On 12 June 2014, the U.S. Supreme Court (USSC) issued an 8-0 opinion (PDF) expounding the intersection of two federal statutes including the Lanham Act in POM Wonderful v. Coca Cola, 571 U. S. ___ (2014). This opinion concerns the alleged preclusion of a cause of action under one federal statute by the provisions of another federal statute. Pre-emption principles are instructive insofar as they are designed to assess the interaction of laws bearing on the same subject.The Lanham Act, which governs trademarks, permits one competitor to sue another for unfair competition arising from false or misleading product descriptions. 15 U. S. C. §1125.The Federal Food, Drug, and Cosmetic Act (FDCA) prohibits the misbranding of food and drink. 21 U. S. C. §§321(f), 331.
The USSC reversed and remanded the Ninth Circuit decision. The result is that POM Wonderful may bring suit against Coca Cola.The USSC held that competitors may bring Lanham Act claims alleging unfair competition based on false or misleading product descriptions on food and beverage labels regulated by the FDCA even though the FDCA exclusively controls what appears on packaging.
The syllabus of the opinion, from which I borrow liberally, presents a succinct summary of the opinion. The Food and Drug Administration (FDA) has promulgated regulations regarding food and beverage labeling including one concerning juice blends. Unlike the Lanham Act, which, relies in large part for its enforcement on private suits brought by allegedly injured competitors, the FDCA and its regulations give the United States nearly exclusive enforcement authority and do not permit private enforcement suits. The FDCA also pre-empts certain state misbranding laws.
Neither the Lanham Act nor the FDCA, in express terms, forbids or limits Lanham Act claims challenging labels that are regulated by the FDCA. The absence of such a textual provision when theLanham Act and the FDCA have coexisted for over 70 years is “powerful evidence that Congress did not intend FDA oversight to be theexclusive means” of ensuring proper food and beverage labeling. See Wyeth v. Levine, 555 U. S. 555, 575 (2009). Both statutes touch on food and beverage labeling, but the LanhamAct protects commercial interests against unfair competition, while the FDCA protects public health and safety.
Petitioner POM Wonderful LLC, which produces, markets, and sells, inter alia, a pomegranate-blueberry juice blend, filed a Lanham Act suit against respondent Coca-Cola Company, alleging that the name, label, marketing, and advertising of one of Coca-Cola’s juice blends mislead consumers into believing the product consists predominantly of pomegranate and blueberry juice when it consists predominantly of less expensive apple and grape juices, and that the ensuing confusion causes POM to lose sales.
The Coca-Cola product only contains 0.3% pomegranate juice and 0.2% blueberry juice. Alleging that the use of that label is deceptive and misleading, POM sued Coca-Cola under §43 of the Lanham Act. 60 Stat. 441, as amended, 15 U. S. C. §1125. That provision allows one competitor to sue another if it alleges unfair competition arising from false or misleading product descriptions. The Court of Appeals for the Ninth Circuit held that, in the realm of labeling for food and beverages, a Lanham Act claim like POM’s is precluded by a second federal statute, the FDCA. The USSC reverses this holding.
The Lanham Act creates a federal remedy “that goes beyond trademark protection.” POM Wonderful at slip op. 10, citing to Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U. S. 23, 29 (2003). The broader remedy is at issue between POM Wonderful and Coca-Cola.
The USSC states that the FDCA and the Lanham Act are complementary and have separate scopes and purposes. The greater specificity in the FDCA would matter only if the Lanham Act and the FDCA cannot be implemented in full at the same time. See RadLAX Gateway Hotel, LLC v. Amalgamated Bank, 566 U. S. ___, ___ (2012) (slip op., at 5–7). But neither the statutory structure nor any empirical evidence indicates to the USSC that there should not be any difficulty in fully enforcing each statute according to its respective terms. In fact, the FDA explicitly encourages manufacturers to include material on their labels that is not required by the regulations. 58 Fed. Reg. 2919.
Coca-Cola and the United States asked the Court to elevate the FDCA and the FDA’s regulations over the private cause of action authorized by the Lanham Act. But USSC states that the FDCA and the Lanham Act complement each other in the federal regulation of misleading labels.
The primary lesson from this opinion is that trademark and unfair competition regulations are separately enforced from other federal and state provisions such as the FDCA. The Lanham Act should be separately considered from other laws such as product labeling. Individuals and businesses should consult with a knowledgeable trademark and trade dress practitioner if they have questions or concerns about trademark and unfair competition regulations in relation to products and services for sale.