Ciba-Geigy Corporation v. Bolar Pharmaceutical Co., Inc.

Before HUNTER and HIGGIN- BOTHAM, GILES, Judges, Dis Circuit Judge* trict THE OPINION OF COURT HIGGINBOTHAM,Jr., A. LEON Circuit Judge. appeal

This is an from a final order granting appellee the district court CIBA- (“CIBA”) permanent Corporation a GEIGY against appellant Bolar Pharma- injunction (“Bolar”). Company CIBA had ceutical injunc- previously obtained a preliminary evidentiary an against tion Bolar after hearing court. This before the district * Giles, sitting by designation. States District James T. United Honorable Pennsylvania, for the Eastern District of Court injunction preliminary injunction preliminary affirmed the A. That is affirmance, perman sued on October 1982 is made appeal. After ent.1 developed in the based on same record

evidentiary hearing preliminary in- for the Corp. v. CIBA-GEIGY Bolar Pharmaceu granted per- a junction, the district court (D.N.J. tical 23, 1983). No. 82-788 Dec. injunction. question manent now Bolar, below, petitioned the loser this court presented is whether the district court summary get affirmance in order to granting permanent injunction. Supreme erred this case to the Court. We denied prop- request. Because we believe the district court granted injunction, erly CIBA a My reference to the axiom “haste will affirm. we makes waste” concerns the confusion cre opin

ated when district court converts an granting preliminary injunction I. ion into opinion granting permanent injunction an affirming prelimi- Since our decision expressly recasting findings without its ac eager nary injunction, Bolar has been cordingly. The standard for this court re Supreme take this case to the Court where versing preliminary the issuance of a in Bolar believes this matter would be re- junction is different from the standard for Unfortunately, solved in its favor. because . reversing permanent injunction. Because repeatedly, sought quick Bolar has deter- expressly the district court did not recast courts, by mination the lower this case findings legal its in terms of the standard might example a classic of the old axiom applicable permanent injunction, to a makes that “haste waste.” mechanical task is left to this court. Al petitioned Supreme the for a Bolar Court though we are able to so the convert dis of certiorari after our affirmance of writ opinion, prefer trict court’s we would much CIBA-GEIGY that the district preliminary injunction. the opin court recast its own Co., Corp. v. Bolar Pharmaceutical language ion the of the standard it is (3d Cir.1983). petition F.2d 56 That applying. possi This would the eliminate — -, denied. U.S. S.Ct. bility of confusion as to the what (1984) L.Ed.2d 763 Bolar returned to the would, run, long court intended and in the district court and asked that the district promote judicial economy. hearing concerning the court convert its process might As tedious as the be for preliminary injunction into a final trial on us, necessary we believe it is to ensure that the merits. prelimi- the district court’s of its conversion 23, 1983, Sarokin, Judge On December nary injunction does not become the basis reviewing prior litigation history after the appeal. of another prelimi- of his and this court’s affirmance issuing findings opinion When on nary injunction, entered an order which preliminary injunction, the district provided, inter alia: preliminary injunc- court used traditional parties having consented to convert- language. example, said, As an it tion hearings plaintiff’s mo- held on F’s SK & assuming that “even ‘reasonable preliminary injunction to the fi- tion for anticipation’ not standard does survive merits; trial on the and the Court nal . CIBA-GEIGY has demonstrated having present concluded that on the likelihood success establishing record and for the reasons set forth its copied Bolar its trade dress with the inten- 11, 1982, opinion August Ciba-Geigy is tion, part, permit at least in to induce or relief; final entitled Corp. substitution.” CIBA-GEIGY December, day v. Bolar It is on this 22nd Pharmaceutical 1983, ORDERED, added). DE- (D.N.J.1982) (emphasis ADJUDGED places At other opinion CREED in its the district addition, pertinent granted appeal. relief not 1. In the district court other to this language court used similar couched CIBA believed it had met its burden of preliminary injunction context. of Ives while Bolar proof any reading under presented it had believed that sufficient parties agreed When the “convert” to defeat CIBA’s claim for evidence hearing plaintiff’s prelim- on the motion for preliminary injunction. and final Indeed inary injunction to the final trial on parties they convinced that both were so merits, expressly the district court did not any significant alter in felt little need to change language opinion prelimi- of its in the respect the briefs had filed narily enjoining It Bolar. did so refer- injunction. appeal preliminary For ence, parties agreed and the to the district stated, example, Bolar disposing court of the case in this manner. changes reading [ejxcept This for minor which reflect bolstered 16,1983 preliminary injunc- court’s order of December wherein the conversion stated, injunction, tion into a (cid:127) present substantially brief is identical to having hearings April held on [t]his earlier May 12 [its brief.] and June 1982 on Corpora- plaintiff Ciba-Geigy motion of Bolar Motion to Consolidate at 3. preliminary injunction, plaintiff tion for reasons, analyzing For the above being sufficiency satisfied of its case treated the we have district court’s proof purposes therein for of a trial on findings plaintiff has demonstrated merits, believing it and defendant “likelihood of success” the merits as sufficient evidence and made submitted findings plaintiff “succeeded” on proof plain- to defeat offers therein the merits. merits, tiff's claim at a trial of the it is December, 1983, day this 16th of II. stipula- consent and

ORDERED parties tion the patent In received a 1970 CIBA on the of drug hydroehloride/hydrochlo- hydrazaline rothiazide, anti-hypertensive composed an (2) hearing April 22, May The held on vasodilator, hydralazine hydrochloride, 15,1982 plaintiff’s 12 and June on motion hydrochlorothiazide, and a diuretic. Until preliminary injunction shall consti- patent public its was dedicated to the in in tute the trial on the merits this action. 1981, right to CIBA retained exclusive Corp. Bolar Pharmaceu- CIBA-GEIGY v. drug, produce and market the which it sold (D.N.J. 1983) tical No. 82-788 Dec. registered under the trademark APRESA- added). (emphasis mg./25 ZIDE. chose to market its 25 CIBA It is almost to believe absurd mg. dosage capsule, in a blue and white its parties did not realize that the district mg./50 mg. pink capsule, in and white findings implicitly had converted its mg. mg./50 dosage pink and its 100 in a merits of a “likelihood of success” capsule. flesh and white findings of “success” on the merits. to August two months Moreover, before parties any none of the made APRESAZIDE, CIBA first marketed anoth- argu- suggestion in their or at oral briefs Pfizer, Inc., company, er first marketed appeal ment on the from the anti-hypertensive, Minipress. another Mi- findings of injunction that dosages, nipress pink is sold in two one in in fashion court should be construed capsules, the other in manner in and white blue and different from the which we parties capsules. in this white Due to the differences have construed them. size, Minipress capsule and white primarily case concerned with the suf- blue were signif- and ficiency of the and does not resemble blue white evidence with v. Ives Lab- APRESAZIDE capsule. Although pink icance of Inwood Laboratories (“Ives"), oratories capsule is Minipress and similar white U.S. 102 S.Ct. (1982) appearance pink their case. and white APRESA- 72 L.Ed.2d 606 to the § capsule, drugs chemically 43(a), ZIDE are CIBA asserted two violations of prescribed groups and distinct distinct allegations derived from one that Bolar patients. falsely designated origin generic of its drug by manufacturing capsules init iden- patents dedicated to

