Wednesday, October 03, 2007

Digital smackdown

Your satellite ad has been interrupted ... (reference): DirecTV Inc. v. Comcast of Illinois III, Inc, 2007 WL 2808235 (N.D.Ill.).

Previous DirecTV v. cable litigation discussed here and here.

DirecTV’s American Pie ad claimed that consumers preferred DirecTV’s picture quality to that of cable. And here’s an interesting point: the ad has been enjoined, but there it is on YouTube. DirecTV could, one presumes, send a DMCA notice, but has little incentive to do so. When will we see the first injunctive relief in TV ad cases requiring DMCA notices to YouTube and similar sites?

Comcast challenged the American Pie ad, which was based on a consumer survey, as well as ad claims based on a survey of home video installers. In the consumer survey, subjects watched TVs showing a DirecTV digital and asked to compare them to analog signals. They were not told that one was analog and the other digital. Unsurprisingly, the consumers thought the digital signal was better, because digital signals are better. As a result, to run an ad claiming superiority over cable (which includes digital cable) without disclosing the analog/digital difference was “obviously” misleading. Indeed, the court expressed its willingness to grant Comcast summary judgment on this point. The other factors thus also favored preliminary injunctive relief. (The transcript is quite interesting as a matter of case management: “I regard the likelihood of an appellate reversal of an injunction against running the American Pie type ad as close to zero as one gets in legal proceedings. It is so obviously unfair on its face that an appeal would seem likely to me to jeopardize the appellant in terms of raising a frivolous appellate issue.”)

The installer survey was more complicated. It was as problematic as the consumer survey in asking for a DirecTV/cable comparison without specifying digital cable. Some areas covered by the survey appear not to have digital cable available, so the installers there would necessarily be basing their opinions on analog cable. Instead of unfair questions, the court suggested that a proper survey question would have been, “based on your experience as an installer, do you have a preference as between the picture afforded by satellite digital or cable digital[?]”

Installers’ sophistication can’t mitigate the problems with the survey because there was no screening to make sure they’d had experience with both satellite and cable digital. It’s possible that some of the installers interpreted the question to be asking for a digital-digital comparison, but the court found that unlikely, because there was no evidence in the record that digital signals differ because of source. “The very fact that these people came up with four to one in favor of DirecTV speaks loudly for the proposition that they were responding on the basis of their experience with DirecTV’s digital signal versus analog cable.” (The court did reject Comcast’s argument that payments to the dealers who employed the surveyed installers amounted to bribes to choose DirecTV; there was no evidence the dealers passed on these relatively small sums to the installers.)

These claims were survey-based, rather than test-based, establishment claims; the key principle is that establishment claims can be falsified by showing the measurement device used did not establish the proposition for which it was cited. Here, Comcast showed that the installer survey was not sufficiently reliable to justify the conclusion that installers preferred DirecTV over a “truly comparable” product, digital cable. The court specifically found that DirecTV intended to imply that installers had compared apples to apples and found DirecTV’s apples shinier.

There was a disclaimer on the ad, but the court discounted it entirely. It was on the screen for four seconds, but “even if it were on the screen for 40 seconds, it wouldn’t be legible enough or conspicuous enough for anyone to see it and to read it and to understand it.”

Thus DirecTV was enjoined from running any ads based on these surveys.

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