The recent Havana Club case is potentially a huge development in Lanham Act false advertising law, and it is the subject of an ABA Antitrust-Private Advertising Committee teleseminar, tomorrow (October 11) at 12:30 eastern.
It’s hornbook law that a literally truthful advertising claim can be enjoined because it conveys a false implied claim as measured by a survey. Previously, the only real exception to this rule was the 7th Circuit’s Mead Johnson case regarding the claim “1st Choice in Doctors,” which Judge Easterbrook said could not be attacked with a survey because the claim was “objectively verifiable.”
Mead Johnson has not really been followed, and previously was thought to be an issue unique to the Seventh Circuit. That is, until Havana Club. There, the Third Circuit joined the Seventh Circuit and adopted the Mead Johnson rule that a literally truthful and unambiguous claim is not subject to attack by a survey. The court said that plaintiff could not introduce a survey to show that “Havana Club” conveyed a false implied message that the rum was made in Cuba -- because the bottle disclosed that it was actually from Puerto Rico.
Thus, when a court decides that an implied falsehood theory is too tenuous, it can exclude and not even consider a survey (regardless of how well the survey is designed).
The implications remain to be seen.
Dial in for the free ABA teleseminar where Lanham Act litigators will debate a mock hypothetical that features the Havana Club issue.