Opinion
02 Civ. 8046 (WHP).
February 11, 2008
Counsel of Record: Matthew B. Lehr, Esq., Davis Polk Wardwell, New York, NY, Counsel for Plaintiff.
Harold P. Weinberger, Esq., Kramer Levin Naftalis Frankel LLP, New York, NY, Counsel for Defendant.
REDACTED MEMORANDUM AND ORDER
Defendant Procter Gamble Company ("P G") moves pursuant to Fed.R.Civ.P. 60(b)(5) to vacate or, in the alternative, to clarify this Court's Judgment and Order of Permanent Injunction dated May 29, 2003 (the "Injunction Order"). This Court conducted a three-day evidentiary hearing on P G's motion. Based on the following findings of fact, this Court modifies the Injunction Order.
Although P G's motion sought only vacatur or clarification of the Injunction Order, modification of the Injunction Order is the appropriate relief. This Court "should grant the relief to which each party is entitled, even if the party has not demanded that relief in its pleadings." Fed.R.Civ.P. 54(c).
FINDINGS OF FACT
I. Background
Plaintiff Playtex Products, Inc. ("Playtex") markets Gentle Glide tampons, and P G sells a competing brand called Tampax Pearl. (Complaint dated Oct. 9, 2002 ("Compl.") ¶¶ 10, 16, 17.) Both brands use plastic applicators and are available in regular, super absorbency, and super-plus absorbency sizes. (Transcript of Proceedings held from June 19 to June 21, 2007 ("Tr.") at 167.) P G also markets a fourth "light" tampon with lower absorbency. (Tr. at 167.) The regular and super absorbency sizes represent eighty to eighty-four percent of P G's plastic applicator sales. (Tr. at 166.)II. The Injunction Order
Playtex commenced this action, claiming inter alia that P G had violated the Lanham Act, 15 U.S.C. § 1125(a), by advertising that P G's Tampax Pearl ("Tampax Pearl" or "Old Pearl") provides better leakage protection and comfort than Gentle Glide.
Following a jury verdict in favor of Playtex, this Court issued the Injunction Order, which provided in relevant part:
P G, its officers, directors, principals, agents, servants employees, successors and assigns, and all those acting in concert or participation with them are permanently enjoined from communicating or stating that (a) Tampax Pearl tampons are superior in wearing comfort or protection to Playtex Gentle Glide tampons; and (b) Tampax Pearl tampons are superior in absorbency to or have an absorbent braid for better protection than Playtex Gentle Glide tampons, either explicitly or implicitly by reference to "the leading plastic" applicator tampon, and without limitation of reference to the use of comparative words such as "superior," "better," or "more". . . .
(Injunction Order ¶ 1.)
III. Development of New Pearl
In 2004, P G invested approximately $6 million to improve the performance of Tampax Pearl, culminating in the launch of a new Tampax Pearl in October 2005 ("New Pearl"). (Tr. at 19-21.)
P G's tampons are made from a fiber web of rayon and cotton, which are combed for impurities. (Tr. at 17.) Each fiber web is formed to specific dimensions, embossed, covered in a "nominal overwrap material" and cut into discrete pads. (Tr. at 17-18.) Cords and braids are sewn onto each pad. (Tr. at 17-18.) The pads are compressed into an unstable cylindrical shape using a cross die and push rod, placed into carrier molds, and stabilized through exposure to microwave conditioning. (Tr. at 18.) The stabilized cylindrical pads are passed through an assembly unit that pushes each one into an outer applicator, before being packaged for sale. (Tr. at 18.) When a tampon is inserted into a woman's body, its contact with moisture causes the fibers to expand and absorb fluid. (Tr. at 19.)
