Antitrust Law Daily Wrap Up, ADVERTISING—W.D. Pa.: Steam iron maker’s claims against competitor can proceed, (Apr 3, 2014)

By Linda O’Brien, J.D., LL.M.

In an action suit brought by a small appliance manufacturer against a competitor over comparisons between the steam power of their products, the complaining manufacturer’s allegations of literal falsity were sufficient to establish false advertising under the Lanham Act, the federal district court in Pittsburgh has decided (Groupe SEB USA, Inc. v. Euro-Pro Operating LLC, April 1, 2014, Eddy, C.).

Small appliance manufacturers, Groupe SEB USA and Euro-Pro Operating LLC, sell household steam irons in the United States. Groupe SEB’s steam irons are sold under the brand name “Rowenta,” while Euro-Pro’s steam irons are sold under the brand name of “Shark.” Groupe SEB filed suit against Euro-Pro, alleging false advertising under the Lanham Act and unfair competition under state law in relation to representations of the steam power on the packaging and hangtags of certain Shark steam irons. Groupe SEB asserted that an outside laboratory conducted steam power tests on Rowenta and Shark models and the test results established that Euro-Pro’s advertising about its Shark steams irons’ comparative performance was literally false. Euro-Pro moved to dismiss.

The court found that Groupe SEB’s allegations of literal falsity with respect to the packaging and hangtags of the Shark steam irons were sufficient to establish false advertising claims under the Lanham Act. Under the Supreme Court’s decision in Ashcroft v. Iqbal, a claim is facially plausible when there are sufficient facts to draw a reasonable inference that the defendants are liable for the alleged misconduct. Groupe SEB’s complaint (1) provided quotations of the alleged false statements and disclaimers on the packaging and hangtags; (2) provided photographs of the Shark packaging; (3) identified industry standards regarding testing protocols; and (4) described the outside laboratory tests which concluded that Rowenta outperformed Shark in every test. The allegations were sufficiently detailed regarding the alleged falsehoods to allow Euro-Pro to make a proper defense, the court noted.

In rejecting Euro-Pro’s argument that Groupe SEB failed to identify advertising representing product superiority to consumers, the court noted that Euro-Pro’s statements on packaging that Shark steam irons offer more powerful steam than Rowenta at half the price were clearly claims of superiority that deceives customers into believing that lower-cost Shark steam irons offer the same high-quality performance as Rowenta steam irons.

The case is No. 14-137.

Attorneys: Gretchen L. Jankowski (Buchanan Ingersoll & Rooney PC) for Groupe SEB USA, Inc. Mark A. Grace (Cohen & Grace, LLC) and Randall K. Miller (Venable LLP) for Euro-Pro Operating LLC.

Companies: Groupe SEB USA, Inc.; Euro-Pro Operating LLC

Cases: Advertising PennsylvaniaNews