Sufficiency of Evidence

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7^th Circuit Court of Appeals

Case Name: Eli Lilly and Company, et al. v. Arla Foods, Inc., et al.

Case No.: 17-2252

Officials: BAUER, ROVNER, and SYKES, Circuit Judges.

Focus: Sufficiency of Evidence

In 2017 Arla Foods, a global dairy conglomerate based in Denmark, launched a $30 million advertising campaign aimed at expanding its cheese sales in the United States. Branded “Live Unprocessed,” the campaign covers all major media platforms and targets the growing market for all-natural foods. To that end, the ads assure consumers that Arla cheese contains no “weird stuff” or “ingredients that you can’t pronounce”—in particular, no milk from cows treated with recombinant bovine somatotropin (“rbST”), an artificial growth hormone. The flagship ad in the campaign features a vivid rhetorical flourish implying that milk from rbST-treated cows is unwholesome. Narrated by a seven-year-old girl, the ad depicts rbST as (among other things) a cartoon monster with razor sharp horns and electric fur.

Enter Eli Lilly & Company and its subsidiary, Elanco US, Inc. (collectively, “Elanco”). Elanco makes the only FDA approved rbST supplement and markets it under the brand name Posilac®. Soon after the Arla ad campaign debuted, Elanco filed suit alleging that the ads contain false and misleading statements in violation of the Lanham Act. Elanco simultaneously moved for a preliminary injunction and supported the motion with copies of the ads, scientific literature documenting rbST’s safety, and evidence that a major cheese producer had decreased its demand for rbST in response to the ad campaign. The district judge concluded that Elanco has a reasonable likelihood of success on the merits and issued the requested injunction. The judge later modified his order to cure technical deficiencies.

Arla appeals, arguing that Elanco (1) failed to produce consumer surveys or other reliable evidence of actual consumer confusion; and (2) did not submit adequate evidence linking the ad campaign to decreased demand for its rbST. Arla also challenges the modified injunction as vague and overbroad and lacking adequate factual findings. We affirm. Consumer surveys or other “hard” evidence of actual consumer confusion are unnecessary at the preliminary-injunction stage. And the evidence of causation is sufficient at this stage of the proceedings: the harm is easily traced because Elanco manufactures the only FDA-approved rbST supplement on the market. Finally, the modified injunction is sufficiently definite and adequately supported by the record and the judge’s findings.

Affirmed

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.