Court Hops Up Injunction, Enjoining Bud Light Packaging
In the latest development in the Lanham Act litigation between beer titans MillerCoors and Anheuser-Busch, the district court issued an order enjoining Bud Light from using the “No Corn Syrup” language and icon on product packaging, expanding the existing injunction covering the same claims in print and television advertisements. MillerCoors v. Anheuser-Busch Cos. (MillerCoors II), No. 19-cv-218-wmc, 2019 U.S. Dist. LEXIS 149954 (W.D. Wis. Sept. 4, 2019). However, the court permitted Anheuser-Busch to exhaust its existing supply of packaging with the enjoined image and language (assuming it can be done in 270 days, which Anheuser-Busch has signaled it will). The decision offers an interesting analysis of implied comparative claims and how the defendant’s replacement costs may impact the “irreparable harm” inquiry at the preliminary injunction stage.
In June, we reported on MillerCoors’s partial success in barring Anheuser-Busch’s advertisements that depicted Anheuser-Busch’s Bud Light with the label “NO CORN SYRUP” alongside a Miller Lite bottle with the label “CORN SYRUP.” The court found that MillerCoors had not demonstrated the falsity of ads referencing the mere use of corn syrup, given that MillerCoors in fact uses corn syrup for fermentation when Anheuser-Busch does not. But it enjoined the “CORN SYRUP”/ “NO CORN SYRUP” ads, holding that they communicated the false message that MillerCoors beers actually contain corn syrup.
Although MillerCoors had urged the court at oral argument to extend the injunction to the “No Corn Syrup” language and icon on Anheuser-Busch’s packaging (shown in the images below), the court declined to reach the issue on the record before it, since it had not been addressed in briefing. Instead, the court invited additional submissions from the parties before passing judgment on the packaging claims.
In its most recent decision, upon reviewing the parties’ supplemental submissions, the court handed MillerCoors another partial victory. It prevented Anheuser-Busch from using the “No Corn Syrup” language and icon in new packaging, but it allowed Anheuser-Busch to use up any packaging already printed as of the date the original preliminary injunction became effective (June 6, 2019), up to 270 days after that date, whichever is earlier. That is the exact time frame in which Anheuser-Busch’s quality control policy requires its packaging to be used, so the court’s ruling simply required Anheuser-Busch to run through its normal relabeling cycle for replacing the offending text.
After receiving emergency briefing from Anheuser-Busch, the court further modified its injunction two days later, allowing Anheuser-Busch to use packaging on hand through November 1, 2019 that still contains the “No Corn Syrup” language and icon. MillerCoors v. Anheuser-Busch Cos. (MillerCoors III), No. 19-cv-218-wmc, 2019 U.S. Dist. LEXIS 152559, at *2 (W.D. Wis. Sept. 6, 2019). This was due to Anheuser-Busch’s representations that (1) it had printed additional packaging after June 6, 2019 containing the challenged claims and (2) it “cannot have packaging complying with the court’s injunction until the end of October.” Id. The court was “troubled by [Anheuser-Busch]’s decision to continue to print new packaging containing language that almost certainly violated the spirit of the court’s [June 6, 2019] injunction” but “reserve[d] on whether the defendant’s conduct supports finding an ‘exceptional case,’” such that attorney’s fees may be available to MillerCoors as the prevailing party. Id. at *1-2 (emphasis in original).
When Can Advertising Statements That Do Not Expressly Make Comparative Claims Be Deemed Impliedly Comparative?
The court noted that, unlike the advertising campaign it had previously enjoined, the packaging at issue here is not expressly comparative because it does not mention either Miller Lite or Coors Light. Instead, the packaging claims focus only on the absence of an ingredient (i.e., corn syrup) from Bud Light products. Yet the court held that the “No Corn Syrup” packaging contains the “implicit message” that other beers contain corn syrup, which, as described in the court’s first ruling, is a false message. MillerCoors II, 2019 U.S. Dist. LEXIS 149954, at *9. And because Lanham Act violations are presumed to inflict irreparable harm on the plaintiff, MillerCoors did not need to come forward with evidence of business loss to demonstrate its injury. Id. at *8.
The court’s finding of a likely Lanham Act violation rested on several predicate findings. First, the court observed that the packaging should not be considered in isolation but in light of the full advertising campaign, including the advertisements previously deemed to be false. Second, it recognized that the light beer market consists almost entirely of Bud Light, Miller Lite, and Coors Light—and thus, when Bud Light is touted as not containing corn syrup, consumers could reasonably infer that Bud Light’s principal competitors do contain corn syrup. Finally, the court found that at least some, if not nearly all, Bud Light products are positioned next to Coors Light and Miller Lite at the point of sale, as reflected in the image below. Based on this, the court held that a reasonable jury could “find that a substantial segment of consumers would infer Bud Light’s principal competitors contain corn syrup, especially after a hundred million dollar television and print campaign misleadingly suggested the same thing.” Id.