Antitrust Law Daily Wrap Up, ADVERTISING—SDNY: Acquiescence in Ad Portrayal Precluded False Ad Claim, (Apr 1, 2013)

By William Zale, J.D.

Because a teddy bear manufacturer acquiesced in an antihistamine advertiser’s portray of the teddy bear as a trigger for an allergic reaction, the manufacturer failed to state a Lanham Act false advertising claim, the federal district court in New York City has ruled (Great British Teddy Bear Co. v. McNeil-PPC, Inc., March 29, 2013, Griesa, T.). The court also dismissed claims under the New York deceptive practices law and false advertising law because the manufacturer failed to assert conduct having a broad impact on consumers.

McNeil-PPC, a New Jersey pharmaceutical company, hired Vidal Partnership to produce an online advertising campaign for the antihistamine Zyrtec. Vidal developed a concept in which cherished objects were revealed to be the cause of allergies, while Zyrtec would allow the allergy sufferer to enjoy the objects again. In email correspondence, managing director Paul Jessup of The Great British Teddy Bear Company acquiesced in the portrayal of its bear in the advertisement, according to the court.

Acquiescence is an equitable defense whereby relief may be denied a trademark owner who has, by word or deed, expressed consent to the defendant's use of its mark, the court observed. While an affirmative defense like acquiescence is generally pleaded in a defendant’s answer and is not normally a proper subject for a pre-answer motion to dismiss, an affirmative defense may be raised by a pre-answer motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, without resort to summary judgment procedure, if the defense appears on the face of the complaint, the court said.

The email correspondence between Sullivan-Brady and Jessup, before the court on the motion dismiss, demonstrated that plaintiff acquiesced to the depiction of the bear in the Zyrtec advertisement. Jessup explicitly approved the general concept of the advertisement in his email of January 24, when, after Sullivan-Brady had explained it to him, he stated: “So we are talking about dust mites on your favorite toy—I like that.” Jessup was provided the full storyboard for the advertisement, he never objected to bear’s depiction, and the storyboard did not differ from the final advertisement in any way that is relevant to plaintiff’s false advertising claim.

N.Y. Gen. Bus. Law §349 forbids “[d]eceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service in this state.” N.Y. Gen. Bus. Law §350 forbids “[f]alse advertising in the conduct of any business, trade or commerce or in the furnishing of any service in this state.” To be actionable, a defendant’s acts or practices must have a boad impact on consumers at large, the court noted.

The plaintiff did not allege anything approaching a specific and substantial injury to the public at large, according to the court. Perhaps some people, after glancing at the advertisement at issue, would wrongly infer that the plaintiff’s bear is made of hyper-allergenic materials. The real injury would not be borne by public; but by the plaintiff, in the form of reduced sales, the court concluded.

The case is No. 12 Civ 3926.

Attorneys: Richard Pu (Richard Pu, P.C.) for The Great British Teddy Bear Company. Kenneth P. Norwick (Norwick, Schad & Goering) for McNeil-PPC, Inc.

Companies: The Great British Teddy Bear Company; McNeil-PPC, Inc.; Vidal Partnership, Inc.

Cases: Advertising StateUnfairTradePractices NewYorkNews