A federal court judge denied a permanent injunction to Schering-Plough in its suit against Neutrogena alleging that Neutrogena violated the Lanham Act, even though the judge granted partial summary judgment on the grounds that the sunscreen advertisements in question were literally false.

U.S. District Court Judge Sue L. Robinson ruled that Neutrogena’s ads were literally false because the company used the term “Helioplex” to describe a system with specific ingredients: avobenzone, diethylhexyl-2,6-napthalate (“DEHN”), and oxybenzone.

Schering-Plough filed suit claiming that the ads violated the Lanham Act because Neutrogena substituted DEHN with a different agent in its Ultra Sheer Dry-Touch Sunblock SPF 100+ sunscreen, and failed to notify consumers of the change in active ingredients while continuing to use the Helioplex mark.

When Judge Robinson agreed, the company then sought a permanent injunction against Neutrogena. But relying upon the recent U.S. Supreme Court decision eBay v. MercExhange, Judge Robinson said the plaintiff was not entitled to a presumption of harm simply because there had been a finding of literal falsity. Instead, the traditional analysis for injunctive relief must still be satisfied – a four-factor test where the plaintiff must show irreparable harm, the inadequacy of legal remedies, that the balance of hardships between the parties requires an injunction, and that the public interest would be served – and Schering-Plough failed to meet its burden, she ruled.

To read the order in Schering-Plough Healthcare Products, Inc. v. Neutrogena, click here.

Why it matters: Advertisers should take note that harm cannot be presumed upon a showing of literal falsity. The decision was a victory for Neutrogena, but the company could still face a permanent injunction if Schering-Plough can satisfy the four-factor test.