It's not hip to be false

The HipSaver Company, Inc. v. J.T. Posey Co., --- F. Supp. 2d ----, 2007 WL 1417446 (D. Mass.)

The parties compete in the market for hip protectors, “padded garments used to prevent hip and femur fractures in the elderly.” They sued each other once before, resulting in a settlement in which Posey paid Hipsaver $360,000, agreed to discontinue certain advertising, and agreed to engage in corrective advertising. The parties released all claims, known or unknown, available to them at the time, and agreed to provide each other 30 days written notice before using the results of any further comparative testing of Posey and HipSaver products. They then sued each other again over new (and some continuing) ads.

After evaluating the effect of the previous release and eliminating certain claims that had been available to the parties at the time, the court turned to the remaining unreleased claims. (The court also refused to dismiss HipSaver’s claim for breach of the settlement agreement based on failure to provide new testing results in advance.)

HipSaver argued that six statements in Posey’s ads were literally false. The court treated the statements as making two claims: (1) tests prove Posey’s hipsters are the “best” and “most effective” at absorbing impact-force associated with a fall, and (2) tests have proven the general effectiveness of Posey’s hipsters, without any comparative claim. HipSaver argued both that the tests weren’t sufficiently reliable to justify the statements and that, even if they were reliable, they didn’t support the claims. Though the testing didn’t comply with ASTM standards, the court determined that material issues of fact remained on both issues.

HipSaver also challenged the statement that the testing demonstrated that Posey products were proven “most effective” and “reduced the impact force by 90%, the best results of any hip protector available.” According to HipSaver, the materials used in Posey’s garments placed third in Posey’s own tests, after HipSaver’s SlimSaver. Posey argued that “best” “refers not just to a garment’s impact-absorption potential, but also to other considerations such as comfort and price.” Posey also argued that “most effective” was mere opinion.

The court had little difficulty rejecting these bad arguments. In context, “best” was about reducing impact force, not other features, as was “most effective.” (What I don’t understand is why, if HipSaver was correct about the test results, it didn’t win summary judgment as to this statement.)

The court then dismissed HipSaver’s challenges to Posey’s non-comparative claims: Posey's hip protectors were “proven effective in laboratory tests,” “help protect against injury from falls,” and “showed excellent impact energy absorption.” It ruled that HipSaver hadn’t met its burden of producing evidence that Posey’s testing didn’t support those claims. But to the extent that material issues of fact remained about whether the testing was reliable, I would have thought that HipSaver’s first challenge to the non-comparative claims remained viable.

Posey also argued that HipSaver suffered no injury from the ads, because HipSaver’s sales continued to grow at a regular rate during the ad campaign and didn’t increase when the ads were withdrawn; the ads were ineffective at selling Posey products; and Posey earned only $32,000 in profits on hip protectors during the relevant period. HipSaver’s expert report on damages was much sloppier and less specific, but given that the parties are direct competitors, the court gave HipSaver leeway at this point in the litigation. To proceed with its claim for Posey’s profits, however, it will need to provide evidence on causation and damages.