Bud Light King’s advertising reigns supreme in Seventh Circuit

11 May 2020 Reed Smith Client Alerts

Home Perspectives Bud Light King’s advertising reigns supreme in Seventh Circuit

The Seventh Circuit’s recent decision in the hotly contested dispute between Molson Coors Beverage Company USA LLC (Molson Coors) (maker of Miller Lite and Coors Light beers) and Anheuser-Busch Companies LLC (Anheuser-Busch) (maker of Bud Light beers) sounds a cautionary note for future parties contemplating a false advertising claim – look at yourself before judging others. Molson Coors Beverage Company USA LLC v. Anheuser-Busch Companies LLC, 2020 WL 2097557, --- F.3d ---- (May 1, 2020).

Authors: Jennifer Yule DePriest

This case arose from a well-known Bud Light advertising campaign launched during the 2019 Super Bowl, including a 60-second commercial, titled “Special Delivery,” as well as two 15-second commercials, “Medieval Barbers” and “Trojan Horse Occupants,” which focused on the use of corn syrup in the brewing of competitor Miller Lite and Coors Light beers. The “Special Delivery” ad, for instance, featured a fictional Bud Light kingdom, where, as the Bud Light King explained to his subjects, Bud Light beer is brewed with water, rice, hops, and barley. When a barrel of corn syrup is delivered, the king declares that Bud Light is not brewed with corn syrup and orders his knight to deliver the barrel to the Miller Lite and Coors Lite kingdoms, where beer is brewed with corn syrup. Anheuser-Busch extensively disseminated its “no corn syrup” campaign after the Super Bowl, running several additional television commercials, including two broadcast during the 2019 Oscars, a Twitter and print-media campaign, as well as billboards stating that Bud Light had “100% less corn syrup” than Coors Light and Miller Lite. See MillerCoors, LLC v. Anheuser-Busch Cos., 385 F. Supp. 3d 730 (W.D. Wis. 2019).

Molson Coors (originally filed by related entity MillerCoors LLC) sued Anheuser-Busch for false advertising under the Lanham Act, arguing that while it uses corn syrup as an ingredient in brewing Miller Lite and Coors Light, the advertising misleadingly suggested corn syrup was actually in the final beer product. Accordingly, the dispute centered on the distinction between Miller Lite and Coors Light’s acknowledged use of corn syrup as the aid to fermentation in brewing their beers, and the alleged false message that there is actually corn syrup in the beer that consumers ultimately drink.

The Seventh Circuit (as do others) recognizes two categories of false advertising under the Lanham Act: statements that are literally false and statements that are true but misleading. Eli Lilly & Co. v. Arla Foods, Inc., 893 F.3d 375, 381–82 (7th Cir. 2018). The district court in the Western District of Wisconsin found that Anheuser-Busch’s advertising was not literally false – the ads truthfully stated that Miller Lite and Coors Light are “made with,” “brewed with” or “use” corn syrup. But the court granted a preliminary injunction to bar Anheuser-Busch from making purported misleading statements that suggested to consumers that corn syrup was in Miller Lite and Coors Light beer, later modifying that injunction to also bar statements on Anheuser-Busch’s own packaging that Bud Light beer had “no corn syrup.” MillerCoors, LLC v. Anheuser-Busch Cos., 385 F. Supp. 3d 730 (W.D. Wis. 2019); id., 2019 WL 4187489 (W.D. Wis. Sept. 4, 2019); id., 2019 WL 4247725 (W.D. Wis. Sept. 6, 2019).

The Seventh Circuit’s May 1, 2020 decision vacated the injunction. Rather than addressing the specifics of Anheuser-Busch’s advertising, the Seventh Circuit found prohibitive Molson Coors’ own descriptions of corn syrup as an ingredient in its beers, including on its website, reasoning “[b]y choosing a word such as ‘ingredients’ with multiple potential meanings, Molson Coors brought this problem on itself.” Molson Coors Beverage Company USA LLC v. Anheuser-Busch Companies LLC, 2020 WL 2097557, at *2, --- F.3d ---- (May 1, 2020). The Court concluded it is not false or misleading for “a seller to say or imply, of a business rival, something that the rival says about itself.” Id. The Court made clear its view that “[l]itigation should not be a substitute for competition in the market”, admonishing “[i]f Molson Coors does not like the sneering tone of Anheuser-Busch’s ads, it can mock Bud Light in return.” Id.

In some respects, the Court’s decision is intuitive – if a business describes its own products in a certain way, competitors cannot be precluded from making similar statements. What makes this decision novel, however, was the Court’s focus not on whether the defendant, Anheuser-Busch’s, advertising might be confusing to consumers, but rather on what plaintiff Molson Coors’ description of corn syrup as an “ingredient” in its beers could convey to consumers. The Seventh Circuit observed that while the term “ingredients”, as used by Molson Coors, could refer to “inputs” in the brewing process, it might also refer to what was in the finished Coors Light and Miller Lite beer. Going forward, a business considering a Lanham Act action should carefully consider not only how consumers might understand a competitor’s advertising, but also how its own public representations about its products – whether on its website, packaging, advertising or otherwise – could be understood – or misunderstood – by consumers.

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