Reports that Matter

United States v. Philip Morris USA Inc.: Amended Final Opinion

Despite Their Internal Knowledge, Defendants' Marketing and Public

Section 69 of 129

Despite Their Internal Knowledge, Defendants' Marketing and Public

Statements About Low Tar Cigarettes Continue to Suggest that They Are Less Harmful than Full-Flavor Cigarettes 2377. As detailed below, Defendants made, and continue to make, false and misleading

statements regarding low tar cigarettes in order to reassure smokers and dissuade them from quitting. These actions include: assertions that low tar cigarettes deliver "low," "lower," or "less" tar and nicotine than full-flavor cigarettes; claims that low tar cigarettes are "mild" or deliver "clean" taste; and use of brand names with descriptors such as "light" and "ultra light," with full knowledge that consumers interpret these claims and descriptors to convey reduced risk of harm.

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  1. Low tar cigarettes have captured an enormous share of the total cigarette market. The percentage of low tar cigarettes (i.e., cigarettes with an FTC-reported tar yield of 15 mg. or less) has increased from 2% in 1967 to 81.9% of total cigarette sales in 1998. (no bates) (US 86655) (FTC, 1994 Report at Table 6A, Table 7); 92382035-2095 at 2057 (US 57179); (no bates) (US 87925 at 8) (FTC, 1979 Report); (no bates) (US 60434 at 22-26) (FTC, 1998 Report).

  2. From the 1960s to the present, Defendants' marketing of their health reassurance brands has featured claims of lowered tar and nicotine accompanied by written statements that implied a health benefit as a result of the lowered tar levels. Defendants have also used marketing imagery, such as lighter color cigarette packaging and white tipping paper, to communicate to smokers that Defendants' health reassurance brands were "lighter" and lower in tar.

  3. Over the last five decades, Defendants have not only introduced numerous stand- alone cigarette brands that purport to be low in tar (e.g., Merit, Vantage, and Carlton), but have also introduced low tar "brand extensions" of existing full flavor cigarette brands (e.g., Marlboro Lights and Ultra Lights as extensions of the full flavor Marlboro brand). Defendants have used so-called brand descriptors such as "light," "medium," "mild," and "ultra light" to market both their new brands, as well as their brand extensions as low in tar. Virtually every major brand undertook line extensions and by 1980 over 50% of cigarettes sold were "low tar" (with an FTC Method tar yield of 15 mg or less). Dolan WD, 123:21-124:7. Defendants acknowledge that, today, every major manufacturer continues to manufacture and sell low tar brands and brand extensions in both the 'light' and 'ultra light' categories. Ivey WD, 54:6-17; Bonhomme WD, 8:13-9:18.

  4. Although the FTC does not formally classify cigarettes according to tar or nicotine yield, industry practice, according to Denise Keane, Philip Morris General Counsel, has long been to apply the 'light' descriptor to cigarettes with 7 to 14 milligrams of tar, and the 'ultra light' descriptor to cigarettes with fewer than 7 milligrams of tar." These brand descriptors "have been developed by cigarette manufacturers through their advertising." Keane WD, 56:14-23; Mulholland

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WD, 26:4-27:9; accord Henningfield WD, 56:8-11 (testifying that the FTC has no "control over which cigarettes Defendants advertise as 'light' or 'ultra light'").

  1. The terms "Light" and "Low Tar," as they are used by Defendants, are essentially

"meaningless" and "arbitrary." As Dr. Farone explained:

[T]here are lights of certain brands with higher tar levels than regulars of other brands from the same company, and there are also lights and regulars of the same brand that have the same FTC tar rating. So therefore the term "light" is not related to tar or taste. For example, according to the most recent FTC report of tar and nicotine yields, Philip Morris sells versions of Virginia Slims and Virginia Slims Lights that both deliver 15 mg of tar by the FTC method.

Farone WD, 116:3-14; 525311179-1223 at 1185, 1207-1208, 1222 (US 52977).

  1. The FTC's 1967 report to Congress concluded that Defendants were using the word

"mild" in advertising "as a euphemism for cloaking the dangers of increased cigarette smoking." The

Report noted, in particular, the following ads:

Carlton filters have "Good mild taste . . . created for those who are interested in the amount of tar and nicotine in the smoke of their cigarette. . . ." "Montclair (menthol filter) cigarettes are made especially for smokers who seek exceptional mildness. . . ." "You get Pall Mall's famous extra length of fine tobaccos . . . and a filter tip. Result? A new longer length, a full 100 millimeters long and a new milder taste . . ." and "(Chesterfield kings) made to taste even milder through longer length."

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  1. In its 1968 report, the FTC concluded that Defendants' use of the phrase "mild taste" in advertising is just another way to communicate the term "less harmful" to smokers:

Advertising in 1966 featured the phrase "mild taste" to describe the satisfactions obtained from smoking and also as a euphemism to cloak the dangers of cigarette smoking. The euphemistic effect derives from the possibility that the public assumes "mild" tasting cigarettes to be less strong, i.e. lower in tar and nicotine than many cigarettes, and hence less hazardous.

TIMN288040-8122 at 8055-8056 (JD 043418).

  1. The 1971 FTC report noted that "[r]elieving anxieties about the risks to health posed by cigarette smoking" was among Defendants' three main advertising themes and that "[c]laims of low tar and nicotine content present yet another appeal to relieve concern about the dangers to health associated with cigarette smoking." In 1975 and 1976 reports, the FTC reported that this theme, used separately or with themes regarding taste or desirable personality characteristics, "continued to predominate in 1975," and "continued to dominate in 1976, with little variation in format and copy except in the greatly increased promotional emphasis given to the lower and lowered 'tar' varieties." 680043553-3595 at 3564, 3567 (US 87922);1005121108-1119 at 1114 (US 87921); (no bates) (JD 003563 at 4-5) (FTC, 1976 Report).

  2. The 1981 FTC report on cigarette advertising noted, many of Defendants' advertising campaigns had, over the course of the preceding four decades, "impl[ied] that smoking a particular brand solves the health problem or at least minimizes the risk." The report noted that Philip Morris's Parliament and American Tobacco's (subsequently B&W's) Tareyton cigarettes "imply that their special filters minimize the risks of smoking." The report also cited the advertisements for RJR's Vantage, B&W's Viceroy, and Lorillard's True cigarettes as examples of advertising campaigns implying that the brands marketed are either not harmful or less harmful. (no bates) (JD 004744 at 2-12) (FTC, 1981 Report).

911

  1. Similarly, the 2001 Institute of Medicine report cited the advertisements of Defendants Philip Morris, RJR, B&W, American Tobacco, Lorillard, and Liggett as examples of advertisements that relate health benefits to particular low tar cigarette brands. (no bates) (US 20919) (Institute of Medicine, Clearing the Smoke: Assessing the Science Base for Tobacco Harm Reduction) (K. Stratton, et al., eds., National Academy Press 2001); 99053048-3558 at 3124-27 (US 57494).

  2. The FTC noted in a 1976 report that "[t]he lower and lowered 'tar' and nicotine cigarettes have in the last year been the subject of an intensive promotional effort by cigarette manufacturers." Defendants' spending on the advertising and marketing of low tar cigarettes (i.e., cigarettes yielding 15 mg. or less tar per the FTC Method) has been disproportionately high compared to their domestic market share. The FTC's report for 1997 revealed that for every single year from 1967 to 1992. Defendants' advertising and promotional spending for low tar cigarettes exceeded their domestic market share. According to one marketing expert, low tar cigarettes came to "substantially reshape and define the cigarette market," explaining that:

[T]he real "boom: time for these cigarettes is the late 1970s. In 1974, manufacturers devoted about 15% of their advertising and promotion dollars to these products. By 1979, this spending grew to 67%. At the time, the percent of sales represented by low tar was only 30%, so spending was disproportionately high on these "health reassurance" brands. These products, which accounted for less than 15% of cigarette sales in 1975 came to hold the majority of the market by

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It was not until the mid-1990s that the percentage of sales made by low tar brands finally equaled the amount that Defendants were spending to promote them, which was about 70% of the industry total. HHS1311770-1805 at 1799 (US 76080); Dolan WD, 125:6-126:7.

  1. According to Dr. Henningfield, who among his many other credentials headed the National Institute of Drug Abuse from 1994 to 1996, smokers are not always familiar with the FTC rating of their cigarette, but are aware of whether their cigarettes are "light" cigarettes or "regular." There is little, if any, dispute that consumers believe that "light" cigarettes deliver less tar and nicotine than regular cigarettes, and that consumers believe that regular cigarettes are more hazardous than "light" cigarettes. Henningfield WD, 56:12-57:10.

  2. Relatively few people understand that smoking low tar or light cigarettes can be -- and often is -- just as dangerous as smoking full flavor cigarettes. Weinstein WD, 54:21-55:20. A peer-reviewed, published study showed that 70% of low tar cigarette smokers believe that such cigarettes decrease one's daily intake of tar. Weinstein WD, 55:5-8 (citing Kozlowski et al., Smoker reactions to a "radio message" that Light cigarettes are as dangerous as regular cigarettes. Nicotine & Tobacco Research, 1(1);67-76(1999)). Similarly, another study showed that approximately half of all respondents did not know how many light cigarettes would have to be smoked to get the same level of tar intake as from one full flavor cigarette. Fewer than 10% believed that it would be one light cigarette. Weinstein WD, 55:12-15 (citing Kozlowski, L.T., Goldberg, M.E., Yost, B.A., White, E.L., Sweeney, C.T., Pillitteri, J.L. Smokers' misperceptions of light and ultra-light cigarettes may keep them smoking. American Journal of Preventive Medicine, 15, 9-16 (1998) ("Kozlowski, Goldberg, et al., 1998")).

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  1. Defendants have used this misperception to their advantage. A 1996 article in the American Journal of Public Health cited a 1993 Gallup survey in which 56% of smokers believed use of the term "low tar" conveyed relative safety compared to full-flavor cigarettes. The American Journal of Public Health article also cited a 1987 National Health Interview Survey finding that 46% of smokers of cigarettes with tar yields of 6 mg. or lower (per the FTC Method) believed they had reduced cancer risk compared with smokers of cigarettes with higher FTC tar yields. 2074759740- 9746 at 9741 (US 43526); accord 99053048-3558 at 3112 (US 57494) (2001 Institute of Medicine study stating "When filtered and low-yield cigarettes were introduced into U.S. markets, they were heavily promoted and marketed with both explicit and implicit claims of reducing the risk of smoking. Even as data accumulated, albeit slowly, that these products did not result in much -- if any -- decrease in risk, consumers have continued to believe otherwise. . . . Consumer misunderstanding is explained in part by the ways in which these products are marketed. . . . [T]he tobacco companies have appealed to health concerns of smokers at least since 1927. Claims about tar and nicotine levels appeared as early as 1942").

