False Advertising Claims Get Doused Due to Lack of Consumer Survey Evidence

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False Advertising Claims Get Doused Due to Lack of Consumer Survey Evidence,?Op. 1, No. 22

When it comes to a claim for false advertising under Section 43(a) of the Lanham Act, an advertisement is typically characterized as either "literally false," or "misleading," or perhaps even both. The characterization matters and may well impact whether survey evidence is going to be necessary.

If an ad is literally false, it conveys an unambiguous false statement of fact. It's football season now, so we might as well illustrate the point using beer advertisements. Let's say a beer brewer advertises that each bottle of its grog contains "15 calories" when, in fact, each bottle contains 215 calories. The ad conveys a literally false statement of fact. In such an instance, the court will presume the ad deceived consumers. But what if our brewer makes a statement that is simply "misleading?"

Take, for example, the series of Anheuser-Busch Bud Light medieval commercials that aired back during Super Bowl LIII. They featured the King of the Bud Light Kingdom receiving a misdelivered massive barrel of corn syrup at the Bud Light castle. Bud Light is not brewed with corn syrup, but both Coors and Miller Lite are. Thus, the Bud Light King (aptly surnamed "Barley") and his subjects set off on a harrowing quest through medieval lands and waterways to deliver this corn syrup to its "rightful owners" at the Coors and Miller Lite castles.

Modern-day MillerCoors did not chuckle over this humor from the Dark Ages. It sued. It claimed, among other things, that these ads were misleading under Section 43(a) of the Lanham Act because consumers would think the finished products actually contained corn syrup, when they did not.

When an advertisement is claimed to be misleading--such as these accused Bud Light commercials--the court will not typically presume consumer deception. Instead, in most cases it will require proof that a "substantial portion" of reasonable consumers were duped. That typically requires the complaining party to come forward with a consumer survey. But is the distinction between "literally false" and "misleading" always so clear? Not always.

To explore how this can be a bit murky, let's depart the medieval lands of warring brew kingdoms and plumb the depths of a decision out of the Buckeye state involving two rival pipe fitting companies. Shepard v. Lokring Tech., LLC, 2023 U.S. Dist. LEXIS 142926 (N.D. Ohio Aug 15, 2023).

To simplify the facts, we will just say that employee of pipe fitting company # 1 ("Old Co."), left for rival pipe fitting company # 2 ("New Co."). After employee landed at New Co., he didn't pipe down. Instead, he sent an email to prospective pipe fitting purchasers. The employee made the following statements about Old Co.'s products:

Old Co. was piping hot over these allegations and sued for false advertising under Section 43(a) of the Lanham Act. Old Co. alleged that both statements were "literally false" and that the Court should presume consumer deception. The Court disagreed.

Based on the record evidence including deposition testimony, the Court found these were not literally false statements of fact. Instead, the Court held that some of portions of these statements were factually accurate yet some were "misleading." And, because Old Co. did not present evidence that a "substantial portion" of consumers were deceived (in the form of a consumer survey, for example), the Section 43(a) claims failed at summary judgment.

The Takeaway. As a general matter, if an advertisement is misleading (as opposed to literally false), it will usually require the complaining party to show a significant portion of the intended audience was deceived. This is typically accomplished by survey evidence specifically designed to test for such deception. The Court's decision is set forth below.

Bud Light Post Script: Oh, and what became of the Bud Light brouhaha you ask? MillerCoors did, in fact, present survey evidence showing consumers were deceived by some of the ads, and the trial court entered an injunction. MillerCoors, LLC v. Anheuser-Busch Cos., LLC, 385 F. Supp. 730, 760 (W.D. Wis. 2019). That victory would he short lived, though, as the Seventh Circuit reversed, see Molson Coors Bev. Co. USA LLC v. Anheuser-Busch Cos., LLC 957 F.3d 837, 839 (7th Cir. 2020)("If Molson Coors does not like the sneering tone of Anheuser-Busch's ads, it can mock Bud Light in return"), and King Barley and Anheuser-Busch ultimately prevailed on remand.