Lanham Act Dispute Brewing over Corn Syrup in 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.
Against the backdrop of a medieval castle setting, Anheuser-Busch boasted that whereas MillerCoors’s flagship beers are “made with” corn syrup, Anheuser-Busch’s Bud Light is made with only rice, hops, water, and barley. In one ad, for example, the Bud Light king mistakenly receives a very large barrel of corn syrup and goes to great lengths to return the corn syrup to its rightful owner at the Coors Lite castle. Upon receipt of the barrel, the castle steward shouts “Well well well, looks like the corn syrup has come home to be brewed. To be clear, we brew Coors Lite with corn syrup.” The commercial concludes with a close-up of a Bud Light glass and an on-screen banner: “No Corn Syrup.”
Six weeks later, MillerCoors sued Anheuser-Busch, alleging that this commercial and others like it violated the Lanham Act and constituted trade dilution because by highlighting the use of corn syrup, Anheuser-Busch (1) misled consumers into believing that corn syrup is actually present in the beer they drink, when in fact it is just a starting material for the fermentation process; (2) created confusion as between the use of corn syrup and the use of high-fructose corn syrup, which consumers actively avoid because they deem it unhealthy; and (3) suggested that the MillerCoors uses only corn syrup and no other ingredient to make its flagship beers. MillerCoors, LLC v. Anheuser-Busch Companies, LLC, No. 3:19-cv-00218-wmc (W.D. Wis. Mar. 21, 2019).
In an accompanying motion for a preliminary injunction seeking to enjoin the Anheuser-Busch ads, MillerCoors argued that Anheuser-Busch focused on “corn syrup” because that ingredient was “triggering” to consumers and because they would draw a connection between “corn syrup” and “high fructose corn syrup.” Anheuser-Busch opposed the motion and moved to dismiss, noting that MillerCoors had publicly embraced its use of corn syrup, with a nod to the corn farmers in the American heartland, and—in social media and text messages from senior marketing executives after the ads appeared—actually thanked Anheuser-Busch for the opportunity to promote its product.
MillerCoors’s claims underscore that even whimsical comparative advertising can give rise to claims of falsity under the Lanham Act. As between the parties, there appears to be no dispute that corn syrup is an ingredient, but MillerCoors disputes what the commercials suggest about how the ingredient is used in the beer. In particular, MillerCoors takes issue with the suggestion that corn syrup is present in the finished beer, as opposed to merely being used as a starting material, and that brewing with corn syrup makes Coors Lite less healthy or desirable than Bud Light, which is brewed with rice.
As this case winds its way through the United States District Court for the Western District of Wisconsin, it will offer an interesting application of the Lanham Act’s standards for false and misleading advertising and irreparable harm.
Tapping into Lanham Act Claims
It is black letter law that a false advertising claim under the Lanham Act requires a showing that the challenged advertising is (1) literally false, either on its face or by necessary implication; or (2) that it is literally true but subjects consumers to a misleading impression. See, e.g., Eli Lilly & Co. v. Arla Foods, Inc., 893 F.3d 375, 382 (7th Cir. 2018) (“We have recognized two types of actionable statements under the Lanham Act: those that are literally false and those that are literally true but misleading.”).
Under this standard, even a showing by Anheuser-Busch that the advertisement is literally true—i.e., that MillerCoors uses corn syrup to brew its beer—won’t be a slam dunk if the court concludes that the ad misleads consumers as to the differences between the two beers. MillerCoors maintains that the ad leads consumers to believe that they are drinking a tall glass of “corn syrup,” when in fact that corn syrup has fermented into alcohol just as sugar ferments in any other beer.
