Clorox Co. Puerto Rico v. Proctor & Gamble Commercial Co.

          United States Court of Appeals
                       For the First Circuit


No. 99-1608

                  THE CLOROX COMPANY PUERTO RICO,

                       Plaintiff, Appellant,

                                 v.

              THE PROCTOR & GAMBLE COMMERCIAL COMPANY,

                        Defendant, Appellee.


         APPEAL FROM THE UNITED STATES DISTRICT COURT

                  FOR THE DISTRICT OF PUERTO RICO

        [Hon. José Antonio Fusté, U.S. District Judge]


                               Before

                         Lynch, Circuit Judge,
                     Cyr, Senior Circuit Judge,
                      and Lipez, Circuit Judge.



     Armando Lloréns, with whom Dora M. Peñagaríciano       and
McConnell Valdés were on brief, for appellant.

     Harold P. Weinberger, with whom Jonathon M. Wagner,
Gabrielle L. Gould, Kramer Levin Naftalis & Frankel, LLP, Pedro
J. Santa-Sánchez, and O'Neill & Borges were on brief, for
appellee.
October 3, 2000
           LIPEZ, Circuit Judge. "Más blanco no se puede" (Whiter

is not possible) was the advertising tag line used by the

defendant, the Proctor and Gamble Commercial Company, to sell

its detergent, Ace con Blanqueador (Ace with whitener), in

Puerto    Rico.     The    Clorox   Company   Puerto     Rico    cried    foul,

complaining that no detergent brings out the white like its

chlorine bleach when used with a detergent.               Proctor & Gamble

modified   its    pitch,    inviting    consumers   to    "Compare       con   su

detergente . . . Más blanco no se puede" (Compare with your

detergent . . . Whiter is not possible).              Unimpressed by this

change,    Clorox     sued,     alleging,     inter      alia,     that        the

advertisements were false and misleading in violation of Section

43(a) of the Lanham Act, 15 U.S.C. § 1125(a).                   After Clorox

moved for a preliminary injunction, the district court dismissed

the false advertising claim sua sponte.          Concluding that Clorox

has stated a claim under § 43(a) of the Lanham Act, we vacate

the dismissal and remand to the district court for further

proceedings.

                                       I.

           We present the facts in the light most favorable to

Clorox, the party opposing the dismissal of the complaint.                     See

Langadinos v. American Airlines, Inc., 199 F.3d 68, 69 (1st Cir.

2000).    In 1989, Proctor & Gamble introduced in Puerto Rico Ace


                                     -3-
con Blanqueador, a powdered laundry detergent that contains a

non-chlorine whitening agent described as a "color-safe oxygen

bleach" with a patented "activator," the same formula used in

powdered Tide with Bleach marketed in the continental United

States.     In 1997, Proctor & Gamble introduced a liquid version

of Ace containing a "compound of high levels of sulfactants and

enzymes which function as a whitener and a color enhancer," the

same formula used in liquid Tide with Bleach Alternative.

                   The Original Doorstep Challenge Campaign

               Proctor & Gamble conducted some consumer studies in

1997 and determined that an obstacle to obtaining an enhanced

market share for Ace con Blanqueador was the public's perception

that chlorine bleach was necessary to get clothes white.                    Using

this     new       information,   Proctor       &    Gamble   implemented      an

advertising campaign to counter the perception of consumers that

chlorine bleach was necessary, and to convince them that Ace was

a     superior      option   to   using    a    lower-priced    detergent      in

conjunction with chlorine bleach. This "Doorstep Challenge"

included       a    series   of   television        advertisements     in   which

Francisco Zamora, a television celebrity in Puerto Rico, visited

women in their homes to ask them about their laundry practices

and    to   elicit     their   praise     for   Ace.     In   the    commercials

depicting powdered Ace, the overriding theme was that chlorine


                                        -3-
bleach was not necessary to get clothes white if washed with

Ace.   The commercials pitching liquid Ace also emphasized its

enhanced whitening capacity, but did not specifically mention

chlorine bleach.     Each commercial closed with the tag line,

"Whiter is not possible," a slogan Proctor & Gamble had been

using since powdered Ace arrived on the market in 1989.

          For instance, the "Evelyn" commercial for powdered Ace

went as follows:

          Francisco: Do you use Ace?

          She:     No . . .

          Fco:     What is your laundry routine?

          She:     I put in the three detergents I use,
                   I throw in a bit of chlorine and I
                   let it soak until the next day.    I
                   waste a lot of time . . . but to
                   accomplish what I want I have to do
                   it that way.

          Fco:     I dare you to wash your white
                   garments with Ace and nothing else!

          She:     Without chlorine?

                   . . . .

          Fco:     Without chlorine . . . we're going to
                   wash all these.

          She:     I don't think so . . .

          She:     The truth is . . . that's whiteness, that's
                   whiteness!  So now I'm going to save money,
                   time . . .

                   . . . .

                                -4-
                        [VISUAL: Whiter is not possible.]

Certified Translation.

                       The Promotional Mailing

           As part of its campaign to sell Ace, Proctor & Gamble

sent a promotional brochure and product sample to consumers in

Puerto Rico.    The first page of the brochure depicted a bowling

ball imprinted with the word "Ace" standing in front of several

bowling pins that resembled Clorox bottles.           The caption read:

"Da en el blanco con una sola tirada," (hit the [white] spot

with just one shot).    The second and third pages of the brochure

contained additional pictures surrounded by punchy statements in

Spanish like, "Dare to pass the test.     Wash with Ace and nothing

else," "Say goodbye to the complications of chlorine and other

cleaners," and "Resist the 'bombs.'1 Put your ACE con Blanqueador

to the test."     Like the television commercials, the brochure

ended with the tag line, "Whiter is not possible!"