After CIBA’s were public, began hydrazaline tical to those CIBA the hydroc Bolar to manufacture used for APRESA- hloride/hydrochlorothia allegations ZIDE. The other derived from capsules size, shape and col- zide same that Bolar’s manufacture and distribution mg./50 mg./25 mg. the 25 and 50 or as hydralazine hydrochloride/hydrochlo- mg. capsules.2 pro APRESAZIDE Bolar capsules rothiazide identical to CIBA’s capsules duced the the intention that capsules, APRESAZIDE with reasonable they cap would resemble APRESAZIDE anticipation or the intent that would capsules sules. Bolar are identical illegally be' substituted for APRE- CIBA’s capsules except that APRESAZIDE each capsules, SAZIDE would constitute contrib- imprinted respective with the name of its utory infringement off) (passing trademark manufacturer. meaning within of the federal statute. CIBA, APRESAZIDE, marketing fol- granted The district court CIBA’s initial industry practice. lowed normal As APRE- request preliminary injunction only pre- SAZIDE can be obtained with a granted request perma later CIBA’s for a scription, advertising CIBA directed injunction. prevented nent Bolar is thus pharmacists physicians rather than di- advertising, distributing, from or market rectly purchasers anti-hypertensives. Bolar, marketing drug, generic present generic its has its version of APRESA-Z industry practice by directing also followed IDE.3 advertising to wholesalers who sell to proved (1) CIBA that the trade dress of who, turn, may pharmacists substitute non-functional; (2) APRESAZIDE was for APRESAZIDE on the acquired secondary APRESAZIDE had physician prescribing advice of the meaning group with an identifiable patient. with the consent of the (3) anti-hypertensives; users of that Bolar dispensing pharmacist, A when APRE- reasonably anticipate phar- could that some generic equivalent, SAZIDE or its removes provided generic hy- macists with Bolar’s original capsules from their container hydroehloride/hydroehlorothia- dralazine places in container and them another bear- attempt illegally zide would substitute it ing pharmacist’s As a conse- label. APRESAZIDE; (4) for CIBA’s and quence, identifying no the consumer sees copied Bolar CIBA’s APRESAZIDE trade imprints

marks other than the small on the intent, part, dress with the at least in capsules themselves. % of Bo- facilitate the substitution generic drug lar’s for brand name CIBA’s III. drug. initially Bolar moved this court for a brought in CIBA this action the United summary hurry affirmance so it could States District Court for the District of Supreme Court. We denied Bolar’s 43(a) Jersey New under section of the appeal per- motion because this involves a (“Lanham Act of Trademark Act” or injunction, requires § manent which us to “Act”), 1125(a) (1982), and U.S.C. law, examine anew that we found suf- Jersey’s competition under New unfair evidence (1964 Supp. 1984). uphold injunction preliminary N.J.S.A. 56:4-1 and ficient to a Bolar, color, course, shape, and size ver- 2. The combination of the could market capsules consti- changed aspect of each of CIBA’sAPRESAZIDE sion of APRESAZIDEif it respective CIBA seeks an tutes its injunction trade dress. product’s clearly its trade dress so as to distin- capsules’ copying its based on the guish it from trade dress. CIBA’sAPRESAZIDE opinion, "trade trade dress. In this the terms "coloring” are dress” and "color scheme” or interchangeably. used Advertiser, County v. Atlantic Co. requires apply us to a different which 75, 81, (1969). N.J.Super. 260 A.2d legal standard. begin analysis our We with consideration finding of the district court’s that the fea- IV. imitated Bolar are non-functional. tures deciding permanent In whether SK&F, v. Premo Pharmaceutical issued, Co. injunction the court must should be Laboratories, (3d Cir.1980), 625 F.2d 1055 plaintiff actually if determine has suc applied the correct standard for (i.e. this court met its ceeded on merits burden making finding nonfunctionality under so, proof). If the court must then consider Jersey New law. stated: We Evans v. Bu appropriate remedy. chanan, (3d Cir.1977). nonfunctionality generally re- 555 F.2d 373 Proof of showing quires a that the element of the claimed viola- Because this case involves product purpose serves no other than (§ 43(a) of Trade- tions of federal law drug, In the case of a identification. (Lanham Act)) mark Act of 1946 and New example, allegedly, ele- nonfunctional (N.J.S.A. 56:4-1) Jersey support law efficacy. ment not enhance must grant permanent injunction, of a we Id. at 1063. must the state and federal review both proper determine the claim order Judge finding of Sarokin’s non- scope injunction. If the district functionality finding A is a of fact. correctly succeeded clearly court found that CIBA of fact erroneous when the re “ claim, viewing court is left ‘definite and on the merits its state with the firm grant permanent injunction can conviction that mistake has been of a ” Inwood, committed.’ 102 S.Ct. at 2189 only prevent activity as it relates to Bolar’s v. United (quoting United States States is, Jersey. neces- New That Bolar cannot Gypsum 68 S.Ct. U.S. sarily prevented manufacturing from 525, 542, (1948)). 92 L.Ed. 746 We believe selling product simply California appellant Bolar failed to this case activity because its is unlawful New that the district court’s was If, however, Jersey. the district court cor- erroneous. rectly found CIBA succeeded on its federal claims, in- uphold we must Regarding nonfunctionality, the issue of long junction entirety in its so as the bal- the district court found that CIBA had equities injunctive ance of relief. favors APRE- arbitrarily chosen to manufacture We will first the claimed violations pink SAZIDE in blue & & white white consider law, of New then the claimed viola- capsules and that no medical or business compelled tions of federal law. considerations its choice. The that Reid-Provident noted A. Law Laboratories, Inc., corporation, a third of New Jer- CIBA claims two violations successfully producing drug in a the same sey unprivileged imitation law Bolar: Similarly, different color. the district court off. found that no consider- medical or business Unprivileged Imitation shape compelled ations the size and unprivileged imitation To establish capsule. CIBA’s APRESAZIDE As CIBA Jersey law, plaintiff must under New asserted, had the district court found that (1) of its that an imitated feature color, show capsule APRESAZIDE’s size and non-functional, (2) the imita product is that shape purpose serve no other than iden- to the likely tion to cause confusion as tify product. is as APRESAZIDE CIBA’s (3) product product’s origin, argu- that rejected The district court Bolar’s French acquired secondary meaning. concerning alleged functionality has ments v. dress,, stating, Manufacturing American Co. Reeds of APRESAZIDE’s trade Co., 325, Park 333- uses differ- Plastics N.J.Super. fact that a manufacturer “[t]he Publish- 34, Press (1952), distinguish ent colors to between its own 90 A.2d 54-55 Having products particular does not make those decided that CIBA satisfied functional as to other colors manufactur- first two essential elements of a suc F.Supp. ers.” at 1111. The district unprivileged claim of cessful imitation un .547 rejected Bolar’s other also functional- law, Jersey we turn der New to the final arguments, premised pri- ity which were element—whether the district court’s find marily assumption physicians on the that the trade dress of that APRESAZIDE pharmacists prescribe would capsules acquired secondary had meaning appearance only. based on its Based on clearly was erroneous. The district court say that this evidence we cannot the dis- met found that CIBA its burden. We finding non-functionality trict agree. clearly was erroneous. Reeds, In French American 20 N.J.Su- necessary We turn to the second (1952) per. 90 A.2d 50 the court set unprivi element of a successful claim of proving secondary forth the standard for leged Jersey imitation under New law— meaning under New law. It stated is, proving likely that that the imitation is plaintiff that must show that the article in product’s cause confusion ori “ question ‘has become associated in the gin eyes consuming public. in the of the public mind with the first comer as manu- standard of on this Our review issue ____’” facturer or source Id. at again clearly erroneous standard. Af (quoting A.2d at 55 Crescent Tool Co. v. record, carefully reviewing ter we do Bishop Kilborn & 247 Fed. 300- finding not consider the district court’s on (2d Cir.1917)(L. Hand, J.)). Similarly, clearly this issue to be erroneous. SK&F, as this court stated in if only “[t]he The district court found that CIBA’s identifying value of the trade dress was in capsules APRESAZIDE could not be distin- ;.. source, goods with their that value guished from Bolar’s imitation suffices in New courts to establish typical patient utilizing such medi- secondary meaning.” 625 F.2d at 1064. cation. The district court reasoned as fol- Thus, applied the district court the cor- lows: said, rect standard when it “it is no more Realistically, the likelihood of confusion necessary plaintiff prove here for by side-by-side cannot com- be assessed patients identify prod- APRESAZIDE those parison plaintiff’s and defendant’s plaintiff than it ucts with was for [CIBA] products. physical ap- It is the overall Dyazide patients SK&F pearance of defendant’s trade dress , product identified that with SK&F.” 547 which is critical. The vast F.Supp. at 1113. Because the district court patients type take who of medication standard, applied legal the correct we must identify do not or cannot their medi- only decide whether the district court’s cation, source, by or its reference to the patients that APRESAZIDE identi- imprinted drug capsule matter on the or fy products those clearly CIBA is er- patients tablet. Most of such are over say roneous. If we cannot with firm con- age years of 60 unlikely and it is that its viction errone- sufficiently eyesight will have acute ous, we cannot reverse on this issue. to detect the difference their between products usual medication and Bolar’s concluding secondary meaning imprintations based on the Bolar’s acquired by had been CIBA’s APRESA- capsules. ZIDE, the district court considered the du- at 1103. manufacturing, ration of CIBA’s exclusive marketing selling and of APRESA- We do not find in error the district ZIDE, right CIBA’s finding exclusive to use that Bolar’s imitation trademark, likely APRESAZIDE as a the nature capsules CIBA’s APRESAZIDE is to advertising pro- and extent of consuming public confuse relevant CIBA’s and product’s to origin. featuring motions APRESAZIDE’s trade 852

