In 2013, the Second Circuit issued an important opinion in Ony, Inc. v. Cornerstone Therapeutics, Inc., a false advertising case. The Second Circuit held that the publication and dissemination of a scientific study that had the effect of touting the comparative benefits of the defendant’s product is noncommercial speech and is thereby immune from the false advertising provisions of the Lanham Act.1 As we noted in an article regarding that opinion, while the court’s central holding was sound, its rather sweeping language created the potential for mischief if extended to facts beyond those at issue in that case. That potential for mischief was squarely presented in the Eastman Chemical case recently decided by the Fifth Circuit.2

The Eastman Case

Eastman, a spinoff from Eastman Kodak, is a leading manufacturer of a copolyster resin designed for use in rigid plastic products. Sold under the trademark Tritan, Eastman’s product is used to make a vast array of household products, such as water bottles, Tupperware, blenders, etc. Defendant PlastiPure is a consulting company that works with plastics manufacturers to help them develop products that are free of chemicals having Estrogenic Activity (“EA”), which is believed to pose health and environmental hazards. Co-defendant CertiChem, Inc. is a sister company that utilizes a patented in vitro test (known as the “MCF-7 assay”) to determine whether manufactured plastic products are EA-free. Both companies are controlled by Dr. George Bittner, a professor at the University of Texas. The two defendants work in tandem: CertiChem tests the clients’ products to determine if they are EA-free, and “certifies” those that are, while PlastiPure works with those same clients to develop products that are EA-free and to develop marketing programs touting that attribute.

Dr. Bittner and a colleague published a peer-reviewed paper on the MCF-7 assay test, which explained the test and the results of its testing on hundreds of plastic products. PlastiPure also disseminated a brochure targeted to manufacturers of plastics products in which it discussed the health hazards of EA-containing plastics, and touted the company’s ability to help them develop EA-free products. This brochure included a bar chart in bold red coloring that identified five products made from Tritan, all of which were shown to have extraordinarily high EA levels. Eastman claimed the defendants’ MCF-7 assay test could not be extrapolated to the real world of plastics products, had no relation to the presence of EA in products made from Tritan, and that its results were contradicted by Eastman’s own testing that showed that Tritan does not have EA. The case was tied to a jury which returned a verdict in favor of Eastman.

In pre- and post-trial motions, defendants argued that whether products made with Tritan exhibit EA, and thus pose a health hazard, is a matter of legitimate “scientific debate” and that, under the Second Circuit’s decision in Ony, statements made in the course of that “debate” are immune from Lanham Act scrutiny. The trial court readily disposed of this argument. As it stated:

“Eastman did not sue Defendants over Dr. Bittner’s scientific paper, which was also published in a peer-reviewed scientific journal. Instead, Eastman’s false advertising claims are based on non-scientific materials, such as an advertising brochure, press releases, and Defendants’ website, none of which included the full context of the scientific paper, and some of which pre-dated the publication of Dr. Bittner’s paper. The ‘scientific debate’ in this case moved from the pages of academic journals to commercial advertisements targeted at consumers.”3

Defendants’ Appeal

In their appeal to the Fifth Circuit, defendants’ primary argument was that the presence of EA in commonly-used household goods is a matter of important “scientific debate” and that statements made in the course of that debate are scientific opinions and thus immune from Lanham Act scrutiny. Their argument was extraordinarily sweeping. According to defendants, the mere fact that estrogenic activity in household goods is a matter of “scientific debate” immunizes any and all statements made on that subject – regardless of the context in which they are made:

“Defendants PlastiPure and CertiChem made statements regarding scientific conclusions they had drawn based both on their own peer-reviewed and published research and on the peer-reviewed and published work of others. Each of those statements constitutes speech relating to academic work and matters of public interest and is protected by the First Amendment to the United States Constitution. . . . The public’s right to know both sides of scientific opinions regarding the safety of products they use is a value embraced by the First Amendment.”4

Had this argument been made merely in the context of Dr. Bittner’s peer-reviewed paper, it would have been unremarkable. But the argument went far beyond Dr. Bittner’s paper and encompassed any statements that referred to or utilized data from Dr. Bittner’s paper ‒ even statements made in the context of everyday commercial advertising. Here is what defendants told the Fifth Circuit:

“Eastman dedicates substantial effort to demonstrating that Defendants engaged in commercial speech and then argues the unremarkable proposition that the First Amendment affords no protection to false commercial speech. Appellee’s Brief at 32-39. Amici curiae also employ this tactic. The holding in Ony, however, goes well beyond that simplistic question. The Question Ony raises is instead whether a statement relating to one side or the other of a scientific debate can be false for the purposes of the Lanham Act, irrespective of whether the statement is made in a commercial context.” 5

According to defendants, Ony holds that a statement made in everyday commercial advertising cannot be false for purposes of the Lanham Act so long as it relates to an ongoing “scientific debate.”

