Dyson sued Bissell for false advertising; here the court
grants Dyson’s partial motion for summary judgment and denies Bissell’s motion
to exclude/disqualify certain experts.
Bissell advertises that consumers can improve their
respiratory health by using Bissell vacuum cleaners, touting the specific air
filtration performance of eleven different models on its website, packaging,
and products. Open-system
(OS) vacuum cleaners are not sealed and leak some air from gaps and seams; most
of the claims at issue related to OS models, though Dyson also challenged
claims regarding Bissell’s Healthy Home vacuum, a closed-system model in which
the unit is sealed.
In 2010, Bissell advertised that its OS vacuums had a “HEPA
Media Filter,” and that the filters or vacuum cleaners “capture[d] over 99.9%”
of certain allergens. Dyson argued that
HEPA is the term used in the US to indicate that a filter or filtration system
traps 99.97% of dust and other particles that are 0.3 microns in size. But,
Dyson continued, the statements were false because the OS vacuums didn’t meet
HEPA standards or capture over 99.9% of allergens. And Bissell allegedly
falsely claimed that the Healthy Home vacuum was “airtight” and that it
captured 100% of certain allergens.
Dyson commissioned independent testing of the Bissell
vacuums using allegedly industry standard tests, which showed that the
filtration performance of the OS vacuums didn’t come close to HEPA level. The testing also supposedly showed that the
filters used in the vacuums didn’t even themselves meet the HEPA standards (or
capture 99.9% of allergens, of course).
Further, the testing allegedly showed that the Healthy Home vacuum wasn’t
airtight and didn’t perform at HEPA levels.
After Dyson sued, Bissell added new disclaimers indicating that
only the filter, and not the vacuum cleaner as a whole, met HEPA standards, and
revised the disclaimers in 2012.
Dyson also alleged that its unique designs and superior
filters made its vacuums far superior to those of Bissell in terms of allergens. Bissell, knowing the importance consumers
place on healthy products, allegedly deceived consumers, who can’t
independently verify its claims, thus harming Dyson, Bissell’s direct
competitor. Dyson sued under the Lanham
Act as well as under Illinois’s
Uniform Deceptive Trade Practices Act, its Consumer Fraud
and Deceptive Trade Practices Act, and common law unfair competition.
The court first evaluated Bissell’s challenge to an expert
report on Dyson’s survey. While Dyson
bore the burden of establishing admissibility, and while a consumer survey must
comply with principles of professional survey research, consumer surveys are
rarely so flawed as to be completely unhelpful to the trier of fact and
therefore inadmissible; shortcomings generally go to weight instead.
Dyson’s expert, Kivetz, examined certain advertising claims
that the court agreed were representative of the claims at issue. On four panels of the the package for one of its vacuums, Bissell
stated: “HEPA Media Filter*—The filter captures 99.9% of pollens and ragweed
from the air passing through it.” The packaging also included Bissell’s initial
disclaimer on the lower left corner of the back panel, which states: “ *The
filter media, not the vacuum as a whole, complies with the High Efficiency
Particulate Air (HEPA) filter specification.”
The test cell saw that packaging, while the control group
viewed modified packaging with a disclaimer directly below the claims stating “*The vacuum during operation does not meet
the HEPA filter specifications.” (Wow,
that’s a really defendant-favorable control ad.) Respondents were asked what, if anything, was
being communicated to them about the HEPA Media Filter and about the vacuum
cleaner as a whole, with more specific followups. Responses were coded by an independent
coder. Kivetz concluded that the
challenged claims caused net 27% deception, and that Bissell’s initial
disclaimer didn’t work.
Bissell argued that the survey questions didn’t address the
relevant issue and were based on undefined terminology. Respondents were first asked “what message or
messages, if any, does this package mainly communicate to you about this
product?” and “Anything else?” Then the filter question: “Does or doesn't this
package communicate to you anything about a HEPA Media Filter?” A no response
ended the survey. A yes response led to:
“What does this package communicate to you about a HEPA Media Filter?” and then
“What else, if anything, does this package communicate to you about a HEPA
Media Filter?” Next: “Do you think that:
This package does communicate to you whether the vacuum
provides HEPA level performance during operation
This package does not communicate to you whether the vacuum
provides HEPA level performance during operation, or
Do you not know?”
If the respondent chose the first option (not clear if it
was rotated in practice), there was a follow-up:
“What does this package
communicate to you about whether the vacuum provides HEPA level performance
during operation?” and “What else, if anything, does this package communicate
to you about whether the vacuum provides HEPA level performance during
operation?”
Bissell argued that the later questions didn’t address the
relevant question of whether participants believed the claims related to the
vacuum as a whole or merely to the filter.