  2. Defendants continue to disseminate false and misleading public statements regarding their true intent in marketing low tar cigarettes. For example, Defendants Philip Morris, RJR, B&W, and Lorillard jointly stated to the FTC in February 1998: "The manufacturers do not claim that lower-yield cigarettes are 'safe' or are 'safer' than higher yield cigarettes." Comments of Philip Morris Inc., RJR Tobacco Co., Brown & Williamson Tobacco Corp., and Lorillard Tobacco Co. on the Proposal Titled FTC Cigarette Testing Methodology Request for Public Comment (62 Fed. Reg. 48,158) at 3, 94 ("Joint Comments") (US 88618).

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  1. Defendants have publicly committed to refrain from marketing with implied health claims. In April 1964, the Cigarette Company Defendants adopted the Cigarette Advertising and Promotion Code ("Code"), which includes provisions prohibiting "advertising which makes a representation with respect to health." The Cigarette Company Defendants have claimed publicly that they have obeyed and continue to obey the 1964 Code, last revised in December 1990. Krugman WD, 164:6-21. Each cigarette company Defendant continues to state on its website and in other public statements that it has adopted the Code and that it follows the Code in planning and executing its cigarette marketing. 2070557699-7702 (US 20519). 2025345360-5362 (US 20414); MNAT00608606-8614 (US 78779); TIMN0102493-2494 (US 21271); TIMN0015615-5617 (US 21265); 2022976326-6335 (US 20370); ATX040294056-4056 (US 58599). See Section V(F)(7)(a)((1)) regarding the total lack of enforcement of the Code. More recently, Defendants agreed in the 1998 Master Settlement Agreement not to make "any material misrepresentation of fact regarding the health consequences of using any tobacco product." Section III(r) of the Agreement states:

Prohibition on Material Misrepresentations. No Participating Manufacturer may make any material misrepresentation of fact regarding the health consequences of using any Tobacco Product, including any tobacco additives, filters, paper or other ingredients.

(no bates) (JD-045158) (Master Settlement Agreement, § III(r)).

  1. Defendants also told the FTC in their 1998 testimony: "Smokers are familiar with the ratings produced by the current test method, and continued use of the current test method assures historical continuity of the data. For these reasons, testing under the current FTC test method should continue." Joint Comments at 4.
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  1. In response to the FTC's question regarding the need for official guidance on brand descriptors, Defendants stated: "The manufacturers are not convinced that there is a need for official guidance with respect to the terms used in marketing lower rated cigarettes." As to terms, such as

"light" and "ultra light," "[t]he manufacturers believe smokers understand that these descriptors are terms of comparison rather than signifiers of absolute value." Joint Comments at 94.

  1. In response to the following FTC query:

What data, evidence, or other relevant information on consumer interpretation and understanding of terms such as "ultra low tar," "ultra light," "low tar," "light," "medium," "extra light," and "ultima," as used in the context of cigarettes exists? Do consumers believe they will get significantly less tar from cigarettes described as "light" or "low tar" than from regular full flavor cigarettes, and do they believe they will get significantly less tar from cigarettes described as "ultra low tar" or "ultra light" than from "light" or "low tar" cigarettes? Do the brand descriptors convey implied health claims?

Defendants Philip Morris, RJR, B&W, and Lorillard jointly stated in their joint comments to the

FTC:

The manufacturers believe that consumers choose "light" or "ultra" products for a variety of reasons, including lighter flavor, lighter taste, less menthol (or other flavor) taste, and smoother smoking characteristics. Some consumers may choose such products for other reasons. The manufacturers do not intend the descriptors to convey any level of 'safety' with regard to their products.

Defendants' joint comments further stated: "The manufacturers are not aware of evidence that consumers use descriptors in lieu of the FTC numbers as their primary source of information about the 'tar' and nicotine yields of different brand styles." Joint Comments at 95.

  1. In response to the FTC's question:
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What available evidence exists concerning how consumers view cigarettes with relatively low tar and nicotine ratings and their perception of the relative risks of smoking such cigarettes rather than full flavor cigarettes?

Defendants Philip Morris, RJR, B&W, and Lorillard jointly stated:

The manufacturers are unaware of evidence concerning such consumer views and perceptions except to the extent that such evidence is presented in [the National Cancer Institute's Smoking and Tobacco Control Monograph No. 7].

Joint Comments at 89.

  1. Defendants' testimony to the FTC fails to make any reference to the vast amounts of consumer research Defendants conducted, and had conducted for them by their numerous advertising and marketing consultants, that expressly found that many consumers strongly disliked the taste of low tar cigarettes, but were smoking them because they believed they were healthier for them. Accord 2041186475-6517 at 6478, 6504 (US 22181*) (November 29, 1994 submission to the National Cancer Institute on behalf of B&W, American Tobacco, Lorillard, and Liggett contending that smokers use FTC tar and nicotine ratings primarily for information relating to taste considerations, referring to what Defendants called "the well-established significance of the FTC's machine-determined yields for comparing the flavor, richness and satisfaction of different brands of cigarettes," and predicting that if modifications to the FTC Method occurred, "[c]onsumers . . . would be deprived of important information about the flavor, taste and feel of cigarettes -- information consumers consider to be highly relevant in distinguishing among" brands).

  2. As detailed below, Defendants' public statements about low tar cigarettes on their websites, the statements of their executives, and their internal documents are false and misleading.

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(1) Philip Morris's Low Tar Cigarette Marketing Techniques

  1. Over the last 50 years Philip Morris has used a variety of marketing techniques to reassure smokers that certain brands and types of cigarettes would reduce their health risk from smoking by reducing their exposure to tar. Philip Morris advertisements in the early 1950s made explicit claims of reduced harm, such as the following:

1952: "If, like millions today, you are turning to filter cigarettes for pleasure plus protection . . . it's important that you know the Parliament Story." 696000888-0916 at 0894, 0905, 0908 (US 21387); Harris WD, 70:3-6.

1952: "Parliament's exclusive Filter Mouthpiece gives you the important extra protection of the Parliament 'Safety-Zone' Construction. . . . As the irritants, brown tars and colorless nicotine are trapped, they remain where they belong–in the recessed filter, completely out of contact with your lips." 696000888-0916 at 0894, 0905, 0908 (US 21387)

1954: "You're So Smart to Smoke Parliaments." (US 2731) (emphasis in original); see also (US 2756) (1956 Parliament advertisement in Sports Illustrated magazine noting same).

1954: "The cigarette that takes the FEAR out of smoking!" 696000888-0916 at 0908 (US 21387).

  1. In addition to making explicit health claims, since the 1970s Philip Morris has used brand descriptors such as "light" and "ultra light" to communicate that certain brands of cigarettes are low in tar and nicotine. James Morgan, who was Brand Manager of Marlboro from 1969 to

1972, during the time when Philip Morris introduced Marlboro Lights, its first "light" cigarette, explained the intended meaning of the "lights" descriptor. Morgan stated that, from the very beginning, the "lights" descriptor was intended to communicate that the brand was low in tar -- as opposed to a brand that was lighter in taste:

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From the very beginning the phrase, "Lowered tar and nicotine" was going to be on the package [of Marlboro Lights]. That was the phrase that described to the consumer what the product was in our judgment. . . . We felt the brand name, Marlboro Lights, was a real help in terms of the description of the product being low in tar and nicotine which appeared on the pack from the inception of the project. . . . We are not talking, in my judgment, talking about light . . . as a taste. It's not a term that means anything in terms of taste, and the name Marlboro Lights as I said before, a word which we feel has appeal in a different sense than suggesting what the cigarette even tastes like. . . . It was our desire in this entire Marlboro Lights brand project to constantly position Marlboro Lights as being -- as having lower tar and nicotine from Marlboro [Reds].

Morgan PD, Philip Morris Inc. v. R.J. Reynolds Industries, Inc., 10/15/74, 4:9-10; 10:15-11:4;

78:20-79:14; 79:25-80:5; 81:8-12; 85:23-86:4; Morgan PD, Philip Morris Inc., 11/25/74, 247:11-14.

  1. According to Morgan, Philip Morris made a calculated decision to use the phrase

"lower tar and nicotine" even though its own marketing research indicated that consumers interpreted that phrase as meaning that the cigarettes not only contained comparatively less tar and nicotine, but also that they were a healthier option. Morgan PD, Price v. Philip Morris, Inc., 6/15/02,

45:2-45:25, 45:2-46:25, 47:2-47:25, 48:2-48:25, 49:2-49:25, 50:2-50:25, 51:2-51:5, 52:15-52:20.

  1. Morgan, who later became CEO of Philip Morris, further explained in 2002 that rather than relying on the tar and nicotine numbers from the FTC Method, "the major influence in people's perceptions in the tar of a cigarette would have come from the marketing positioning of a brand as opposed to people literally reading the FTC [tar and nicotine figures]." Morgan also stated that,
919

if you took the advertising, the point of sale, whatever may have been said on the racks or the cartons, the whole panoply of what the consumer saw about a cigarette brand would be more influential in that consumer's perception of the tar of that brand . . . than the fact that they may or may not have sat down and looked at a newspaper that had the latest Federal Trade Commission report.

Part of the image that Philip Morris was marketing was the concept of lowered tar and nicotine.

Morgan PD, Philip Morris Inc., 11/25/74, 174:10-175:4; 175:16-175:25.

  1. Jeanne Bonhomme, Director of Consumer Insights for Philip Morris, echoed these views:

Philip Morris aims its low tar cigarette marketing at least in part at smokers of regular cigarettes who are concerned about the amount of tar they are inhaling and want to reduce it. . . . Philip Morris was aware that consumers understood the "lights" brand descriptor from its advertising and marketing pieces to be equated with low tar.

Bonhomme WD, 12:6-11; 13:17-19; 15:1-4; 16:1-7; 43:11-14.

  1. In or around 1995, Philip Morris considered changing the name of Merit to Merit

Lights, because "Philip Morris was concerned that consumer research showed that Merit marketing no longer effectively conveyed to consumers that Merit was low in tar." Bonhomme WD, 13:1-22.

