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.
Last month we reported on MillerCoors’s quest to enjoin Anheuser-Busch’s ads highlighting MillersCoors’s alleged use of corn syrup in its beer. MillerCoors claimed that the quirky, medieval-themed ads—which depicted, among other things, serfs delivering vats of corn syrup to the “MillerCoors castle”—misled consumers into believing that corn syrup is present in the finished MillerCoors beers, when in fact corn syrup is used only as a starting “substrate” for fermentation into alcohol. Some of the ads, including the serf delivery one, referenced MillerCoors’s “use” of corn syrup. Others depicted Anheuser-Busch’s Bud Light with the label “NO CORN SYRUP” alongside a Miller Lite with the label “CORN SYRUP.” MillerCoors urged the court to put a stop to the entire campaign.
In its recent decision, the court handed MillerCoors a partial victory. It enjoined the “CORN SYRUP”/ “NO CORN SYRUP” ads, holding that they communicated the false message that MillerCoors beers actually contain corn syrup. But it found that MillerCoors had not demonstrated the falsity of the ads referencing mere use of corn syrup, given that MillerCoors in fact uses corn syrup for fermentation when Anheuser-Busch does not. The court was unconvinced by MillerCoors’s evidence that the ads also led consumers to believe that MillerCoors beers contain corn syrup, or that Anheuser-Busch beers contain a more wholesome ingredient.
When Can Truthful Statements Mislead Consumers?
The court held that the ads describing MillerCoors beer as “made with corn syrup,” “brewed with corn syrup,” and “uses corn syrup” had not been proven false or misleading, even as it allowed that the ads were “susceptible to misunderstanding.” The court also found nothing in the ads to support MillerCoors’s assertion that the ads implied something disparaging about corn syrup’s effects on health. Id. at *27.
To reach this conclusion, the court distinguished a long line of cases in which a truthful statement was paired with a clearly “disparaging or derogatory” depiction of an ingredient, or in which there was an affirmative misleading statement about the contents of the product. See id. at *31 (citing Eli Lilly & Co. v. Arla Foods, Inc. 893 F.3d 375, 379 (7th Cir. 2018) (ingredient was depicted as a “cartoon monster” and various references were made to the “weird stuff” in plaintiff’s product)); id. at *24-*25 (citing Abbott Labs v. Mead Johnson & Co., 971 F.2d 6, 9-10 (7th Cir. 1992) (defendant enjoined from representing its product containing “rice syrup solids” when its components were only “derived” from rice)). The court concluded that the Anheuser-Busch ads fell into neither category: the factual statements they contained were truthful, and while they poked fun at MillerCoors’s use of corn syrup, they did not say or imply that corn syrup was harmful.
In reaching this conclusion, the court gave short shrift to a consumer survey MillerCoors proffered, which purported to show that consumers interpreted the ad to mean that MillerCoors beers contained corn syrup. Id. at *28, 47-49. The court questioned the validity of the survey, which asked consumers open-ended questions about the meaning of the ad and produced a wide range of results. Its findings as to falsity were based firmly on its own analysis of the ads and conclusion that they did not communicate the alleged false message.
The “corn syrup”/ “no corn syrup” ads were a different story, as were the ads claiming that Anheuser-Busch’s beers offer “100% less corn syrup than Miller Lite.” These statements, according to the court, “support a reasonable interpretation that Miller Lite and Coors Light contain corn syrup,” which is false. Id. at *35-36 (emphasis in original). Thus, MillerCoors suggests that poking fun at the “use” of corn syrup is permissible, while a straight “corn syrup” to “no corn syrup” contrast is too blunt a tool and creates the impression of corn syrup as an additive to the final product.
Intent to Deceive Does Not Result in a Presumption of Confusion
MillerCoors also tread some interesting ground on the relevance of internal marketing documents and public marketing statements to determining the likelihood of consumer confusion.
The court extensively outlined Anheuser-Busch’s strategy and thinking behind the corn syrup campaign, including that Anheuser-Busch believed consumers might see “corn syrup” and think “high fructose corn syrup” (which MillerCoors does not use, even for fermentation). But ultimately the court declined to infer from this internal strategy, absent additional evidence, that Anheuser-Busch actually caused consumer confusion by referencing the “use” of corn syrup. Noting that the Seventh Circuit had not adopted a rebuttable presumption of consumer confusion based on intent to deceive, the court declined to apply such a presumption here. Id. at *22, 42-43. Opting for a very pragmatic approach, the court noted that “all advertising seems to be an effort to exploit consumer likes and dislikes, interests and fears,” and the fact that Anheuser-Busch sought to exploit consumer “dislike” of corn syrup did not mean that it had misled consumers. See id. at *43.
Even without the presumption, MillerCoors notes its position is in the minority and subject to change should the Seventh Circuit decide to wade into the effect of intent to deceive. With the growing numbers of courts closely scrutinizing the intent behind marketing campaigns, marketers have a tricky balance to strike—it is hard enough to figure out what consumers need and want and give it to them. Now they must also consider how they internally and externally characterize their marketing vision to avoid giving fodder to a disgruntled competitor. One way of doing so is by providing neutral public statements and judiciously refraining from creating a paper trail that suggests a new marketing slogan is a silver bullet to destroy the competition or leverage mistaken consumer expectations.
Social Media Does Not Carry the Day on Consumer Confusion or Irreparable Harm
As a growing outlet for marketing products to consumers, it is no surprise that social media is starting to feature prominently in advertising litigation. But at least for the MillerCoors court, social media was a useful data point, but not dispositive, in satisfying the requirements for a preliminary injunction.
In the context of finding consumer confusion based on the “no corn syrup” ads, the Court looked to both survey evidence and social media reaction. The court deemed the latter “anecdotal,” but probative in that it corroborated the 35% rate of confusion from the survey. Id. at *44, 48-49.
Social media evidence played a similar supporting role in the court’s irreparable harm analysis. The court credited both survey evidence and “anecdotal” social media snapshots as evidence that the ads had caused reputational harm to MillerCoors. However, it gave short shrift to Anheuser-Busch’s arguments that MillerCoors’s bullish statements on social media—which suggested the company was unfazed by the ads—precluded a finding of irreparable harm.