Eli Lilly and Company v. Arla Foods USA, Inc.
893 F.3d 375
7th Cir.2018Background
- Arla Foods launched a $30 million “Live Unprocessed” ad campaign stating its cheese is made from cows not treated with rbST and using imagery/words to suggest rbST-derived milk is "weird" or unwholesome; a small disclaimer saying "No significant difference has been shown" appeared in tiny print.
- Elanco (maker of Posilac®, the only FDA‑approved rbST supplement) sued under the Lanham Act and Wisconsin deceptive‑trade law, alleging Arla’s ads are false and misleading and moved for a preliminary injunction.
- At a hearing the district court found the ads likely to mislead consumers about the safety/wholesomeness of rbST‑derived dairy, credited scientific evidence that rbST‑milk is not different in safety, and preliminarily enjoined the ads and disparaging statements "substantially similar" to them.
- Arla appealed, challenging (1) the sufficiency of evidence of actual consumer confusion (no consumer surveys), (2) causation linking the ads to decreased demand for rbST, and (3) the injunction’s scope, specificity, and supporting factual findings.
- The district court modified its injunction to cure technical defects; the Seventh Circuit reviewed the preliminary injunction for abuse of discretion and legal questions de novo.
Issues
| Issue | Plaintiff's Argument (Elanco) | Defendant's Argument (Arla) | Held |
|---|---|---|---|
| Whether consumer surveys or other hard evidence of actual confusion were required at the preliminary‑injunction stage | Surveys are not required; ads, FDA guidance, and evidence of decreased demand suffice to show likelihood of deception | Elanco needed consumer‑survey proof or other hard evidence of actual consumer confusion before a preliminary injunction | Court: Surveys not required at PI stage; the ads, regulatory guidance, and decreased‑demand evidence gave a reasonable likelihood of success on Lanham Act claim |
| Whether Elanco showed causation (ads caused commercial injury) | Elanco sells the only FDA‑approved rbST product, so decreased demand for rbST necessarily harms Elanco; confidential evidence showed a major cheese maker ceased rbST use citing Arla ads | Arla argued Elanco failed to link the ads to reduced purchases of rbST with sufficient evidence | Court: Causation sufficiently pled at PI stage—Elanco’s unique market position and the cheese producer’s response supplied adequate support |
| Whether the injunction was unconstitutionally vague or overbroad (Rule 65 specificity) | Injunction carefully prohibits the attached ad and ads substantially similar that disparage rbST/Posilac or imply dangers; modifications cured technical defects | Arla argued "substantially similar" and wording (e.g., banning implication that consumers shouldn’t "feel good" about rbST products) are vague/overbroad and could bar lawful speech | Court: Modified injunction is sufficiently definite when read as a whole, not overbroad, and consistent with Rule 65 requirements |
| Whether the injunction lacked adequate factual findings under Rule 52(a) and Rule 65(d) | The order traced scientific evidence and explained reasons for the injunction; brief, pertinent findings suffice for PI relief | Arla argued findings were too general (e.g., "dangerous or unsafe" phrasing) and did not support certain prohibitions | Court: Findings were adequate and not requiring excessive particularization; no abuse of discretion |
Key Cases Cited
- Hot Wax, Inc. v. Turtle Wax, Inc., 191 F.3d 813 (7th Cir.) (distinguishes literally false statements from those literally true but misleading for Lanham Act claims)
- Abbott Labs. v. Mead Johnson & Co., 971 F.2d 6 (7th Cir.) (consumer surveys not required at the preliminary‑injunction stage)
- Lexmark Int’l, Inc. v. Static Control Components, Inc., 134 S. Ct. 1377 (Sup. Ct.) (causation and commercial injury standards for Lanham Act claims)
- Schering‑Plough Healthcare Prods., Inc. v. Schwarz Pharma, Inc., 586 F.3d 500 (7th Cir.) (examples of "bald‑faced" literal falsity in advertising)
- BASF Corp. v. Old World Trading Co., 41 F.3d 1081 (7th Cir.) (analysis for explicit representations of fact that conflict with reality)
- S.C. Johnson & Son, Inc. v. Clorox Co., 241 F.3d 232 (2d Cir.) (contextual reading of injunction language can render otherwise imprecise terms sufficiently specific)