  1. This contemplated name change is documented in a June 23, 1995 internal Philip

Morris memorandum, titled "Merit 'Filter' vs. 'Lights' Test -- Research Proposal," from Lauren

Schwed, Philip Morris Analyst, to Jodi Sansone, then Brand Manager for Merit at Philip Morris

USA, and Rebecca Gordon, a Philip Morris USA Assistant Brand Manager under Sansone. The memorandum described the motivation behind an attached consumer research study as follows:

Merit is considering changing the name on the Parent pack from "Filter" to "Lights" in order to clarify the tar level of the cigarette. There is a thought that changing the wording on the pack to replace the word "Filter" with the word "Lights" would help clarify what the

920

true tar level is for Merit Parent. However, there is some concern that changing the name to "Lights" could possibly detract from the brand's flavor heritage.

2045628330-8330 (US 26955).

  1. In a memorandum dated November 27, 1995, Shari Teitelbaum, a consumer researcher for Philip Morris, summarized the results of the "Merit 'Filter' vs 'Lights' -- Final Report" for Sansone. Teitelbaum noted that the name change affected Merit smokers' perceptions: "Before tasting the cigarette, Merit smokers seemed to think that Merit Lights was lower in tar than Merit Filter." Teitelbaum noted that changing the name to Merit Lights caused one third of current Merit smokers to "alter their perception of Merit in terms of taste and tar level." The study also confirmed Philip Morris's fear that changing the name to Merit Lights would imply a poor-tasting cigarette: for current Merit smokers, "[t]he name change did seem to have a significantly adverse impact on perceptions of the brand's taste." 2045596010-6012 at 6011 (US 26952); 2045596013-6040 at 6032 (US 26953); Bonhomme WD, 14:1-15:4.

  2. Philip Morris did finally change the name of Merit Filters to Merit Lights, even though there was no difference in the cigarette. Brennan-Lund PD, Price v. Philip Morris, Inc., 9/20/02, 157:15-22.

  3. Similarly, Philip Morris marketed a 15 mg. cigarette as both Virginia Slims and Virginia Slims Lights. 525311179-1223 at 1222 (US 52977).

  4. Jeanne Bonhomme verified that Philip Morris has known for years from its consumer research that some smokers "interpret brand descriptors as communicating a less hazardous cigarette than full-flavor brands." Bonhomme WD, 20:3-6.

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  1. In an October 21, 1994 memorandum, titled "Marlboro Medium Smoker Image Study," Marian Halpern, an employee in the Philip Morris consumer marketing research department, reported to Tom Keim, a Philip Morris brand manager, that the "Reasons for Smoking Medium" were as follows:

Most smokers said they chose Medium because of its perceived health benefit. Over half of the Medium smokers said they started smoking Medium because they wanted a cigarette with lower tar and nicotine (56%). For many respondents, the name "Medium" communicated information on this product feature, with almost one quarter (24%) of these smokers saying that 'Medium' refers to the cigarette's lower tar and nicotine.

2063731671-1688 at 1672 (US 22222); Bonhomme WD, 18:1-19:5.

  1. Philip Morris tries to create marketing pieces that communicate certain brands are low in tar, not just with words like the "lights" brand descriptors, but also with the imagery they present to consumers, such as the color it selects for the cigarette pack and tipping paper. When packaging decisions are made at Philip Morris, it is recognized that the color influences peoples' perception of the strength and tar level of the product. Bonhomme WD, 20:10-17; 22:1-4.

  2. For example, Philip Morris knows that consumers perceive a blue cigarette pack and white tipping paper as an indication that a cigarette is low in tar, and that generally speaking, the lighter the cigarette package color, the lower its tar content is perceived to be by consumers. Philip Morris continues to this day to market and sell Marlboro Lights and Marlboro Ultra Lights with lighter color packaging and tipping paper. Bonhomme WD, 21:13-18; 23:20-22.

  3. Nancy Brennan-Lund, Philip Morris Senior VP of Marketing, confirmed that, in order to communicate low tar in cigarettes, Philip Morris USA has used a "lighter, more white background" and a "white filter as opposed to a cork colored filter." Susan Norris, Marlboro Brand

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Manager from 1995-1999, also noted that, in her experience, colors such as silver and light blue communicate to consumers that a cigarette is an ultra light brand. Brennan-Lund PD, Price, 9/20/02, 179:6-17; Norris PD, United States v. Philip Morris, 7/31/03, 162:6-165:8, 179:17-184:19.

  1. Over the last five decades, Philip Morris has conducted extensive consumer research to perfect the delivery of its "light" and low tar cigarette brand marketing message to ensure it provided smokers with health reassurance and offered an alternative to quitting.

  2. Marlboro Lights. With respect to Marlboro Lights, Philip Morris designs the packaging to distinguish it from Marlboro Red and communicate to consumers that it provides "the best of both worlds," -- low tar and good taste. Bonhomme WD, 22:5-18.

  3. A November 15, 1971 "Philip Morris U.S.A. Inter-Office Correspondence" to James Morgan from the Philip Morris USA Marketing Research Department set forth results of a Philip Morris consumer study on Marlboro Lights. Under the heading "Advertising Awareness," the report stated that "[l]ow tar and nicotine remained the most frequently mentioned comment." 1000292744- 2762, 2745 (US 35205).

  4. A December 1971 Marlboro Lights "Product Promotion Plan" distributed to the Philip Morris sales force discussed the introduction of Marlboro Lights and ways to market and maximize sales of the brand. It stated:

The introduction of Marlboro Lights is a very timely move on the part of your company. The consumer is becoming increasingly aware of tar and nicotine contents in cigarettes and many are searching for one with low tar and nicotine content and full flavor. Marlboro Lights fill this need.

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  1. A retrospective Philip Morris document dated September 1991, titled "Background Information on PM Brands," stated:

To capitalize on the booming low tar market, Marlboro Lights was introduced in 1972. It became the first successful low tar line extension in the industry . . . Marlboro further broadened its appeal to low tar smokers with the addition of Marlboro Lights 100's in 1978, Marlboro Lights King Size Flip-Top Box in 1980 and Marlboro Lights 100's Flip-Top Box in 1984.

2070143190-4433 at 3206 (US 27257).

  1. James Morgan, former President and CEO of Philip Morris USA, confirmed that Marlboro Lights were positioned as "lower in tar and lighter in taste than Marlboro Red" and were marketed to people seeking a low tar and nicotine cigarette, including smokers of both high and low tar cigarettes. A 1974-1975 Philip Morris magazine advertisement for Marlboro Lights stated: "Marlboro Lights. The spirit of a Marlboro in a low tar cigarette." Philip Morris has used the phrases "lowered tar and nicotine" and "Lights" in association with Marlboro Lights for over 30 years. Morgan PD, Price, 6/5/02, 20:13-25, 21:2-6, 32:22-25, 33:2-25, 34:2-11; 2045404133-4163 (US 85000); 03496228-6630 at 6323 (US 20057); Morgan TT, Price v. Philip Morris, Inc., 2/18/03, 64:4-7.

  2. A May 31, 1988 Philip Morris USA Marketing Research Department report from Philip Morris's primary advertising agency, Leo Burnett, and Philip Morris consumer researchers Karen Eisen and Jeanne Bonhomme, recited focus group results and stating that "many felt that Marlboro Lights was gaining in favor because of health concerns." 2044743883-3891 at 3885 (US 85001); Brennan-Lund PD, Price, 9/20/02, 190:1-192:11; Bonhomme WD, 23:5-19.

924

  1. Benson & Hedges. A 1974-1975 advertisement for Philip Morris's Benson & Hedges Multifilter brand stated: "Today people not only want a great tasting cigarette, but one that's low in 'tar' and nicotine. Nothing's simple anymore . . . [w]e've managed to lower the 'tar' and nicotine and still give you a cigarette with full rich flavor for you to enjoy." (US 87184); see also 03496228-6630 at 6326 (US 20057).

  2. A September 1991 Philip Morris document, titled "Background Information on PM Brands," stated:

Benson & Hedges 100's Lights and Lights Menthol were introduced in 1977 in response to consumer preference for a milder, lower tar cigarette . . . today Benson & Hedges is among the leading low tar cigarettes. In mid-1982, Benson & Hedges Deluxe Ultra Lights was launched to take advantage of dynamic growth in both the 100mm and ultra low tar markets. The regular and menthol packings, both at 5mg tar, were instant successes. Fueled by distinctive packaging and taste richer than that of other ultra low (hence the ad slogan "rich enough to be called deluxe"), Deluxe Ultra Lights is a major contributor to the image and sales strength of Benson & Hedges.

2070143190-4433, 3211-3214 (US 27257); see also ADV004 1118-1120 (US 745) (1982 advertisement).

  1. Cambridge. Tom Goodale's handwritten notes from an October 15, 1979 meeting, the regular "new products" meeting of Philip Morris scientists, reflect Philip Morris's plan to create an impression in consumers' minds of Cambridge as being extremely low in tar. The plan was to introduce Cambridge with a tar level below the then-lowest FTC tar brand sold -- Carlton -- and then to raise the tar level over time. The notes reveal, under the heading Project Trinity (Cambridge's project name prior to commercial introduction), "Hit mkt [market] below Carlton tar - afterwards can drift higher." 1001507595-7596 at 7595 (US 85102).
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  1. According to Dr. Farone, former Director of Applied Research at Philip Morris USA, based on his participation in numerous monthly meetings in 1979 relating to Cambridge:

The long-range plan [for marketing Cambridge] was to introduce the product as a low tar product and then eventually to increase the tar of the product. . . . [I]t was anticipated that the product would not sell very well at that low tar and eventually they would increase the tar, and having sold it as a low tar product people still would think of it as a low tar product. In my view, and from my experience, the lowest yielding version of many brands, including the original Cambridge, but also B&W's Carlton, RJR's NOW, etc., were created to give the brands a lowest tar image, while the sales are in the higher tar and nicotine versions of those brands. Those lowest yield versions of the brand are very hard to find in stores.

Farone WD, 2:2-8; 2:15-19; 128:4-128:22.

