Wednesday, March 11, 2015

Past falsity is no guarantee of present results

Dyson, Inc. v. Euro-Pro Operating LLC, No. 14-cv-09442 (N.D. Ill. Mar. 10, 2015)
I’m going to try to go light on the details of the tests here, featuring evaluations of vacuums’ carpet cleaning power.  Bottom line: while Dyson brought some serious objections to Euro-Pro’s tests and showed likely liability for past wrongful activity, it was not entitled to a preliminary injunction.

Euro-Pro runs ads claiming that “the one and only industry-recognized test of carpet cleaning,” performed by an independent laboratory, shows that its “Shark Rotator Powered Lift Away” vacuum deep cleans carpets better than Dyson’s “Animal” vacuum.
ASTM standards for carpet cleaning (the world is a big place with many standards!) use several types of carpet as a stand-in for the variety of carpets a vacuum will encounter in the real world. They require results to meet the 90% confidence level, as well as sampling at least three machines from any given model.  (Confidence intervals can be made smaller by using more samples.)  The settings should be tested as provided for in the instruction manual for each type of carpet; there are other highly detailed specifications about testing procedures, including the pattern, speed, and height the tester should use to vacuum and how to clean the vacuum between tests.  The percentage of dirt removal effectiveness is the average of the geometric means obtained by making three cleaning passes per test vacuum over each of the four carpet types in the prescribed pattern.
While Dyson’s vacuum adjusts automatically to the type of carpet, “the names of the settings and the corresponding instructions, handle nomenclature, and handle icons changed multiple times after the release of Euro-Pro’s NV650.” The record contained three complete sets of instructional materials (manual, quick start guide, and hang tag) plus a fourth set of instructions comprised of a manual and quick start guide that Euro-Pro posted on its website in December 2014, which weren’t packaged with the vacuums on store shelves. “Thus, the marketplace has a mix of outdated and current instructions.”  The instructions generally told consumers to use upper settings (less suction, which means less cleaning ability) on shag/high pile carpet. Euro-Pro argued that it consistently intended the middle setting to be used for carpet unless the vacuum was difficult to push or pull (meaning more suction on high pile carpet unless it caused trouble pushing/pulling).
Euro-Pro prominently and extensively claimed in its ads to have independent lab tests to back up its better suction claim. For example, one of the versions of its short-form infomercial has this graphic:

Its banner ads don’t generally include the disclaimer about the setting used for testing; Euro-Pro said that this was due to space limitations, but didn’t show that it would be unable to include a disclaimer if it changed its graphic.
When the Euro-Pro model launched in July 2014, the person who made the claims in the infomercials didn’t actually know whether Euro-Pro had independent lab tests supporting its claim of cleaning superiority, though his team had been tasked with designing a vaccum that would outclean the Dyson.  He believed that his team would have ensured that Euro-Pro’s claims were supported by appropriate testing when the infomercial was released and the boxes with cleaning superiority claims appeared on store shelves.
The claims at issue are establishment claims, and Dyson argued that Euro-Pro’s tests failed to substantiate them. The court considered only third-party testing, not internal testing, and then only third-party testing that failed to meet the 90% confidence level, since such tests were noncompliant with ASTM’s requirements. Based on the remaining universe of third-party testing, the court didn’t find a sufficient likelihood of success on the merits.
However, when Euro-Pro launched the NV650 in mid-2014, its representation that independent laboratory testing supported its cleaning superiority claim was false. It didn’t have such tests then, and it also was uncertain whether the lab that ran the tests at issue was really independent. Dyson might ultimately be entitled to damages for the period of time in which Euro-Pro’s claim was false, but not to a preliminary injunction.
One detail from the testing: the court believed that the fact that the confidence intervals varied across tests, depending on the sample size, created a “fundamental problem” with the parties’ evidence.  A comparison of mean results, stripped of the accompanying upper and lower ranges of the confidence limit/confidence interval, wouldn’t necessarily tell the full story of truth or falsity, since a broad confidence interval might mean it was pretty likely that any particular vacuum would diverge from the mean.  (Regardless of the size of the confidence interval, though, the mean is still the best estimate in any given test.)  The court wanted the parties to address this issue, likely with statistics experts, as they proceeded.
The biggest fight was about the appropriate settings/level of suction for the tests, based on ASTM’s instructions to use the manufacturer’s own settings, which were incredibly hard to figure out/inconsistent.  (If there had to be a mini-trial about the right settings, my inclination would be to interpret the instructions against the drafter and require the “tests prove” claim to be accurate as to either alternative; otherwise I’d find that the tests don’t prove the proposition for which they are claimed.)  The court found that the current instructions told consumers to use the middle setting (higher suction, thus greater cleaning) unless they experienced difficulty pushing or pulling the vacuum (in which case they should use the lower-suction setting).  The NV650 moved easily on ASTM-compliant carpet, which I take to mean that it was ok to base claims on the middle setting going forward, though the court didn’t make a final ruling on what setting should have been used for testing deep carpet. “Euro-Pro’s revisions cured any defects in the prior versions of its product documentation.” And claims of past harm can’t support preliminary injunctive relief.
Taking the relevant tests together, the NV650 narrowly edged out the DC65, though further development of the record could change this conclusion.  While “Dyson’s injury in the face of Euro-Pro’s advertising claims is likely to be both significant and irreparable,” there just wasn’t likely success on the merits yet.

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