For New Pearl, P G modified its manufacturing process. First, P G changed the fiber used in the braids, from one with a Y-shaped cross-section to one with a round-shaped cross-section that packs more tightly and allows fluid to seep into the tampon's pad more quickly. (Tr. at 21, 25-26; Exhibit ("Ex.") A: "Pearl Upgrade Changes" presentation at 2.) Second, P G modified the pads. [Redacted.] [I]t shifted from embossing the entire pad with a fishbone pattern to embossing only the center of the pad; and it reduced the pressure and temperature of the embossing process. (Tr. at 29-33; Ex. A at 4-6.) [Redacted.] Third, P G increased the mechanical conditioning in New Pearl by compressing it with a longer push rod, resulting in shorter tampon length. (Tr. at 22; Ex. A at 8.) [Redacted.] Finally, P G further aided the absorption and tampon expansion by increasing the diameter of the inner carrier mold used to make New Pearl. (Tr. at 22, 35-39; Ex. A at 8-10.)
Certain modifications in the manufacturing process described in this Court's Memorandum and Order dated February 6, 2008 have been redacted from this paragraph because they constitute trade secret information filed under seal.
According to expert testimony, although no single change was singularly responsible for improving Tampax Pearl's absorbency, cumulatively these process changes enabled New Pearl to absorb a greater amount of fluid than Old Pearl. (Tr. at 99, 113; Ex. A at 1.) Through in vitro testing, which simulates conditions inside the body, P G confirmed this improvement for its regular, super and super-plus Pearl tampons. (Tr. at 40, 77-78.)
P G then commissioned two in vivo tests — one for regular and the other for super absorbency tampons — in which participants tried both New Pearl and Old Pearl and reported any leakage. (Tr. at 135-136, 139; Exs. C and D: test requests for regular and super absorbency dated July 12, 2004 and Nov. 11, 2004.) The participants froze the tampons after use and returned them to P G to verify they were used properly. (Tr. at 135-136.)
P G analyzed the data from these tests in three ways: first, it compared the average leakage rates of New Pearl and Old Pearl ("Average Percent Leak"); second, it analyzed the amount each returned tampon had absorbed before any leakage occurred ("Average Percent Leak Adjusted for Load"); and third, it determined the average leakage rate, excluding tampons that had absorbed more than their federally mandated capacity prior to leakage (i.e. nine grams for regular and twelve grams for super absorbency) ("Average Percent Leak Below Maximum Design Capacity"). (Tr. at 140-142.) Both regular and super absorbency New Pearl showed improvement over Old Pearl in their leakage protection in all three categories, although the improvement in the Average Percent Leak category was not statistically significant for regular absorbency New Pearl. (Tr. at 144-148; Exs. E and F: Regular and super absorbency test result charts dated Sept. 2004 and July 2005.)
IV. Tests Comparing New Pearl and Gentle Glide
P G and Playtex each conducted in vivo studies comparing the absorbencies of New Pearl and Gentle Glide (respectively, the "P G Study" and the "Playtex Study").
A. The P G Study
The P G Study compared the absorbency of New Pearl and Gentle Glide in regular and super absorbency sizes. (Tr. at 166; Ex. G: Protocol description at 1.) The P G Study did not try to compare the brands by comfort. (Tr. at 165-166.)
Participants were pre-screened to represent a cross-section of regularly menstruating women aged eighteen to forty-nine. (Tr. at 154-156; Ex. G at 1.) Participants could only qualify for the regular size test group if they typically use regular tampons at least six times per period, while those qualifying for the super absorbency test group had to typically use at least six super tampons per period. (Tr. at 155; Ex. G at 1.) Two hundred eighty and two hundred seventy women completed the regular and super absorbency studies, respectively. (Tr. at 151; Ex. G at 1.) The participants were given ten unmarked test tampons from each brand, of the size that they said they typically use, with the twenty tampons numbered to ensure a random sequence of use. (Tr. at 160-161; Ex. G at 1; Ex. I: Panelist instructions.) The participants were told to use the test tampons whenever their test tampon's size was required, but otherwise to use the number of tampons and the sizes they typically would, given their amount of flow at the time. (Ex. G at 1; Ex. I; Tr. at 155.) The participants froze the test tampons after use and returned them to P G along with a diary sheet for each tampon recording whether or not leakage occurred. (Tr. at 157, 164.)
