PBM makes store brand infant formula, and Mead Johnson makes Enfamil. Enfamil now contains DHA and ARA, as do store brand formulas: they have the same levels of these lipids and obtain them from the same supplier, which is the only FDA-approved source of them. The challenged ads cite independent clinical studies in which pre-lipid Enfamil was compared to current Enfamil and found inproved eye and brain development for infants. (Abbott, Mead Johnson’s main competitor, challenged similar advertising in front of NAD, which found several times that Mead Johnson was advertising falsely and referred the issue to the FTC. Nonetheless, the advertising was apparently important enough to Mead Johnson to continue—understandably so, since parents will pay a substantial premium to choose products that will benefit their infants.)
The challenged ad states, “It may be tempting to try a less expensive store brand, but only Enfamil LIPIL is clinically proven to improve brain and eye development.” The small-print disclaimer says that this is Enfamil v. Enfamil. The mailer also says, “En-Fact: Enfamil LIPIL’s unique formulation is not available in any store brand.” And there’s a graphic in which one side of a picture of a duck is blurry and the other is clear, marked “without LIPIL” and “with LIPIL” respectively, again with disclaimer. (This picture is the current version at Enfamil's website, which easily discloses the actual comparison, with no need for a separate small-print disclaimer.)
The same disclaimer accompanied the claim, “Store brands may cost less, but Enfamil gives your baby more.” So it appeared three times, which the court thought was notable, even though it was always in small print.
The court rejected a preliminary injunction for failure to show literal falsity, dissecting the ad in a way I think inappropriate. The court found that it was undisputed that the independent studies showed that Enfamil with lipids outperformed Enfamil without lipids, and thus “the reference to clinical studies” cannot be literally false. (Except that PBM wasn’t complaining about “the reference,” but how the reference was used.) “Moreover, to the extent that a consumer could read the statement to mean that clinical studies have compared Mead Johnson’s formula to other brands (which indubitably would be inaccurate), the Disclaimer clarifies the point ….” (Except that consumers don’t process disclaimers, and disclaimers can’t take back what the main text says, and the main text compares store brands to Enfamil.)
Similarly, the court found that “unique” didn’t refer solely to lipids. “An objective reading of this statement suggests that ‘unique’ refers, not to LIPIL® as an isolated component of the overall formula, but rather to Enfamil® LIPIL®, the formula in its entirety.” Enfamil does have some ingredients that PBM’s store brands don’t. (This case is a great illustration of Richard Leighton’s observation at the ABA conference that explicit falsity means what the judge says it means.)
The Blurry Duck illustration survived for similar reasons.
Comment: Standing alone, the “clinically proven” claim that is actually only about Enfamil v. Enfamil might be misleading rather than false. But it’s not standing alone: it’s just after “it may be tempting to try a less expensive store brand”; the necessary implication is that the clinical proof is comparative. Likewise, the references to “unique formulation” might be fine alone, but focusing on the lipids, which are not the unique element of the formulation, changes the ad to false. Now the question is whether PBM will come back with a survey to prove what is obvious.