Antitrust Law Daily Wrap Up, ADVERTISING—NDIll: “Only Avery” Advertising Statements Not Literally False, (Nov 12, 2012)

By Jody Coultas, J.D.

Continental Datalabel could not state a Lanham Act false advertising claim against competitor Avery Dennison Corporation for making allegedly misleading statements regarding its label products, according to the federal district court in Chicago (Continental Datalabel, Inc. v. Avery Dennison Corporation, November 9, 2012, Feinerman, G.).

The companies were competing manufacturers of self-adhesive address labels designed to be easier to peel from their backing sheets. Avery introduced its next-generation Easy Peel labels, which were designed to enable the sheets to be folded to expose the labels’ edges and allowed the user to re-run the sheet through a printer. An expert concluded that Continental’s labels, like Avery’s next-generation Easy Peel labels, possess a “pop-up feature,” meaning that they could be folded to make the labels’ edges “pop up” and become exposed without having to be torn. Continental alleges that retailers decided not to carry its labels because Avery threatened to sue for infringement of patents it ostensibly had on technology that Continental ostensibly had incorporated into its products.

To state a Lanham Act false advertising claim, Continental needed to show a false statement of fact by Avery in a commercial advertisement about its own or another’s product that actually deceived or had the tendency to deceive a substantial segment of its audience, the deception was likely to influence purchasing decisions, Avery caused its false statement to enter interstate commerce, and Continental was injured either by direct diversion of sales from itself to Avery or by a loss of goodwill.

Because Avery’s statements were not literally false, and because Continental failed to produce evidence that the statements caused actual consumer confusion, the court dismissed the Lanham Act claim. The statements at issue were “Only Avery label sheets bend to expose the Pop-up Edge™” and “Only Avery offers the Pop-up Edge™ for fast peeling—just bend the sheet to expose the label edge.” Avery argued that the statements assert not that Avery’s labels alone offer the generic pop-up function described by the phrase, but merely that Avery’s labels alone offer the particular version of that function that carries the “Pop-up Edge” name. These statements did not meet the literal falsity standard. Further, a consumer survey to determine whether consumers were misled produced no evidence of actual confusion.

The case is No. 09 C 5980.

Maxwell J. Petersen (Pauley Petersen & Erickson) for Continental Datalabel, Inc.

Robert W. Unikel (Kaye Scholer LLP) for Avery Dennison Corporation.

Cases: Advertising IllinoisNews