The Seventh Circuit has weighed in on the highly publicized advertising dispute between beer giants Molson Coors and Anheuser-Busch. See Molson Coors Beverage Company v. Anheuser-Busch Companies, LLC, Nos. 19-2200, 19-2713, 19-2782, 19-3097 & 19-3116 (7th Cir. May 1, 2020).
In early 2019, Anheuser-Busch began advertising that Miller Lite and Coors Light use corn syrup as a source of sugar that yeast ferments into alcohol, whereas Bud Light uses rice. Molson Coors (then MillerCoors) claimed the ads created the false impression that its beers actually contain corn syrup. As a result, Molson Coors brought suit in federal district court contending that Anheuser-Busch violated §43 of the Lanham Act, 15 U.S.C. §1125, which prohibits various forms of false or misleading advertising by competitors. The case was hotly contested in the district court, which ultimately issued a preliminary injunction precluding Anheuser-Busch from running certain ads but not others. Cross-appeals were filed.
The Seventh Circuit boiled the case down as follows: “The basic contention has been that the true statement ‘their beer is made using corn syrup and ours isn’t’ wrongly implies that ‘their beer contains corn syrup.’” Id. at 3.
In resolving the issue, the Seventh Circuit highlighted that Molson Coors identifies corn syrup as an ingredient in Miller Lite and Coors Light. Id. at 4. The Seventh Circuit agreed with Molson Coors that an “ingredient” differs from what the final products “contain.” Id.
Nevertheless, the Seventh Circuit found that Anheuser-Busch’s advertisements did not violate the Lanham Act. The Court noted that Anheuser-Busch has not advertised that its rival’s products “contain” corn syrup. Id. The Seventh Circuit acknowledged that some consumers may infer corn syrup makes its way into Molson Coors beer. Id. However, “[b]y choosing a word such as ‘ingredients’ with multiple potential meanings, Molson Coors brought this problem on itself.” The Seventh Circuit was unwilling to find false or misleading advertising against a rival over something that the rival says about itself. Id. at 5. Instead the Seventh Circuit offered the following advice and directive: “If Molson Coors does not like the sneering tone of Anheuser-Busch’s ads, it can mock Bud Light in return. Litigation should not be a substitute for competition in the market.” Id.
The Seventh Circuit’s ruling was a big win for Anheuser-Busch. However, the case illustrates the fine line in Lanham Act cases where the advertisements at issue are not literally false, but could still be considered misleading.