The Argument of Eastman and the Amicus Parties

Defendants’ First Amendment argument was so sweeping that it caught the attention of the American Chemistry Council (“ACC”) the leading trade group for companies in the chemistry industry, and the Vinyl Institute (“VI”), a trade association representing the leading manufacturers of vinyl-related products.6 While ACC and VI took no position regarding the merits of the underlying dispute, they supported Eastman’s position regarding the First Amendment issue.

The argument advanced by both Eastman and the Amicus parties was simple and straightforward. When scientific debate is carried out via articles in scientific journals and presentations at scientific conferences, it is protected speech. However, when scientific data is used in connection with the dissemination of advertising and promotional materials, the companies responsible for disseminating those materials are subject to the false advertising provisions of the Lanham Act. False advertising cases frequently involve scientific debate about the safety, efficacy or other characteristics of a wide range of products, including drugs, chemicals and medical devices; defendants’ argument would eviscerate the applicability of the Lanham Act to those cases and would open the door to disparagement and scare campaigns about any product or ingredient said (by a competitor) to be unsafe or unhealthy.

The Fifth Circuit Opinion

In a lengthy and well-reasoned opinion, the Fifth Circuit rejected defendants’ argument and affirmed the trial court’s decision and injunction. The court began by acknowledging the crucial Lanham Act distinction between statements of fact, which are actionable, and statements of opinion, which are not.7 The court then discussed the Second Circuit’s opinion in Ony, and acknowledged that court’s holding that statements made in the context of scientific literature or scientific presentations are statements of “opinion” and thus protected speech under the First Amendment.8 But that was as far as the court was willing to go. As the court explained:

“The plaintiff in Ony sought to enjoin statements made within the academic literature and directed at the scientific community . . . . Here, in contrast, Eastman did not sue Appellants for publishing an article in a scientific journal. Rather, Eastman sought to enjoin statements made in commercial advertisement and directed at customers.” 9

Moreover, defendants’ commercial speech did not suddenly become immune merely because it related to a matter of “scientific debate”:

“It is of no moment that the commercial speech in this case concerned a topic of scientific debate. Advertisements do not become immune from Lanham Act scrutiny simply because their claims are open to scientific or public debate. Otherwise, the Lanham Act would hardly ever be enforceable – ‘many, if not most, products may be tied to public concerns with the environment, energy, economic policy, or individual health and safety.’ ”10

Finally, the court dealt with a particularly vexing issue that arose in Ony, namely, the Second Circuit’s extension of First Amendment immunity to the “secondary” dissemination of the article in question via a press release. The Fifth Circuit explained that this aspect of the Ony ruling was extremely narrow:

“In Ony, the secondary distribution was limited to the issuance of a press release summarizing the article’s findings and dissemination of the article itself. Here, the secondary distribution did not include any dissemination of the article; in fact, the sales brochure was distributed prior to the article’s publication. Nor did the sales brochure simply tout the article’s findings – the sales brochure specifically highlights the alleged EA content of Tritan, but the article never even mentions Tritan by name. As the district court recognized, the different results in Ony and in this case reflect the difference between presenting an article’s conclusions and ‘transform[ing] snippets . . . a paper which never mentions Tritan or Eastman by name . . . into commercial advertisements claiming Tritan is harmful.’ ”11

As noted in our earlier article about the Ony case, the Second Circuit’s extension of First Amendment protection to Ony’s press release was contrary to prior precedents, which uniformly hold that a press release touting the findings of a scientific study is commercial advertising. The Fifth Circuit wisely limited Ony’s immunity for press releases; the court appears to suggest that any such immunity would only apply where the press release contains a summary of the study results and is accompanied by a copy of the study itself. While the immunization of press releases may continue to govern cases in the Second Circuit, we believe that other courts will either reject this aspect of Ony or severely limit it, as did the Fifth Circuit.

Why it matters: The Fifth Circuit’s decision is a timely addition to false advertising case law. The Second Circuit’s Ony decision, while largely correct, had the potential to unravel decades of false advertising precedent. The Fifth Circuit wisely limited Ony’s scope and reaffirmed the applicability of the Lanham Act to advertising involving scientific claims and issues.