                        The Modified Campaign

           In January 1998, the Clorox Company, which markets in

Puerto Rico a brand of chlorine-based liquid bleach called

Clorox, sent a letter to Proctor & Gamble complaining that the

Doorstep   Challenge   campaign   was   false   and    misleading,   and


     1    The combination of detergent and chlorine bleach is
called "la bomba" in Puerto Rico.

                                  -5-
demanding that Proctor & Gamble stop running the television

advertisements.    Although Proctor & Gamble would not alter the

theme of its advertising, it agreed to soften the tag line by

adding the qualification, "compare with your detergent," before

the phrase "whiter is not possible."2

           The qualification did not satisfy Clorox.          In March

1998, Clorox filed this lawsuit, alleging in its complaint

violations of Section 43(a) of the Lanham Act, 15 U.S.C. §

1125(a),   the   Federal   Trademark   Dilution   Act,   15   U.S.C.   §

1125(c), the Federal Trade Commission Act and regulations, 15

U.S.C. § 45(a), Article 1802 of the Puerto Rico Civil Code, P.R.

Laws Ann. tit. 31 § 5141, and regulations issued by the Puerto

Rico Department of Consumer Affairs ("DACO").            Clorox later

amended the complaint by dropping the claims pled under the FTC

Act and the FTC and DACO regulations, and adding a claim under

Article 1802 predicated solely on Proctor & Gamble's alleged

violations of those laws and regulations.3         Proctor & Gamble

moved to dismiss all of the claims except the Lanham Act claim.



     2    For advertisements depicting liquid detergent, the new
tag line read, "Compare con su detergente líquido . . . Más
blanco no se puede." (Compare with your liquid detergent . . .
Whiter is not possible).
     3    Presumably, Clorox did this because it worried that the
FTC Act and FTC and DACO regulations do not authorize private
rights of action.

                                 -6-
Clorox then sought leave to amend the complaint again to add

Proctor          &    Gamble's   alleged      violation    of   the   Lanham   Act    as

another predicate for its Article 1802 claim.4

                     Clorox sought to permanently enjoin Proctor & Gamble

from "making any claims that Ace gets clothes 'the whitest

possible,' without the use of Clorox." (Emphasis in original).

Additionally, Clorox sought damages and attorneys' fees under §

43(a)       of        the   Lanham   Act. 5     Finally,    Clorox     moved    for    a

preliminary injunction on its Lanham Act claim.                        In connection

with       the       motion   for    a   preliminary   injunction,      the    parties

conducted document production and depositions and submitted to

the court relevant evidentiary materials, including consumer

surveys, statements of experts, and the testimony of various

witnesses.             The district court did not hear oral argument.

                     In March 1999, while Clorox's motion to amend its

amended complaint and its motion for preliminary injunction were

pending, the district court granted Proctor & Gamble's motion to


       4  This Second Amended Complaint also assailed a new
series of advertisements, first aired by Proctor & Gamble in
September 1998, depicting the celebrity interviewer Zamora
wrapped in chains and exclaiming, "Free yourself from chlorine
bleach!"
       5  Section 35 of the Lanham Act, 15 U.S.C. § 1117(a),
allows for the recovery of damages and attorney's fees for false
advertising in violation of § 43(a). See 4 J. Thomas McCarthy,
McCarthy on Trademarks and Unfair Competition § 27:40 (4th ed.
1997).

                                              -7-
dismiss      both     the    Dilution   Act   and   Article    1802    claims.

Additionally, the district court dismissed the Lanham Act claim

sua sponte.         This appeal followed, limited to the dismissal of

the Lanham Act and Article 1802 claims.

                                        II.

                        A.    The Sua Sponte Dismissal

             We review de novo the district court's dismissal of

Clorox's Lanham Act claim pursuant to Fed. R. Civ. P. 12(b)(6).

See Beddall v. State St. Bank & Trust Co., 137 F.3d 12, 16 (1st

Cir. 1998).         We will affirm the dismissal of the complaint if,

and   only    if,    accepting    all   well-pleaded   facts   as     true   and

drawing all reasonable inferences in favor of the plaintiff, the

complaint "fail[s] to state a claim upon which relief can be

granted."     Fed. R. Civ. P. 12(b)(6).         That is, the complaint is

properly dismissed only when the allegations are such that "the

plaintiff can prove no set of facts to support [the] claim for

relief."     Rockwell v. Cape Cod Hosp., 26 F.3d 254, 260 (1st Cir.

1994).

             Courts must move cautiously when dismissing a complaint

sua sponte.         See, e.g., Baker v. Cuomo, 58 F.3d 814, 818 (2d

Cir. 1995).          Although it is occasionally appropriate for a

district court to "note the inadequacy of the complaint and, on

its own initiative, dismiss the complaint[,] a court may not do


                                        -8-
so without at least giving plaintiffs notice of the proposed

action and affording them an opportunity to address the issue."

Wyatt v.    City of Boston, 35 F.3d 13, 14-15 (1st Cir. 1994)

(quoting Literature, Inc. v. Quinn, 482 F.2d 372, 374 (1st Cir.

1973)).    See also Perez v. Ortiz, 849 F.2d 793, 797 (2d Cir.

1988) (noting that "the general rule is that a 'district court

has no authority to dismiss a complaint for failure to state a

claim    upon   which   relief   can    be   granted   without   giving    the

plaintiff an opportunity to be heard'").               Clorox was given no

opportunity to argue the validity of its claim to the district

court.    Moreover, the court's dismissal was done in the face of

Proctor & Gamble's acknowledgment that "the complaint states a

claim under the federal false advertising statute[--]Section

43(a) of the Lanham Act."           Clorox had no reason to suspect,

therefore, that its Lanham Act claim was in danger of dismissal.