dress, generic name of product as the in the number of sales under APRESA zide 1114, suit,” F.Supp. at dress, 547 trade and the extent of the ZIDE’s patients associate APRESAZIDE one copying of APRESAZIDE’s trade dress. Inc. v. source. See Salton Cornwall generally Toy Corp. v. Plawner Ideal 975, Corp., (D.N.J.1979). F.Supp. 477 986 (3d Cir.1982). Toy Mfg. Corp., 685 F.2d 78 case, In this association between factors, Regarding these APRESAZIDE’s trade dress and the trade following court made the observations: and CIBA is name APRESAZIDE suffi 1976, Since October CIBA-GEIGY has prove secondary meaning. cient continuously marketed its APRESAZIDE name APRESAZIDE is more than a de dress, products in the same trade and for scriptive is term. APRESAZIDE a federal years, from October 1976 to over five ly registered pre trademark that carries a pharmaceuti- March it was the sole See E.I DuPont de sumption validity. company cal marketed these com- which International, Nemours & Co. v. Yoshida products particular in the trade bination Inc., (E.D.N.Y.1975); F.Supp. dress described. Pace, v. F.Supp. Coca Cola Co. date, From October 1976 CIBA- (W.D.Ky.1968). The district court re GEIGY, through its CIBA Pharmaceuti- jected Bolar’s claim APRESAZIDE division, spent Company cal has and con- generic appellation, had become the thus spend sums of mon- tinues to substantial alone is entitled tó use “APRESA- CIBA ey advertising promoting its APRE- and product. ZIDE” as the name of products physicians, pharma- SAZIDE (1) exclusive sale of APRE- Given CIBA’s During hospitals. period cists and SAZIDE; (2) the fact that “APRESAZIDE” through CIBA-GEI- October trademark; (3) registered is a extent of expenditures GY’s for the distribution of APRESAZIDE; (4) advertising and sales of promotional samples free and for exactly, copying, Bolar’s of APRESA- literature, films, symposia medical dress; (5) pur- ZIDE’s trade Bolar’s promoting its seminars APRESAZIDE say pose copying, we cannot with firm products in excess of million. In $9 were a mistake was made conviction that addition, during period, this same finding secondary meaning district court in cost attributable to the efforts of the dress. Because APRESAZIDE’s trade Company Pharmaceutical sales CIBA secondary the district court’s promoting prod- force APRESAZIDE erroneous, meaning not ucts was million. over $16 upheld. therefore must be (footnote omitted). at 1101 Passing Off Moreover, sales of APRESAZIDE CIBA’s steadily capsules increased since their establishing have In addition to its New Jer- making imitation, market introduction. In addition to sey unprivileged claim for findings, these the district court reasoned district court concluded that CIBA succeed- product generally Jersey considered to ed on the merits of its New claim “[a] acquired proofs requisite pass- have distinctiveness and second- off. The ary meaning ing trade dress has off law when its been under New have been recently Id. at 1113. copied.” The district court articulated. “specifically principal Bolar’s held that it is [found] has been actionable [I]t deliberately copying APRE-

motivation in conduct under New law for a increase sales trade dress was to put product SAZIDE’s manufacturer hydralazine hydrochloride/hydrochlo- of its pharmacist of a in a form in hands expense of reasonably rothiazide at the can combinations which the manufacturer Id. products.” anticipate may passed off as APRESAZIDE that it [CIBA’s] placed great product also another if the manufactur- The district court even encourage pass- significance nothing use er does in Bolar’s “consistent else hydralazine off. hydrochloride/hydrochlorothia- F, and that its full extent F.2d at 1062. occurs cannot be & 625 See also Boeh SK Pharmadyne agree v. Labora ringer Ingelheim known. We with the district court tories, (D.N.J.1980) F.Supp. may many that it unfair to the ethical law); (applying New Merrell-Na pharmacists predicate and honest a rule tional Laboratories v. Zenith Laborato assumption phar- of an that some law ries, U.S.P.Q. 157, 160(D.N.J.1977)(ap may illegally ge- macists do and substitute law). plying New drugs greater neric in order to make a profit, very but we see little harm to the previously,