  1. In 1979, Philip Morris promoted Cambridge as a low tar brand yielding 0.0 mg tar

(less than 0.1 mg tar) on the FTC test. The 0.0 mg tar Cambridge cigarette was removed from the market and replaced by Cambridge light and ultra light brands, all of which had considerably more tar than the original Cambridge cigarette. Dr. Farone made it clear that:

The plan all along was to deceive the public into thinking that the Cambridge Light cigarette was a low tar cigarette, when in fact it was not . . . the trend to increasing tar deliveries in the product is very clear and there is no advertising that says that such increases are being made.

Farone WD, 129:18-132:17; 2024983860-3862 at 3860 (US 20015).

  1. Dr. Farone explained that "Philip Morris never even bothered to consumer test the

0.0 mg [Cambridge] version against the similar variant of Carlton and this is a major piece of evidence that they had no plans to keep it on the market." A September 20, 1979 Philip Morris memorandum, titled "Project Trinity," states that with respect to the 0.0 mg tar version of

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Cambridge: "Consumer testing is not required for this model." Farone WD, 128:23-129:17;

  1. Nancy Brennan-Lund, Senior Vice President of Marketing at Philip Morris, admitted that Cambridge Lights had more tar and nicotine than the original Cambridge. She further admitted that, as the tar and nicotine numbers were not identified on the packs of Cambridge Lights cigarettes, the only way consumers could possibly know that Cambridge Lights had more tar than Cambridge regular was by a perceived taste difference. Brennan-Lund PD, Price, 9/20/02, 145:5-154:16.

  2. Merit. In 1976, Philip Morris introduced a new brand, Merit, at 9 milligrams tar with "enriched flavor." Merit formed the basis for line extensions to Merit Ultra at 4 milligrams and later Merit Ultima at 1 milligram. The three were jointly advertised in a "low, lower, lowest" presentation of the product line. Dolan WD, 124:1-4; 1002325022-5022 (US 21510).

  3. Philip Morris's marketing for some of its low tar cigarette brands, including Merit, "encouraged consumers [whom Philip Morris referred to as potential "down-switchers"] to switch from regular cigarettes to low tar cigarettes." Historically, "Philip Morris targeted potential down-switchers with its marketing for Merit," and "Merit [consumer] research is used to target potential down-switchers." Bonhomme WD, 13:4-5; 27:16-21; 29:3-30:5.

  4. Philip Morris's marketing for Merit cigarettes targeted "self-conscious" and "uncomfortable" smokers. A Philip Morris memorandum, titled "The Uncomfortable Merit Smoker," dated January 6, 1993, stated: "'Self-conscious' smokers are defined as people who are uneasy with their status as smokers. They see smoking as a sign of personal weakness and are starting to feel ashamed that they smoke." 2044905001-5007 at 5001 (US 20454); Bonhomme WD, 49:1-3:47:8-11; see also, Teitelbaum PD, United States v. Philip Morris, 4/16/02, 132:21-137:21.

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  1. According to Suzanne LeVan, Philip Morris Vice-President of Premium Brands from 1991-2001 with responsibility for Merit, "the Merit strategy is to convince smokers who are switching down [in tar levels] and who are looking for a good tasting cigarette that Merit is a brand that they should try." LeVan PD, United States v. Philip Morris, 6/25/02, 178:13-181:2; accord 2063690017-0018 (US 85002).

  2. According to a retrospective Philip Morris document dated September 1991 and titled "Background Information on PM Brands," the "Benefits Statement" of Merit was: "You'll enjoy low tar and good flavor with Merit." "At only 7 mg. of tar, Merit delivers the rich flavor of leading cigarettes with twice the tar." "With Merit Menthol you get rich menthol flavor at only 8 mg tar." The document indicated that Merit Ultra Lights and Merit Ultra Lights 100's were introduced in 1981. 2070143190-4433 at 3211:3214 (US 27257); accord 2063724711-4714 (US 39838) (Confidential).

  3. Philip Morris's targeting strategy was recorded in a retrospective June 13, 1995 document from Leo Burnett -- Philip Morris USA's long-time marketing agency -- titled "Merit Advertising Overview Historical and Current for Jodi Sansone." Under the heading "Merit -- Current 'You've Got Merit' Campaign," the document stated: "Strategy: Convince Self-conscious and uncomfortable smokers who want to switch to a low tar alternative but won't sacrifice taste completely," "With Merit, you can switch down to lower tar and still enjoy smoking," "Because: Merit delivers satisfying taste at every level of low tar." The document described the "Merit Brand Essence" as follows: "Since the brand's introduction twenty years ago, the core Merit proposition has been low tar with good taste. Once a smoker has made the decision to switch to a lower tar product, they are faced with the challenge of finding one that delivers on taste. Merit offers a positive solution–they can switch down to lower tar and still get satisfying taste." 2048200699-0727 at 0708 (US 38648) (emphasis in original); Bonhomme WD, 48:12-49:3.

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  1. Philip Morris's strategy for Merit was successful. Norma Suter Drew, Philip Morris Vice President for Portfolio Brands and former Brand Manager and Marketing Director for Merit cigarettes from 1992-1994, delivered a July 1993 presentation, titled "Merit Franchise," in which she reported that "Merit is a brand smokers switch to in order to reduce tar/nicotine." Elsewhere in the presentation, Drew wrote that one of the top two "Goals" for Merit advertising was to achieve a "[s]ignificant increase in Merit's highest brand image statement, 'Are among the lowest in tar/nicotine', versus Carlton and Now." The presentation also noted that "70% of industry switching is between tar levels." Under the heading "Merit Advertising," the presentation noted that "Merit smokers tell us that they come to the franchise because they desire a lower tar cigarette that still tastes good – switching down makes them feel better about the fact that they smoke." Bonhomme WD, 49:4-14; 2070661683-1727 at 1685, 1687, 1713, 1716 (US 40337) (emphasis added).

  2. The following Merit advertisements, in conformity with the internal marketing documents detailed above, communicated to consumers that, with Merit, they could reduce their tar intake and thus reduce their health risk, without sacrificing taste:

1976: "New Low Tar Entry Packs Taste of Cigarettes Having 60% More Tar." (no bates) (US 5087). 1976: "The greatest challenge to cigarette-makers in the last two decades has been how to make a low tar cigarette that wasn't 'low'; in taste. It seemed impossible. Until now. After twelve long, hard, often frustrating years, Philip Morris has developed the way to do it. The cigarette is called MERIT. It delivers only 9 mg. tar. One of the lowest tar levels in smoking today." (no bates) (US 4981); Biglan WD, 203:17-

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1977: "New MERIT 100's. Only 12 mg. of tar. Yet packed with extra flavor. The kind of flavor that makes 'low tar, good taste' a reality for 100's smokers." (no bates) (US 5342); Biglan WD, 203:17-207:3.

1978: "Merit Solving Smoker Dilemma." (US 5704); Biglan WD, 203:17-207:3; (no bates) (US 5483).

1978: "'Best Move Yet.' MERIT['s] . . . . ability to satisfy over long periods of time could be the most important evidence to date that MERIT is what it claims to be: The first real alternative for high tar smokers." (no bates) (US 5951); see also (no bates) (US 6112); (no bates) (US 6131); Biglan WD, 203:17-207:3.

1978: "Research concludes MERIT taste makes move from high tar to low tar smoking unexpectedly easy." (no bates) (US 5803); Biglan WD, 203:17-207:3.

1988: "You Won't Miss What You'll Miss." (no bates) (US 8505).

1988: "Our Less Is Your Gain." (no bates) (US 8556).

1989: "Smoke This Page. If That Reminds You of Your Ultra Lights, Read This Ad." (no bates) (US 8711).

1994: "You can do it! You really can switch down to lower tar and enjoy satisfying taste." (no bates) (US 12892); Biglan WD, 203:17-207:3; 970469347-9474 at 9421; (no bates) (US 85104).

1994: "Yes you can! You can switch down to lower tar and still get satisfying taste. You've got MERIT." (no bates) (US 9241) (emphasis in original); Bonhomme WD, 30:6-18.

  1. A September 16, 1987 Leo Burnett U.S.A. research report for Philip Morris, titled

"Merit Brand Image Study," noted in the section "Attitudes Toward Smoking" that "[w]hile health concerns are motivating factor, taste/enjoyment are still key." A summary at the end of the report stated: "Merit smokers we sampled are committed smokers . . . However, they have mixed feelings about smoking -- health concerns/loss of control . . ." and their switching to Merit "provides health reassurance." 2072735414-5500 at 5431, 5492 (US 41598); Bonhomme WD, 27:22-28:17.

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  1. A January 1991 document, titled "Merit Positioning Study," assessed "perceptions of Merit's positioning within the low tar category." Under the heading "What Down Switchers want in a cigarette," the document noted that approximately half of downswitchers found "very low tar" (50%) and "very low nicotine" (48%) to be "absolutely essential." 2048976844-6906 at 6850, 6890, 6892 (US 85004).

  2. Consumer feedback confirmed the successful delivery of Philip Morris's intended message. An August 1991 report prepared for Philip Morris, titled "Merit Positioning Strategy Development," observed that, "[i]n addition to advantages associated with lesser tar and nicotine delivery, low tar users note that such brands allow higher volume, deeper inhalation smoking with few tradeoffs." The report also commented that Ultra Light users "note their further downswitching to ultralights from lights for health benefits primarily." The report noted that Merit users "like perceiving [Merit cigarettes] as rather safe, sensible, middle-of-the-road, non-threatening, and generating the feeling that they aren't doing anything wrong." 2072735123-5247 at 5131, 5132 (US 41596).

  3. An internal Philip Morris memorandum dated May 16, 1995 from Lauren Herman, an employee in the market information and planning group, to Norma Suter Drew, then acting Brand Manager for Merit cigarettes, titled "Merit Alternative Campaign Qualitative Exploratory -- Final Report," discussed the results of research conducted to gauge consumer interest and appeal of Merit marketing campaigns. Under the heading "Key Findings," Herman reported that "Competitive smokers appear to be most likely to respond to the concepts that offer the clearest product cues.

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These smokers require the most rational reason why they should smoke Merit, (e.g. lower tar)." Under the heading "Implications," Herman recommended that "[s]ince low tar is essentially the core of these alternative concepts, the low tar message should be more pronounced." 2063724960-4962 at 4960, 4962 (US 39842).

