The original version of this article was printed in Law360 on June 17, 2019. Updates were made to reflect new developments.
You are what you eat, and consumers are becoming increasingly interested in what, exactly, that is. Consumer surveys and interviews of food company executives signal that transparency is the watchword,1 as educated and invested consumers become more focused on specific ingredients. Whereas some ingredients enjoy a health halo (kale and blueberry everything, anyone?), other ingredients are left in the shade.
Where consumers go, advertisers follow. Some focus on touting the good, others on distancing their own ingredient lists from the bad. Some advertisers take the additional step of tying competitor’s products to ingredients with negative consumer perceptions. Enter false advertising litigation.
The current marquee case is MillerCoors LLC v. Anheuser-Busch Cos. LLC,2 filed on March 21, 2019.
Most agree that beer is an alcoholic beverage traditionally made with four ingredients: water, barley, yeast and hops. But what about corn syrup, a favorite villain of nutritionists?
Anheuser claimed in a recent ad campaign that MillerCoors uses corn syrup to brew Miller Lite and Coors Light, while Anheuser does not to brew Bud Light. This campaign landed Anheuser in the U.S. District Court for the Western District of Wisconsin, where MillerCoors sued Anheuser for false advertising and moved for a preliminary injunction a week later. In its PI motion, MillerCoors asked the court to prohibit Anheuser from saying or implying, in any advertisement, that either Miller Lite or Coors Light contains corn syrup or high fructose corn syrup.
Anheuser’s ad campaign began during Super Bowl LIII, when nearly 100 million viewers saw Bud Light’s ad titled “Special Delivery.” The ad, set in medieval times, depicted the Bud Light Kingdom’s arduous journey to return an improperly delivered barrel of corn syrup to its allegedly rightful owner — either Miller Lite or Coors Light. The ad makes only two claims expressly: that both Miller Lite and Coors Light “use” or are “brewed” with corn syrup, and that Bud Light is “brewed with no corn syrup.”
After the Super Bowl commercial aired, Anheuser embarked on an extensive, multifaceted advertising campaign centered on Bud Light’s lack of, and Miller Lite’s and Coors Light’s “use” of, corn syrup. For example, Anheuser took out billboards with an image of a Bud Light bottle and, in large wording encompassing two thirds of the space, the statement “100% Less Corn Syrup than Miller Light” and Bud Light packaging stating “Hops. Barley. Water. Rice. No Corn Syrup. No Preservatives. No Artificial Flavors” with icons illustrating the “no” phrases. Together, the ads arguably imply that the use of corn syrup is at best inauthentic, and at worst, unhealthy.
While MillerCoors complained that Anheuser’s ad campaign constitutes false advertising, the ads say nothing that’s literally false. In fact, MillerCoors proudly admits to using corn syrup as a “fermentation aid” at the beginning of the brewing process for Miller Lite and Coors Light. But it maintains that any corn syrup is burned up as the beers are brewed, and no corn syrup makes it into the final product. And Anheuser likely knows this — because its ads don’t say that Miller Lite or Coors Light contain corn syrup.
So, if there is no false statement, what is the basis of MillerCoors’s complaint?
False advertising under the Lanham Act prohibits not only statements that are literally false but also statements that are literally true but convey a materially false or misleading impression. It’s just that different proof is required to prove the claim. Literally false ads are presumed deceptive with no additional evidence. Conversely, when the claim is that an ad is literally true but misleading, the plaintiff must produce evidence of actual consumer confusion based on the ad.
Here, MillerCoors complained that Anheuser’s ads create the “demonstrably false” consumer impression that the Miller Lite and/or Coors Light that they drink contain corn syrup — or, worse, high fructose corn syrup — and are thus inferior to or unhealthier than Bud Light.