As noted the exact copying drug pharmacists of APRESAZIDE’s trade dress and manufacturers and in dosage pink levels for the blue & white equivalents generic this case where capsules & white has been established. in APRESAZIDE can be manufactured dif- copied Bolar CIBA’s APRESAZIDE sizes, shapes ferent or colors added without mg. capsule and 50 mg./25 blue & white cost. mg./50 mg. pink capsule. The & white significance perma- of Because of a pur court also found that Bolar’s injunction, quote nent we pose copying was to increase sales of its reasoning regarding public in- hydrochloride/hydrochlorothia hydralazine by enjoining terest served Bolar’s imitation expense zide at the APRESA- [CIBA’s] of APRESAZIDE’s trade dress. The dis- products. ZIDE The district court found explained: trict court drug that Bolar’s could be mistaken for substitution, legal Even the case of ju The district court took APRESAZIDE. endangers public Bolar’s conduct in- many phar notice of convictions of dicial products terest. If Bolar’s look confus- illegally York for macists New substitut ingly CIBA-GEIGY’s, pa- similar to ing generic drug drug. for a brand name may-never fully tient learn or understand Finally, the at 1108 n. 9.4 copying are not made the same district court found that Bolar’s intended, products pre- was at least manufacturer as the he had APRESAZIDE pharmacists’ illegal part, viously taking thereby jeopardiz- to facilitate sub been — ing stitution of Bolar’s look-alike for CIBA’s right give his his informed consent APRESAZIDE. to the substitution. patient satisfactory A

It for the dis- who has had was not erroneous find, evidence, experience drug may readily more trict court based on copied agree that Bolar APRESAZIDE with to a of the same substitute anticipation pharmacists blush, reasonable appearance. At first such conclu- drug illegally would substitute Bolar’s may appear sion consistent with Bolar’s CIBA’s. arguments functionality. regarding However, similarity may such cause the Having that Bolar established violated patient to make the unwarranted as- Jersey’s unprivileged imita- laws sumption that the medication is identical off, equita- passing tion and turn to the we and from the same manufacturer as the ble considerations to determine whether prior fraught In this medication. area injunction properly grant- was health, procedure with risks to no should The district court found that Bolar’s ed. patient be condoned affords to the which drug deprives patient look-alike of the anything pertinent less than all principal differentiating means between information and conditions which will she/he desires and that which prompt an for such information. supports a find- dispensed. evidence inquiry public There practice substitution is no harm to the differ- say Jersey. that this pharmacists and tion in New We cannot 4. The conviction of at least 93 inference, pharmacies present- in the off in New York on the basis of the evidence filing ed, suit was years preceding of this improper. three probative illegal substitu- found of likelihood of entiating pills; may Jersey of its unprivileged between the there its New imitation claim, great harm in not. it also succeeded on the merits of its under claim federal law. Even if an au- (footnote omitted). Id. at interpretation Jersey thoritative of New district We believe that the suggests law that the facts established do equitable finding concerning court’s the prove unprivileged not claima for imitation public interest was not in error.5 alsoWe 56:4-1, appropriate under an inter- N.J.S.A. in believe that the district court did not err § 43(a) pretation of of the Lanham Act finding Jersey that Bolar the violated New indicates that the district court did not err prohibiting unprivileged laws imitation and granting injunctive in relief on the of basis passing Consequently, off. affirm we will unprivileged CIBA’s imitation claim under grant permanent injunction the of the upholding the In federal statute. this on based the district court’s decision con claim, rely on our we discussion of the cerning Jersey New law.6 Jersey in evidence the New law section of unprivileged imitation. B. Federal Law CIBA also asserted claims under section Passing Off 43(a) Act, of the Lanham U.S.C. changed Bolar asserts that Ives the stan- § 1125(a), unprivileged for imitation and § 43(a) proof passing dard of off under passing off. Ives, of the Lanham Act. It contends that Unprivileged Imitation read, properly requires showing of intent part the on of manufacturer to induce the unprivileged To imita establish pass products retailers to off imitative Act, plaintiff tion under the must § 43(a) when a it claim is asserted. While nonfunctionality of the imitated feature is debatable whether Ives altered the stan- prove secondary meaning and must § proof 43(a), dard of off under proofs imitated feature. These are essen proof we need not decide the standard tially required the same as those for un findings The issue. district court’s factual privileged Jersey imitation under New unnecessary. make that The factu- debate law.7 F SK & Co. v. Premo Pharmaceuti findings al in and our review of them this Laboratories, cal Be 625 F.2d at 1065. markedly findings case differ from the findings cause the district of fact appellate their ill review Ives. respect Jersey to the claim were New erroneous, clearly not findings Ives, of fact Appeals In the Court of for the necessary proof to the of CIBA’s federal Second Circuit was reversed because clearly setting findings claim were also not erroneous. “erred in aside fact Thus, because the mer- were not erroneous.” 102 CIBA succeeded on S.Ct. case, others, many competition 5. this as in the district 7. “The federal law of unfair is not case, perform balancing different, court was test to significantly upon forced to as it bears identify greater public SK&F, interest. Bolar’s ar- Jersey.” from that of 625 F.2d at New gument copying of APRESAZIDE’s An 1065. assertion that Ives held that trade public trade dress is in the interest is not neces- dress is functional as a matter of law is incor- assertion, sarily a frivolous court but district merely rect. Ives held that a circuit court can- find, error, being could in without not set aside a district court’s of func- greater damage public would result from tionality simply reviewing court because the production capsules. of look-alike "might give the facts another construction.” (quoting 102 S.Ct. at United States v. Real court, reviewing interpreting 6. If a in federal Board, 485, 495, Estate S.Ct. 339 U.S. law, determines that CIBA did not succeed Indeed, (1950)). coming 94 L.Ed. 1007 claims, succeed merits of its federal but did Ives, Supreme to its Court did decision claims, on the of its New merits will, not even consider the reasonableness injunction issued clause, functionality of trade court's accordance with the and credit full faith only Jersey. be valid We will dress. affirm granting injunction based on fully fact. the New of this claims aware Supreme Court stressed that tent to facilitate substitution inwas 52(a) error. Just as the trial “recognizes judge Fed.R.Civ.P. and rests should not have been reversed Ap- the Court of unique opportunity afforded the peals Judge case, Sarokin in this judge credibility trial court to evaluate the having opportunity had the to evaluate the weigh of witnesses and to the evidence.” credibility weigh of witnesses and the evi- 102 In evaluating Id. S.Ct. at 2188-89. dence, must be sustained on this issue be- credibility weighing of witnesses and findings cause his are not errone- evidence, Ives, the district court’s factual ous. We therefore affirm the district findings precluded any holding that there disposition pass- of CIBA’s federal was a violation of section of32 the Lanham ing off claim. judge Act. The trial that case held that “fairly the materials before him could not V. suggest infringe be read” to trademark Finally, the district court was ment. Darby Drug Ives Laboratories v. prevented not granting injunction from Co., (E.D.N.Y.1980). F.Supp. 488 397 by CIBA’s unclean A hands. successful unclean hands defense injunction pro to an findings by In contrast to the made ceeding requires a showing by defendant judge exculpating generic the trial plaintiff’s inequitable conduct is findings manufacturer in that it subject matter involves judge impli made the trial in this case plaintiff’s Salomon, claim. Edelman v. cate Bolar prerequisite and constitute the F.Supp. 1178, (D.Del.1983). Bo predicate holding that there was a vio lar’s assertions that CIBA marketed 43(a) lation of section of the Lanham Act. APRESAZIDE “step-two” drug as a when Here, alia, the express inter district court “step-three” it is in fact a drug,9 that CIBA ly generic found that Bolar’s alternative sold two adulterated batches of APRESA- could be mistaken for CIBA’s APRESA- ZIDE in and that APRESAZIDE’s ZIDE, many pharmacists had been markings do not conform with FDA stan illegal convicted of substitution in New implicate dards do not transgressions so York, copied that Bolar APRESAZIDE’s egregious preclusion as to merit the of an trade dress intent to increase sales of injunction. Moreover, alleged wrong expense its at the alternative of doings do subject not relate to the matter CIBA, copied and that Bolar trade CIBA’s and, of Bolar’s claim consequently, we can intent, part, dress with the at least say not the district court committed revers illegal Irrespective induce substitution.8 rejecting error ible Bolar’s unclean analysis by the trial court as to the hands defense. significance opin of footnote 13 in the Ives VI. ion, us, on the of the record basis before say cannot firm we with definite and con above, For the reasons stated we viction that the trial court’s of in- affirm the will order of the district court judge’s findings “step-two" drug 8. The trial step must be read in 9. A is used in the second accordance with our discussion of the trial steps. "step-three” drug a series of treatment A judge’s injunction preliminary conversion of the step steps. used in the third of such treatment pages injunction. 846-849 permanent See ato alleged labelling CIBA’s motive in APRESAZIDE our discussion supra. accordance with step-two drug probability was to increase the judge's findings read as we the trial follows: prescribed patients suffering that would be it copies CIBA has demonstrated ... its trade dress with the that Bolar (the hypertension hypertension from number of intention, at least in patients reaching stage being higher two than part, illegal permit to induce or substitution three). reaching stage allega- the number This ... CIBA its ultimate burden of [satisfied] tion, noted, subject does not bear ____ [And, proving such an intent CIBA] injunction proceeding matter of the and thus proved although prod- Bolar intended that imply does not district court committed substitution, legal uct it also would facilitiate granting permanent reversible error in in- contemplated and intended that substi- junction. place tution would take as well. at 1116. granting under both Lanham Act New injunction CIBA true ********10 F, e.g., common law. & SK against Bolar.I. 1062-63, 1065; French American F.2d GILES, Judge, dissenting. District Co., Inc. v. Plastics Park Reeds Mfr. agree I am unable to with the conclu- Inc., N.J.Super. 325, 333-34, 90 A.2d sions reached on the issues (1952). agree majority’s I with the 54-55 secondary meaning Ac- off. respect analysis and conclusions with Although cordingly, respectfully I dissent. However, functionality. I am unable to appropriate the court below articulated the the trade agree proven that CIBA has meaning un- legal secondary standard for acquired sec- dress of APRESAZIDE has law, and federal der both ondary meaning. Although the federal and apply properly failed to that standard issue, almost identical on this I state law is respect pass- the record evidence. With analyze each. will off, majority should ing I conclude that the effect, Inwood v. any, decided if have what A. Federal Law Ives, 844, 2182, 72 456 U.S. 102 S.Ct. (1982), controlling has on the L.Ed.2d 606 meaning, secondary “a man To establish v. Pre- Circuit, SK&F Co. in