P G again analyzed the data for both the regular and super absorbency tests by comparing Average Percent Leak, Average Percent Leak Adjusted for Load, and Average Percent Leak Below Maximum Design Capacity. (Tr. at 168.) For the regular absorbency size, Average Percent Leak was 20.9% for New Pearl and 24.1% for Gentle Glide, Average Percent Leak Adjusted for Load was 18.5% for New Pearl and 24.0% for Gentle Glide, and Average Percent Leak Below Maximum Design Capacity was 18.1% for New Pearl and 22.9% for Gentle Glide. (Tr. at 169-170.) For the super absorbency tampons, Average Percent Leak was 22.6% for New Pearl and 25% for Gentle Glide (though this result was not statistically significant), Average Percent Leak Adjusted for Load was 16.5% for New Pearl and 22.3% for Gentle Glide, and Average Percent Leak Below Maximum Design Capacity was 17.6% for New Pearl and 21.7% for Gentle Glide. (Tr. at 171; Ex. G at 2.)
The P G Study had certain shortcomings. First, it did not compare New Pearl and Gentle Glide in the super-plus absorbency size. (Tr. at 166-167, 177.) Second, the study did not exclude participants who typically use cardboard rather than plastic applicator tampons; for these women, using New Pearl and Gentle Glide would not completely conform to their normal tampon usage. (Tr. at 252-254.) Third, the tests excluded women aged thirteen to seventeen, who represent roughly 15% of the plastic applicator tampon market, because they were considered too young to participate. (Tr. at 266, 395, 406.)
B. The Playtex Study
The Playtex Study compared New Pearl and Gentle Glide in regular, super and super-plus absorbencies. (Tr. at 404-05.) The participants were 737 women aged thirteen to forty-nine from forty different geographical markets in the United States who had used a plastic applicator in the previous three months. (Tr. at 405, 406, 416.) The participants were each given sixteen tampons in sequence, along with one diary sheet for each tampon. (Tr. at 399; Ex. X: Questionnaire instructions dated Nov. 2006 at 6.) The participants were given tampons of the size they typically use, and were given the choice of scented or unscented. (Ex. U at 6.) For each tampon they used, participants had to record on their diary sheets whether leakage occurred. (Tr. at 399.) After they had used at least four tampons, the participants read their results to an interviewer over the phone. (Tr. at 401-03.) The Playtex Study found that both New Pearl and Gentle Glide tampons had a twelve percent leakage rate among participants who confirmed they followed the instructions precisely. (Tr. at 471.)
The interviewers also asked the participants, "Which product, if either, did you prefer for its protection?" (Tr. at 402.) More participants stated that they preferred Gentle Glide over New Pearl for protection. (Ex. 35: Computer tabulations of leakage and preference data for Playtex Study dated Apr. 23, 2007 at 27519, 27520). However, this data is irrelevant to whether New Pearl provides better protection against leakage than Gentle Glide, and this Court therefore chooses not to consider this part of the Playtex Study.
The Playtex study was flawed in several respects. First, the consultants Playtex hired to perform the test mistakenly instructed participants "not to use any other tampon products during the test period." (Tr. at 211-12, 428.) The participants were therefore instructed to conform their tampon use to the one size, and the sixteen test tampons, that they were given. (Tr. at 212-13.) However, the participants reported in their pre-screening interviews that they use an average of seventeen tampons during their periods; moreover, women will often use different absorbencies, depending on their flow. (Tr. at 212-213.) Thus, the Playtex Study failed to simulate normal consumer usage. (Tr. at 212-13.) Second, because neither the used tampons nor the diary sheets were collected, there was no way to review the accuracy of the participants' responses or the interviewers' reporting. (Tr. at 217-18.) Third, only 217 of the 737 participants personally confirmed that they had followed the procedures correctly; that number is significantly fewer than the combined 550 participants who confirmed they completed the P G Study's procedures. (Tr. at 461-63; 217-18.)