Instead, the survey induced respondents to erroneously draw a distinction
between the vacuum during operation and not in operation. Bissell identified a “handful” of verbatim
responses indicating that those respondents believed that HEPA level
performance could only be achieved if the vacuum was running. But this handful indicating “possible
confusion” on the part of a few respondents didn’t sufficiently show that the
survey didn’t address the relevant issue.
“ Confusion on the part of a few Participants is the unavoidable, albeit
undesirable, by-product of asking Participants open-ended, non-leading
questions during a Survey.”
Bissell argued that the questions didn’t raise the
possibility that filtration performance claims might be based on filter-only
testing, but that was “an objection to Kivetz's failure to use leading
questions to suggest the response desired by Bissell.” Plus, the progression of questions began
broadly, then focused on the filter alone, then asked whether the claims
communicated anything about the filtration benefits of the vacuum as a whole—which
was the point of interest.
Bissell next objected to the use of “HEPA level performance”
in the questions as an undefined term.
It argued that HEPA standards differ depending on what is being tested
or described. But the survey wasn’t
designed to test consumers’ understanding of the phrase “HEPA level
performance” or to determine whether the vacuum or filter actually achieved
HEPA level performance. Instead, the
survey tested whether consumers believed that Bissell was making claims about
the vacuum as a whole. The precise
definition of “HEPA level performance” was therefore not relevant to this
survey, and it was close enough in meaning to Bissell’s claims (including the
99.9% claims) to serve as an appropriate proxy for them. Mead Johnson & Co. v. Abbott
Laboratories, 201 F.3d 883 (7th Cir. 2000), didn’t apply because the survey
wasn’t being used to define the meaning of that phrase.
Bissell also challenged the coding of the survey. It contended that many responses indicated
neutrality or uncertainty about whether respondents believed the vacuum
provided HEPA level performance during operation. The coding was done independently by a coder
who didn’t know the purpose of the survey.
This masked procedure made Bissell’s claims of bias unconvincing. “Moreover, Bissell has not presented any
legal authority supporting the proposition that survey responses must be coded
in a completely objective manner, and certain case law in fact suggests
otherwise.” It also didn’t matter that
the coder wasn’t given “relevant information about filtration standards, HEPA,
and HEPA protocols,” since the coder wasn’t evaluating how consumers defined
HEPA level performance. Likewise, it
didn’t matter that Kivetz didn’t know that the HEPA standard referenced in
Bissell’s first disclaimer was a test protocol for filter media alone; survey
respondents would likely also lack such knowledge.
Bissell then argued that presenting only the packaging to
respondents didn’t properly replicate market conditions, which should have
included multiple products and point of sale materials. But this wasn’t a trademark case, and there
was no precedent that comparative products and literature are required to
replicate market conditions in a false advertising case. And “case law suggests that ‘standards for
replicating market conditions for a consumer confusion survey in a trademark
infringement case cannot be applied wholesale’ to cases alleging false advertising.”
A mall intercept survey using an actual
package and a price card similar to the marketplace reality, along with
instructions to examine the package as if the respondent was at the store
thinking of buying it, were fine. (Though
I don’t think there was any problem with this survey, I don’t understand the
rationale for distinguishing false advertising and trademark here. There could be one, I suppose, having to do
with what questions consumers are asking themselves when they make decisions—but
then we’d be forced to confront the fact that trademark doesn’t require
materiality, though it should.)
Bissell then pointed out that Kivetz criticized a survey in
another case as unreliable for allowing participants to continue to view the
packaging while the answered the survey questions, then did the same thing
here. But Kivetz identified material
distinctions in the respective surveys, specifically the category of products
at issue. Here, the products were
vacuums, “the purchase of which would likely involve deliberate and thoughtful
decision-making by a consumer before its purchase because of its significant
cost,” whereas the previous survey involved low-cost beverages. In the context of a big-ticket purchase,
market conditions are better approximated by allowing respondents to view the
stimulus throughout the survey.
None of the criticisms warranted exclusion of the survey.
Likewise, Bissell failed to disqualify Dyson’s technical
expert on filtration, Susan Goldsmith, even though she’d done work for Bissell
as well, once more than ten years before the case began and once during the
case, before Dyson disclosed her as an expert.
Goldsmith’s relationship with Bissell was far from exclusive. Instead,
Goldsmith performs services for the entire vacuum industry, including for
direct competitors. She’s one of the
world’s leading experts on vacuum cleaner testing, and few experts are capable
of performing her services. Her company
was possibly the only independently accredited lab in the world with both the
expertise and the expensive, specialized equipment required to run the tests at
issue in the case. The fact of her
previous work for Bissell, including her exposure to confidential information,
wasn’t sufficient to disqualify her.
