Seventh Circuit mostly ends corn syrup war: Coors can’t bar AB from touting “ingredients”

Molson Coors
Beverage Co. USA v. Anheuser-Busch Cos., Nos. 19-2200, 19-2713, 19-2782,
19-3097 & 19-3116 (7th Cir. May 1, 2020)
I think of the
Second Circuit as usually the most formalist Lanham Act court (you have to say
the magic words when it comes to the likelihood of confusion test, for example),
while the Seventh Circuit is the most formless: it reaches the result it thinks
correct as a matter of common sense in any given case, while giving the
absolute minimum in the way of principles or rules. Honestly, this case may do
better than average in rule-giving, at least because of the way the court characterized
the facts (noticeably, without describing any of the relevant ads or the way
that AB framed corn syrup as similar to high-fructose corn syrup): Because both
parties agree that AB’s beer is made using corn syrup, even if no corn syrup is
in the final beverage, Coors is allowed to advertise that fact.  This is a version of reading misleadingness
out of the test for false advertising, which the Seventh Circuit often (but not
always!) does.
The district court
split the baby, allowing AB to advertise that Bud Light is made using rice
while Coors’s products are made using corn syrup, but not to use ads that cause
consumers to think that Coors contains corn syrup. The court of appeals
simply rejected the idea that the true statement “their beer is made using corn
syrup and ours isn’t” could falsly imply that “their beer contains corn syrup.”
 Coors identifies corn syrup as an “ingredient”
in its beer. Coors pointed out that “ingredients” isn’t the same thing as “contains”:
there’s no alcohol on that ingredient list. “Yet common usage equates a product’s
ingredients with its constituents—indeed, some of Molson Coors’s own managers
testified that a beer ‘contains’ what’s on the ingredients list.” Anyway, AB
didn’t use the word “contain,” even if some consumers “doubtless” inferred that
corn syrup was in the beer. Coors’s own statements would yield the
same inference. [The Seventh Circuit is, as always, very confident about what consumers would think, no matter what evidence of consumer reaction is present or absent.  Given error costs in litigation, this approach is not without its merits, but in cases like this it lacks the epistemological humility that might better protect the consumers we have.]
“By choosing a word
such as ‘ingredients’ with multiple potential meanings, Molson Coors brought
this problem on itself. It is enough for us to hold that it is not ‘false or
misleading’ (§1125(a)(1)) for a seller to say or imply, of a business rival,
something that the rival says about itself.”
Judgment affirmed to
the extent that an injunction was denied, reversed to the extent that it was
granted. Remanded (perhaps to see whether the terrible dilution claim, now the
only issue in the case, can proceed).

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