Appeals court relies on beer-drinker survey in allowing lawsuit over ad parody

ST. LOUIS — A federal appeals court relied on a shopping mall survey of 301 beer drinkers to support its finding that a parody of an advertisement is subject to trademark infringement laws because it might confuse consumers.

The U.S. Court of Appeals in St. Louis (8th Cir.) also held in the June 30 ruling that the First Amendment fails to preclude Anheuser-Busch’s state trademark dilution claims against the publisher of a fictitious ad for “Michelob Oily.”

Balducci Publications in April 1989 published the ad parody on the back cover of “Snicker,” a humor magazine. The mock advertisement featured a can of “Michelob Oily,” which resembles Anheuser-Busch’s Michelob Dry, pouring oil on a fish. The illustration also includes an oil-soaked version of Anheuser-Busch’s A & Eagle design and “Michelob Oily” products resembling other Anheuser-Busch beers.

Publisher Richard Balducci said the parody is a comment on environmental pollution, including the then-recent oil spill in the Gasconade River, the source of Anheuser- Busch’s water supply. A disclaimer runs along the side of the page.

Anheuser-Busch sued Balducci Publications in U.S. District Court in St. Louis, saying the “Michelob Oily” ad infringed on its federal and state trademarks and could lead consumers to believe it sponsored the ad. The court dismissed the claim, along with trademark dilution and unfair competition claims, saying the parody “did not create a likelihood of confusion in the marketplace” but did warrant protection under the First Amendment.

Anheuser-Busch appealed to the Court of Appeals, saying the District Court gave disproportionate weight to Balducci’s First Amendment concerns and erred in finding no likelihood of confusion.

The Court of Appeals reversed the District Court decision because it found that the parody was likely to confuse consumers. The court relied on a survey in which 45 percent of 200 beer drinkers or purchasers questioned in St. Louis shopping malls found nothing about the parody that suggested it was an editorial.

Senior Circuit Judge John R. Gibson, writing for the three-judge panel, also found that the First Amendment does not protect Balducci Publications from liability because the public interest in avoiding consumer confusion outweighs the public interest in free expression in this case.

The case was remanded to the District Court for judgment, which must grant Anheuser-Busch injunctive relief that protects it from further trademark infringement while preserving Balducci’s First Amendment rights.

(Anheuser-Busch, Inc. v. Balducci Publications; Media Counsel: James E. Parrot of Richards, Schwartz & Associates, St. Louis.)

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