precedent that, in ufacturer must show the minds of Laboratories, Inc., Pharmaceutical mo public, primary significance of a the the Cir.1980). (3d of F.2d 1055 Resolution 625 identify product or term is to the feature necessary guid- provide this issue would prod product, source of the rather than the this Circuit. ance to the lower courts within Ives, 102 2186 n. 11 uct itself.” S.Ct. at addition, In I conclude that there was insuf- (citing Kellogg Co. v. National Biscuit support ficient evidence Co., 109, 113, 1, 118, 59 S.Ct. 83 305 U.S. copied that Bolar the trade Freixenet, S.A., See also (1938)). L.Ed. 73 with the intent to dress of APRESAZIDE Liquor Admiral & et et al. v. Wine Therefore, I induce substitution. al., Cir.1984); 148, (3d F.2d at 152 731 and dis- reverse the decision below would Toy Corp. Toy v. Plawner Ideal Mfr. injunction. permanent the solve (3d Cir.1982); Corp., 685 F.2d Scott 82 Gold, Inc., Liquid Payer v.Co. Scott’s 589 out, majority points the the because As (3d Cir.1978). This court F.2d injunction the from court below converted Toy; Ideal primary the stated permanent making preliminary “[w]hen without the trade dress to a con significance of findings, we must additional view yroduct not sumer designating likelihood of previous determinations of yroducer, but its trade dress has ac findings merits as ultimate success on the Toy, Ideal secondary meaning.” quantum quired of on the merits. That of success added). (emphasis At the grant for the of a 685 F.2d at 82 evidence which suffices least, necessarily very proven that the con preliminary injunction will not it must be single, injunctive re- the trade dress sufficient for sumer links Processed Therefore, obligated unnamed, are to review source. lief. we albeit Comm., Inc., Plastic Co. v. Warner in this case afresh. the record Payer, (7th Cir.1982); Scott F.2d MEANING I. SECONDARY 589 F.2d at 1228. Various factors have probative secondary unprivileged been held to be prevail on a claim To meaning, including the extent of sales and imitation, nonfunc- CIBA must both use, buyer meaning. advertising, length associ- secondary This is tionality and view, dissenting accept thoughtful fact that we are bound 10. From our fuses to prior ruling court, F, first, F.2d at one- of this SK & 625 opinion it devotes has two faults: court, obligated panel are did not 1055. As a of this we its discussion to an issue we third of prior panel’s construction of New not address this to follow a Jersey and therefore we need decide interesting reject panel cannot those problem. Its second and law and as a we theoretical that, prior protesta- simply case despite views we think the because more serious flaw is may reality, wrongly contrary, dissent re- have been decided. to the tions copying. ation and the fact of Ideal Toy, secondary not sufficient for meaning. See 11; 685 F.2d at 82. 102 S.Ct. at 2186n. Toy, Ideal F.2d at 82. that CIBA had established sec promotional techniques necessarily ondary meaning, the district court relied employed by pharmaceutical industry primarily upon the factors identified in apart set it from more consumer-oriented Toy, including Ideal the extensive advertis promotional fields. All efforts are directed APRESAZIDE, promote the continu physicians pharmacists, leaving and dress, use drug’s great ous trade ultimate consumer uneducated as to the copy commercial success and the fact of prescription drug. source of the On this ing. See CIBA-GEIGY v. Bolar Pharma score, persuaded by I am the observations Co., Inc., ceutical 1101- reasoning Judge Nickerson in the 102, 1105, (D.N.J.1982). Likewise, 1113-14 opinion Ives. He stated: relies these factors in physicians pharma- No doubt affirming the district court’s conclusions on “Cyclospasmol” cists the signifies word Majority Opinion at 852- this issue. See source. But there is sup- no reason to However, merely these factors are pose patients. this is so as to They have secondary meaning. indicia of Focus target not been the of the sales cam- should not be diverted from the main in paigns, they play no role in choosing quiry signifies the trade dress —whether drugs buy. what Nothing in this producer product or source of the suggests record that by ‘understand public. the minds of the The district court anything the word more than a kind of “patients taking found that APRESAZIDE drug to which for one reason or another products have come to associate the trade they become habituated.’ Bayer [have] capsules dress those with the brand Drug Co., 505, Co. v. United 272 Fed. representing name APRESAZIDE as a sin (S.D.N.Y.1921)(L. Hand, J.). 510 Such gle supply although source of not with the patients prescriptions as read their do CIBA, particular manufacturer.” 547 not Cyclospasmol“any attribute to other Thus, F.Supp. at 1102.1 the association meaning ingredient gen- than as an in a the between trade dress and the name compound, eral to which faith and sci- APRESAZIDE deemed was sufficient to might impart therapeutic ence virtue.” However, single denote a source. there Id. simply patients no evidence that link Thus, one cannot infer from the fact single, the word APRESAZIDE with a al patients recognize that Cyclos- the name anonymous beit source. Nor was there pasmol they appreciate that that the any suggest patients evidence to that rec drug they single receive comes from a ognized that the word APRESAZIDE was source. If do not know that the registered a brand name and trade-mark.2 source, designates single word it fol- denoting Rather than the source or a they associate with a color lows that source, the probably word APRESAZIDE signify single name does not to them a function, product identifies the its (e.g., acquire source and cannot secondary medicine”), “my pressure blood meaning. which is 1. remarked that The court also "it is no name APRESAZIDEand CIBA is sufficient to necessary plaintiff prove more here for to that prove secondary meaning.” Majority Opinion identify patients products APRESAZIDE those (emphasis added). at Although 852 APRESA- plaintiff with CIBA-GEIGY than it was for prove trade-name, ZIDE is that CIBA's does not indi- patients in SK&Fthat DYAZIDE identified public cate that the associates that name with CIBA, product F.Supp. at with SK&F.” 547 Indeed, specifically CIBA. the court below Although necessary pub- it is not CIBA, contrary. F.Supp. found to the 547 identify particular lic to the trade dress with only permitted 1102. The fact that CIBA is manufacturer, single named a link with a pro- use the name APRESAZIDEwould not be required. source is secondary meaning public bative of absent rec- ognition exclusivity. of this 2. The be- states that the "association tween the trade APRESAZIDE’strade dress and

