DNA StrandEighty-eight percent of consumers are willing to pay more for healthier foods. Manufacturers have responded by focusing marketing campaigns on the health and safety benefits of their products, often at the expense of their competitors. But when Arla Foods portrayed a seven-year old girl defining a common hormone used to increase milk production in cows as “weird stuff” akin to a “six-eyed monster” with “razor sharp teeth” and electric fur, a Wisconsin federal judge decided the ad went too far and would likely mislead consumers. Despite Arla’s reliance on a small disclaimer and “scientific debate” over the health and safety of dairy products made from cows treated with rbST, the Court enjoined Arla’s campaign, finding it was likely to mislead consumers into thinking rbST was unsafe, unhealthy, weird, and “altogether something you should not feel good about feeding your family.”

On April 25, 2017 Arla launched a $30 million advertising campaign targeting “ingredient savvy” U.S. consumers seeking more information about the products they are eating and feeing their families. The centerpiece of the campaign is a 30-second commercial titled, “Arla Cheese Asked Kids: What is rbST?”

rbST is a genetically engineered version of bovina somatropin (bST), a naturally occurring hormone that assists cows with producing milk. rbST is designed to prolong the lactation period of cows and to increase milk production. But that is not how seven-year old Leah defines rbST in the ad.

Leah explains that rbST is a “large six-eyed monster” with “razor sharp teeth” that is “so tall that it can eat clouds”—all while an animated video of the monster is shown. Leah then warns the viewer not to touch the monster because its “fur is electric.” The video then depicts a fisherman touching the monster, appearing to get electrocuted, and then falling down a hill. The animation ends and Leah is shown drawing a picture of the monster while a narrator says, “Actually rbST is an artificial growth hormone given to some cows, but not the cows that make Arla cheese. No added hormones. No weird stuff.” A small disclaimer is shown at the bottom of the screen, stating “Made with milk from cows not treated with rbST. No significant difference has been shown between milk derived from rbST-treated cows and non-rbST-treated cows.”

After Arla launched its campaign, a U.S. supplier of rbST filed a Lanham Act false advertising claim against Arla alleging that its advertising makes false and misleading representations regarding the health, safety, and composition of dairy products made with milk from rbST-treated cows. The supplier argued that its supplement has been approved since 1993, and the FDA has repeatedly found “no significant difference” between milk derived from rbST-treated and non-rbST treated cows.

Arla attacked the Supplier’s claims on multiple fronts, arguing that (1) the Supplier lacked standing because it could not show any connection between Arla’s advertising to any claimed injury and could not show an imminent threat of injury (2) the advertising cannot be false because there is no scientific consensus on the health and safety of rbST; and (3) no reasonable consumer would take its statements about rbST seriously. The court rejected each of these arguments in an opinion that will likely be relied upon by other Lanham Act litigants as health and safety claims in advertising continue to grow.

Standing: Arla argued that the Supplier could only be harmed if a sequence of events occurred that established tangible harm. To have standing, the Supplier would have to show the following: cheese consumers viewed the advertising and decided to no longer purchase cheese from cows treated with rbST à manufacturers then reconsidered the source of their dairy products and forced dairy suppliers to change their business model à the suppliers then informed farmers they will not buy milk from cows treated with rbST à the farmers then told the Supplier they will no longer purchase rbST.

After an extensive analysis of the Supreme Court’s decision in Lexmark Int’l, Inc. v. Static Control Components, Inc., 134 S. Ct. 1377, 1395 (2014), the Court rejected Arla’s standing arguments and held that the Supplier had Lanham Act and Article III standing. For example, evidence showed that one cheese producer had already informed the Supplier that it would be transitioning to rbST-free cheese in part due to Arla’s commercials. These factors were sufficient to confer standing.

False/Misleading Statements: Arla argued that its advertising statements were mere puffery, and no reasonable consumer would actually believe that rbST is a monster with electronic far. The court agreed that the advertising was not literally false, but it was not puffery, either. The Supplier would likely succeed in showing that Arla’s advertising misleads consumers into concluding “cheese from cows treated with rbST is dangerous, unhealthy, and something that you should not feel good about feeing to your family.” Even though the commercial later explained rbST is an artificial hormone and included an FDA-recommended disclaimer asserting no compositional difference, “the majority of the commercial implie[d] that rbST is something frightening or alarming.” Thus, even without a survey that is normally required to demonstrate that consumers are likely to be misled, the court concluded that the Supplier produced sufficient evidence at the preliminary injunction stage to show that Arla’s advertising was likely to mislead its intended audience.

Health and Safety Debate: The Court also rejected Arla’s claim that its ads could not be false since the health and safety effects of rbST are the subject of scientific debate. Arla’s expert introduced a declaration asserting there is a link between rbST injections in cattle and increased production of a hormone linked to increased risks of cancer in humans. The Supplier responded with its own expert, who asserted that rbST is safe for both cows and humans. The Supplier also introduced recent findings by the Joint FAO/WHO Expert Committee on Food Additives (JECFA), and most recently the FDA, which in 2016 stated that rbST “is safe and effective for its intended uses and that there is no significant difference between milk from cows treated with rbST and untreated cows.” The Court held that despite the disagreement among experts, Arla had produced “strong evidence in support of its claim that there is no quantifiable difference between milk from cows treated with rbST and those that have not been treated with rbST,” and was thus likely to succeed on the merits.

Arla also argued that scientific debate over the safety of rBST immunized their advertising. But the Court rejected that claim, consistent with the conclusion of other courts that have noted that the mere presence of debate over health and safety does not give a free pass to make false and misleading advertising claims. See, e.g., Eastman Chem. Co. v. Plastipure, Inc., 775 F.3d 230, 236 (5th Cir. 2014) (“Advertisements do not become immune from Lanham Act scrutiny simply because their claims are open to scientific or public debate. Otherwise, the Lanham Act would hardly ever be enforceable – many, if not most, products may be tied to public concerns with the environment, energy, economic policy, or individual health and safety.”).

Key take-away from the Court’s opinion include the following:

  1. Preliminary injunctions under the Lanham Act are a powerful tool to go after competitor misconduct quickly. In this case, the injunction issued within 27 days of the lawsuit being filed.
  2. Standing is very broad under the Lanham Act – a company does not have to be a direct competitor in order to win a Lanham Act case.
  3. Using creative or humorous devices – such as children drawing “monsters” to depict cow hormones – does not shield or excuse an advertiser from communicating disparaging messages.
  4. An alleged scientific “debate” will not immunize disparaging advertising.
  5. As companies promote their “more natural” sourcing, methods, and ingredients, they should be careful not to disparage competitors who still follow use more traditional alternatives that are determined safe by regulators such as FDA.