            There   are   limited      exceptions   to   the   general    rule

barring dismissal without notice, applicable to frivolous claims

or to claims whose defects could not be cured by amendment.                See

Wyatt, 35 F.3d at 15 n.1 (noting that reversal of a sua sponte

dismissal without notice may not be "mandated if amendment [of

the complaint] would be futile or if it is patently obvious that

the plaintiff could not prevail"); Street v. Fair, 918 F.2d 269,


                                       -9-
272   (1st    Cir.     1990)   (per    curiam)   (noting      that     procedural

protections may be unnecessary when the court dismisses in forma

pauperis      actions    as    frivolous).       As   our    discussion     infra

indicates, Clorox's Lanham Act claim does not fall within any of

these exceptions.

             Recognizing the procedural vulnerability of the court's

dismissal, Proctor & Gamble points out that Clorox submitted

substantial evidence in conjunction with its complaint and its

preliminary injunction motion--evidence that the district court

presumably could have used to convert, sua sponte, a motion to

dismiss into a motion for summary judgment.                 See 5A Charles Alan

Wright & Arthur R. Miller,             Federal Practice and Procedure §

1366, at 470 (West Supp. 2000)                (explaining that it may be

appropriate for a court to convert a motion to dismiss into one

for summary judgment sua sponte when parties offer material

outside    of    the    pleadings     in   conjunction      with   a   motion   to

dismiss).       Proctor & Gamble now urges us to treat the district

court's ruling as a summary judgment, inviting us to affirm on

any alternative ground supported by a full examination of the

record.      See Frillz, Inc. v. Lader, 104 F.3d 515, 516 (1st Cir.

1997) (stating that we may "affirm an entry of summary judgment

on any alternative ground made manifest by the record").




                                       -10-
          There are several problems with this approach.         Even

if we were to agree that it would have been appropriate for the

district court to consider material outside the pleadings in

connection with its sua sponte dismissal of the Lanham Act

claim, this is not what the district court did.          The court's

opinion and order sets forth its analysis in a section entitled

"Motion to Dismiss," which it prefaces with a discussion of the

12(b)(6) motion to dismiss standards.           The court expressly

grants "Defendant's motion to dismiss Plaintiff's complaint for

failure to state a claim upon which relief can be granted

pursuant to Fed. R. Civ. P. 12(b)."         More significantly, the

district court did not conduct the searching review of the

record necessary to rule on summary judgment.       See Garita Hotel

Ltd. Partnership v. Ponce Fed. Bank, F.S.B., 958 F.2d 15, 18-19

(1st Cir. 1992) (stating that the test for deciding whether a

district court's ruling is a 12(b)(6) dismissal or an entry of

summary judgment is "whether the court actually took cognizance

of" supplementary materials).       The district court looked only to

the face of the complaint.          It did not purport to dismiss

Clorox's Lanham Act claim based on an evaluation of the record

as a whole.

          Moreover,   Proctor   &    Gamble's   suggestion   fails   to

address   the fundamental problem with the district court's sua


                                -11-
sponte    actions:      the    failure     to    give    Clorox    notice       and    an

opportunity      to    be   heard.        Even   if   the     district    court       had

converted      the    motion   to    dismiss     into    a    motion   for      summary

judgment--which it did not--such conversion usually requires

that "all parties shall be given reasonable opportunity to

present all material made pertinent to such a motion."                          Fed. R.

Civ. P. 12(b).         Although we do not "mechanically enforce the

requirement of express notice of a district court's intention to

convert    a   Rule     12(b)(6)     motion      into    a    motion   for      summary

judgment," we do guard against allowing such a conversion where

it would come as a "surprise" or be "unfair" to the party

against     whom      judgment       is    rendered.           Chaparro-Febus          v.

International Longshoremen Ass'n, Local 1575, 983 F.2d 325, 332

(1st Cir. 1992).        In light of Proctor & Gamble's acknowledgment

that the complaint stated a claim under § 43(a) of the Lanham

Act, the district court's conversion without notice would have

been both surprising and unfair.

            It would only compound the unfairness to Clorox if we

accepted the invitation of Proctor & Gamble to indulge the

fiction that the district court's ruling was a summary judgment

determination         and   then     affirm      on     any    basis     that    seems

appropriate.         Clorox has now tailored its appellate advocacy to

address the legal standards that it reasonably expected would


                                          -12-
govern this appeal--i.e., the standards governing review of a

12(b)(6)    dismissal.            Clorox          has   never    had    an    adequate

opportunity      to     argue    the       relationship       between      the   record

evidence and its Lanham Act claim.                  Also, it would be imprudent

to evaluate the voluminous filings in this case in light of the

summary judgment standard without advocacy from both parties on

the relationship between this evidence and the legal standards

governing liability under the Lanham Act.

           Our refusal to review the entire record based upon

summary judgment standards does not mean, however, that we will

not examine any of the filings in this case.                               The record

includes hundreds of pages of exhibits appended to the various

complaints and submitted in support of motions to dismiss and

motions    for    and    against       a    preliminary       injunction.         These

exhibits include the full text of the advertising copy, internal

company memoranda, letters exchanged between the parties, market

research    and       consumer     survey         data,   and    declarations       and

deposition testimony of experts and other witnesses.                           Although

much of the evidence contained in the record is out-of-bounds in

reviewing a 12(b)(6) dismissal, it is well-established that in

reviewing the complaint, we "may properly consider the relevant

entirety of a document integral to or explicitly relied upon in

the   complaint,       even     though      not    attached     to   the     complaint,


                                           -13-
without converting the motion into one for summary judgment."