On May 24, 2019, the court issued a preliminary injunction against Anheuser, albeit much narrower in scope than MillerCoors initially sought. The court held that the statements in the commercials about corn syrup were literally true, but some nevertheless are likely to mislead consumers into believing the beer contained corn syrup (as opposed to corn syrup simply being used during the brewing process).3
The court found that the stand-alone claims “brewed with,” “made with,” or “use” corn syrup were literally true, and that MillerCoors was not likely to successfully prove they were misleading. By contrast, MillerCoors was found likely to succeed in showing that the claims Bud Light contains “100% less corn syrup” than Miller Lite/Coors Light and that Bud Light contains “no corn syrup” were misleading because they “support[ed] a reasonable interpretation” that the finished products “contain corn syrup” (they do not).4 The court also held that commercials stating that corn syrup is an “ingredient” “cross the line to encourage a reasonable consumer to believe that corn syrup is actually contained in the final product.”5
Survey evidence played an important role in the court’s decision to grant the preliminary injunction. The survey found that a net 35% of respondents (after deducting noise from the control group) were misled into believing that Miller Lite and Coors Light contain corn syrup. MillerCoors also relied on consumer communications following the launch of Anheuser’s ads. Although the court found that consumer comments provided “some anecdotal support for the survey results,” because the analysis was based on 32 communications out of 100 million people who watched the Super Bowl, they ultimately fell short of showing likely consumer deception.
MillerCoors also pointed to social media reactions to the ads, which, it argued, proved that 28.6% of the posts showed that the authors mistakenly believed that corn syrup is present in the final product. The court, once again, held that while social media posts were helpful “anecdotal evidence,” they did not “carry the day” on their own.6
On September 4 and 6, 2019, the district court modified its earlier preliminary injunction by enjoining Anheuser from using the “no corn syrup” language and icon on its own packaging. Acknowledging that “the packaging now at issue does not mention Miller Lite or Coors Light,” it ruled “that does not mean that it is not actionable under the Lanham Act.” “Viewed in context of the full advertising campaign, a reasonable jury could find that the implicit message of the packaging is that other beers contain corn syrup.” Persuasive for the district court were Anheuser and MillerCoors’ near-monopoly on the light beer market. “[W]ith Bud Light, Miller Lite and Coors Light accounting for almost 100% of sales, that same jury could also find a substantial segment of consumers would infer that Bud Light’s principal competitors contain syrup, especially after a hundred million dollar television and print campaign misleadingly suggesting the same thing,” the court concluded. The takeaway for the brand owner is that the overall context of a large advertising campaign matters.
The preliminary injunction decisions were, of course, appealed to the Seventh Circuit. Without addressing the issues substantively, on October 21, 2019, the Seventh Circuit issued a limited remand requiring the district court to comply with Rule 65(d) of the Federal Rules of Civil Procedure and set an injunction in a document separate from the court’s opinion. On October 23, the district court complied and issued an order detailing the injunction terms in a separate document. Now we wait for the Seventh Circuit to rule substantively.
Overall, the district court’s decisions granting a preliminary injunction against Anheuser serve as an important reminder that even truthful statements may cross the line into misleading territory if they are vague (and thus subject to multiple interpretations) and/or if the claims are analyzed in the full context of the ad.
The preliminary injunction decisions also add to the developing body of law surrounding comparative advertising claims about food ingredients, particularly those with negative consumer connotations.
In seeking injunctive relief, MillerCoors argued that Anheuser’s campaign sought to exploit consumers’ alleged disdain for high fructose corn syrup, or HFCS, and lack of understanding that corn syrup and HFCS are not the same thing. HFCS has been a known boogeyman in advertising campaigns.
For example, in January 2019, the National Advertising Division (NAD) issued a decision on Kraft Heinz’s claim that Unilever falsely disparaged other ketchup brands by implying that ketchup made without HFCS was more “real,” “healthier” and “better for you.” Kraft Heinz also challenged social media influencer posts, paid for by Unilever, that cautioned consumers to stay away from HFCS-containing ketchup because it is “evil” and “fake.”
Kraft Heinz also challenged Unilever’s product label, which displayed “No High Fructose Corn Syrup” next to the product name, “Real Ketchup.” Kraft Heinz argued that consumers would think that Hellmann’s was saying that its product was “real” because it contained no HFCS (and that ketchups that do contain HFCS are not real). NAD disagreed.