858 Laboratories, Co., v. object single- Darby Drug Ives Inc. of an with a ... source —even Inc., (E.D.N.Y.1980), though 400 488 unnamed —and. an interest on the (2d grounds, rev’d on other part consuming public F.2d 538 buying nom., Cir.1981), rev’d sub Inwood v. Squeezit Corp. v. source.” because 2182, 72 Inc., 844, 102 S.Ct. L.Ed.2d 606 Dispensers, Plastic U.S. N.J.Super. remand, (2d 697 F.2d 291 Cir. (1954). Similarly, 106 A.2d 322 aff’d 1982). French Reeds Co. Park American v. Mfr. Co., Inc., N.J.Super. 325, Plastics pharmaceutical In in- the context of the (1952), Superior A.2d 50 Court of New Toy factors dustry, the Ideal also become Jersey stated: meaningful. somewhat less The amount of advertising promotion, normally which is an condition relief absolute [I]t helps prod- consumers to familiarize plaintiff ... whatever that the show that uct, is not relevant as it is seen never appearance of his wares has in fact public. Similarly, volume of sales particular per- come mean that some not telling is not where consumer does may not be plaintiff individually son —the choose drug. particular The continu- them, public and that known —makes unimportant dress is ous use of the trade ____ them cares who does make recognizes only public unless the one question critical of fact at the outset color, shape manufacturer uses always public is is whether moved alone, copying, standing size. The act of is any degree buy the article because of prove meaning. secondary not sufficient to are the source and what features no summary, there is evidence on this distinguishes which it that source. consuming public record that the links the Bishop Kilborn 247 Fed. & 300- single trade dress of APRESAZIDE with a (2d Cir.1917). Although the New source, Accordingly, or unnamed. I named meaning secondary virtually test for has would hold that CIBA failed to standard, same as the federal secondary meaning under federal law.3 prong inquiry— law adds to the a second Therefore, public interest. CIBA would Jersey Law B. link only single have to not with show source, public secondary also that the wants that Under New law mean- but because ing product of the source. has defined as “identification This would been blush, analysis my may appear on this 3. At conclusion the SK&F court’s issue is virtu- first con- There, ally Pointing trary to the in non-existent. distinctive to this Circuit’s decision SK&F. advertising, trade extensive that dress and the court the court concluded trade dress diuretic, DYAZIDE, only value of trade acquired had sec- concluded that ”[t]he SK&F’s ' SK&F, identifying goods meaning, ondary dress source, their 625 F.2d was at in the that value suffices New Jer- There was evidence in SK&F that 1065-66. secondary sey SK&F, meaning." only establish courts to diuretic on the market DYAZIDEwas form, F.2d at 1064. The court ad- capsule only never which one came in patients link only dressed whether would the distinc- using and the which was use bi-colored capsules single Here, tive maroon and white color Id. at 1059. there was maroon. source. antihypertensive, makes an evidence that Pfizer MINIPRESS, strength at least one of which Perhaps conclusory court's rather treat- appearance similar to APRESAZIDE. See proce- ment of the issue in SK&Farises from its CIBA, F.Supp. at 1107. The court SK&F, posture. dural like earlier decision irrelevant, case, found this as MINIPRESS and APRE- Corp. see CIBA-GEIGY v. Bolar ingredients (3d Cir.1983), SAZIDE contain different and are F.2d 56 Pharmaceutical drugs, thereby reducing grant both preliminary brand name was injunction. of a reviewed after the SK&F, illegal possibility employed substitution. Id. In standard is a likeli- The however, only Here, DYAZIDEwas the diuretic mar- hood of reviewing on the merits. we are success including appearance, keted with that diuretics to determine whether a final record ingredients pro- containing produced prove different and those CIBAhas secondary sufficient evidence to meaning. not duced as manu- SK&F did alter the brand name as well secondary meaning; Arguably, it sim- this makes the case traditional test for facturers. ply applied procedural Unfortunately, secondary meaning stronger. context. it in different recognition seem to entail some anticipate duplication sonable to of a name, APRESAZIDE is a brand rather trade dress would facilitate passing off. SK&F, generic drug, than a and that its CIBA, 1063; status as 625 F.2d at such makes it public. more desirable to the 1116; F.Supp. at Majority Opinion at 854. Although desirability may inferred, conclusion, be I quarrel. With this have no A brings proving CIBA no closer to always that the manufacturer can reasonably antici- public pate associates the trade dress of APRE- copying that the act of a trade dress particular single with a SAZIDE or source. make will substitutions easier. I question continuing vitality of this In French American Reeds, the court anticipation” light “reasonable test listed factors similar to the ones relied Supreme the United States Court decision court, upon by the district including length Further, Ives. I conclude that the dis- use, volume, advertising sales and “ef trict court’s finding alternate of intentional promote forts to a conscious connection in under Ives is not inducement supported public the minds of the prod between the Moreover, the record evidence. it is neces- N.J.Super. uct and its source.”4 20 at sary to consider what effect the demise of However, 90 A.2d at 56. the court was anticipation the reasonable standard has on quick point only out that these are fac prediction this court’s Supreme how the considered, dispositive tors to not crite Court of New would decide state establishing secondary meaning. ria subject. law on the explained ultimate test of “[t]he secondary meaning always must remain Ives and the Lanham Act A. plaintiffs product whether in its distinctive Stating that “it is debatable whether Ives broadly trade dress has become known to proof altered the standard of for passing public indicating origin.” a certain § 43(a)____’’the off under majority opinion Id. 90 A.2d at 57. I previously have issue, refuses to reach the relying instead sup concluded that there is no evidence to upon the district court’s alternate port public that the associates the of intentional inducement. Majority appearance partic of APRESAZIDE with a Opinion at 854. I major- share neither the Therefore, single ular or source. CIBA ity’s hesitancy nor doubt on this issue. also failed to secondary meaning has under the Jersey. law of New Ives also a “look-alike” case. However, it was decided on the narrow