Shaw v. Digital Equip. Corp., 82 F.3d 1194, 1220 (1st Cir. 1996)

(citing Watterson v. Page, 987 F.2d 1, 3-4 (1st Cir. 1993)

(explaining        that    the    main   problem   of   looking      to   documents

outside      the     complaint--lack         of    notice     to     plaintiff--is

dissipated "[w]here plaintiff has actual notice . . . and has

relied upon these documents in framing the complaint")).                       "Were

the rule otherwise, a plaintiff could maintain a claim . . . by

excising an isolated statement from a document and importing it

into the complaint . . . ."              Id.; see also Northern Indiana Gun

& Outdoor Shows, Inc. v. City of South Bend, 163 F.3d 449, 454

(7th Cir. 1998) ("It is a well-settled rule that when a written

instrument contradicts allegations in the complaint to which it

is    attached,           the     exhibit    trumps     the        allegations.").

Accordingly, in determining whether Clorox has stated a claim

for relief for false advertising, we read the allegations in the

complaint in light of the full text of the advertising copy

contained in the record.              We limit our evaluation of material

outside the complaint to the advertisement copy because that is

the   only    material           we   deem   "integral"     to     assessing    the

sufficiency of the allegations in the complaint.

             In closing our discussion of the sua sponte dismissal,

we must reiterate that basic fairness and sound prudential


                                         -14-
reasons   underlie       our    insistence      on    the   involvement    of   the

parties in any dismissal.             "[A]dequate notice helps the court

secure a just determination, by giving parties moved against the

opportunity to present their best arguments in opposition."

Perez,    849   F.2d    at     797   (internal       citations    and   quotations

omitted).       This    case     aptly   illustrates        the   wisdom   of   that

insistence.      The relationship between the allegations in the

complaint and the Lanham Act false advertising claim is complex

and contested.     By dismissing Clorox's Lanham Act claim without

the benefit of the parties' advocacy in addressing these complex

issues,   the    district        court    misunderstood       the    relationship

between the allegations in Clorox's complaint and the relevant

legal standards.        We turn now to those standards.

            B. The Lanham Act False Advertising Claims

            The false advertising prong of the Lanham Act provides:

            (1) Any person who, on or in connection with
            any goods or services, or any container for
            goods, uses in commerce any word, term,
            name, symbol, or device, or any combination
            thereof, or any false designation of origin,
            false or misleading description of fact, or
            false or misleading representation of fact,
            which--

                       . . . .

                       (B) in commercial advertising or
                       promotion, misrepresents the nature,
                       characteristics,    qualities,    or
                       geographic origin of his or her or


                                         -15-
                   another person's goods, services, or
                   commercial activities,

            shall be liable in a civil action by any
            person who believes that he or she is or is
            likely to be damaged by such act.

15 U.S.C. § 1125(a).6      A plaintiff can succeed on a false

advertising claim by proving either that an advertisement is

false on its face or that the advertisement is literally true or

ambiguous but likely to mislead and confuse consumers.        See

Southland Sod Farms v. Stover Seed Co., 108 F.3d 1134, 1139 (9th

Cir. 1997); Castrol, Inc. v. Pennzoil Co., 987 F.2d 939, 943 (3d

Cir. 1993); Abbott Labs. v. Mead Johnson & Co., 971 F.2d 6, 13

(7th Cir. 1992).    If the advertisement is literally false, the

court may grant relief without considering evidence of consumer

reaction.    See United Indus. Corp. v. Clorox Co., 140 F.3d 1175,



    6     The elements of a false advertising claim under the
Lanham Act are: (1) a false or misleading description of fact or
representation of fact by the defendant in a commercial
advertisement about its own or another's product; (2) the
statement actually deceives or has the tendency to deceive a
substantial segment of its audience; (3) the deception is
material, in that it is likely to influence the purchasing
decision; (4) the defendant placed the false or misleading
statement in interstate commerce; and (5) the plaintiff has been
or is likely to be injured as a result of the false or
misleading statement, either by direct diversion of sales from
itself to defendant or by a lessening of goodwill associated
with its products. See Southland Sod Farms v. Stover Seed Co.,
108 F.3d 1134, 1139 (9th Cir. 1997); see also Johnson & Johnson-
Merck Consumer Pharms. Co. v. Rhone-Poulenc Rorer Pharms., Inc.,
19 F.3d 125, 129 (3d Cir. 1994); 4 J. Thomas McCarthy, McCarthy
on Trademarks and Unfair Competition § 27:24 (4th ed. 1997).

                               -16-
1180 (8th Cir. 1998).   In the absence of such literal falsity,

an additional burden is placed upon the plaintiff to show that

the advertisement, though explicitly true, nonetheless conveys

a misleading message to the viewing public.     See Sandoz Pharms.

Corp. v. Richardson-Vicks, Inc., 902 F.2d 222, 228-29 (3d Cir.

1990).   To satisfy its burden, the plaintiff must show how

consumers have actually reacted to the challenged advertisement

rather than merely demonstrating how they could have reacted.

See id. at 229.

         Clorox's   amended   complaint   alleged   that   Proctor   &

Gamble's original and modified Doorstep Challenge television

campaigns, as well as the promotional brochure, were false and

misleading.   Specifically, Clorox alleged that the Doorstep

Challenge advertisements and promotions conveyed the false and

misleading message to the Puerto Rican public that Ace con

Blanqueador gets clothes as white or whiter than a detergent

used with chlorine bleach.7    Clorox also alleged that the name


    7     Significantly, the Lanham Act false advertising claim
was directed at the alleged comparison between Ace and chlorine
bleach.   Unlike the Dilution Act claim, therefore, the false
advertising claim is not directed at a dilution, disparagement,
tarnishment, or diminishment of Clorox's brand name. That is,
Clorox alleged that it was false and misleading to claim the
superiority of Ace over chlorine bleach, generically, not Clorox
bleach, in particular.       To the extent that such false
advertising would lead to a reduction in market share for Clorox
as the leading producer of chlorine-based "cleansing bleach" in
Puerto Rico (Clorox alleged that it controls 74% of the Puerto

                               -17-
"Ace con Blanqueador" is literally false with respect to Ace

liquid detergent.

