Section 43(a) of the Lanham Act provides a private right of action for companies to sue their competitors for a wide variety of “false or misleading” commercial statements. Classic false advertising claims involve a defendant’s false or misleading statements either about its own or a competitor’s product when those statements lead to the plaintiff’s lost sales or damage to its business reputation. A variety of claims fall into these categories, including a defendant’s statements about how its products performed on tests, and misleading assertions about the results of the testing. On January 30, the United States Court of Appeals for the D.C. Circuit provided further insights into permissible advertising and promotion of the results of its products’ testing. In the case, POM Wonderful, LLC, et al. v. Federal Trade of Commission, the court held that POM Wonderful, LLC (“POM”) may no longer advertise or market its products as promoting certain health benefits. While the court broadly sided with the FTC in enjoining POM from claiming that its products produced the claimed benefits, the court stopped short of requiring certain elevated evidentiary standards the FTC sought.
POM manufactures and sells pomegranate-based products, primarily juice, but also tablets. In a series of advertisements and promotional brochures from 2003 to 2010, POM routinely cited medical studies as demonstrating that its products can prevent and treat heart disease, prostate cancer and erectile dysfunction. The FTC filed an administrative complaint against POM charging that these advertisements were false, misleading and unsubstantiated.
POM’s promotional materials regularly referenced scientific support for the claimed health benefits of its pomegranate products, and the millions of dollars that has been spent on medical research. For example, POM sponsored a number of studies examining the capacity of its products to improve cardiovascular health. While one study with a small sample size suggested a benefit from pomegranate juice consumption, one subsequent larger study found no statistically significant difference between a treatment group and the placebo group; and another, generally found no statistically significant difference in one cardiovascular measure, though it found some evidence of a difference in one particular subgroup of patients. Despite the results of these studies, POM’s promotional brochures cited the first study, saying “POM Wonderful Pomegranate Juice has been proven to promote cardiovascular health,” along with a description of the first study, but with no mention of the second or third.
In addition to the cardiovascular studies, POM sponsored research on the effect of pomegranate juice consumption in prostate cancer patients. One study, which followed 46 patients who had all undergone radical prostatectomies and radiation therapy, with no control group, concluded that the rate of growth of the prostate tumor cells (the “PSA doubling time”) slowed. The study’s leader himself noted that patients who have undergone the surgery and radiation therapy commonly experience a lengthening of PSA doubling time. Nonetheless, POM’s literature cited the results of the study, claiming that “drinking 8 ounces of POM Wonderful pomegranate juice daily prolonged post-prostate surgery PSA doubling time from 15 to 54 months.”
POM’s sponsored research concerning the effects of pomegranate juice consumer in men with mild to moderate erectile dysfunction suffered from similar limitations. One study evaluated the results using two measures, one being a “validated” tool (i.e., showing statistical reliability), the other not being a validated measure. The study showed some evidence of improvement by the non-validated measure. However, the scientifically validated measure did not show a statistical difference. POM touted the study outcomes based exclusively on the non-validated measure.
After extensive administrative proceedings, the full FTC held POM liable for making false and misleading statements in its advertisements. The Commission distinguished between “efficacy claims” and “establishment claims.” An efficacy claim suggests that a product successfully performs the advertised function or yields the advertised benefit, but includes no suggestion of scientific proof. Establishment claims, such as those made by POM in its advertisements, suggest that a product’s effectiveness has been scientifically established. In this case, the Commission found that POM’s ads repeatedly claimed the benefits of its products in the treatment or prevention of heart disease, prostate cancer and erectile dysfunction; and consistently touted medical studies ostensibly supporting those claimed benefits, when in fact the studies had numerous deficiencies, a lack of appropriate control groups, and statistically insignificant results. Furthermore, citing ads that POM’s product is “backed by $34 million in medical research at the world’s leading universities” revealing “promising results for erectile, prostate and cardiovascular health,” the Commission found that “when an ad represents that tens of millions of dollars have been spent on medical research, it tends to reinforce the impression that the research supporting product claims is established and not merely preliminary.” The ads’ references to the described studies as “promising,” “initial,” or “preliminary” did not detract from the Commission’s conclusion.
The FTC entered an order prohibiting POM from making representations about its products’ efficacy in the treatment or prevention of any disease unless the representation is non-misleading and supported by “competent and reliable scientific evidence that, when considered in light of the entire body of relevant and reliable scientific evidence, is sufficient to substantiate that the representation is true.” The order then explained that competent and reliable scientific evidence meant a minimum of two successful “randomized and controlled human clinical trials,” or RCTs. POM appealed Commission’s order, particularly the FTC’s newly articulated two-RCT standard. In the D.C. Circuit decision, the court sustained the FTC’s conclusion that POM’s ads contained misleading and deceptive claims, but reversed the two-RCT requirement on First Amendment grounds, consistent with the test for evaluating commercial speech enunciated by the Supreme Court in Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n.
While the court agreed that the government has a substantial interest in the accuracy of information used to market products, it held that the two-RCT standard was not sufficiently tailored to protect that interest. The court noted that the FTC has required less than two RCTs in certain other orders involving disease claims. Observing that the First Amendment protects companies’ rights to advertise their products, the court found that the Commission had failed “adequately to justify a categorical floor of two RCTs for any and all disease claims.” Mandating more than one such study in the case of food or supplements was understood to be extremely costly, and could end up denying consumers accurate information about a product’s disease-prevention attributes that could be documented in a single well-designed clinical trial. Thus, while food and supplement makers should have “competent and reliable scientific evidence” to support such establishment claims, that evidence falls short of more than one RCT.
Although the POM Wonderful decision concerns a company’s advertising claims as seen through the lens of the FTC Act, it is instructive under the Lanham Act as well. A plaintiff may well argue that, if a company’s advertising claim lacks “substantiation” under the FTC’s standards, the claim is misleading as a matter of law. Thus, this case allows a Lanham Act plaintiff to argue that a defendant’s “establishment” claims not supported by an RCT are, at the very least, presumptively misleading.