  1. A September 4, 1996 Leo Burnett document reported on an August 27, 1996 meeting held in New York between Leo Burnett and Philip Morris (Jose de Castro, Suzanne LeVan, and Jodi Sansone) to discuss Merit marketing for 1997. The document acknowledged that past Merit marketing focused more heavily on communicating that it is low in tar, and less on sending a message about the brand's taste. Under the heading "Discussion/Agreements Reached," the document stated: "Client/agency agreed that we need to move the bar forward in terms of taste communication, as currently it is not as recognizable/prominent as low tar in Merit awareness ratings, yet it is a key driver of consumer choice/purchase." 2071522201-2203 at 2201 (US 27299).

  2. A February 9, 1998 draft research report prepared for Philip Morris by the research firm Kane, Bortree & Associates, titled "Merit Strategic Revitalization Plan, Stage I Learnings," analyzed ways to "build Merit's share of the low tar segment." 2063687348-7527 at 7350, 7353- 7356 (US 39820*); see also 2063686921-6942 at 6934 (US 88629) ("Kane Bortree makes use of a variety of innovative, psychologically derived techniques. These techniques allow us to get inside the consumers' heads"). The 1998 report discussed two types of low tar smokers who find the taste of light cigarettes unsatisfying and do not feel comfortable smoking: "Quitters" and "Validation Seekers." The report cited Merit Ultima, Merit Ultra Lights, Camel Lights, and Marlboro Ultra Lights as brands for those who do not feel comfortable smoking. 2063687348-7527 at 7356, 7357, 7359 (US 39820*).

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  1. The February 1998 draft research report was followed by a March 31, 1998 draft report by Kane, Bortree & Associates, titled "Merit Strategic Revitalization Plan, Stage II Learnings/Stage III Recommendations." Under the heading "Positioning Learnings to Date," the March report noted that "'Light' is a bigger promise than low-tar with opportunity for broad appeal" because it conveys "Tastes light," "Feels light," "Low tar," and "Better for you." The report recommended that Merit's "positioning should convey acceptability of smoking." The report further discussed a contemplated "Additive Free" Merit line extension, and noted that: "Additive-free is an excellent fit with 'light'" because it "[r]einforces 'better for you.'" 2080486996-7108 at 7010-12 (US 45330); Bonhomme WD, 17:2-16.

  2. A May 14, 1998 internal Philip Morris document, titled "Merit Brand Initiatives," incorporated the findings of the March 31, 1998 Kane, Bortree & Associates study, recreating that study's representation of the four segments of the lights market and stated, under the heading "Merit Strategic Positioning Copy Strategy": "What we would like smokers to believe -- Merit offers a viable alternative to Light brands with full flavor heritage." 2070657640-7650 at 7644, 7646 (US 22015).

  3. Marlboro Ultra Lights. A June 1979 draft report prepared for Philip Morris by Goldstein/Krall Marketing Resources, Inc., titled "Smokers' Reactions to an Ultra Light Brand Extension for Marlboro," discloses that Philip Morris began conducting consumer marketing research on a new cigarette line extension of the Marlboro brand, Marlboro Ultra Lights, as early as 1979. Discussing the reactions of Marlboro Red smokers to the concept of Marlboro Ultra Lights, the report stated:

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The introduction of a Marlboro Ultra Light brand appeared to be viewed in the following manner: . . . An attempt to produce a safer cigarette for those interested in cutting down their smoking and in a lighter cigarette. . . . A "smart" way to prevent the loss of or switching of Marlboro smokers to other brands if they are currently unsatisfied in their quest for a lighter/safer cigarette.

2041097977-7999 at 7984 (US 85006); Bonhomme WD, 31:10-34:17.

  1. Under the heading "How Marlboro Ultra Lights Were Positioned," the report stated: The following is a description of a brand image developed from the discussions [with consumers] in all three groups: . . . Safer cigarette -- less tar and nicotine. . . . Probably a better/innovative filter." The report further stated: "With regard to smoker image, respondents suggested: . . . People cutting down for health reasons/people trying to quit. More concerned people (about health). More aware people (those reading the numbers in the ads)." 2041097977-7999 at 7987 (US 85006).

  2. On May 1, 1989, Philip Morris began test marketing Marlboro Ultra Lights, which it positioned as delivering 6 mg. of tar (per the FTC Method). In a February 8, 1989 internal Philip Morris memorandum, Richard Camisa delivered to colleagues at Philip Morris the "Marlboro Ultra Lights Marketing Plan Overview." The overview set forth the target audience for Marlboro Ultra Lights, noting that

[c]onsumer research suggests that there are vast numbers of smokers, including Marlboro smokers, who are seeking lower tar but who are also unwilling to sacrifice flavor and/or smoking satisfaction in return. The opportunity for Marlboro lies in its ability to offer smokers the lower tar they seek with less trade off in taste.

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  1. The document further stated: "A blue/gray pack with white tipping . . . provides traditional ultra low tar reassurance." Jeanne Bonhomme, Director of Consumer Insights for Philip Morris, confirmed that "low tar reassurance," as used in the document, referred to the fact that:

Within the context of selecting a pack color for Marlboro Ultra Lights there was discussion about what pack color would make it readily apparent that the brand was an ultra low tar. Many of the lights and low tar products used blue packaging as a signal of being lower tar, so there were discussions about making sure that advertising and packaging easily communicated that Marlboro Ultra Lights was an ultra low tar.

2070624747-4763 at 4748 (US 22014); Bonhomme WD, 64:1-6.

  1. Philip Morris conducted research to determine how cigarette pack and tipping color influenced consumer perceptions of Marlboro Ultra Lights' strength and tar level. In a June 25, 1990 memorandum from Jeanne Bonhomme, then a contract consumer marketing researcher for Philip Morris, to Richard Camisa, titled "Marlboro Ultra Lights Portfolio Test," Bonhomme reported the results of a cigarette ad pack test conducted on consumers for Marlboro Ultra Lights. Bonhomme reported that for consumers tested, "[p]redictably, expectations about [Marlboro Ultra Lights'] strength and tar level were influenced by the pack and tipping color. Red/Cork was viewed as being strongest tasting and higher in tar than the two white tipped options, particularly Blue/White." 2070197338-7340 at 7338 (US 40255); Bonhomme WD, 21:4-22:4; see also 2071535027-5090 at 5033, 5043 (US 22020).

  2. Marlboro Ultra Lights was launched nationally on January 28, 1998, and Philip Morris continues to market and sell Marlboro Ultra Lights to this day. Philip Morris targeted all Marlboro smokers with Marlboro Ultra Lights, not just current low tar smokers. Norris PD, United States v. Philip Morris, 7/31/03, 132:17-23, 162:6-165:8, 121:13-125:11; Bonhomme WD, 34:15-17.

935

  1. Marlboro Medium. In June 1991, Philip Morris launched Marlboro Medium, a lower tar line extension of the Marlboro brand. A September 1991 Philip Morris document, titled "Background Information on PM Brands," stated that Marlboro Medium was aimed at "consumers still looking for a satisfying low tar cigarette with flavor." 2070143190-4433 at 3206 (US 27257).

  2. Philip Morris's November 1994 continuous smoker tracking survey (a random smoker phone survey Philip Morris has conducted continuously since the 1980s) discusses Philip Morris's targeting of health-conscious smokers. The document stated that male smokers of Marlboro Medium age 18-24 "need affirmation as smokers" and may be candidates for ultra lights. In this survey, Philip Morris created a profile of 18-24 year old male Marlboro Flavor Low (Marlboro Medium) smokers as individuals who are less comfortable with smoking, feel pressure to quit, and do not enjoy some of the "image benefits" to the same degree as other smokers. The Marlboro Flavor Low (Marlboro Medium) male smokers age 18-24 are more likely to cite the low tar level as influential in determining their regular brand. 2048735500-5604 at 5562, 5543, 5548-5549 (US 21971).

  3. An internal February 10, 1995 Philip Morris memorandum from Marian Wood to Tom Keim, titled "Marlboro Medium Brand Imagery," revealed that in 1991, Philip Morris spent $50 million on advertising for Marlboro Medium, 36% of Marlboro's total advertising budget for that year. 2063731689-1710 at 1695 (US 79820).

  1. Philip Morris continues to sell Marlboro Medium. Bonhomme WD, 20:1-2. 2455. Parliament. Philip Morris marketed the Parliament brand as a low tar brand featuring

a "recessed" filter. A Philip Morris document, titled "Background Information on PM Brands," dated September 1991, stated:

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It was during the proliferation of filtered cigarettes in the 1950's that Philip Morris gave Parliament its hallmark of today -- the recessed filter. Unlike ordinary filter tip cigarettes, Parliament's famous recessed filter kept tar from touching the smoker's lips. Since the addition of this unique filter, Parliament smokers have enjoyed their brand's approach to smoking: clean, sophisticated, and distinctive. In 1979, Parliament's name was changed to Parliament Lights. This change reflected the brand's low tar status and helped capitalize on a growing low tar trend.

A "Benefit Statement" in the document was: "Parliament Lights -- since tar on the filter tip never touches your lips, the taste is refreshingly light." 2070143190-4433 at 3217-3218, 3222 (US 27257).

  1. A 1975 Parliament advertisement in Sports Illustrated magazine stated that, although cigarette holders gave "cleaner taste," there was "[n]o need for a cigarette holder today. Parliament's filter is recessed, so you taste only rich, clean tobacco flavor. It's the neatest trick in smoking." (US

4709); see also (no bates) (US 4885).

  1. A 1977 Parliament advertisement in Cosmopolitan magazine stated:

As you smoke, tar builds up on the tip of your cigarette filter. That's "filter feedback." Ordinary flush-tipped cigarettes put that tar build-up against your lips. And that's where Parliament has the advantage. Parliament's filter is recessed to keep tar buildup from touching your lips.

ADV029 0247-0249 (US 10614).

  1. As noted in the 1981 FTC Report on cigarette advertising, Philip Morris's Parliament advertisements from the time period preceding the Report (i.e., late 1970s-1981) implied that its

"special filters minimize the risks of smoking." FTC, 1981 Report at 2-12 (JD 004744).