II. PASSING OFF ground appropriate standard of rev SK&F, liability White, this court held in a concurring opin iew.5 Justice imposed ion, could be off under took the to task for not decid 43(a) Act, presented section of the Lanham petitions U.S.C. the issue in the for § 1125(a) (1982), and New law certiorari —whether the Second Circuit proven placed where it is that a is “in applying erred in anticipa reasonable pharmacist the hands of a in a form in tion standard contributory to a claim of Ives, reasonably infringement which the manufacturer can an- under the Lanham Act. ticipate may passed (White, it J., off as anoth- 102 at concurring). S.Ct. 2190-91 Warner & product Citing er even if the manufacturer Lilly Co. v. Eli does & nothing encourage passing else to off.” 265 U.S. 44 S.Ct. 68 L.Ed. 1161 SK&F, (1924), The F.2d at 1065-66. Justice White chracterized the rea court, anticipation and the sonable like the court below standard as “watered SK&F here, majority Id. 102 S.Ct. at 2191. He ex- concluded that rea- was down.” “buyer parallels holding 4. This factor association” 5. The actual of Ives is unremarkable —a Toy, appeals may findings elements of Ideal 685 F.2d at 82. As the court of not set aside previous suggests, marketing discussion the district court without a determination that they Ives, techniques pharmaceutical industry, of the vis-a- were erroneous. See 102 S.Ct. prescription drugs, vis useless. render this factor at 2190. should plained ap- mere fact that a intentional inducement also be “[t]he drug company anticipate can that some 43(a). ille- plied to section gal unspeci- substitution will occur to some “§ 43(a) pro Ives Court The noted that extent, by pharma- fied some unknown range practices hibits a broader than cists, by predicate should not for itself be 32____” § (empha does 102 S.Ct. at 2190 Id. 102 S.Ct. at contributory liability.” added).7 sis A brief discussion of these 2192. statutory provisions two will illustrate that criticism, response In to Justice White’s 43(a) simply pro means that section majority stated that if the Second Cir greater scribes a number of activities than upon cuit had relied the reasonable antici SK&F, generally does section 32. standard, pation “the court indeed would (discussing types F.2d at 1065 various applied have down’ and incor ‘watered 43(a)). behavior under section actionable Ives, rect standard.” at 2188 n. S.Ct. face, very On its section 32 is a narrow majority 13.6 Both the and concurrence infringement provision, limited to action for agreed upon proper legal test. Liabili registered Although of a trademark.8 du ty passing contributory infringe for off or not, itself, plication of a trade dress by proof must that the ment be established trademark, infringement of a the imitative intentionally manufacturer induced another might appearance pharmacist induce a pass supply prod off or continued to place generic drug bearing in a bottle know, uct, knowing, having or reason to gen name. Since the brand name is pharmacist engaging brand that the was trade-mark, See id. erally registered substitutions. S.Ct. the manu (White, J., concurring). 2191-92 contributory facturer can for be held liable infringement passing of the inducement of Ives off claim in was contrast, section. In section off under this brought under 32 of the Lanham section 43(a) require infringement does not of a Act, prosecutes the claim while CIBA same mark, desig 43(a). prohibiting instead false in this case under section The issue origin.9 higher whether standard of nation of The mere act of trade becomes majority opined 6. The that the Second Circuit tended to be used in commerce or in sale, sale, offering had not abandoned the traditional standard for passing connection with the distribution, for advertising goods off. The Ives stated that the or or servic- language anticipation simply reasonable es on or with which such use is in connection mistake, confusion, used to the test buttress their conclusion that likely to cause or to cause contributory infringement had been met. 102 or to deceive. S.Ct. at 2188 n. 13. regis- action shall be liable in a civil provided. trant for remedies hereinafter section, 43(a) (b) brought regis- 7. the section claim was Under subsection of this unprivileged designation profits imitation and false shall not be to recover or trant entitled origin. damages those of claims, The Court declined to rule on unless the acts have been committed knowledge had not been reviewed intend- that such imitation is confusion, appeals. court of ed to be used to cause or to cause mistake, or to deceive. (1982). provides, pertinent part: § 15 U.S.C. 1114 Section shall, (1) Any person who without the consent 43(a) provides: 9. Section registrant— annex, affix, Any person apply, or who shall (a) any reproduction, use commerce any goods or use in connection with or servic- counterfeit, copy, or colorable imitation of a es, any goods, sale, or container or containers for a registered mark in connection with the designation origin, any distribution, false of or false de- sale, offering advertising or for scription including representation, words or any goods in connection of or services or symbols tending falsely or to describe likely other represent use is to cause confu- with which such same, sion, mistake, deceive; shall cause such or and or or to cause or to commerce, counterfeit, goods (b) and copy, or services to enter reproduce, or color- into knowledge any person ably registered apply of such who shall with a mark imitate counterfeit, origin falsity designation reproduction, copy, of or de- or colorable of such labels, procure prints, packages, scription representation or signs, cause imitation to or wrappers, transported in com- receptacles in- or used or advertisements same to be duplication duplication. dress is actionable under this Id. at mate reason for misrepresent prod if tends to a section only 1108.11 The other evidence relied actionable, Passing origin. uct’s off is also upon by the court was the conviction of affording plaintiff a like CIBA a choice of (93) ninety-three New York pharmacies and However, statutory remedies.10 the nature pharmacists illegal Id. substitutions. activity, duplicating drug’s of the trade at 1108 n. 9. This evidence was deemed dress, potential wrongdoing by and the sufficient concluding unscrupulous pharmacist, an are the same that the district court’s of intent to regardless statutory of which section induce was not Majority erroneous. plaintiff Consistency logic invokes. Opinion at I agree. 855. do not dictate, therefore, legal that the same stan outset, At the I fail to see the relevance applied dard should to the same be behav of the New York convictions. There is no 43(a). ior under both sections 32 and To pharmacies evidence that these had been plaintiff only prove hold need that rea passing products produced off by Bolar. 43(a) anticipation sonable under section Indeed, suggestion there was no that superfluous would render section 32 illegal convictions involved the substitution eviscerate the intentional inducement stan of a for APRESAZIDE. These dard of Ives. No plaintiff would voluntari may prove convictions illegal substitu- ly proceed giv choose to under section problem, tion is' a York, at least in New Ives, higher they en the burden when under but, nothing respect 43(a) required could invoke section and be Bolar’s actions or intent in duplicating the prove only anticipation. reasonable trade dress of APRESAZIDE.. Moreover, the Ives court indicated that the functionality standard for The district court found that is the same un Bolar had See 102 S.Ct. statutory illegal der both sections. the intent to induce substitution. 20; id. at 2190 n. S.Ct. at 2192-93 There was no of actual inducement. (White, J., concurring). It follows that the There is no claim duplicated that Bolar “passing same must be true for off.” packaging pharmacists so that Thus, I would hold that Ives signaled the might innocently misled. Nor is there anticipation demise of the reasonable stan any that Bolar any- evidence said or did dard, implicitly overruling portion Of thing reasonably that could be construed as this court’s decision SK&F. encouraging illegal substitution. Accord- language to the the manufac- The district court did address the Ives intentionally induce turer must another standard, deciding intentional inducement pass supply goods off or continue to in the alternative should court hold one whom it knows or has reason to know F the SK & reasonable anticipation 2188; id. passing is off. S.Ct. at longer standard was no viable. It found (White, J., concurring) 102 S.Ct. at 2191-92 copied that Bolar the trade APRE- dress of added). (emphasis language requires SAZIDE with intent to facilitate This CIBA, apart F.Supp. substitutions. at some affirmative action from the act support finding, copying. 1116. In of this the'court Such affirmative action is ab- explained legiti below there was no sent from this record. any merce or deliver the same to carrier to be under section 32. The broader reach of section used, 43(a) alia, transported preventing, or shall be liable to a civil is aimed at inter confu- by any person doing public. light action locality falsely business in sion in the mind of the origin respect or in indicated as that Ives decision with to section it is not situated, locality region surprising proceed in which said is or that CIBA under chose 43(a). by any person who believes that he is or section likely damaged by to be the use of such Having rejected functionality appear- 11. description representation. false or ance, rejected argu- tacitly the court also 1125(a) (1982). 15 U.S.C. § similarity dress would ment that the in trade CIBA, contributory Interestingly, legal in- facilitate claim for substitutions.