                 The district court's analysis of the Lanham Act claim

consisted of two paragraphs in which it reasoned that Clorox

"has failed to state a claim" under the Lanham Act because it

could      not    establish       that    Proctor       &   Gamble's      advertisements

contained false or misleading statements.                           In particular, it

found that the tag line appearing in the modified campaign

commercials, "Compare with your detergent . . . Whiter is not

possible," was not false because it compared Ace only to other

detergents, not to detergents used with chlorine bleach.                                 The

court      also        stated    that,    "Ace's       comparison        claim"   was    not

actionable under the Lanham Act because it was "mere puffing."



                 The    district     court's      dismissal        was    erroneous      for

several reasons.              First, it ignored many of the allegations on

the   face       of     the     complaint.        It    did   not    address      Clorox's

allegations            directed    at    the    advertisements       in    the    original

Doorstep Challenge campaign, or the promotional brochure, nor

did   it    address        Clorox's      allegation         that   the    name    "Ace   con

Blanqueador" as applied to the liquid detergent is literally


Rican market), Clorox may be in a position to show that it was
significantly damaged by false claims of superiority with
respect to chlorine bleach.

                                               -18-
false.    Second, it applied an overly-restrictive view of the

requirements for pleading a false advertising claim under the

Lanham Act, dismissing the allegation that the modified campaign

was not false or misleading simply because it found the tag

line, read in isolation, to be literally true.                  Finally, the

district court erred in concluding that Clorox's allegations

were directed at non-actionable puffery.              We analyze Clorox's

various   allegations       de   novo,   see   Beddall,   137   F.3d   at   16,

focusing on (1) the allegations of literal falsity, (2) the

allegations of misleading advertising, and (3) the concept of

"puffery."

                     1.     Claims of Literal Falsity

           Clorox challenged two features of Proctor & Gamble's

advertising campaign as literally false.             First, Clorox alleged

that the television commercials that aired in the original and

modified campaign claimed that Ace gets clothes as white or

whiter than chlorine bleach.         According to Clorox, that claim is

literally false because tests prove that chlorine bleach whitens

better than detergent used alone.              Second, Clorox alleged that

the name, "Ace con Blanqueador," is literally false with respect

to Ace liquid detergent because it falsely suggests that Ace

liquid contains whitener or bleach.

                a.        The Television Advertisements


                                     -19-
           Whether      an   advertisement     is    literally   false     is

typically an issue of fact.         See Mead Johnson & Co. v. Abbott

Labs., 209 F.3d 1032, 1034 (7th Cir. 2000) (denying petition for

rehearing and amending prior panel opinion).                 At least two

factual questions must be answered in evaluating the accuracy of

any   particular     advertisement.        First,     a   factfinder     must

determine the claim conveyed by the advertisement.               See United

Indus. Corp., 140 F.3d at 1181 (applying clearly erroneous

standard to review of district court's factual determination

regarding the claim conveyed by an advertisement for roach

bait); Johnson & Johnson v. GAC Int'l, Inc., 862 F.2d 975, 979

(2d Cir. 1988).      Once the claim made by the advertisement has

been determined, the factfinder must then evaluate whether that

claim is false.      See Castrol, 987 F.2d at 944.

           In the case at hand, the parties focus their attention

solely upon the first of these factual determinations.                   The

complaint asserts that in head-to-head whitening tests, Clorox

achieved   "by   far,    superior   results"    to    Ace.    Clorox     also

emphasizes that "Ace's own boxes" state that in certain cases,

for better results, the consumers must use chlorine bleach.                In

reviewing the motion to dismiss, we therefore assume as true

that chlorine bleach whitens better than Ace and that a contrary

claim would be literally false.       The primary dispute between the


                                    -20-
parties is not which product whitens better,8 but rather whether

any    of       Proctor   &    Gamble's     advertisements          make       a   claim    of

whitening superiority over chlorine bleach.

                 Although      factfinders       usually     base    literal        falsity

determinations            upon      the     explicit        claims        made       by     an

advertisement,            they     may     also        consider     any     claims         the

advertisement conveys by "necessary implication."                          See Southland

Sod Farms, 108 F.3d at 1139; Rhone-Poulenc Rorer, 19 F.3d at

129.        A    claim    is     conveyed    by    necessary       implication           when,

considering the advertisement in its entirety, the audience

would       recognize       the    claim    as     readily    as    if     it      had    been

explicitly stated.                For instance, a factfinder found that an

advertisement that claimed a motor oil provided "longer engine

life and better engine protection" without explicitly mentioning

competitors          nonetheless          drew     a    comparison        by       necessary

implication vis à vis those competitors.                     See Castrol, 987 F.2d

at 941, 946.          This is not to say, however, that all messages

implied by an advertisement will support a finding of literal

falsity by a factfinder:

                 The greater the degree to which a message
                 relies upon the viewer or consumer to
                 integrate its components and draw the


       8  Indeed, Proctor & Gamble does not challenge on appeal
Clorox's assertion that chlorine bleach in combination with a
detergent gets clothes whiter than its Ace detergent.

                                            -21-
           apparent conclusion, however, the less
           likely it is that a finding of literal
           falsity will be supported.        Commercial
           claims that are implicit, attenuated, or
           merely suggestive usually cannot fairly be
           characterized as literally false.

United Indus. Corp., 140 F.3d at 1181.                   Similarly, a factfinder

might   conclude       that      the   message     conveyed     by    a     particular

advertisement remains so balanced between several plausible

meanings   that       the    claim     made   by   the    advertisement        is   too

uncertain to serve as the basis of a literal falsity claim,

though even in that case it could still form the basis for a

claim that the advertisement is misleading.                     See id. at 1182;

Abbott Labs., 971 F.2d at 14.

