POM Wonderful: The New Prescription for False Advertising
Lane Powell Shareholders Fran Jagla, Paul Swanson and Greg Wesner co-authored an article titled “POM Wonderful: The New Prescription for False Advertising” in World Trademark Review’s “Pharmaceutical Trademarks 2015/2016 Global Guide.” The article discussed the 2014 U.S. Supreme Court ruling that determined federal regulations do not preclude companies from bringing false advertising claims under the Lanham Act, which prohibits a number of activities including trademark infringement, trademark dilution and false advertising. This ruling allowed POM Wonderful LLC (POM) to sue Coca-Cola Co., claiming that it was losing sales due to Coca-Cola’s labeling and advertising of its Minute Maid brand pomegranate-blueberry juice. The Minute Maid pomegranate-blueberry juice is nearly five times cheaper than POM’s pomegranate-blueberry juice, but only has 0.5 percent pomegranate and blueberry juice combined, while POM’s version is 85 percent pomegranate and 15 percent blueberry juice.
The POM Wonderful decision was further amplified by the 2014 ruling in Lexmark International v. Static Control Components, which established that the Lanham Act’s unfair competition claim may be brought by a party that is only an indirect competitor with the alleged unfair competitor. Prior to that decision, direct competition was typically required for a party to have standing to sue for unfair competition under the act. Jagla, Swanson and Wesner also provided tips to help ensure compliance with Food and Drug Administration and Federal Trade Commission laws, as well as for avoiding the threat of private Lanham Act suits.
What can be done? The POM Wonderful decision, particularly when read in light of Lexmark, served as a reminder of the importance of clearing trademarks, and reviewing the packaging and advertising of regulated products. Based on the new realities for regulated businesses, there are many opportunities to counsel clients proactively in both trademark clearance and packaging and advertising review. This holds true across multiple industries: food and beverage, alcohol, tobacco, healthcare and medical products. In the pharmaceutical world, for example, one high-risk area for false advertising claims appears to be associated with over-the-counter preparations, including vitamins, supplements and nutritional foods and beverages.