Because “No High Fructose Corn Syrup” was displayed in a different font and encased within a circle, NAD concluded that it was visually separated from the rest of the label and did not convey the message that the product was “real” because it had no HFCS. NAD did, however, recommend that Unilever discontinue the following claim on its website: “As we watched the foods we eat evolve and be better for us, we noticed that ketchup had not kept up. So we decided to change that. Our ketchup is made with only simple, high quality ingredients.” Although NAD recognized that the term “better” can sometimes be justified as subjective puffery, it held that in this case, the “better for us” phrase in Unilever’s advertising could be reasonably interpreted to mean that Hellmann’s Ketchup was comparatively healthier than other ketchups—a claim unsupported by the record.
Other ingredients with complicated reputations have also been at the forefront of false advertising disputes.
In 2018 the U.S. Court of Appeals for the Seventh Circuit (the circuit in which MillerCoors filed) affirmed a preliminary injunction order regarding a cheese commercial that had disparaged a competitor’s dairy products containing the growth hormone rbST while claiming that the advertiser’s rbST-free cheese was food “[y]ou can feel good serving.”7 The ad said nothing that was literally false about rbST. Rather, it implied cheese containing rbST was unhealthier than its rbST-free counterpart. The court held, however, that there was “[n]o significant difference” between dairy products with or without rbST. This false implication, coupled with a demonstrated decrease in consumer demand for cheese with rbST, led the court to find the ad materially deceptive under the Lanham Act.
Two federal district courts also granted preliminary injunctions against Chobani regarding its yogurt ad campaign, #NOBADSTUFF.8
Chobani’s ads were framed around ingredients contained in its competitors’ yogurts — sucralose in Dannon Light & Fit Greek yogurt and potassium sorbate in Yoplait Greek 100 yogurt. The Dannon-specific ad contained text reading, “There’s sucralose used as a sweetener in Dannon Light & Fit Greek! Sucralose? Why? That stuff has chlorine added to it!” And the Yoplait-specific ad read, “Yoplait Greek 100 actually uses preservatives like potassium sorbate. Potassium sorbate? Really? That stuff is used to kill bugs!” While both ads were literally true, the courts found they conveyed the false (and obviously material) impression that Dannon’s and Yoplait’s yogurts were unsafe to eat.
All of these decisions show that even if an advertiser does not make a literally false statement, its ads are not insulated against false advertising claims. An advertiser may still be liable under the Lanham Act (or get an adverse NAD decision) if a court (or NAD) concludes that the advertisement creates a false impression in consumers’ minds about the safety or health consequences of an ingredient when the complaining party shows that consumers consider the ingredient material to buying decisions.
1 See https://www.foodnavigator.com/Article/2018/09/28/Consumers-care-more-about-ingredients-than-brand-Survey and https://www.forbes.com/sites/juliabolayanju/2019/02/16/top-trends-driving-change-in-the-food-industry/#67f071b46063
2 MillerCoors, LLC v. Anheuser-Busch Cos., LLC, Case No. 3:19-cv-218 (W.D. Wis.)
3 MillerCoors v. Anheuser-Busch Cos., 2019 U.S. Dist. LEXIS 88259 (W.D. Wis. May 24, 2019).
4 Id. at *35-36.
5 Id. at *39.
6 Id. at *50.
7 Eli Lilly & Co. v. Arla Foods, Inc., 893 F.3d 375 (7th Cir. 2018).
8 Chobani, LLC v. Dannon Co., 157 F. Supp. 3d 190 (N.D.N.Y. 2016); Gen. Mills, Inc. v. Chobani, LLC, 158 F. Supp. 3d 106 (N.D.N.Y. 2016).
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Finnegan is deeply saddened by the death of our colleague Donald R. Dunner, who passed away on October 16, 2019, after a life of dedication and inspiration to many in IP law. Don was in a category all his own with his talent and distinct knowledge of IP law. His direct approach and enthusiasm for work and life touched everyone who worked with him, and we will miss him dearly.