4th Circuit Applies eBay v. MercExchange Injunction Standard to False Advertising Case

Yesterday the 4th Circuit affirmed a $13.5 million jury verdict and a permanent injunction against Mead Johnson for false advertising about a competitor’s infant formula. In so doing, the court in PBM Prod., LLC v. Mead Johnson & Co., No. 10-1421 (4th Cir. Apr. 20, 2011), applied the injunction standard set forth in the Supreme Court’s patent law decision in eBay, Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006), and held that PBM had introduced sufficient evidence of irreparable harm. The court pointed “primarily” to survey evidence that Mead Johnson’s statements actually misled survey participants. Secondarily, the court noted that damage to “goodwill” and “reputation” also support a finding of irreparable harm. (Of course, this latter basis seems to comes pretty close to the sort of presumption or universal rule rejected by the eBay court.)

The 4th Circuit also held that evidence that a false advertising plaintiff had previously sued the defendant for false advertising is relevant to the defendant’s “intent in making its misleading claims” in the later case, which in turn could relieve the plaintiff of the burden of showing that the defendant’s impliedly misleading claims actually confused people.