MillerCoors, LLC v. Anheuser-Busch Cos.

MILLERCOORS, LLC, Plaintiff, v. ANHEUSER-BUSCH COMPANIES, LLC, Defendant.

19-cv-218-wmc

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF WISCONSIN

September 4, 2019

OPINION AND ORDER

For reasons explained in an earlier opinion, this court entered a preliminary injunction prohibiting defendant Anheuser-Busch Companies, LLC, from using misleading advertising to suggest that corn syrup is in plaintiff's Miller Lite and Coors Light beers, including emphasizing that corn syrup is not in its Bud Light beer in light of a massive advertising campaign intended to suggest just that to consumers. (5/24/19 Op. & Order (dkt. #57).) At the time, however, the court reserved on whether to extend that injunction to Bud Light's packaging because the focus of plaintiff's original motion for preliminary injunction was on television, bill board and print advertising, and the record was not developed sufficiently as to the question of package labeling. Following additional briefing and factual submissions by the parties, the court will now modify its preliminary injunction to cover packaging, but will allow defendant to sell products using the packaging it had on hand as of June 6, 2019, or until March 2, 2020, whichever occurs first.¹

FINDINGS OF FACTS

A. Overview of Bud Light Packaging

For beer, secondary packaging is the outer packaging that contains individual bottles and cans. For a 6-pack, 12-pack or 24-pack of Bud Light, the secondary packaging is the outer cardboard package that holds the bottles or cans. The following images reflect the current version of the packaging of the front and side panels of Bud Light's 6-pack of bottles:

Image materials not available for display.

(Reis Decl. (dkt. #60) ¶¶ 5-6.)

MillerCoors points out the "no corn syrup" on the front and side panels, and the "see bottom panel" language on the side panels. The bottom panel also states "find out what's in your beer" and "learn more at: budlight.com." (Emphasis added.)

Image materials not available for display.

(Id. ¶ 7.)

Until June 3, 2019, the Bud Light website contained the following images:

Image materials not available for display.(Id. ¶¶ 27-28.) The first image states, "We believe you deserve to know what ingredients we put into our beer." (Emphasis added.)

The prior injunction required compliance by June 3, and defendant represents that it changed the website images to the following on that date:

Image materials not available for display.

(Harrison Decl., Ex. 1 (dkt. #68-1).) The language has been modified to now read, "We believe you deserve to know what ingredients we use to brew our beer." (Emphasis added.) Moreover, the second image displayed above was replaced with the following image:

Image materials not available for display.

(Harrison Decl., Ex. 2 (dkt. #68-2).)²

B. Light Beer Retail Displays

At least some retail displays of Bud Light are displayed alongside packages of Miller Lite and Coors Lights, as depicted below:

Image materials not available for display.

(Reis Decl, Ex. 2 (dkt. #60-2) 4.)

Ryan Reis, MillerCoors Vice President of the Coors family of brands, avers that packages of Bud Light are "almost always" displayed at retail alongside packages of Coors Light and Miller Lite (Pl.'s Suppl. PFOFs (dkt. #59) ¶¶ 146-47), an assertion defendant purports to dispute solely because it is only supported by Reis's "say-so," but provides nocontrary opinion or experience evidence. Reis also represents that there is "nearly total overlap between Miller Lite and Bud Light distribution and retail" (id. ¶ 148), which defendant purports to dispute on the same basis. According to an unspecified Nielsen report, Bud Light, Coors Light and Miller Lite also comprise 100% of the national premium light beer market.

C. Packaging as a Driver of Purchasing

Reis avers that secondary packaging is an effective way to drive purchasing decisions because it communicates claims about the product to consumers at the point-of-purchase. Defendant challenges Reis's ability to provide such statements on two grounds: lack of personal knowledge or expertise on consumer behavior. Given Reis's current role and past education and experience in marketing and brand management, including at MillerCoors (Reis Decl. (dkt. #14) ¶¶ 2-4), both grounds fall flat. Indeed, Reis's background and expertise appear to make him eminently qualified to testify about the marketing of beer.

The parties also offer competing customer studies in support of their respective positions. MillerCoors points to a Neilsen report showing that 32% of Baby Boomers, 47% of Generation X and 60% of Millennials have not yet decided which brand of beer to purchase when they enter a store. (Reis Decl. (dkt. #60) ¶ 35.) In contrast, Anheuser-Busch points to Mintel's 2018 consumer research report on beer and craft beer, showing that packing is not an important factor in deciding what beer to purchase for 91% of beer purchasers and for 94% of non-craft beer drinkers, the latter of which include drinkers of light beer, but does not disclose whether light beer purchasers fall above or below that percentage. (Saini Decl. (dkt. #66) ¶¶ 3-6.)