  1. Jeanne Bonhomme observed that although the recessed nature of the filter did not further reduce the tar delivery or make the cigarette any less harmful, she could "recall learning that some consumers believed that a recessed filter produced a cigarette that was better for you because it reduced tar and less tar was perceived to be less of a health risk." A November 23, 1988 Philip Morris USA memorandum co-written by Bonhomme and Karen Eisen, with the subject heading "Parliament Super Lights In-Depths," confirmed that "[f]or many, the recessed filter implied a health benefit -- 'keeps tar away.'" Bonhomme WD, 34:18-35:1; 35:20-36:15; 2071388176-8178 at 8178 (US 40452).
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(2) Philip Morris's Research on the Low Tar Cigarette Category 2460. Internal Philip Morris documents show that Philip Morris conducted consumer

marketing research not just on individual low tar cigarette brands, but on low tar cigarettes as a category. These documents establish that Philip Morris has long known and intended that its advertisements and marketing for low tar cigarettes, featuring claims of lowered tar and nicotine and "light" and "ultra light" brand descriptors, contributed to and reinforced consumers' mistaken belief that low tar cigarettes are better for their health, and encouraged consumers to smoke them for this reason.

  1. According to Nancy Lund, Senior Vice President of Marketing at Philip Morris, Philip Morris was aware in the 1970s and 1980s that some consumers believed that light/low tar cigarettes were safer than full-flavored cigarettes. She also noted that, during this time period, Philip Morris marketed such cigarettes to these consumers and profited from those sales. Brennan-Lund PD, Price, 9/20/02, 158:6-161:15.

  2. James Morgan, the former CEO of Philip Morris, acknowledged that the trend in the 1970s toward low tar cigarettes was due in large part to consumer perception that they were less hazardous to health than higher tar cigarettes, and specifically admitted that "the consumer was perceiving in the 1970s lower tar as tied to less hazardous." Although Morgan conceded that "we were aware of that," he admitted that, despite being armed with this knowledge, Philip Morris took no additional steps to counter that mistaken perception. Morgan PD, Price, 6/5/02, 42:16-42:25;

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43:2-43:25; 44:2-44:25; 45:2 - 45:25; 63:10-63:25; 64:2-64:25; 65:2-65:21; 1004888470-8484 (US

85009); 502641641-1646 (US 85008).

  1. A May 1976 study prepared for Philip Morris by The Roper Organization, titled "A

Study of Smokers' Habits and Attitudes With Special Emphasis on Low Tar Cigarettes," stated:

[T]his study shows that the smoking public is convinced that to the extent any brands are better for health, it is the low tar brands that are. . . . Low tar brand smokers cite as the most liked characteristic of their brand . . . as compared with smokers of flavor filters, they say it is "better for your health" and cite its "more effective filter. . . ." Brands Thought Better For Health -- The low tar brands have cornered opinion that to the extent any brands are better for your health, they are. . . . Three in ten of all smokers said some brands were better for health than others, and almost half of the low tar brand smokers said this. . . . Furthermore, it is the lower tar content of these brands that make people say they are better for your health.

2024921314-1612 at 1333, 1348, 1352-1353 (US 20403).

  1. A January 1979 study prepared for Philip Morris stated:

These ultra low tar smokers indicated that they are aware of the low tar levels in their brands and that they switched to them specifically because of advertising calling this fact to their attention. . . . As lower and lower tar brands become available, it would appear smokers are subject to advertising pressure and brand availability, and the opportunity for switching obviously occurs. . . . Characteristics of ultra low tar smokers were: people who want to quit . . . more interested in health. . . . When asked how they happened to switch to the brand they are now smoking many of the Carlton smokers cited advertising and tar and nicotine ratings. . . . When Carlton ads were shown in the groups, it was obvious that most respondents had seen them and were aware of the copy claims. It was these claims and other Carlton ads to which smokers referred prior to exposure and

939

when discussing the fact that advertising had been one of the factors causing them to try the brand. This would seem to indicate that ultra low tar smokers are paying attention to and being attracted by the advertising. Respondents . . . appeared to react favorably to the Triumph ads. They said that 3 mg. tar was within the ultra low tar range implying that it represented a safer cigarette.

2040066740-6766 at 6747, 6748, 6751-52, 6754, 6756, 6757 (US 20435).

  1. A March 1979 report prepared for Philip Morris, titled "A Study of Smokers' Habits and Attitudes With Special Emphasis on Low Tar and Menthol Cigarettes," stated:

The appeal of low tars is simple and single -- better for you, less harmful, easier on the lungs, throat, etc. The weakness or objection to low tars is also simple -- tasteless, lacking in satisfaction, and the related factor of hard to draw on. At the same time there is clear evidence that if the appeal -- safety -- is strong enough, people can over time grow used to, and in some cases come to actually like, the main objection to low tars -- low taste.

2049455309-5318 at 5315 (US 22218).

  1. A June 1979 draft report prepared for Philip Morris by Goldstein/Krall Marketing

Resources, Inc., titled "Smokers' Reactions to an Ultra Light Brand Extension for Marlboro," stated, under the heading "Awareness of Tar and Nicotine Levels":

One of the points on which respondents were probed when first shown the array of packs used as stimuli was their awareness of tar and nicotine levels for the brands. While most smokers in the groups could not give correct tar figures for each brand, they seemed to know a general range in which brands fell. . . . Respondents attributed their knowledge . . . to advertising. Evidently, the heavy weight of advertising concentrated against tar claims has penetrated these various groups of smokers to some extent.

  1. A July 27, 1987 Philip Morris Asia letter from Joe Tcheng to Cecil Yow stated:
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The mild/lights segment is the fastest growing segment in the Hong Kong market. . . . There is definitely a growing health consciousness in the market due to regular Government anti-smoking campaign. . . . Research shows that Lights = Mild = Less Harmful. Government's anti-smoking measures will intensify and . . . [t]his may further increase health concern and it is very likely that the mild/lights segment will continue its rapid growth.

2504046594-6601 at 6594 (US 85012).

  1. A 1990 Philip Morris transcript of a conversation between Richard Carchman, then

Principal Scientist, and John Tindall acknowledged that Philip Morris had used filters and claims of low tar as health reassurance mechanisms and that cigarette sales were tied to health concerns.

Tindall stated:

[T]he things that happened in the market in the past I put under basically three groups. One has to do with people's health concerns which we addressed first through filters and then through low tar and ultra low tar. . . . The main thing that has happened in the market over which we have some control is that we have addressed peoples' health concerns through the number of steps I have mentioned. . . . the[re] are opportunities in the market now in the area of smoking and health. People's perceptions of cigarettes with regard to their effects on them. . . . [I]f we are going to do something significant enough to possibly even reverse the declining sales in the market, we're going to have to make advances in the area of people's health.

2023148544-8550 at 8545 (US 85098).

  1. A 1990 Philip Morris document relating to "New Brand Development" in Pakistan revealed Philip Morris's knowledge that cigarette packaging can communicate "mildness" to consumers anxious about the "health/safety issue":

There was little doubt that the pack design with its reliance upon the central gold panel against a white background effectively projected the impression of a very mild cigarette. . . . The evidence as a whole seemed to indicate, in fact, that anxiety about the health safety issue had not yet reached the level where avowedly very mild

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cigarettes . . . could expect an extensive franchise. . . . Over time, anxiety levels would rise, as they have done in other markets and when this happened mild/light brands . . . would begin to achieve respectable sales.

2504008471-8519 at 8478, 8518 (US 85013).

  1. Philip Morris USA's 1992-1996 Strategic Plan for Research and Development stated, under the heading "Perceived Health Concerns," that: "An analysis of the cigarette market over the last 50 years suggests that there have been only two major influences on smokers buying patterns;

namely smokers seeking to address their perceived health concerns and smokers seeking price relief." The document further stated:

The development of products which address perceived health concerns . . . is very much an R&D issue. Previous product changes driven by "perceived health concerns" were the growth of filtered products from 3 to 70% of the market between 1945 and 1953, and the growth of the low tar segment to nearly 50% of the market by 1985. . . . Filtered cigarettes now make up over 96% of the market.

2021529528-9638 at 9608 (US 85084).

(3) Philip Morris's Public Statements About Low Tar Cigarettes

  1. Jeanne Bonhomme, Director of Consumer Insights for Philip Morris, stated that to her knowledge:
  • "Philip Morris has always denied publicly that it markets low tar cigarettes as safe or safer than full-flavor brands;" and
  • "Philip Morris has always denied publicly that it uses brand descriptors such as 'light' and 'ultra light' to communicate they are safe or safer than full-flavor brands."

Bonhomme WD, 11:18-20; 12:12-15.

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  1. A November 14, 1994 fax from Censydiam USA to Philip Morris advised that with respect to the "Health & Fitness" trend: "Outside pressures have made consumers more concerned about health and fitness. They are interested in finding 'user friendly' ways of making their lives healthier without making dramatic changes in their current lifestyles." As examples of the consumer health trend, the document noted increased consumer interest in package labeling that included references to "low/no fat/salt" and "all natural," as well as an increase in the sale of products considered "good for you" such as fruits and vegetables. A 1994 Strategic Trend Analysis prepared for Philip Morris by Censydiam USA illustrating the "Health & Fitness" trend recognized how Defendants had capitalized on this trend, noting that: "Implications for Tobacco Companies: While the trend toward health and fitness is still alive, it has tapered off from its rage in the 1980's. The 1990's focus on moderation. The importance of low/ultra low products should continue in the near future." 2063704131-4132 (US 39829); 2063704088-4091 at 4090-4091 (US 39827); 2063704135-4136 (US 27135).

  2. Faxes dated November 17, 1994 and December 7, 1994 from Thomas R. Keen of the consumer research company Censydiam USA to Marian Halpern, an employee in the Philip Morris consumer marketing research department, described an agreement with Philip Morris whereby Censydiam would produce "write-ups" to Philip Morris on consumer "trends," including, among others, "Health & Fitness," "Delusions of Youth & Beauty," "Dieting Dilemma," and "Quality of Life."

  3. In May 1996, representatives from Philip Morris, including Philip Morris General Counsel, Denise Keane, RJR, B&W, and Lorillard met with the FTC to discuss in part "how Philip Morris and other tobacco companies use FTC test results in their advertising," and "whether the FTC test method could be modified to more accurately reflect actual smoker intake." At that meeting, "the FTC referred to published research showing that smokers believe brand descriptors like 'low tar' and 'light' convey relative safety messages." The FTC requested that the industry representatives provide the FTC with "any information the companies had concerning the issue of consumer perception of low tar, so-called "light" cigarettes." Despite the decades of consumer and marketing research conducted or commissioned by Philip Morris concerning consumers' interpretation of these terms (see Section V(E)(3)(a), supra), Keane testified that "Philip Morris did not provide any such information" to the FTC. Keane WD, 46:18- 48:23; Keane TT, 1/18/05, 10369:20-10370:25; 2048216131-6135 at 6134 (US 38655).

