overstatements expressed in broad, vague language. They are the type of blustering and boasting on which no reasonable person would rely. Cytodyne's generalized promotional statements are exaggerated puffing claims similar to those made by its competitors and were not enjoined. While the Court concludes that Cytodyne's general promotional claims are puffing under the law, it is interesting to note that Dr. Lefavi testified that he had reviewed what he believed to be all of the literature reporting clinical trials of weight-loss products and he was not aware of a study that showed that Xenadrine's fat loss results were less than those from any other natural product. Thus, to the extent that Xenadrine's non- specific promotional claims are not puffery, they are not literally false nor do they misrepresent the results of published research.
D. Conclusions of Law
1. Motion for Contempt or to Summarily Enforce the Order
In a motion for civil contempt, the plaintiff "has the burden of proving, by clear and convincing evidence, that a valid court order existed, that the defendant had knowledge of the Order at and that the defendant disobeyed the Order." See Bad Ass Coffee Co. of Hawaii, Inc. v. Bad Ass Coffee Limited Partnerships, 95 F. Supp.2d 1252, 1256 (D.Utah 2000) (citing Reliance Ins. Co. v. Mast Construction Co., 159 F.3d 1311, 1315 (10th Cir. 1998). Basic Research has failed to meet that burden in this case.
There is no question that there is a valid court order and that Cytodyne knew of the order. However, there is no evidence that Cytodyne disobeyed the order. The Order only prohibited test proven superiority claims that relied on clinical studies that did not support the claims made. The Court enjoined Cytodyne from referencing certain generic studies and there is no dispute that Cytodyne has not referred to those studies. Rather, Cytodyne's objectively measurable claims now refer to the Peak Wellness Study, which this Court finds to be competent and reliable scientific evidence. The Peak Wellness Study was an adequate and well controlled clinical trial, conducted on human beings, evaluated in an objective manner by persons qualified to do so, and it used procedures generally accepted to yield accurate and reliable results.
Basic Research's assertion that Cytodyne has violated the Order by disseminating general promotional claims that do not claim to be test proven is without merit. Basic Research's argument is premised on a faulty reading of the Order. While the Order may have prohibited Cytodyne from disseminating "any advertising claim which includes false and/or misleading representations identical or similar to those false advertising claims" set forth in paragraph 1 of the Order ( see Order ¶ 2), the claims referred to were all test proven superiority claims that referenced the generic studies. The Court specifically allowed Cytodyne to make truthful claims or claims based on competent and reliable scientific evidence. The Order did not prohibit Cytodyne from making promotional or puffing claims. Indeed, the Court specifically allowed such claims that appeared on the third Xenadrine label and other promotional and testimonial claims that were included in portions of the advertisements before the Court at the preliminary injunction hearing. Moreover, if the Order was construed as Basic Research wants it construed, Cytodyne could not make any promotional claim unless it had a test to prove it. This would mean that Cytodyne would be held to one standard (a more stringent standard) while Basic Research and all other competitors would be held to another, less stringent standard. That was not the Court's intent.
Puffery is an exaggeration or overstatement that is expressed in broad, vague, and commendatory language. Castrol, Inc. v. Pennzoil Co., 987 F.2d 939, 944 (3d Cir. 1993). "Bald assertions of superiority or general statements of opinion cannot form the basis of Lanham Act liability." Pizza Hut, Inc. v. Papa John's Int'l, Inc., 227 F.3d 489, 492 (5th Cir. 2000). The Ninth Circuit summed up this concept when it stated that "most courts [define puffing] as involving outrageous generalized statements, not making specific claims, that are so exaggerated as to preclude reliance by consumers." See Cook, Perkiss and Liehe, Inc. v. Northern California Collection Serv., Inc., 911 F.2d 242, 246 (9th Cir. 1990).
Courts have found a variety of claims to be puffery. For example, in Atari Corp. v. The 3DO Co., 31 U.S.P.Q.2d (BNA) 1636 (N.D. Ca. 1994), the court held that the challenged advertising claim which stated that "3DO, The Most Advanced Home Gaming System in the Universe" was puffery because the claim that the system was the "most advanced" was a general assertion of superiority and "not the kind of detailed or specific factual assertion" that is actionable under the Lanham Act. Id. See also Smith-Victor Corp. v. Sylvania Elec. Products, Inc., 242 F. Supp. 302, 308- 09 (N.D. Ill 1965) (the phrase "far brighter than any lamp ever before offered for home movies" held to be puffery); LensCrafters, Inc. v. Vision World, Inc., 943 F. Supp. 1481 (D.Minn. 1996) (defendants claim that it had the "Most Advanced Equipment Available" held to be puffery); Pizza Hut, 227 F.3d at 942 ("Better Ingredients. Better Pizza" is puffery).
Similarly here, the general claims made by Cytodyne that Xenadrine is "the most effective thermogenic fat-loss technology in the world," and others like it, are general promotional claims and are not actionable under the Lanham Act. Indeed, they are similar to claims made by Cytodyne's competitors, including Basic Research. There is no basis in the Court's Order to conclude that it intended to hold Cytodyne to a higher standard than the law requires. There is also nothing in the Court's earlier decisions that provides a basis for punishing Cytodyne for its prior acts since, by its terms the Order is preliminary and entered solely to preserve the status quo until the full merits of the claims are tried. Prohibiting Cytodyne from making lawful puffing claims in its advertising would be patently unfair and is not justified by the facts in this case. In addition, Cytodyne's advertisements, which include testimonials from athletes, doctors and others who have used Xenadrine, are lawful promotional claims which were lawful at the time the injunction was entered (Judge Sam did not enjoin them) and remain lawful today.