10. comfortably fringement or off fits more 862 (First) (quoting Restatement

Assuming punishes merely that at 1062 Ives § substitution, added). (1938))(emphasis intent to induce This Torts 713 unchanged. Proof of some strikingly result remains language sounds similar to that copying thing in addition to the act of is employed quot in Ives. The SK & F court beyond question that the required. It is 713, following ed the illustration section purports to have substantial Ives standard derived from Co. v. which Warner & ly anticipa than the more bite reasonable Lilly 265 U.S. S.Ct. Eli & 44 latter, copy the act of tion test. Under (1924). L.Ed.2d 1161 It must be noted imitating ing proves By offense. majori that was cited both the Warner virtually impos drug, trade dress of a it is support ty and the concurrence in Ives as anticipate may fail to that “it sible to for the intentional inducement standard. passed product____” & off another SK Ives, 2188; at See 102 S.Ct. at id. S.Ct. Thus, F, satisfy 625 F.2d at 1062. (White, J., concurring). The F SK & that higher standard of it would seem antici court then stated that the reasonable proof something more than the act of pation test “has been held ... actionable However, required. is under the imitation law____” Jersey under New 625 F.2d ... analysis, quantum court’s the same Labs., (citing at 1062 Merrell-National satisfy of evidence which would the reason Labs., Inc., U.S.P.Q. Zenith Inc. v. anticipation standard would also suff able (D.N.J.1977), on 159-60 other aff'd inducement. ice to intentional Under (3d Cir.1978)). grounds, 579 F.2d 786 Oth either, copying prove the the act of would citing jurisdic er than cases from other However, rejection offense.12 tions, decided both state and federal under anticipation reasonable test the Ives law, analy engaged the court in no further “ Court as ‘watered down’ and incor Jersey sis decision or New of Merrell rect____”, 102 S.Ct. at 2188 n. mandates F, at state Law.13 SK & 625 F.2d See something in addition to the act of required satisfy imitation is the inten drug While was a look-alike Merrell there is tional inducement standard. Since case, in that it it differs from this case support insufficient evidence passing by pharmacists, actual off involved induce,' of intent to I con contributory infringe- well as a claim for as. clude that this erroneous. part ment on the of the manufacturers. latter, Jersey B. New Law respect to the that court found With precedent Jersey that there was no New upon F, Relying as- SK & Merrill, Thus, point. U.S.P.Q. at 160. anticipation sumes that the reasonable Supreme “predict” it had to how the Court Jersey. standard is the law of New rule, Jersey presented if of New would However, Majority Opinion at 852. contributory infringement. a claim of conflicting sig- court in & F sent out SK Looking “general tenants” New Jer- nals, observing fol- first law, sey competition unfair the court con- 711 and 713 of the Restate- lows sections play cluded that has “fair become the (First) ment of Torts. Section 713 defines watchword____” Id. The Court then dis- off, passing stating, fraudulently “[o]ne cussed some rather dated federal cases if, goods another markets his as those of anticipation which endorsed the reasonable though making misrepresentation him- no self, purchas- standard. Based these cases and the intentionally he induces his tenants,” F, “general 625 F.2d the court concluded ers to so market them.” SK & explained recognized of his 13. The SK&F court never how the 12. The district court the effect ruling duplication proved adopt intent to fa- courts New could both inten- standard, "such an indict- cilitate ment could off. He stated tional inducement as articulated in logically any generic Restatement, extend anticipa- reasonable and the drug.” produced manufacturer a look-alike who tion test. CIBA, at 1108. plaintiff likely prevail against passing the hold Bolar liable for off under this compet Accordingly, manufacturers on a claim of unfair standard. I- would reverse ition.14 Id. the decision below in its entirety.

Nothing “general in the tenants” of New

Jersey law, competition unfair as articulat by court,

ed Merrell tends to Jersey adopt

New would the reasonable

anticipation standard over the test of inten Indeed,

tional inducement. the SK F& acknowledgment Jersey that New follows sections 711 and 713 of the Restate Poulis, Lefteri POULIS Athena his (First) ment of Torts indicate would wife, Appellants, opposite. only insight provided exact v. Jersey New courts is found in dicta in STATE FARM FIRE AND the French American Reeds case. The CASUALTY COMPANY. Superior Jersey Court of noted New present questions the action did not No. 83-5600. marketing,” off or “fraudulent cit Appeals, United States Court of § (First) ing the Restatement of Torts Third Circuit. (1938). Quoting plaintiff, the court stated that the claim any did “not involve element Argued 3, April 1984. any attempt intent or on re of actual 5, Decided Nov. 1984. spondents’ part goods to see their as those appellant.” Reeds, French American N.J.Super. 90 A.2d at 52. If anticipation reasonable were the standard Jersey, plaintiff New in French might

American Reeds not have limited

the case to unprivileged claims of imitation.

Discounting “general the so-called ten- competition,

ants” of unfair the Merrell

decision, upon which the F court SK &

relied, analogy is based an to federal analogy longer

law. This justified is no

the wake Assuming of Ives. the reason- anticipation

able standard has been over- law,

ruled as a matter of federal it follows

that it cannot be under New viable in the

law absence of endorsement of

that standard the courts of Jersey. New that,

I would hold accordance with the §§ (First)

Restatement of Torts

(1938), and v. Lilly Warner & Co. Eli & 265 U.S. 44 S.Ct. 68 L.Ed. (1924), adheres to the

traditional intentional inducement stan- previ-

dard. For the reasons stated section,

ous there is insufficient evidence to Merrell, SK&F, like predicting was decided in the con- articulated that it was sey that New Jer- preliminary injunctive text Although adopt anticipation relief. would the reasonable implicit holding, in the the Merrell court never standard.

Case Details

Case Name: Ciba-Geigy Corporation v. Bolar Pharmaceutical Co., Inc.

Court Name: Court of Appeals for the Third Circuit

Date Published: Jan 8, 1985

Citation: 747 F.2d 844

Docket Number: 84-5056, 82-5797

Court Abbreviation: 3rd Cir.