The US Supreme Court has delivered a judgment in an action that brought POM Wonderful face-to-face with the Coca Cola Company. The court generally agreed (8-0) that POM was permitted to bring a claim forward against Coca Cola for putting a misleading label on their pomegranate and blueberry drink.
This case involved POM the producer of various juices, generally with a pomegranate base, POM’S main products is its Pomegranate Blueberry Juice. Minute Maid, owned by the Coca Cola Company also produce a large variety of fruit juices.
In 2007, Minute Maid published its version of POM’s pomegranate blueberry drink. The only difference was the label showed the words ‘Pomegranate and Blueberry’ in a larger font size than any of the other fruit names on the label, and included a eminent picture of a pomegranate at the foreground of the picture. POM was starting to lose its market share to Minute Maid, therefore, it decided in 2008 to sue Coca Cola for false advertising.
POM suspected that Coca Cola had misled its customers into believing that the product was made up of pomegranate and blueberry, when in reality it merely contained 0.3% of pomegranate juice and 0.2% of blueberry juice. Most importantly (99%) of the drink was made up of apple and grape juice. POM alleged this desecrated a key principle of the Lanham Act- the primary trade mark federal statute in the USA, which related to false advertising.
Nevertheless, Coca Cola argued that they were allowed to describe the drink as they did, since their label complied with the US Food and Drug Administration (FDA) regulations. FDA justified having put forward the pomegranate ingredient on the label, despite of its small percentage in the drink, by saying that the flavour of the drink was pomegranate. The US Court of Appeal for the 9th Circuit, agreed that, since Coca Cola had complied with the FDA regulations, POM could not challenge them under trade mark law.
Justice Anthony Kennedy of the Supreme Court said that the FDA regulations do not rule out a competitor from suing for unfair competition on the basis of false or misleading claims by invoking a different law. In fact, he said, the FDA rules and trade mark law complement each other in regulating misleading labels. While he acknowledged that allowing trade mark claims to be decided by judges throughout the USA may lead to differing outcomes, he said that this conclusion was justified since that was the way which Congress had chosen to enforce a national policy upholding fair competition.
Following the judgment, concerns have been raised as to the uncertainty of food labelling rules. Compliances with the FDA regulations for food labelling is unlikely to be enough if the product misleads the customer as to the real amount of an ingredient inside. The “floodgates” argument was also brought up; suggesting that, as a result of this ruling, there will be an increase in lawsuits.