Finally, Basic Research's motion also includes a Motion for Expedited Enforcement of Preliminary Injunction Restraints. There is no apparent difference in the standard used in a motion to enforce as opposed to a motion for contempt. Both would require a showing that the injunction has been violated, a showing that has not been made in this case. To the extent that Basic Research is seeking some alternative relief, such as a modification of the order to extend its reach to general promotional claims, there is no legal or factual basis for granting such relief.
For these reasons, the motion for contempt and the motion to enforce the order are denied.
2. Motion to Vacate
Cytodyne asks this Court to vacate the preliminary injunction on the grounds that it is moot or that circumstances have changed such that the Order is no longer required to control the conduct that was the subject of the complaint. Specifically, Cytodyne asserts that the eight generic studies have not been cited since before the Order was entered almost a year ago and there is no reason for Cytodyne to ever cite those studies because it has had a product specific study to rely on for over one year and has commissioned further studies of Xenadrine. Cytodyne has also claimed that Basic Research has abused the Court's Order by misrepresenting its effect on current advertising claims as an advertising tool. In addition, Cytodyne asserts that Basic Research is improperly using the Order by bringing unsupported motions for contempt in this Court and by falsely accusing Cytodyne of fraud.
The district court has inherent power to modify or vacate a preliminary injunction. See Sierra Club v. United States Army Corp of Engineers, 732 F.2d 253, 256 (2d Cir. 1984), cert. denied, 475 U.S. 1084 (1986). When considering whether to modify a preliminary injunction, "a district court is not bound by a strict standard of changed circumstances but is authorized to make any changes in the injunction that are equitable in light of subsequent changes in the facts or law or for any other good reason." Movie Systems, Inc. v. MAD Minneapolis Distrib, 717 F.2d 427, 430 (9th Cir. 1983); see also In re Dore Assoc. Contracting, Inc., 54 B.R. 353 (Bankr.W.D.Wisc. 1985) (noting that the "rigorous test for modification of a permanent injunction is not applicable to preliminary injunctions" and that "if for any reason a court changes its estimation of the merits of the case it may dissolve the preliminary injunction.") This contrasts with the stricter standards that apply when a court is asked to modify a permanent or final injunction. Id; Museum Boutique Intercontinental, Ltd. v. Picasso, 880 F. Supp. 153, 161 (D.C. S. N.Y. 1995) (citations omitted). The court also has the discretion to vacate a preliminary injunction when the party in whose favor the injunction was entered has abused the injunction." GMA Accessories, Inc. v. Positive Impressions, Inc., 1999 U.S. App. LEXIS 100030 (2d Cir. 1999).
It is not clear from the case law which party has the burden of proof in a motion to vacate a preliminary injunction. At least one court has noted that it "should not invariably fall on the moving party." In re Dore Assoc. Contracting Inc., 54 B.R. 353, 361 (Bankr.W.D.Wisc. 1985). "Since a preliminary injunction is based only upon a judicially estimated state of facts it would be inequitable to arbitrarily assign the burden of proof to the party seeking relief from the injunction." Id.
Cytodyne had already stopped referencing the generic studies before the Memorandum Decision and Order were entered. Cytodyne's management also monitored the catalogues and advertisements from distributors and the internet and contacted them if they ran out-of-date information. There is no evidence of any violation of the Order. Cytodyne has followed the Court's direction and its test proven claims now rely on a competent and reliable, product specific study. Cytodyne's generalized promotional claims fall within the puffing doctrine of the Lanham Act. Accordingly, because there is no current violation of the Order and no realistic prospect that Cytodyne will violate the order in the future by relying on the generic studies, there is no longer any showing of irreparable harm to Basic Research.
The purpose of a preliminary injunction is to preserve the status quo. The status quo here required Cytodyne to take affirmative action to retract or not use advertisements of test proven superiority that relied on the generic studies. The Court found that these advertisements gave Cytodyne a "competitive advantage." By enjoining those ads, the Court put the parties back on a level playing field in the marketplace. The Court did not require Cytodyne to meet a standard higher than is required by the law, nor did it seek to punish Cytodyne. Because the "competitive advantage" the Court found Cytodyne obtained through the test proven claims that relied on the generic studies no longer exists, there is no need for the injunction to remain in effect.
In addition, the Court's earlier conclusions that Basic Research will likely prevail on the merits and that the equities weigh in favor of Basic Research are also drawn into question. While the Court will ultimately hear and rule on the merits of its claims relating to past advertising, there is no likelihood of Basic Research prevailing on the merits on the claim that Cytodyne's current or future advertising violates the Lanham Act at this time.
Therefore, for the reasons state herein, it is hereby
ORDERED that defendant, Cytodyne Technologies, Inc. has not violated the Preliminary Injunction Order entered by this Court on February 3, 2000 and therefore, plaintiff's Motion for Contempt and to Enforce the Preliminary Injunction is DENIED. It is FURTHER ORDERED that in light of the changed circumstances, there is no basis in law or in fact to continue the preliminary injunction in effect. Accordingly, defendant's Motion to Vacate the Preliminary Injunction is GRANTED. It is also ORDERED that defendant's Motion to Strike the Declaration of F. Xavier Pi- Sunyer, M.D. is DENIED and defendant's Motion for Sanctions is also DENIED. Each party is to bear its own costs and fees.