           In    reviewing        the    dismissal       in   the    present    case,

however,   we    are       not   required     to   determine        what    claim   was

actually conveyed by the advertisements because we are not

factfinders.         Instead, we must evaluate whether the complaint,

as supplemented by the advertising copy, alleges facts that

would allow a rational factfinder to conclude that Proctor &

Gamble's     advertisements            make   a    superiority        claim    either

explicitly      or    by    necessary    implication.         We     must    draw   all

reasonable inferences as to the claim made in the advertisements

in favor of Clorox.           See Southland Sod Farms, 108 F.3d at 1139;

see also Rhone-Poulenc Rorer, 19 F.3d at 129; U.S. Healthcare,

Inc. v. Blue Cross, 898 F.2d 914, 922 (3d Cir. 1990).                        Dismissal

                                         -22-
would only be proper if no reasonable factfinder could conclude

that the advertisements, viewed in the light most favorable to

Clorox, make a claim of whitening superiority for Proctor &

Gamble's product.

            We conclude that Clorox has stated a claim that Proctor

& Gamble's original Doorstep Challenge commercials are literally

false.     These commercials juxtapose a tag line, "Whiter is not

possible," with images of consumers who normally used bleach to

achieve white clothes and who are favorably impressed by the

results obtained from using Ace alone.               The overall theme of the

commercials is that bleach is unnecessary if clothes are washed

with Ace, and, in fact, many of the consumers visited by Zamora

are congratulated at the end of the commercials for passing "the

Ace   whiteness      challenge   without        chlorine."         Some    of     the

commercials also suggest that eliminating chlorine from the

laundry process will save consumers time or money, or curtail

the negative side effects of washing clothes with chlorine.                         A

factfinder    could    reasonably   conclude         that,   viewed       in    their

entirety,    these    advertisements   claim         that    Ace   is     equal    or

superior    in   whitening   ability       to    a    detergent     and        bleach

combination.

            The modified Doorstep Challenge campaign continued the

same visual comparisons, as well as the congratulatory comments


                                    -23-
for passing the "Ace whiteness challenge without chlorine," but

added the words "Compare your detergent" to the "Whiter is not

possible" tag line shown at the bottom of the screen at the end

of   the    commercials.        Although      this    change     may   render   the

comparative     claim    of    the    advertisements      more    ambiguous,     we

nonetheless conclude that it remains reasonable to interpret

these      advertisements      as    making   by     necessary    implication     a

superiority claim for Ace over chlorine bleach.                    Consequently,

the court erred in dismissing Clorox's literal falsity claims

with respect to both Doorstep Challenge campaigns.

                  b.    The Name "Ace con Blanqueador"

             Clorox     also    alleged       that     the     name,    "Ace    con

Blanqueador," as applied to liquid Ace, is literally false.

According to Clorox, the word "blanqueador" implies that liquid

Ace has whitening capabilities like bleach.                  Clorox alleged that

this is literally false because in its liquid form Ace does not

contain bleach or whitening agents.                Instead, it contains only

a "color enhancer."         Clorox emphasizes that liquid Ace uses the

same formula as "Tide with Bleach Alternative" whose name,

unlike "blanqueador," clearly signifies the absence of bleach.

Proctor & Gamble responds that "blanqueador" means "whitener,"

and that the name cannot be literally false because tests show




                                       -24-
that the agents added to liquid Ace produce greater whiteness

than detergents without those agents.

           Clorox's allegations about the use of the name "Ace con

Blanqueador" for the liquid detergent state a claim for literal

falsity.   Although "blanqueador," meaning "whitener," is broad

enough to encompass both bleach and non-bleach whitening agents,

the question remains whether liquid Ace is properly described as

containing "whitening agents" of any sort.       Clorox has alleged

that it is not, insisting that Ace's ingredients are properly

termed "color enhancers."      Although the distinction between a

"whitening agent" and a "color enhancer" eludes us, we must

credit that allegation in this appeal from a 12(b)(6) dismissal.

If Clorox succeeds in proving that liquid Ace contains only an

"enhancer,"   rather   than   a   "whitener,"   and   if   it   further

establishes the other elements of a false advertising claim, see

supra note 6, it will be entitled to relief under the Lanham Act

because Proctor & Gamble's designation of Ace liquid detergent

as "Ace con Blanqueador" would be literally false.

               2. Claims of Misleading Advertising

           In addition to its claims of literal falsity, Clorox

has alleged in its complaint that the Ace advertising campaign,

even if true or ambiguous, makes an implied claim that is

misleading to consumers.      This second theory of recovery under


                                  -25-
the Lanham Act is independent of a literal falsity theory. See,

e.g., Coca-Cola, Co. v. Tropicana Prods., Inc., 690 F.2d 312,

317 (2d Cir. 1982).     Unlike the requirements of a claim of

literal   falsity,    the   plaintiff   alleging   a   misleading

advertisement has the burden of proving that a substantial

portion of the audience for that advertisement was actually

misled.   See Rhone-Poulenc Rorer, 19 F.3d at 134 (citing U.S.

Healthcare v. Blue Cross, 898 F.2d 914, 922 (3d Cir. 1990)).   An

advertisement's propensity to deceive the viewing public is most

often proven by consumer survey data.       See id. at 129-30.9

Clorox appended to the amended complaint a consumer survey

prepared by David Whitehouse of Gaither International/Puerto

Rico, Inc.10   The survey consisted of a series of open-ended




     9    In some circuits, if the defendant "intentionally set
out to deceive the public," using "deliberate conduct" of an
"egregious nature" in light of the advertising culture of the
marketplace in which the defendant competes, a presumption
arises that customers were, in fact, deceived, dispensing with
the need for the plaintiff to commission a consumer survey. See
Rhone-Poulenc Rorer, 19 F.3d at 131-32; Johnson & Johnson*Merck
Consumer Pharms. Co. v. Smithkline Beecham Corp., 960 F.2d 294,
298-99 (2d Cir. 1992); McCarthy § 27:58.     Because Clorox has
proffered a consumer survey, we need not decide whether Clorox's
allegations that Proctor & Gamble intentionally acted in bad
faith creates a presumption of consumer deception.
     10   In addition to its own survey, Clorox contends that
Proctor & Gamble's market research, commissioned three months
into the Doorstep Challenge campaign, demonstrates that
consumers have been misled.