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  1. A September 10, 1999 Davis Polk & Wardwell memorandum to Mark Berlind of Philip Morris includes "a series of questions that might arise, as well as possible answers, relating to low delivery cigarettes and brand descriptors." In answer to the question "If the brand descriptors do not indicate what smokers actually inhale or serve as a point of comparison among competing brands, what purpose do they serve?," the memorandum proposed responding that Philip Morris's brand descriptors do communicate that Philip Morris's lower tar brands deliver less tar and nicotine than full-flavor brands: "For example, the 'Lights' in Marlboro Lights indicates that the smoke yields for Marlboro Lights is lower than that for Marlboro, and Marlboro Ultra Lights delivers less smoke 'tar' and nicotine than Marlboro Lights." 2072675414-5417 at 5415 (US 27347).

  2. This document's proposed response to the question whether "Philip Morris ever intend[ed] to or propose[d] to take advantage of" the "perception" of consumers that "lower-yielding brands [are] 'safe' or 'safer' than full-flavor brands" was that "Philip Morris has never intended [to] or proposed to take advantage of this perception. (although over time various individuals in the

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Company may have suggested that the Company do so)[.]" 2072675414-5417 at 5415-5416 (US 27347) (bracketed material in original).

  1. Following publication of the NCI's Monograph 13 in November 2001, ABC News.com requested information from Philip Morris regarding low tar cigarettes and, as stated in a November 26, 2001 email from Philip Morris employee Christina Malito, "whether or not there are real health benefits to them." In an internal e-mail reply sent that same day, Ellen Merlo, then Senior Vice President of Corporate Affairs at Philip Morris and a decades-long Philip Morris employee, wrote that Philip Morris's response to the inquiry should be: "[W]e make no claims. Started producing them in response to consumer demand for lighter tasting cigarettes." 2085802175- 2176A at 2175B (US 85123*).
  1. Merlo later stated: [A]s far as Philip Morris's position publicly, we would advise people not to in any way infer that light or lighter cigarettes are any safer than full flavor cigarettes . . . my communication, both through our website and in any public statements that I make, would be that the general public should not in any way infer that light or lighter means that that cigarette is safer than a full-flavor cigarette.

Merlo PD, Price, 10/2/02, 96:24-101:24.

  1. According to Nancy Brennan-Lund, then Senior Vice President of Marketing at Philip Morris USA, Philip Morris's use of the word "lights" in its marketing of low tar cigarettes is intended to mean a lighter tasting cigarette. Brennan-Lund PD, Price, 9/20/02, 19:21-24.

  2. As recently as 2003 and 2004, the Board of Directors of Altria (formerly known as Philip Morris Companies), publicly made misleading statements to its shareholders and to the U.S. Securities and Exchange Commission ("SEC") in documents filed with the SEC. In a March 17,

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2003 Proxy Statement, a group of Altria shareholders proposed to the Altria Board of Directors that "the Board find appropriate ways of informing our customers about the actual health risks of smoking 'light and ultra light' cigarettes to disassociate them from any belief that such products are safer and deliver less tar and nicotine." The shareholder proposal cited Monograph 13 which found that "most smokers believe 'Lights' and 'Ultra Lights' are less harsh and deliver less tar and nicotine," and that, "on average, smokers believe that Lights afford a 25% reduction in risk, and Ultra Lights a 33% reduction in risk;" the Canadian Government's conclusion that the terms low tar, light and ultra light are deceptive to the consumer; and the World Health Organization's recommendation that the terms light and ultra light be banned as misleading. The Board of Directors of Altria recommended that shareholders vote against this proposal, stating: "for those adults who choose to smoke, PM USA and PMI believe descriptors such as 'low-tar,' 'mild,' and 'light' serve as useful points of comparison for cigarette brands regarding characteristics such as strength of taste and reported tar yield." (no bates) (US 87741).

  1. In May 2004, Philip Morris placed the following statement on its website: "Philip Morris USA does not imply in its marketing, and smokers should not assume, that lower-yielding brands are safe or safer than full-flavor brands. There is no safe cigarette." TLT0770066-0088 at 0077 (US 72408); accord TT, 2/24/05, 14340:19-20 (counsel for Defendants referring to Philip Morris website and stating "we don't tell people that these cigarettes are safer"); see also PM3000185282-5319 at 5289, 5291-92 (US 88095).
  1. Philip Morris further states on its website: Because smokers have varying preferences, Philip Morris USA offers products with differing yields of tar and nicotine, as measured by machine methods. We believe that it is appropriate to continue to
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differentiate our brands on this basis and that descriptors such as "lights," "ultra-lights," "medium" and "mild" help communicate these differences to adult smokers.

TLT0770066-0088 at 0077 (US 72408); see also PM3000185282-5319 at 5289 (June 2003 Philip Morris website stating same and further stating "we believe that [low tar brand] descriptors serve as useful points of comparison for cigarette brands regarding characteristics such as strength of taste and reported tar yields . . .") (US 88095).

  1. Similarly, on August 22, 2002, although Geoffrey Bible, former CEO of Philip Morris Companies, claimed he had never been presented with any data as to how consumers actually perceive brand descriptors, he testified that he believes that they "simply convey taste preferences." Bible PD, United States v. Philip Morris, 8/22/02, 165:3-166:7.

b. R.J. Reynolds (1) R.J. Reynolds's Low Tar Marketing Techniques 2484. Camel Lights advertisements in the 1980s offered the "solution" of low tar cigarettes

that offered "[s]atisfaction" by providing acceptable "taste," which was lacking in low tar cigarettes:

1980: "Discover Camel Lights. Satisfaction. Low tar." 1980: "Discover satisfaction. Camel Lights. The Camel World of satisfaction comes to low tar smoking. . . . Camel Lights brings the solution to taste in low tar." 1981: "Camel Lights. Low tar. Camel taste." 1981: "Camel Lights. . . . Same low tar, same Camel taste."

519315781-5797 at 5788-5789, 5792-5793, 5795, 5796 (US 79583).

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  1. RJR's 1994 marketing research on Camel Special Lights advertising ("Concept #17: The Special Lights Filter. Takes out impurities other filters can't touch") included the following statements from smokers that the advertisement conveyed to them:

"It sounds like it's taking the poison out of the cigarette." "Takes out the impurities -- makes it sound like a healthier cigarette." "The special filter would clean the cigarette and make it a healthier cigarette to smoke." "It makes me feel I can enjoy smoking without harming myself because the filter takes out impurities. It sounds safer to smoke." "[I]t's safer for you." "Sounds like it would save your lungs."

509619620-9625 at 9620, 9622, 9624, 9625 (US 85015).

  1. RJR marketed Doral as a low tar cigarette brand in the 1970s. A January 1972 Doral advertisement in Newsweek magazine stated: "Doral, the low 'tar' and nicotine cigarette . . . [t]he filter system you'd need a scientist to explain. . . . But Doral says it in two words: 'taste me.'" (US 87452); Schindler WD, 68:12-13.

  2. A June 1975 RJR Doral advertisement in Sports Illustrated magazine analogized smoking low tar cigarettes to a "Doral Diet." The advertisement, depicting a man lighting a cigarette, stated:

How I lost 700 mg. of "tar" the first week . . . without losing out on taste. I'm not too big in the willpower department. But I lost 700 milligrams of "tar" the first week on what I call "The Doral Diet." Now I can still enjoy smoking, and cut down on 'tar' and nicotine, too. . . . For a pack a day smoker like me, my Doral Diet really ads up.

(US 4746); Schindler WD, 68:14-69:9; 03496228-6630 at 6329 (US 20057).

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  1. A June 24, 1975 advertising research report for the Doral "Diet Filter" advertising campaign prepared by Reynolds's Marketing Research Department and "conducted to aid in evaluating six 'Doral Filter' executions in recall impact and communication," recorded smokers' impressions and perceptions of Doral advertisements. 501457575-7706 at 7576 (US 22150).

Consumers had the following perceptions of the campaign:

The ad said something about a diet of tar and nicotine. My impression was that they had less tar and nicotine than other brands. The main idea was that they're better for you because of the cut-down in tar and nicotine. (Id. at 7581).

My impression was that they claim it's safer to smoke Doral than other cigarettes. (Id. at 7585).

The main idea was that it's safer to smoke. (Id. at 7586).

I got the impression that they want you to switch to Dorals and save your health. (Id. at 7587).

They brought out the idea that it might be a good cigarette to try if you're worried about the amount of "tar" and nicotine your lungs are absorbing. The main idea was to save your health, but if you still want to smoke, smoke Doral. (Id. at 7588).

It showed a man sitting in a chair and lighting up a Doral. It said that it had less "tar," but the taste didn't change. The impression it brought out was just the fact that it's a safer cigarette for your health, if you have to smoke. They were trying to get across that it has less "tar," and is still as good in taste as the other cigarettes. (Id. at 7591).

The main idea was that it's less dangerous to your health than any other cigarette. (Id. at 7593).

A man was smoking a cigarette. The ad said that Doral is lower in tar and nicotine than any other cigarette. The impression that came across was that they would be less harmful if you smoked them. There's a lower tar and nicotine count. The main idea of the ad was that smoking Doral is better for your health. (Id. at 7608).

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Their main idea was that they would still taste good, but they're low in tar and nicotine and would consequently be better for you. (Id. at 7611). The main idea was you have less chance of danger to your health with Doral than another brand. (Id. at 7613). My impression was it's much less of a health risk. (Id. at 7613).

Schindler WD, 69:14-71:21.

  1. Two months after this Doral Diet research report, RJR placed another Doral Diet advertisement in the August 4, 1975 edition of Sports Illustrated magazine that doubled the claimed loss of tar -- to 1400 mg. -- compared to the June 1975 advertisement, (US 4746). The August 1975 advertisement featured the headline: "How I lost 1400 mg. of 'tar' the first week . . . without losing out on taste." (no bates) (US 4789); Schindler WD, 72:5-17.

  2. A 1975 study regarding the effectiveness of another Doral advertising campaign found that: "Attitude diagnostics indicated that smokers had no problem understanding the 'Wise Up' campaign. Respondents felt that 'Wise Up's' main point was a low tar and nicotine claim (84%) with some taste mentions (24%)." By way of example, some of the respondents noted:

The main idea they were trying to get across was it's less dangerous to the health and better tasting. I guess the idea is that Doral is safer to smoke, as it has less tar and nicotine than others. My impression was that Doral is less harmful. The main idea they were trying to get across was to smarten up because the cigarettes have less tar. The main point of the ad was you can have good taste and be a little less harmful, too.

