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March 16, 2010
Damages Analysis Provided by Brattle Principal Dr. Kenneth Wise Contributes to Record Verdict in Lanham Act Case Against Mead Johnson & Co.

Damages analysis provided by Brattle principal Dr. Kenneth Wise contributed to a $13.5 million jury verdict against Mead Johnson & Co. in a Lanham Act case alleging that mailings by Mead Johnson to mothers of infants provided the misleading impression that Enfamil Lipil baby formula was nutritionally superior to store-brand versions. This represents the largest jury award in a Virginia court in 2009 and one of the largest jury awards ever in a Lanham Act case. The plaintiff, PBM Products, manufactures more than 95 percent of store-brand infant formula sold in the United States. PBM alleged that mailings by Mead Johnson to mothers of infants provided misleading information concerning the nutritional value of the store-brand formula. The mailings referred to clinical trials showing that Enfamil formula containing lipids led to superior brain and vision development. The actual comparison was to Enfamil without lipids, but PBM’s allegation was that the mailings could have been misinterpreted to imply that the clinical comparison was to store brands. However, store brand formula produced by PBM, in fact, contains lipids. At trial, PBM attorneys from Kramer Levin Naftalis & Frankel LLP and other PBM experts showed both that the mailings lessened consumers’ interest in store-brand formula and that the PBM formula contained essentially the same lipids as Enfamil. Dr. Wise’s damage analysis was based on an econometric model that projected what PBM’s market share would have been in the absence of the contested mailings. A comparison of the projection to the actual market share identified the impact. Mothers buy infant formula until a child concludes the first year. The Mead Johnson mailings were sent to mothers of three-month olds in each of nine consecutive months and then ceased. The mailings, therefore, would increase in the population of prospective infant formula purchasers and then decline. Dr. Wise, in fact, found an impact that increased during the nine-month period of the mailings and then decreased when the mailings ceased. He testified that there would be future damages after the mailings ceased because of mothers who had received mailings moving through the first year and due to potential word-of-mouth impacts. The jury’s award exceeded Dr. Wise’s estimate of past damages, apparently including amounts for future damages. Consistent with standard practice, Dr. Wise testified that he had tested a range of factors that theoretically could have affected PBM market share, and ultimately excluded from his model a number of factors found to have no statistically significant effect. Nonetheless, in December 2009, Mead filed a motion for a new trial, claiming that the jury based the $13.5 million award on damages calculations that failed to account for market factors including other ad campaigns that attacked store-brand formulas. On March 3, 2010, Judge James R. Spencer of the U.S. District Court for the Eastern District of Virginia rejected Mead’s attempt for a new trial, ruling that “Although Mead Johnson may have critiques it can make of Dr. Wise’s analysis, the bottom line is that he used a reliable regression analysis that was based on relevant and appropriate data. He explained why certain variables were included and why others were excluded.” Dr Wise's team at The Brattle Group included Principal Benjamin Sacks, Senior Associate Armando Levy, and Research Analysts Aneliya Valkova, Sean Ogden, and Jenny Palmer.