## Facts

- Johnson & Johnson (J&J) sold Johnson’s Baby Oil and Johnson’s Baby Lotion, which were also used by some consumers as shaving or skin-moisturizing products.
- Carter-Wallace, Inc. (Carter) sold NAIR, a depilatory product, and in 1977 reformulated NAIR to include baby oil.
- Carter advertised “NAIR with baby oil,” emphasizing the inclusion of baby oil and suggesting skin-conditioning benefits.
- J&J alleged the advertising was false or misleading and implied NAIR’s baby-oil content provided moisturizing benefits comparable to J&J’s baby oil or lotion, harming J&J’s sales and goodwill.
- J&J brought a claim under Lanham Act § 43(a) and state unfair-competition law, seeking injunctive relief only.
- At the preliminary stage, J&J offered evidence including declining baby-oil sales, consumer testimony and survey evidence indicating some consumers believed NAIR with baby oil removed the need for separate baby oil or lotion, and NAIR’s market-share gains.

## Issues

1. In a Lanham Act § 43(a) false-advertising claim seeking only injunctive relief, must the plaintiff prove actual damages, or is evidence of likely competitive injury sufficient to avoid dismissal and proceed to the merits?

## Decision

- The Second Circuit reversed the dismissal of J&J’s § 43(a) false-advertising claim and remanded.
- The court held that a competitor seeking injunctive relief need not prove actual, realized damages; a showing of likely injury is sufficient.
- The court concluded J&J’s evidence supported a reasonable inference that the challenged advertising could cause harm to J&J’s sales or goodwill.
- The court did not decide whether Carter’s advertising was false or misleading, leaving falsity and related merits questions for further proceedings.

## Legal Principles

- Lanham Act § 43(a) false-advertising liability does not require proof of intent to deceive.
- For injunctive relief under § 43(a), a plaintiff may establish standing and entitlement to proceed by showing likely competitive injury (e.g., diverted sales, loss of goodwill), rather than quantifying actual losses.
- Where parties compete in overlapping consumer uses and the advertising targets the same consumer concerns, a logical causal connection between the challenged advertising and likely injury can support injunctive relief standards.
- Requirements for proving damages are more demanding than the showing required to obtain preventive relief aimed at stopping ongoing or future injury.

## Conclusion

The court held that, in a competitor false-advertising suit under Lanham Act § 43(a) seeking an injunction, evidence supporting a likelihood of competitive harm is enough to proceed; requiring proof of actual damages at the liability stage is error, so the case was remanded for a determination of falsity and appropriate relief.


Johnson & Johnson v. Carter-Wallace, Inc., 631 F.2d 186 (2d Cir. 1980)