D. Bud Light's Survey

Defendant further commissioned its own survey to undermine plaintiff's claim of a likelihood of consumer confusion with respect to the challenged statements on the packaging. Specifically, Philip Johnson, a market research survey expert, conducted a survey of 625 light beer drinkers. The participants were shown either a test or control version of the side or front panels of Bud Light's 12-pack bottle packaging. The only difference between the test and control was that the control had the "no corn syrup" language and icon removed.

After reviewing the front image for 10 seconds and the side image for 10 seconds, participants were asked a series of open ended questions, including: "In your own words, what as the main message, if any, on the package you just saw? Please describe it as best as you can. What else, if anything, did the information on the package say or suggest to you?" (Johnson Decl. (dkt. #65) ¶ 23.) In response to this question, zero respondents in either group mentioned Miller Lite or Coors Light. The majority of respondents reported that the main message conveyed by the packaging is Bud Light's ingredients. For those respondents who correctly identified Bud Light or Budweiser as the brand of beer shown in the packaging, they were then asked, "Did the package say or suggest OR did the package not say or suggest something about any other brand or brands of beer?" (Id. ¶ 26.) In response, 28% of the test group and 23% of the control group answered that the packaging did say or suggest something about other brands. Those respondents were then asked, "[w]hat other brand of beer did the package say or suggest something about?," to which only one respondent in the test group identified Miller Lite or Coors Light. (Johnson ReplyDecl. (dkt. #83) ¶ 22.) When asked what the packaging says or suggests about other brands of beer, 3% of the test respondents reporting receiving any message about other brands of beer having or using corn syrup. (Johnson Decl. (dkt. #65) ¶¶ 30-31.)

E. Costs

As of June 6, 2019, the total value of unused secondary packaging for Bud Light products containing the "no corn syrup" icon and language is $27,711,176, which amounts to 69,471,463 packages.³ This packaging had not yet been used to pack Bud Light products, nor had it been shipped to distributors or retailers. Also as of June 6, 2019, defendant has 1,326,587 cases of finished beer for Bud Light that have been packaged into secondary containers but that have not yet left A-B's breweries or warehouses. The value of the product in this packaging is approximately $5,000,000. Defendant also represents that its quality control policy requires secondary packaging be used within 270 days. Therefore, the packaging available as of June 6, 2019, will "expire" by early March 2020.

OPINION

The court will not recount the standard governing plaintiff's motion for preliminary injunction other than its burden to demonstrate some likelihood of success in proving the challenged statements on defendant's packaging have "the tendency to deceive a substantial segment of its audience." (5/24/19 Op. & Order (dkt. #57) 18-20 (citingPlanned Parenthood of Ind. & Ky., Inc. v. Comm'r of Ind. State Dep't of Health, 896 F.3d 809, 816 (7th Cir. 2018); Eli Lilly & Co. v. Arla Foods, Inc., 893 F.3d 375, 382 (7th Cir. 2018)).) Under the Lanham Act, such false advertising "violations are presumed to be irreparable, even if the plaintiff fails to demonstrate a business loss." Promatek Indus., Ltd. v. Equitrac Corp., 300 F.3d 808, 813 (7th Cir. 2002).⁴

At the end of its prior order, the court described the packaging as "non-comparative" (5/24/19 Op. & Order (dkt. #57) 49), which defendant now characterizes as a "ruling." (Def.'s Opp'n (dkt. #63) 2.) However, the court expressly declined to rule on the packaging without additional submissions by the parties and merely chose that adjective to draw a contrast with the Second Thespians commercial and the series of billboards, both of which referenced Bud Light's "no corn syrup" in close proximity to Miller Lite's or Coors Light's "corn syrup." (5/24/19 Op. & Order (dkt. #57) 8, 10, 32-33.) While the packaging now at issue does not mention Miller Lite or Coors Light, that does not mean that it is not actionable under the Lanham Act. See, e.g., Time Warner Cable, Inc. v. DIRECTV, Inc., 497 F.3d 144, 162 (2d Cir. 2007) ("Given the nearly binary structure of the television services market, it would be obvious to consumers that DIRECTV's claims of superiority are aimed at diminishing the value of cable—which, as discussed above, is synonymous with TWC in the areas covered by the preliminary injunction. Therefore, although the Revised Simpson Commercial does not explicitly mention TWC or cable, it 'necessarily diminishes' the valueof TWC's product.").

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