                               -26-
questions followed by several follow-up probes.                In reliance on

the survey, the complaint alleges that:

            In open-ended questions, 35% of respondents
            of its scientifically valid survey responded
            that the main message of the Doorstep
            Challenge Campaign was that, with ACE, there
            is no need to use other products for maximum
            whitening performance.    In addition, when
            the respondents were asked if 'the Detergent
            in the Ad (ACE) Leaves Clothes as White or
            Whiter than If One Uses Bleach,' 47% totally
            agreed and 20% somewhat agreed with that
            statement. Plainly, the Doorstep Challenge
            Campaign has been amply shown to be likely
            to cause consumer deception.

Clorox     has   also    alleged   in      its    complaint    that     "in     its

promotional activities and advertisements," Proctor & Gamble

"deceiv[ed] and confus[ed] the public, causing consumers to

wrongly believe they are buying a detergent that possesses the

same qualities and characteristics as a detergent used with

CLOROX."

            The court was required to credit Clorox's allegations.

It could not conduct its own evaluation of the advertising copy

because    whether      advertising   is     misleading    depends      on    "what

message    was   actually     conveyed       to   the    viewing      audience."

Smithkline Beecham Corp., 960 F.2d at 298;                    see also Rhone-

Poulenc Rorer, 19 F.3d at 129.          In deciding whether a message is

"misleading,"     the    message   conveyed       is   discerned   by    "public

reaction," not by judicial evaluation.                 McCarthy § 27:56; see


                                      -27-
also Castrol, 987 F.2d at 947 ("[I]n cases where the issue is

whether a statement . . . has a tendency to mislead, confuse, or

deceive     .   .   .   [,]    the    court's      reaction   is   at    best   not

determinative and at worst irrelevant.") (internal quotation

marks omitted).         That is, absent some other defect in its proof

of the elements of a false advertising claim, see supra note 6,

if Clorox's consumer survey data (or Proctor & Gamble's own

market research data) shows that the advertisements "deceive[d]

a     substantial       portion      of    the     intended   audience,"        U.S.

Healthcare, 898 F.2d at 922, Clorox is entitled to relief under

the    Lanham   Act.11        Hence,      the    claims   asserting     misleading

advertising were improperly dismissed.12


       11 Although we have quoted Clorox's allegations relying
on the results of its own consumer survey, we do not mean to
suggest that a Lanham Act plaintiff must identify the particular
consumer survey that will be used to support its allegations to
survive a motion to dismiss. For the purposes of a motion to
dismiss, a court must credit the type of allegations of
misleading advertising set forth here. Obviously, if confronted
with a motion for summary judgment, the plaintiff can no longer
rest on the allegations in the complaint.
       12 Proctor & Gamble vigorously disputes the validity of
Clorox's survey.   In opposing Clorox's motion for a preliminary
injunction, Proctor & Gamble supplied its own expert, Dr.
Michael Rappeport, who testified that the responses to the open-
ended questions in Clorox's survey do not "by any stretch of the
imagination" show that the commercial's message was that there
is no need to use products other than Ace con Blanqueador for
maximum whitening performance.       Dr. Rappeport concluded,
moreover, that the methodology used to conduct the survey was
"so biased as to have no value whatsoever." Proctor & Gamble
also argues that Clorox's own expert, Whitehouse, failed to

                                          -28-
         Proctor & Gamble offers one last defense of the court's

ruling, pointing to Mead Johnson & Co. v. Abbott Labs., 201 F.3d

883, modified by, 209 F.3d 1032 (7th Cir. 2000) as a case that

stands for the proposition that "a consumer survey could not be

used to show that an advertisement that is clear and unequivocal

on its face otherwise conveyed a misleading message."   According

to Proctor & Gamble, its tag line in the modified campaign

"clearly and unequivocally" does not compare Ace with Clorox

and, therefore, Mead Johnson prevents Clorox from using a survey

to prove that a comparison was made.   We need not decide whether

we would agree with Mead Johnson in a factually similar case.

This case is of a different order.

         Mead Johnson addressed whether a label was misleading

in claiming its product to be the "1st Choice of Doctors."    See

201 F.3d at 883-84.    The plaintiff argued that its surveys

demonstrated that consumers interpreted "first" to mean that

"more than 50%" of doctors preferred that brand rather than




vouch for the survey results when asked about it in his
deposition. Finally, Proctor & Gamble insists that even if the
survey were valid, it tests only one advertisement, and
therefore could not support Clorox's claim that the whole
advertising campaign was misleading. We express no view on the
merits of Proctor & Gamble's arguments. The "probative value of
a consumer survey is a highly fact-specific determination,"
Rhone-Poulenc Rorer, 19 F.3d at 134 (quotations omitted). It is
not the type of determination that we may make as a matter of
law upon review of a motion to dismiss.

                             -29-
interpreting    "first"   to    mean     that    a    plurality   of     doctors

preferred the brand.      See id. at 884-85.              These distinctions

were important because, though the latter interpretation of the

label was true, the former was false.                See id. at 884.

          After first finding the plaintiff's survey "misleading

if not meaningless," the court identified a "deeper problem: the

use of a survey in the first place."                  Id. at 885.       Although

agreeing that surveys are "accepted ways to probe for things

such as confusion about the source of goods, for confusion

depends   on   the   effect    of   a   phrase   or     trade   dress    on   the

consumer," the court reasoned that surveys should not be used

"to determine the meaning of words, or to set the standard to

which objectively verifiable claims must be held."                Id. at 886.