C. Reliability of the Studies
Despite minor flaws, the P G Study was rigorous in its methodology. (Tr. at 202-03.) Moreover, trial testimony concerning the changes P G made to the manufacturing process provide a plausible explanation for the results of the P G Study, as do the in vitro and in vivo tests showing New Pearl's improvement over Old Pearl. (See Ex. A, C-F; Tr. at 77-78, 99, 113.) Although the P G Study did not compare New Pearl and Gentle Glide in the super-plus size, because P G made the demonstrated manufacturing changes in all sizes, this Court infers that the super-plus size would have tested similarly. The Court finds the P G Study more reliable than the Playtex Study because of the faulty instructions given to the participants of the Playtex Study and greater concerns in the Playtex Study that conditions did not simulate normal consumer use. See Palazzo ex rel. Delmage v. Corio, 232 F.3d 38, 44 (2d Cir. 2000) ("[D]ecisions as to whose testimony to credit and as to which of competing inferences to draw are entirely within the province of the trier of fact.").
CONCLUSIONS OF LAW
"[A] court may relieve a party . . . from a final judgment, order, or proceeding . . . [if] applying it prospectively is no longer equitable." Fed.R.Civ.P. 60(b)(5). "[I]t is appropriate to grant a Rule 60(b)(5) motion when the party seeking relief from an injunction . . . can show `a significant change either in factual conditions or in law.'" Agostini v. Felton, 521 U.S. 203, 215 (1997) (quoting Rufo v. Inmates of Suffolk County Jail, 502 U.S. 367, 384 (1992)). "When considering the continued equity of injunctive relief, a court should . . . recognize the need for flexibility." Gismondi, Paglia, Sherling, M.D., P.C. v. Franco, M.D., 206 F. Supp. 2d 597, 599 (S.D.N.Y. 2002). However, the power to vacate or modify an injunction absent changed circumstances "should be sparingly exercised." King-Seeley Thermos Co. v. Aladdin Industries, Inc., 418 F.2d 31, 35 (2d Cir. 1969). Moreover, the modification must be "suitably tailored to the changed circumstance." Rufo, 502 U.S at 393.
Modification of an Injunction Order is also appropriate "when [its] enforcement . . . without modification would be detrimental to the public interest." Rufo, 502 U.S at 384-85. The First Amendment protects commercial speech that is not false or misleading, because such expression "not only serves the economic interest of the speaker, but also assists consumers and furthers the societal interest in the fullest possible dissemination of information." Central Hudson Gas Elec. Corp. v. Public Service Comm'n of New York, 447 U.S. 557, 563 (1980).
While the Court in Rufo specifically addressed modification of a consent decree, it nevertheless found that a consent decree, while "contractual in nature . . . is subject to the rules generally applicable to other judgments and decrees." Rufo, 502 U.S. at 379.
Given the relative strength of the P G Study, P G's in vitro and in vivo tests supporting New Pearl's improved absorbency, and expert testimony linking P G's manufacturing changes to the improvements, this Court finds P G has demonstrated significant change in the absorbency of its Tampax Pearl tampons relative to Gentle Glide. Moreover, because the information is not false or misleading, disseminating it is in the public interest. Accordingly, this Court will remove the prohibitions against P G advertising New Pearl's superior absorbency and protection from the Injunction Order. This Court has considered Playtex's arguments against lifting these prohibitions without discussing them in detail here.
For example, Playtex suggests replacing the "significant change" standard — the established standard for motions pursuant to Fed.R.Civ.P. 60(b)(5) — with a "material change" standard, and further argues that a change is only "material" if it has been made to a product's design, as opposed to its manufacturing process. (Tr. at 321-22.)
While P G has demonstrated that cumulative changes in its manufacturing process led to greater absorbency, it has not specifically shown that New Pearl's braid is the cause of this improvement; in fact, P G's expert stated that "all of these different changes . . . collectively make the material change in the potential for improved leakage prevention." (Tr. at 113.) Therefore, this Court will continue to enjoin P G from claiming that "Tampax Pearl tampons . . . have an absorbent braid for better protection." (Injunction Order ¶ 1.)
P G has not demonstrated any changed circumstances with respect to its prior claim that Tampax Pearl is more comfortable than Gentle Glide. This Court will continue to enjoin P G from making this claim as well.
CONCLUSION
For the foregoing reasons, this Court modifies the Injunction Order with respect to P G's claims that its Tampax Pearl provides superior absorbency and protection to Playtex's Gentle Glide. The parties are directed to submit a joint proposed amended injunction order consistent with this Memorandum and Order.
SO ORDERED: