Category: Lanham Act
Seventh Circuit Rejects Court Intervention In Light Beer Ad Wars: Is A New Trend Brewing In False Advertising Law?
The last few years have seen a pitched battle for market share among the manufacturers of America’s leading “light” beers—a battle that’s been waged not only in America’s bars and on the airwaves, but in the courtroom. Earlier this month, in Molson Coors v. Anheuser-Busch, Nos. 19-2200, 19-2713, 19-2782, 19-3097 & 19-3116, 2020 WL 2097557 (7th Cir. May 1, 2020), the Seventh Circuit gave Anheuser-Busch, the maker of Bud Light, a major victory in that battle, wiping out an injunction that the district court had entered in favor of Molson Coors, the maker of Miller Lite and Coors Light. That’s newsworthy in itself—but, because of its novel reasoning, the Molson Coors ruling may have broader significance for false-advertising law.
This post originally appeared on Law360.
In Romag Fasteners Inc. v. Fossil Inc., the U.S. Supreme Court recently made it easier for Lanham Act plaintiffs to disgorge the ill-gotten profits of trademark infringers.
Naturally, the question arises: Since false advertising suits are also governed by the Lanham Act, does Romag apply to false advertising suits, too? The answer is likely yes — but there are important differences between the two types of suits that may make disgorgement awards more difficult for false advertising plaintiffs to obtain.
FDCA Preclusion: When Can a Manufacturer Defeat a Competitor’s Lawsuit by Complying with FDA Regulations?
As many readers probably know, when a food or beverage manufacturer gets a consumer class action alleging that its labeling violated state law, one of the first things it should do is consider whether the disputed aspect of the labeling is covered by the federal Food, Drug and Cosmetic Act (“FDCA”). Many provisions of that statute—and, by extension, their implementing regulations—expressly preempt non-identical state-law regulations. If a putative class of consumers is asking a manufacturer to do something different with its labeling than those provisions do, there is a strong argument that the case is preempted: federal law (the FDCA) trumps state law (the relevant consumer protection statute).
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.
Breaking: Supreme Court To Decide Whether Willfulness Is Required To Disgorge Profits Under Lanham Act
Today, in its final orders list of the Term, the Supreme Court granted cert in Romag Fasteners, Inc. v. Fossil Inc. (No. 18-1233), to resolve a deep circuit split regarding Lanham Act remedies. The specific question in Romag is “[w]hether … willful [wrongdoing] is a prerequisite for an award of [the defendant’s] profits.” (All agree that an award of the plaintiff’s actual damages, as opposed to disgorgement of the defendant’s profits, is available irrespective of the defendant’s mens rea—but actual damages are often difficult to prove.) Romag presents this question in the context of a trademark infringement claim, but the outcome should also control in federal false advertising cases, which are likewise governed by the Lanham Act.
A recent decision, MillerCoors v. Anheuser-Busch Cos., LLC, No. 19-cv-218-wmc, 2019 U.S. Dist. LEXIS 88259 (W.D. Wis. May 24, 2019), denied and granted in part a preliminary injunction enjoining a series of advertisements and commercials depicting corn syrup in MillerCoors’s beer.
While the New England Patriots were besting the Rams in the 2019 Super Bowl, Anheuser-Busch tried to get the upper hand on MillerCoors in a series of ads highlighting the “use of” corn syrup in Miller Lite and Coors Light.
Many statutes, including the Lanham Act, impose strict liability for false advertising. Business may therefore incur liability even if a third party was partially or wholly at fault for the challenged inaccuracy. For example, a cosmetics company that advertises its products as “all natural” may be held liable to a competitor through no fault of its own if an unscrupulous supplier substitutes synthetic pigments for the more expensive natural pigments that the company ordered and paid for. Similarly, a food company that labels a product as containing “50 grams of protein per serving” may incur liability to consumers if the laboratory it retained to assay its products’ nutritional content botched those tests.
In the olden days, the law was content to leave whichever tortfeasor the plaintiff chose to sue on the hook for the whole tab—even if the chosen defendant was not the truly blameworthy party. However, “[i]t is now widely recognized that fundamental fairness demands a sharing of the liability” in these situations.