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McNEIL’s TYLENOL PM REMAINS ON MARKET WITH CURRENT PACKAGING

Executive Summary

McNEIL's TYLENOL PM REMAINS ON MARKET WITH CURRENT PACKAGING following a New York federal appeals court ruling Aug. 24 that Tylenol PM does not infringe the trademark and trade dress of Bristol-Myers Squibb's Excedrin PM. The circuit court panel decision reverses a lower court's preliminary injunction ruling that would have required McNeil to stop selling its OTC analgesic/sleep-aid product. "The district court erred in preliminary enjoining McNeil from marketing its combination analgesic/sleep aid in the 'Tylenol PM' trade dress," the appeals court ruling states. The product is not "likely to cause confusion among purchasers due to its similarity to Bristol's 'Excedrin PM' trade dress." BMS filed suit against McNeil on May 21, 1991 in Uniondale, N.Y. federal court charging that Tylenol PM is deliberately packaged to resemble Excedrin PM. On Feb. 20, federal court Judge Arthur Spatt issued a preliminary injunction prohibiting McNeil from marketing Tylenol PM and ordering the firm to recall all advertising depicting the product in its current trade dress ("The Pink Sheet" March 2, T&G-14). McNeil appealed that ruling. While concluding that "the two products are functionally interchangeable," the three-judge appeals panel called the differences between the two products' packages "significant": "By far the most prominent feature of the 'Excedrin PM' trade dress is the trade name 'Excedrin.' At least as prominent on the 'Tylenol PM' packaging is the trade name 'Tylenol,'" the ruling states. "These trade names are the major features of otherwise ordinary boxes." In addition, the court found that the "'Tylenol' trade name is displayed in the same typeface used on other 'Tylenol' products," and that the "'Tylenol PM' trade dress is extremely similar to other 'Tylenol' analgesic products." McNeil had moved to have the BMS infringement suit dismissed in its entirety, but the appeals court declined. The case has been remanded to the district court for a hearing. While the appeals court did not rule for dismissal, it did indicate that it does not believe Bristol-Myers Squibb will prevail in the infringement claim. There is a "possibility, albeit slight, that Bristol will present evidence at trial...that might lead to a change in the ultimate conclusion regarding the likelihood of consumer confusion," the court found. "We are pleased with the appeals court decision to reverse the preliminary injunction, concluding there is no likelihood of consumer confusion arising from our packaging of Tylenol PM," McNeil parent Johnson & Johnson said. "While we are disappointed by the Court of Appeals' decision to vacate the preliminary injunction, we are pleased that the court agrees with the district court that McNeil intentionally copied [certain] elements of the Excedrin PM package," BMS said.
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