Saturday, March 07, 2009

Third time sucks: vacuum battles continue

Dyson, Inc. v. Oreck Corp., 2009 WL 537074 (E.D. La.)

This is the third action in the past three years between the parties. First, Oreck alleged that Dyson’s “no loss of suction” ad was false. Second, Dyson brought numerous false advertising counterclaims. The parties settled, releasing all claims “arising out of” or “related to” the ads at issue, and allowing such claims for products “existing in the US marketplace” as of the day of settlement. Four months later, Oreck sued Dyson for false advertising of its newest model, again attacking the “no loss of suction” claim; this was dismissed on res judicata grounds. (The Fifth Circuit recently affirmed; I didn't blog it because I didn't see anything new about false advertising in the opinion.)

Now, Dyson sued Oreck for a new comparative advertising campaign. Oreck’s 2004 ad campaign included an infomercial in which Oreck’s founder warned customers that bagless vacuums (a class of which Dyson’s vacuums are a member) “spread dirt, bacteria, mold and allergens all over your home.” The new campaign specifically targets Dyson, claiming among other things that a Dyson model can’t clean under furniture; that the Dyson “spreads dirt,” “is messy,” uses a filter that is “not very clean or sanitary,” and is “backbreaking” in its weight; and that the Oreck XL is superior in avoiding dirt, minimizing weight, and fighting bacteria.

Because the current claims are based on new ads that came after the prior lawsuit, res judicata did not apply. What Oreck really wanted was to argue that Dyson’s claims were barred by contract: the settlement agreement. That agreement provided that the parties could use prior ad claims. Oreck argued that “messy” and “spreads dirt” were virtually identical to the earlier claims, which also covered spreading dirt, mess, and smell. However, the previous ad compared Oreck vacuums to all bagless vacuums, and featured a Hoover; Dyson argued that Oreck’s claims were false particularly as to Dyson’s vacuums, which operate differently than the earlier ad claimed. In the new ads, the “messy” vacuum is a Dyson, and Oreck’s founder allegedly disregards Dyson’s specific instructions when emptying it. This is different in kind from the earlier generic claims about bagless vacuums.

Likewise, Oreck’s ads about its new model, the XL Ultra 4120, weren’t covered by the agreement, because that model was not part of the US market at the time of settlement. Oreck argued that the model wasn’t really new, but it consistently advertised it as new, and the 4120 differs functionally in several respects from previous Orecks, including what Oreck advertised as a technological “breakthrough.” It came with new user and service manuals, and Oreck’s corporate representative testified that Oreck complied with FTC guidelines that products advertised as “new” must be at least changed “in a functionally significant and substantial respect.” The court concluded that the settlement was only a safe harbor for existing products; Dyson could bring the exact claims it brought previously against the new product.

Oreck next maintained that many of its challenged statements were nonactionable puffery: (1) the Dyson is “bulky”; (2) the Oreck vacuum emits “no puff” of dust when it is emptied; (3) the Dyson bin emptying process is “messy” and the Dyson filter is “not sanitary” and a “dirty little secret”; and (4) the XL Ultra 4120 weighs “only nine pounds,” while the weight of the DC14 is “backbreaking.”

(1) While “bulky” standing alone is a subjective opinion, context can add meaning and definition, just as “better ingredients” became actionable in the context of misleading claims about the quality of Papa John’s ingredients in Pizza Hut v. Papa John’s. In context, “too bulky to get under furniture,” a phrase uttered during a visual demonstration of the Dyson unable to maneuver under a chair, is specific and measurable, and also capable of being proven false. Thus it is not puffery.

(2) “No puff of dirt”: the ad claimed that the 4120 would not “spew dirt into the air,” as compared to the Dyson, which creates “dust city.” Though a “puff” is not a measurable unit, “no puff” is part of a general, verifiable message that no dirt comes out when a consumer changes the bag. Oreck’s own infomercials show that the presence of dirt is verifiable—a recurring theme is that emptying a bagless vacuum causes a large, visible “puff” of dirt.

(3) Whether something is messy, dirty or the like is a matter of opinion. Reasonable people can differ on whether a particular object is clean, and there’s no objective standard of cleanliness against which to measure Oreck’s ad claims. However, Dyson was not claiming that those phrases alone are false advertising. Instead, Dyson argued that two specific demonstrations in the infomercial were false and misleading because they were inaccurate depictions of the Dyson bin emptying process, thus misleading viewers into thinking that the Dyson spreads dirt. Likewise, Oreck allegedly claimed that Oreck users didn’t need to come into contact with dust and dirt captured by the Oreck vacuum; this too is verifiable.

(4) “Backbreaking”/“Only Nine Pounds”: The court agreed that no reasonable person would rely on the “backbreaking” description; it’s just hyperbole for “heavy.” There’s no danger of consumer deception. However, whether the Ultra weighs only nine pounds is a verifiable fact.

Finally, Oreck argued that it’s true that the Dyson “simply cannot” clean under furniture. In the infomercial at issue, the host tries to clean under a piece of furniture with the Dyson DC14, and the size of the nozzle keeps it from working. The XL Ultra succeeds in its place. Dyson argued that the DC14 comes with attachments that allow it to clean under furniture; indeed, Dyson’s counsel demonstrated at oral argument that the DC14’s attached wand, which easily reaches under furniture, had been removed from the Dyson shown in the infomercial. Oreck responded (weakly) that viewers would understand that a “nozzle to nozzle” comparison was being made. The court understandably found that Oreck couldn’t succeed on this defense on a motion for summary judgment. Though the ad isn’t literally false—the Dyson can’t clean under certain furniture without attachments—the demonstration is misleading. Showing the Dyson without its attachments, and stating that the Dyson can’t clean under furniture, could mislead a reasonable consumer into thinking the Dyson can’t clean under furniture at all.

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