Here’s a very good article by Arnold & Porter’s Randy Miller, strictly for trademark lawyers and those who encamp around them, on the Advertising Compliance website run by my old friend John Lichtenburger about an important development: The Third Circuit’s decision in Pernod Ricard USA, LLC v. Bacardi U.S.A., known as “the Havana Club case” and won, well, by my even older friend David Bernstein, concerning the use of surveys in unfair competition claims under the Lanham Act. Excerpts:
The Third Circuit’s recent decision in Pernod Ricard USA, LLC v. Bacardi U.S.A. about “Havana Club” rum establishes a new battleground in Lanham Act cases. In Havana Club, the defendant successfully urged the court to disregard a survey because the advertising claim (arguably) was unambiguously truthful on its face (the “Havana Club” defense). Prior to Havana Club, the only case that stood for such a proposition was the Seventh Circuit’s decision in Abbott Labs. v. Mead Johnson & Co., which was corrected, criticized as an outlier, and not followed by other courts. Now, Havana Club has revitalized Mead Johnson and given the defense greater credibility, not only in the Third Circuit, but in all Circuits. The “Havana Club” defense is sure to spawn new battles in future Lanham Act cases and litigants should anticipate these issues. This article reviews (1) the use of survey evidence in Lanham Act cases; (2) the Mead Johnson and Havana Club cases; and (3) the significance of Havana Club to litigants in future cases. . . .
Until Havana Club, Judge Easterbrook’s decision in Abbott Labs. v. Mead Johnson stood alone as an exception to the survey rule. In Mead Johnson, the challenger used a survey to show that consumers interpreted the advertising statement “1st Choice of Doctors” to mean that a majority of doctors preferred the product, which was allegedly false claim because only a plurality of doctors preferred the product with many not expressing a preference. Judge Easterbrook refused to even consider the survey, because he determined that the phrase “1st Choice of Doctors” was unambiguous and simply meant that more doctors preferred the advertiser’s product to the competitive product. Having made this determination, Judge Easterbrook would not allow a survey to be used to offer a different meaning to the advertising statement, holding that surveys should not be “used to determine the meaning of words or to set the standard to which objectively verifiable claims must be held.” Judge Easterbrook’s decision was grounded in First Amendment principles, and the opinion noted that a contrary ruling would have the effect of chilling commercial speech. The opinion also indicated that there must be a limit to the use of surveys. Mead Johnson has not been followed, and many judges and commentators that cite to Mead have distinguished or criticized the case.
Bookmark, read and know. Also read Rebecca Tushnet‘s thoughtful, academic commentary.