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501719738-9761 at 9738, 9748-49, 9752, 9755 (US 22075); Schindler WD, 72:18-73:19.

  1. A July 27, 1976 letter to RJR employee Ed Blackmer discussed Doral's market positioning. The letter noted that the

smoker we are going after must be concerned about the health controversy. It is understood that we cannot necessarily target our media against "concerned" smokers, but that this must be accomplished via creative. Nevertheless, we believe it is an important factor in further "segmenting" our target audience.

50224143-4151 at 4147-4148 (US 22103).

  1. In discussing a Doral 4 advertising research proposal in June 1977, the copy strategy was described as: "Convince the Prime Prospect that new Doral 4 is the solution to his concern about the smoking controversy because it offers the optimum combination of ultra-low tar and taste satisfaction." As a result, the advertising was to be addressed to smokers "seriously concerned about the alleged hazards of smoking," and who, "because of [their] concern, seek[] one of the lowest tar levels available (or an ultra-low level)." 501533008-3011 (US 22107); Orlowsky WD, 69:1-23.

  2. Martin Orlowsky, former Executive Vice President of Marketing and Sales for RJR, admitted that RJR's advertisements for Vantage were targeted toward smokers who, due to their concerns about health risks, were seeking a low-tar cigarette. Orlowsky TT, 10/13/04, 2288:24-2289:19.

  3. Vantage advertisements from the 1970s used purported testimonials characterizing Vantage as delivering low tar to smokers and thereby reducing the health risk from smoking:

1972: "Why I smoke Vantage. I read the papers. I watch TV. I hear the things some of them are saying about smoking. . . . And then, frankly, all that the critics say about 'tar' and nicotine has to make an impression. Fact is, they don't make me feel

951

guilty about smoking Vantage." (no bates) (US 3683); Biglan

1977: "Smoking. Here's what I'm doing about it . . . like a lot of people I'm . . . aware of what's being said [about the harm of cigarette smoking]. And like a lot of people I began searching for a cigarette that could give me the taste I like with less tar. . . . Vantage. It's everything the ads say it is. . . . What am I doing about smoking? I'm smoking Vantage." (no bates) (US 5578); see also (no bates) (US 324) (1978 Vantage advertisement in Rolling Stone magazine noting same).

1977: "Vantage is solving a lot of my problems about smoking. (no bates) (US 239).

1977: "Vantage is changing a lot of my feelings about smoking. . . . I'm not living in some ivory tower. I hear the things being said against high-tar smoking as well as the next guy. And so I started looking for a low-tar smoke that had some honest-to-goodness cigarette taste. . . . As far as I'm concerned, when I switched to Vantage, I changed to a cigarette I could enjoy." (no bates) (US 87456).

1977: "My wife got me to switch to Vantage. . . . My wife . . . would remind me of the stories being told about high-tar cigarettes. Well, I began looking into those new low-tar cigarettes. . . . [Vantage] tasted really good and they actually had less than half the tar of my old brand. . . . So now, I smoke Vantage. I get the taste I want and the low tar . . . ." (no bates) (US 87457).

1978: "'Why I choose to smoke. . . . I'm not deaf to what's being said about tar. So I searched out a cigarette that would give me taste with low tar. . . . Vantage has all the taste I enjoy yet, surprisingly, much less tar than my old brand." ADV017 1589-1591 (US 5756).

1978: "'Vantage gives us more taste and less to argue about. My husband and I . . . [are] both aware of the things being said against high tar. So there we were facing each other every day, smoking our high-tar cigarettes and daring each other to switch to something lower. . . . Today, we both smoke Vantage. You could say we're getting less tar and we're

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getting along -- with Vantage." ADV108 0001-0003 (US

1978: "These days, why do I smoke? . . . . With all the talk about smoking and high tar, it didn't take much imagination for me to conclude that the cigarette of the future would taste good and probably be low in tar as well. . . . Then I discovered Vantage. It was my kind of cigarette. It gave me taste. Pleasure. And the low tar I was looking for." (no bates) (US 295).

1979: "New Vantage Ultra Lights. Ultra taste. Never-before, silky smooth, truly satisfying taste -- in an ultra low tar cigarette! (And we do mean ultra low. At only 6 mg of tar, it's lower than 90% of all the cigarettes that people buy.) How is it possible? Through a unique blend of very select, very flavorful tobaccos. That's the Ultra Cigarette -- new Vantage Ultra Lights from Vantage." (no bates) (US 6255); (no bates) (US 6286); Biglan WD, 377:12-379:22.

1988: "Vantage Ultra Lights. How can anything so ultra light taste so ultra good? Find out for yourself. Try a pack today." (no bates) (US 1613); Biglan WD, 377:12-379:22.

See also Orlowsky WD, 73:1-76:22 (discussing US 5578; 324; 239; 87456; 87457; and 295);

76:23-77:11 (discussing US 6255 ); 77:12-78:21 (discussing US 5756 and 87504); Orlowsky TT,

10/13/04 2284:14-2285:20 (discussing US 87504).

  1. The following advertisements for Vantage from the 1970s are clearly encouraging health conscious smokers to switch to Vantage:

1974: "Maybe the people who criticize smoking should stare the facts in the face. Then they might recommend that if you've decided to smoke, but are concerned about 'tar' and nicotine, you might smoke Vantage. Vantage offers smokers the rich, tobacco flavor they've come to appreciate. With a substantial cut in 'tar' and nicotine. So if you're one of those smokers who is now deciding between high 'tar' and nicotine cigarettes that taste good, and low 'tar' and nicotine cigarettes that taste like nothing, you might appreciate Vantage. . . . Vantage is

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both high in flavor and low in 'tar' and nicotine."

1976: "Are you still smoking? In the years since the criticism against smoking first appeared, many people have given up cigarettes. But many more people haven't. . . . [W]e'd like to talk to. . . . [t]hat even larger group of people who are still smoking today. If you're a smoker, you've probably heard the charges leveled against 'tar' and nicotine. You may have become concerned. And chances are you even tried to do something about it. Like trying . . . low 'tar' and nicotine cigarettes. . . . Vantage cuts down substantially on the 'tar' and nicotine you may have become concerned about. . . . So, if you still smoke, but would like to cut down on 'tar' and nicotine, Vantage is one cigarette you should seriously consider."

500713420-3420 (US 48350).

  1. An internal February 11, 1975 B&W memorandum by "J.V.B." commenting on RJR's

Vantage advertisements stated that RJR's advertisement ("Why do you smoke? With what you've been hearing about smoking these days, you probably wonder sometimes why you smoke at all") was

"address[ing] the health issue for competitive purposes." 690007757-7760 at 7759 (US 21039).

  1. An April 19, 1978 memorandum states that "Vantage has traditionally limited its target market to 'concerned' full flavor smokers." 500210073-0075 (US 22108).

  2. In a 1981 memorandum to M.M. Sheridan, titled "Reactions to the VANTAGE/Merit

Image Study," K.A. Schmitt reported that, based upon the study, "smokers in our target category have two primary product desires: a lower tar product which addresses their safety/health concerns, and a product which provides taste satisfaction." The memorandum further reported that

"VANTAGE is seen as not dealing as directly or effectively with the health/safety concerns of the consumer as Merit. Our current advertising approach focuses much more heavily upon the taste/pleasure aspects of our brand than on the safety/health aspects." As a result, the memorandum recommended that Vantage marketing be modified to better "target" smokers with health concerns:

954

"Perhaps a more balanced approach is needed, both to tone down the perceptions of harshness and to renew the belief that VANTAGE does indeed address the target consumer's health/safety concerns." 523474848-4851 at 4848 (US 22156); Orlowsky WD, 71:15-72:16.

  1. An August 1981 consumer research study, titled "Vantage Personalities," prepared for RJR by Social Research, Inc., noted that people in the Vantage target market "have very definite concerns about the alleged health hazards connected with smoking. It is these qualms that have prompted many of them to seek out lower tar brands." That report likewise noted that the target market

abandoned [] harsher brands in search of milder brands with lowered tar and nicotine. This movement was almost always prompted by health concerns. In some cases, people were experiencing actual problems such as coughing, throat irritation, and shortness of breath. Others may not have experienced actual symptoms, but were worried about the publicized alleged health hazards associated with stronger cigarettes.

503148009-8077 at 8006, 8070 (US 22159).

  1. An April 1982 research study, titled "Vantage and Merit Smokers," prepared for RJR by Social Research, Inc., stated:

Both Vantage and Merit smokers have similar early smoking histories . . . switching to lighter cigarettes to relieve physical symptoms and as an acknowledgment of increased concerns about alleged health hazards. . . . [Quoting a Vantage smoker]: "They are lighter, lower in tar and nicotine. . . . They are satisfying like a full-tar cigarette, but they are better for my health. . . . The filter seems strong and effective as a trap for 'harmful' ingredients." Vantage smokers believe that the filter itself is strong enough to catch these impurities. . . . These ideas make them think the end product is a milder and more "healthful" smoke. . . . [Quoting a Vantage smoker]: "I like the filter because

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there's a lot of it, like it's filtering out a lot of the harmful things, like the tar."

511469097-9250 at 9105, 9116 (US 20842) (emphasis in original); Orlowsky WD, 72:17-23; 81:4-8.

  1. A 1979 study prepared for RJR, titled "An Exploratory Study of Smokers' Comprehension of and Reaction to Several Proposed Winston Lights Campaigns," noted that with respect to one of the Winston Lights advertisements, consumers typically reported that they understood the advertisement to mean: "A low tar cigarette that tastes good, is satisfying and safer." 501071439-1530 at 1453 (US 22110); Orlowsky WD, 83:7-12.

  2. Advertisements for RJR's Now cigarette in the late 1970s and 1980s described Now as "the lowest," "lowest in tar," and "lowest tar champion," and included the following:

Now. It's a Satisfying Decision. LOWEST TAR CHAMPION. NOW MENTHOL IS LOWEST By U.S. Gov't. testing method. NOW is LOWEST Of All Softpack 100's. Pick the Lowest. NOW IS LOWEST By U.S. Gov't Testing Method.