Artificial Sweetener Makers Reach Settlement on Slogan

The makers of Equal and Splenda reached an undisclosed settlement yesterday over Splenda’s contested slogan “made from sugar, so it tastes like sugar,” ending a monthlong trial in which, just moments earlier, a jury had reached a verdict.

As a result of the settlement, the verdict was not read to the court.

According to one person close to the matter, the emergence of the verdict suggested that the jury might have found in favor of Equal’s maker, Merisant.

The person spoke on condition he not be identified because neither the terms of the settlement, which he called “sizable,” nor the verdict was publicly disclosed.

Jurors were instructed by the presiding Judge Gene E. K. Pratter not to disclose the verdict.

Merisant, the maker of Equal, sued McNeil Nutritionals, the maker of Splenda, in Federal District Court in Philadelphia in 2004, contending that Splenda had deceived millions of consumers by deliberately creating the impression that Splenda was healthier and natural because it started out with sugar, even though the final product has no sugar.

Merisant had sought at least $176 million from McNeil, a division of Johnson & Johnson.

It was not disclosed whether the settlement would require or prompt Splenda’s maker to alter advertising slogans for its sweetener, a move that could hurt sales at McNeil, Splenda’s maker.

The makers of the two artificial sweeteners released a brief joint statement late yesterday saying that the details of the settlement were confidential and that they would make no additional comment. Lawyers and spokesmen for both companies declined requests for comment.

The unusual lawsuit filed by Equal against Splenda — false advertising claims do not typically go to trial — highlight the fierce battle for leadership in the $1.5 billion artificial sweetener market.

Splenda, introduced as a mass-market product in 2000, has rapidly overtaken the one-time industry leader Equal and now has nearly two-thirds of the artificial sweetener market in the United States.

Splenda’s core ingredient is a nonnutritive sweetener, sucralose, that is manufactured in laboratories as a synthetic compound. Although a sugar molecule is used in the process and despite its similar-sounding name, sucralose is not the same thing as sucrose, the technical name for pure table sugar.

Equal, also known as aspartame, and sold in a blue packet, has no sugar in it at all; its maker has always marketed its product as an artificial sweetener, not as something akin — or closer to — real sugar, like Splenda does.

This week, lawyers for Equal argued before the jury that Splenda’s maker knew consumers were confused about whether Splenda actually contained sugar, but that they deliberately sought to associate their product with sugar, rather than with artificial sweeteners, according to notes provided by a spokesman for Equal’s maker, Merisant.

Splenda argued during the trial, through an array of experts, that it had never deceived consumers or set out to deceive them, since the product did in fact start out with sugar.

Last Thursday, a French business court, the Commercial Court of Paris, ruled in favor of a French subsidiary of Equal’s maker, Merisant, and said that Splenda had intentionally confused consumers with its advertising. The court, which found that Splenda’s French subsidiary had violated French advertising and consumer protection laws, ordered the subsidiary to cease its claims that Splenda is made from sugar and tastes like sugar.

From The New York Times on the Web © The New York Times Company. Reprinted with Permission.