Back in the mid-1990s, Westlake Village-based Breath Asure Inc. was one of L.A.’s highest-flying entrepreneurial success stories. Thanks to an aggressive marketing campaign for its breath-freshening tablets, the company saw its sales shoot from virtually zero in 1992 to $29 million in 1996. Its rapid growth garnered the firm and its husband-and-wife founders national recognition, with numerous awards and glowing media profiles.

But that ride has come to an abrupt end or at least a major fork in the road with Breath Asure filing for Chapter 11 bankruptcy protection on Dec. 21.

Precipitating the filing was a series of adverse rulings resulting from giant competitor Warner Lambert Co.’s challenge to Breath Asure’s marketing claims. Those rulings forced Breath Assure to revamp its product lines and marketing efforts, and ultimately pushed it into bankruptcy.

The filing offers a stark lesson in the rough-and-tumble world of consumer products marketing, particularly when a small firm encroaches on the turf of a multibillion-dollar corporation. Breath Asure found itself outgunned and unable to defend its product claims in repeated challenges; as a result, it was forced to abandon its original breath-freshening capsules that had brought it so much success.

“When you come out with a product that challenges an entrenched giant, you better have really good almost bulletproof substantiation of your claims, because that giant is likely going to come after you,” said Harold Kassarjian, emeritus professor of marketing at UCLA. “If you don’t have that degree of substantiation, this is the likely result.”

Breath Asure officials did not return calls seeking comment.

But attorneys representing the company said the bankruptcy filing has the effect of halting all legal proceedings against the firm, giving it some breathing space to shop for a buyer. In the meantime, the firm is still up and running, employing 25 people at its Westlake Village headquarters and continuing to sell a breath-freshening gum and a revamped breath tablet.

“There is no financial catastrophe here,” said Steven Spector, one of the trio of Jeffers Mangels Butler & Marmaro LLP attorneys handling the bankruptcy filing on behalf of Breath Asure. “This filing is a consequence of the protracted litigation Breath Asure has been subject to.”

Indeed, in its Chapter 11 filing, Breath Asure states that it had $2.46 million in assets and $2.79 million in liabilities, hardly the tremendously upside-down finances normally associated with bankruptcy filings.

At the center of the tale were Breath Asure’s initial claims that its tablets “work with the body’s digestive system to get rid of bad breath.” In essence, Breath Asure claimed that the digestive tract is a source of bad breath and that the active ingredients in its tablets somehow prevented the digestive system from producing that offensive odor. It then had these claims verified at a Texas lab.

Those claims helped distinguish Breath Asure from its competitors, chiefly breath mints like Certs and Clorets (both sold by Warner Lambert) and the newer Altoids (marketed by Philip Morris Cos.). Then Breath Asure launched an aggressive media marketing campaign, featuring endorsements from the likes of radio personality Howard Stern and actor George Kennedy.

But right from the start, Warner Lambert challenged the legitimacy of Breath Asure’s marketing claims. Warner Lambert alleged in a 1994 filing with the National Advertising Division of the Better Business Bureau that there was no scientific evidence that the digestive tract produces bad breath. Furthermore, it alleged there is no evidence that the major active ingredients in Breath Asure’s tablets sunflower and parsley seed oils were effective in working with the digestive tract to fight offensive odors.

Breath Asure fought back, stressing a trio of studies that it had commissioned that substantiated the marketing claims.

But the National Advertising Division rejected Breath Asure’s claims as unsubstantiated in 1994 and again in a similar case brought by Warner Lambert in 1997.

“The advertiser failed to meet its initial burden of proof,” NAD concluded in its ruling. “NAD recommends that the unsubstantiated claims of product performance in terms of product’s efficacy as well as its mechanism of action be substantially modified or discontinued.”

Dogged determination

After the 1997 ruling, Breath Asure said it intended to seek further substantiation for its marketing claims.

But Warner Lambert decided to up the ante by filing in federal court to stop Breath Asure from selling its tablets.

In 1998, a federal judge sided with Breath Asure and allowed the company to continue selling its product. Warner Lambert appealed that decision and, one year ago this week, a three-judge U.S. Circuit Court panel barred Breath Asure from selling its original tablets using the company name.

That was the straw that, 10 months later, prompted the bankruptcy filing, attorneys for the company said.

“In essence, they tried to get around the question of: ‘Is this nothing more than just another breath mint,'” said Ed Lubieniecki, vice president of retail for consulting firm Cap Gemini Ernst & Young. “But if they are unable to prove it’s more than a breath mint, they’re really stuck. And that’s what looks like happened here.”

Ironically, Lubieniecki noted that several years ago Warner Lambert itself was forced to scale back some marketing claims for its Listerine mouthwash.

“Because these products are not regulated by the government, like prescription drugs are, the whole personal-hygiene area is fraught with these marketing claims issues,” Lubieniecki said. “Any company going into this area must be able to handle the risk that goes along with this. Apparently, Breath Asure was not able to.”