Antitrust Law Daily Wrap Up, ADVERTISING—D. Mass.: Dyson’s efforts to remove no-longer-true ad claims insufficient to avoid liability, (Aug 5, 2016)

By Edward L. Puzzo, J.D.

Vacuum cleaner manufacturer Dyson's performance claims in its advertising became literally false after competitor SharkNinja released a new model, and its delay in removing the stale claims from its advertising resulted in strict liability under the Lanham Act, the federal district court in Boston has ruled. The court rejected Dyson’s argument that its "commercially reasonable efforts" to remove the stale claims were sufficient to avoid Lanham Act liability (SharkNinja Operating LLC v. Dyson Inc., August 3, 2016, Burroughs, A.).

SharkNinja and Dyson, competitors in the marketing and sale of household vacuum cleaners, filed claims against each other, alleging that each other’s comparative advertising was false and misleading in violation of the Lanham Act and Massachusetts state law. They filed cross-motions for summary judgment.

SharkNinja’s allegations against Dyson. Starting in 2013, Dyson began advertising that its DC41 model vacuum (and starting in March 2014, its DC65 model vacuum), had "twice the suction of any other vacuum on the market." These statements became literally false no later than July 2014, SharkNinja claimed, when it released its Shark Lift-Away model. SharkNinja’s counsel notified Dyson that its "twice the suction" claim had become literally false upon the release of SharkNinja's Shark Lift-Away model. SharkNinja did not enclose any test results in support of this claim, but by September 2014, Dyson’s own testing, it concedes, revealed that its vacuums no longer had twice the suction of SharkNinja’s Shark Lift-Away model, making its claim literally false. SharkNinja alleged that Dyson dragged its feet in correcting its suction claims, allowing the false claims to remain in the market until early 2015. SharkNinja moved for summary judgment on its false advertising claim; Dyson argued that there was no liability under the Lanham Act if "commercially reasonable efforts" were made to remove the now-stale advertising claims.

The court rejected Dyson’s "commercially reasonable efforts" argument, stating that the Lanham Act created a regime of strict liability. Therefore, intent, willfulness or lack of good faith on the part of the defendant is not necessary in order to make out a false advertising claim under the Lanham Act. Although Dyson claimed that offending advertisers had a reasonable time to remove false claims from the market, the court stated that the cases cited for that proposition by Dyson involved compliance with court-issued injunctions. The cited cases did not stand for the proposition, the court stated, that a manufacturer may avoid liability for false advertising under the Lanham Act if they take prompt commercially reasonable efforts to remove false claims from the marketplace. To accept Dyson’s interpretation, the court continued, would not adequately disincentivize the behavior prohibited by the Lanham Act, and would unfairly shift the cost of stale claims from the party making those claims to its competitors.

SharkNinja, having established that Dyson’s claims were literally false, with the presumption that the advertising claim had a tendency to deceive a substantial segment of its audience, was entitled to judgment as a matter of law on the issue of liability, the court ruled.

Dyson’s allegations against SharkNinja. Starting in September 2013, SharkNinja's advertising for its "Rocket" upright stick vacuum claimed that it "cleans carpets better vs. a full size Dyson" and through a footnote specified that the full size Dyson it referred to was the Dyson DC40 ASTM F608. Dyson claimed that the effect of the statement on consumers was for them to ignore the footnote and believe that SharkNinja was claiming that its Rocket outperformed every full-size Dyson, a claim that was both literally and implicitedly false. SharkNinja countered that it never claimed that it cleaned better than every Dyson, only a Dyson, specifically the Dyson model in the footnote.

The court stated that what the claim actually communicated or necessarily implied was a factual dispute that could not be resolved on summary judgment. Thus Dyson’s motion for summary judgment on its counterclaim was denied.

The case is No. 1:14-cv-13720-ADB.

Attorneys: Christopher M. Morrison (Jones Day) and John G. Froemming (Howrey Simon Arnold & White, LLP) for Shark Ninja Operating LLC. Megan M. New (Kirkland & Ellis LLP) for Dyson Inc. and Dyson Ltd.

Companies: Shark Ninja Operating LLC; Dyson Inc.; Dyson Ltd.

Cases: Advertising MassachusettsNews