Wednesday, October 19, 2011

competitor who benefited from false advertising can't sustain claim

Pom Wonderful LLC v. Ocean Spray Cranberries, Inc., 2011 WL 4852472 (C.D. Cal.)

Pom sued Ocean Spray for false advertising of its "100% Juice Cranberry and Pomegranate" juice, which is comprised largely of apple and grape juice. Ocean Spray counterclaimed that Pom falsely advertises that Pom's pomegranate juice has health-related benefits. Pom moved for summary judgment for failure to show injury.

Ocean Spray acknowledged it had no evidence of any impact on Ocean Spray’s sales or profits, and stated that "there are so few dollars in real damages at stake" that Ocean Spray cannot quantify them. Still, in the absence of actual damages, a court can permit monetary relief based on the totality of the circumstances. However, that didn’t help Ocean Spray, which apparently benefited from Pom’s allegedly deceptive conduct. Ocean Spray’s COO testified that strong sales of Ocean Spray's pomegranate-flavored product were attributable, at least in part, to the popularity of pomegranate juice resulting from Pom's advertising. An award of profits with no proof of harm is an uncommon remedy in a false advertising suit not involving false comparative advertising, and there was no reason to award it here. Ocean Spray argued that this was a comparative advertising case, but the court disagreed. Though Pom compared its products to other drinks, including red wine, green tea, blueberry juice and cranberry juice cocktail, and though Ocean Spray argued that cranberry juice was its primary product and was readily associated with Ocean Spray, “Pom's reference to a generic product or class of products does not exhibit the specificity required of a comparative advertisement.”

Pom’s "Pomegranate Truth" features images of three non-Pom beverages, including Ocean Spray's Juice. Below each, the website lists each product's respective ingredients. But Ocean Spray didn’t show that any of the statements on this website were false or misleading. Had Pom made a false comparative statement about Ocean Spray, the image would likely be sufficiently specific to constitute a comparative advertisement. But those weren’t the facts.
Pom read the label image
The injunctive relief claim also failed because Ocean Spray couldn’t show even a likelihood of injury from Pom’s allegedly false statements.

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