Thursday, July 28, 2011

Blog comments not trustworthy evidence of consumer confusion

QVC Inc. v. Your Vitamins Inc., No. 10-4587 (3d Cir. July 14, 2011)

District court opinion discussed here.

Defendant Lessman owns Your Vitamins, which sells a product called “Healthy Hair, Skin, and Nails.” He used to sell his products on QVC, then switched to QVC’s rival HSN. Thereafter, QVC introduced its own competing Healthy Hair, Skin, and Nails product, and the parties also compete on their resveratrol supplements.

Shortly after QVC introduced its product, Lessman posted several blog posts on his site, complaining about QVC’s unfairness in using the same name and alleging that (1) QVC’s Healthy HSN is over 90% additives; (2) “there is a significant body of troubling research that connects hyaluronic acid, an ingredient in QVC’s Healthy HSN, to cancer, that “it is totally useless and potentially harmful,” and, while it “does not necessarily ‘cause’ cancer...credible research points to a relationship and mechanism, which should preclude its use in vitamins”; (3) Healthy Hair‟s silica is “more common[ly]” known as “sand or glass” and “We also use silica in our Healthy Hair Skin & Nails, but because we recognize its solubility limitations, we include our soluble organic silicon”; and (4) QVC’s resveratrol product includes 3 artificial colors, “is almost two-thirds additives,” comes frompolygonum cuspidatum , not Japanese knotweed, contains “an all but meaningless list of seven different botanicals—NONE of which states a standardization of any kind,” and (in drink form) contains 4 grams of sugar per serving from “a mystery source.” He also made a number of general pejorative remarks about QVC’s products, calling them “ridiculous,” “embarrassing,” “sad,” and “disturbing.”

QVC sued for state law and federal false advertising. The district court denied a preliminary injunction, and the court of appeals affirmed, finding no abuse of discretion.

The district court found that QVC hadn’t shown explicit falsity, even with respect to the most troubling statements about the relationship between hyaluronic acid and cancer. “If his statements concerning that relationship had been literally false, his later statement that the levels of the acid in QVC’s Healthy HSN were so low that it nonetheless would not have an effect would not be sufficient to save him from a finding of literal falsity. One cannot escape liability for a literally false claim by pointing to a later disclaimer.” However, the statements, “while somewhat difficult to parse, cannot be read as unambiguously false.” The court here deferred to the district court’s factual findings.

Misleadingness requires proof of consumer deception, which usually requires a survey. Comments on Lessman’s blog posts purportedly left by consumers were insufficient. The district court looked at the 60-odd comments and found only a handful suggesting consumers had been misled into a materially false belief, which wasn’t enough to show a likelihood of success on the merits. The court of appeals agreed.

The court of appeals further said that even more abundant comments would often be “of only limited value” because “[c]omments left on blog posts can be very difficult to authenticate. The use of false identities in Internet forums is now a well-known tactic for attacking corporate rivals.” (Wait, is the court suggesting that the negative comments were from defendants? If so, there’s a much bigger false advertising problem. Note also the negative implication that in “real name” situations, comments would be more persuasive, though I pity the lawyers who have to track down those commenters.) “Even if a poster is ‘legitimate,’ doubts will often remain as to the sincerity of the comment. And, finally, even if a poster is genuine and making a comment in good faith, whether he or she would fall in to the universe of consumers whose opinions are relevant (i.e., those who are or potentially might be purchasers of the products in question) often cannot be known. Given these considerations, it was especially appropriate for the District Court to give the blog comments only limited weight” (citations omitted).

There’s some internet exceptionalism going on, though maybe it’s justified. Courts routinely admit evidence of phone calls, email, and mail as evidence of deception, without worrying much about whether they’re likely consumers. It’s quite possible that online commenting culture is different enough that the distinction is justified. But, at the very least, decisions like this call into question the consistency of weighing evidence of confusion by conceded nonconsumers against defendants in Lanham Act trademark cases.

And speaking of how trademark plaintiffs have it easier despite proceeding under the same law: QVC argued that a single instance of confusion could be sufficient for liability. “However, every case it cites for this proposition concerns deception under the other branch of the Lanham Act—that is, with respect to trademark confusion. Even in that context, this proposition is not necessarily accepted.” The court of appeals didn’t find clear error in the district court’s holding that QVC hasn’t satisfied the burden of showing that the advertising was likely to deceive a substantial portion of the intended audience.

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