MillerCoors’s claim is not the first of its kind. Courts routinely scrutinize advertisers’ “literally true” statements about the ingredients in their competitors’ products to determine whether they are sending misleading messages about the products’ overall quality. Competitors, for example, took issue with Chobani’s aggressive marketing campaign a few years back where Chobani pointedly criticized competitors’ ingredients. In one commercial, a voiceover while a woman sunbathed near a pool queried about Dannon yogurt: “Sucralose? Why? That stuff has chlorine added to it!” See Chobani, LLC v. Dannon Co., 157 F. Supp. 3d 190, 197 (N.D.N.Y. 2016). In another, Chobani proclaimed “Potassium sorbate? Really? That stuff is used to kill bugs.” General Mills, Inc. v. Chobani, LLC, 158 F. Supp. 3d 106, 112 (N.D.N.Y. 2016). In both cases, the court enjoined Chobani’s advertisements, concluding that the plaintiff competitors were likely to prevail on their Lanham Act claims. Despite the literal truth of Chobani’s statements—i.e., sucralose does contain chlorine atoms as a matter of its chemical composition—they inaccurately hinted to consumers that the products were unsafe to consume, a characterization that greatly troubled the court. General Mills, 158 F. Supp. 3d at 118-19; Chobani, 157 F. Supp. 3d at 203-04.
Anheuser-Busch’s “corn syrup” ads are less explicitly disparaging: they simply highlight the presence of “corn syrup,” without any mention of what that ingredient is or does. Still, there is some force to MillerCoors’s argument that the depiction of “corn syrup,” an oft-reviled ingredient, being used in a vat of Miller Lite sends a falsely disparaging message about the quality of its beers. In this respect, Anheuser-Busch’s campaign is more akin to a different Chobani marketing that claimed Chobani’s Gimmies (toddler-targeted yogurt pouches and tubes) contained 33% less sugar than Dannon’s Danimals. Although the Southern District of New York concluded that there was some potential for consumer confusion in comparing the sugar per fluid ounce across to the two products, Chobani’s sugar comparison did not cause Dannon actionable injury because Chobani “ha[d] a perfect legal right to beat Dannon at its own game by marketing a competing product that has less sugar.” Danone, US, LLC v. Chobani, LLC, 362 F. Supp. 3d 109, 124 (S.D.N.Y. 2019).
Could Fighting Words Counter a Showing of Irreparable Harm?
Even if MillerCoors can show that the ads are false, it must also demonstrate “irreparable harm” in order to obtain an injunction. That requirement has teeth, particularly in light of the growing divide on whether irreparable harm can in fact be presumed. The Third and Ninth Circuits have held that a presumption of irreparable harm is not permitted in Lanham Act cases, including for preliminary injunctive relief. Ferring Pharms., Inc. v. Watson Pharms., Inc., 765 F.3d 205, 216-17 (3d Cir. 2014); Herb Reed Enters., LLC v. Fla. Entm’t Mgmt., Inc., 736 F.3d 1239, 1249-50 (9th Cir. 2013). The Seventh Circuit’s precedent is somewhat dated and the Court of Appeals has not yet addressed whether Lanham Act injury can be presumed. Bernatello’s Pizza, Inc. v. Hansen Foods, LLC, 173 F. Supp. 3d 790, 802 (W.D. Wis. 2016). All this is to say that without a very strong showing of injury to its business, MillerCoors may be facing an uphill battle in its bid for relief.
Anheuser-Busch also argues that MillerCoors’s own conduct and statements prove that it has not suffered any irreparable injury as a result of the advertising. Minutes after the ads appeared during the Super Bowl, a MillerCoors executive texted his counterpart at Anheuser-Busch that the ad campaign was “a massive gift” for which he offered his “sincere thanks.” He also expressed excitement over the prospect of a bout of competitive advertising, texting his counterpart “Game on” and “See you on the battlefield.”
In the aftermath of the Super Bowl campaign, MillerCoors released a similarly bullish full-page New York Times advertisement, asserting that “corn syrup is a normal part of the brewing process and does not even end up in your great tasting can of Miller Lite.” Anheuser-Busch now argues that MillerCoors would not have engaged so enthusiastically with an advertising campaign that was truly causing it “irreparable harm.” This dispute highlights the difficulties of claiming irreparable harm in litigation while continuing to project confidence in the marketplace.
Navigating Comparative Marketing
Competitors need not despair that any and all comparative advertisement will give rise to liability. To the contrary, courts are wary of intervening in a bona fide marketing faceoff, particularly where one competitor is extolling the objective characteristics of its product over the other. The sticking point in comparative advertisements lies where one company disparages another, particularly where the advertisement raises the specter of health or safety concerns for consumers.
How the court will police that line in this beer fight remains to be seen. With the preliminary injunction nearly fully briefed, a hearing is on the docket for early next month, with a decision to follow thereafter. We will continue to monitor this case closely for further developments.