Based upon these objections, the court held that the survey

could not "support a conclusion . . . that [the message conveyed

by the advertisement] either was false or implied a falsehood."

Mead Johnson, 209 F.3d at 1034.

          Procedurally, Mead Johnson is different than this case.

That court's evaluation of the merits of the survey was based on

a record established during a three day hearing on a motion for

a preliminary injunction, which was granted.               See Mead Johnson,

201 F.3d at 884.      As noted, see supra note 12, it would not be

appropriate to undertake a similar analysis of the Clorox survey


                                    -30-
on    the   limited    record       subject    to       review   after     a   12(b)(6)

dismissal.

             Also, the advertising slogan in Mead Johnson was a

single phrase printed on the label of a can of infant formula.

Proctor      &   Gamble   points      us    to      a     similar   phrase      in      its

advertising, the tag line "Compare with your detergent . . .

Whiter      is   not   possible,"      as     though       the   two     slogans     were

comparable.        Proctor      &   Gamble's        tag    line,    however,       is    an

integral part of a television commercial with substantial text

and images.       There is a fundamental difference between a slogan

on a can label that communicates its meaning to consumers solely

through the printed text, and a tag line shown on the screen at

the end of a television commercial that communicates its message

to consumers through a combination of audio-visual and textual

media.      Because we decline to read Proctor & Gamble's tag line

separately from the entirety of the commercials, Mead Johnson is

factually inapplicable to the present case.

                                     3. Puffery

             Finally, the statements, "Compare with your detergent

. . . Whiter is not possible," and "Whiter is not possible," are

not    non-actionable        puffing.            "'Puffing'         is    exaggerated

advertising, blustering, and boasting upon which no reasonable

buyer would rely . . . ."             McCarthy § 27:38.             "A specific and


                                        -31-
measurable advertisement claim of product superiority . . . is

not puffery."     Southland Sod Farms, 108 F.3d at 1145 (claim that

turfgrass seed requires "50% less mowing" was not puffery); see

also Castrol, Inc., 987 F.2d at 946 (claim that motor oil

provides "longer engine life and better engine protection" was

not puffery).     Whether the "Doorstep Challenge" campaign conveys

the message that Ace gets clothes whiter than chlorine bleach,

or compares Ace with other detergents without implying that it

whitens better than chlorine bleach, the claim is specific and

measurable, not the kind of vague or subjective statement that

characterizes puffery.       Indeed, Proctor & Gamble concedes in its

brief that its claim in its modified campaign, "Compare with

your detergent . . . Whiter is not possible," is not puffery.

It contends that it is a true statement supported by its studies

comparing Ace con Blanqueador with other detergents.

           The    original    campaign        tag    line,   "Whiter      is   not

possible," is a closer call on the puffing issue.                        Standing

alone,    that   statement    might    well    constitute       an   unspecified

boast, and hence puffing.        In context, however, the statement

invites   consumers    to    compare    Ace's       whitening    power    against

either other detergents acting alone or detergents used with

chlorine bleach.      Despite this ambiguity, it is a specific,

measurable claim, and hence not puffing.


                                      -32-
          Proctor & Gamble's promotional brochure, on the other

hand, contained statements like, "hit the white spot with just

one shot," "Dare to pass the test.           Wash with Ace and nothing

else," "Say goodbye to the complications of cloro and other

cleaners," and "Resist the 'bombs.' Put your ACE con Blanqueador

to the test."   We agree with Proctor & Gamble that each of these

statements, viewed in isolation, is precisely the type of vague,

unspecified boasting that typifies puffery.            Nonetheless, the

promotional brochure also states, "Whiter is not possible," the

same statement that appears as the tag line on the original

Doorstep Challenge television commercials.          As in the television

commercials,    that   statement       may     be    literally    false.

Accordingly, the brochure cannot be dismissed as mere puffery.

                                III.

          Pursuant to § 43(a) of the Lanham Act, Clorox has

stated a claim for literal falsity relating to the name of the

Ace liquid detergent, "Ace con Blanqueador."            Clorox has also

stated claims for literal falsity and for misleading advertising

with respect to the commercials aired in both the original and

modified Doorstep Challenge advertising campaigns, as well as

the   promotional   brochure.      The   district      court   erred   by

dismissing these claims pursuant to Rule 12(b)(6).               We must

vacate its judgment and remand the Lanham Act claims to the


                                -33-
district court for further proceedings consistent with this

decision.13

           Clorox has also appealed the dismissal of its claim

pursuant   to   Article   1802   of   the   Puerto   Rico   Civil   Code.

Although Clorox in its Second Amended Complaint sought to have

the alleged violation of the Lanham Act added as a predicate for

liability under Article 1802, the motion for leave to file the

second amended complaint was still pending at the time Clorox's

case was dismissed.    Accordingly, the district court never ruled

on that motion, and hence Clorox's Article 1802 claim predicated

on a violation of the Lanham Act is not properly before us at

this time.14    On remand, Clorox should be given the opportunity

to resubmit its motion for leave to amend.

           Vacated and remanded to the district court for further

proceedings consistent with this opinion.



     13   We did not deal with every statement alleged by Clorox
to be false and misleading. The effect of the district court's
decision was to dismiss the Lanham Act claim in its entirety.
If any specific allegation in the complaint does not justify
that outcome, we must vacate. We have chosen to focus in this
appeal on what seem to be the most important of Clorox's
allegations. That focus does not mean that we are deciding the
merits of any of the allegations by Clorox not addressed in this
decision.
     14   For the same reason, we also decline to express any
opinion on the validity of Clorox's claims in its Second Amended
Complaint relating to Proctor & Gamble's September 1998 Ace con
Blanqueador advertising campaign.

                                 -34-