The court also noted that Dyson first hired her for work
relating to this case. Only after
Goldsmith got results adverse to Bissell’s position did Bissell hire her as a
consultant. And by the time Bissell
hired her, it should have been well aware of her work for Dyson related to the
litigation based on Dyson’s initial disclosures, not to mention Bissell’s
awareness that she worked for competitors.
It would be inequitable to disqualify her under these circumstances.
The court then turned to the parties’ cross motions for
partial summary judgment on the falsity of the original statements about
Bissell’s OS vacuums; the Lanham Act and state law claims were identical,
except that for an Illinois CFDTA claim a plaintiff must also prove that the
defendant intended consumers to rely on the deception. Where an ad explicitly or implicitly
represents that tests prove a claim, a plaintiff can show falsity by showing
that the tests don’t prove the proposition for which they’re cited. Bissell’s use of the term HEPA and reference
to a specific numerical percentage implicitly (NB: and necessarily) indicates
that Bissell was relying on tests to support its claim.
The parties disagreed over whether there was one definition
for “HEPA.” But Bissell failed to
provide sufficient evidence to create a material dispute of fact: in the US,
HEPA means that a filter or filtration system has a minimum efficiency of
99.97% for 0.3 micron particles when tested at the application's rated air
flow. Plus, even if the court applied
Bissell’s suggested alternative standards, Bissell didn’t show that the ads
would’ve been accurate under them anyway.
Bissell admitted that it didn’t base its statements on any
tests performed on the OS vacuums themselves.
Instead, it based its statements on tests conducted on the filters
alone. However, Bissell requested that
these standalone tests be done at air flow rates less than the actual rates
created by the OS vacuums. Even Bissell’s
own expert thought this wasn’t ideal.
The court found it undisputed that, even if the claims were about the
filters alone, Bissell still didn’t have adequate testing to support its
claims. Dyson’s own testing showed that
when the filters were tested separately, they didn’t meet HEPA standards. Bissell didn’t refute these results and didn’t
create a genuine issue of fact about them.
Bissell argued that it used the term “Media” in its initial
claims, which is understood in the industry to refer to the paper filter and
thus notified consumers that its claims related only to the filters. But the
court considered the statements in context: “The undisputed facts in this case
and the evidence presented by Dyson clearly show that Bissell used the 2010
Statements to advertise and sell vacuum cleaners, not filters.” Thus, Bissell’s claims were false and
unambiguous representations that the vacuums operated at a HEPA filtration
level and captured 99.9% of allergens.
Even if “Media” had been a clear reference to the paper in the filters,
Dyson still clearly established literal falsity.
The court also found that the statements were material. Bissell’s consumer research on the importance
of respiratory health to improve its marketing showed materiality; Bissell’s
studies showed that filtration efficiency was important to consumers. Plus, the statements appeared on the front
packaging of some vacuums, which was where Bissell highlighted prominent
selling features. An employee testified
at his deposition that the filtration efficiency was one of the “key features
that a customer [is] interested in....” Plus, the statements related to health; particles
less than 2.5 microns in size can result in adverse health effects in humans if
inhaled. No reasonable trier of fact
could avoid finding materiality.
In addition, there was no disputed issue on probable injury
to Dyson. Dyson wasn’t seeking its own lost profits; it need only show probable
injury to prevail. Bissell was Dyson’s
number one competitor in the industry, both on volume and dollar market share
terms. Dyson and Bissell vacuums are
sold in many of the same places and often appear side-by-side. The false statements here would’ve made
cheaper Bissell vacuums more appealing than more expensive Dyson vacuums
advertising the same high filtration efficiency rates. Thus, Dyson suffered a probable and
discernible competitive injury as a result of the false statements, as a matter
of law.
Dyson didn’t move for summary judgment on the later ads with
disclaimers, though Bissell did; the court denied Bissell’s motion for failure
to explain why it was entitled to summary judgment. Dyson had shown adequate evidence that the
later ads were false to go to a trier of fact. Likewise, there was enough
evidence that the closed-system Healthy Home vacuum didn’t capture 100% of
allergens to go forward.
Finally, the court rejected Bissell’s affirmative defenses,
including release—that was based on a 2006 release ending earlier litigation. The release couldn’t have contemplated
later-made ad claims for new products like these, and in any event Illinois
doesn’t enforce contracts exculpating persons from the consequences of their
wilful and wanton acts, and with respect to the initial statements, the facts
showed that Bissell’s false advertising was wanton and willful.
Acquiescence, estoppel, laches, and a statute of limitations
argument also failed for essentially the same reasons: Dyson never condoned
Bissell’s conduct and took action promptly.
For laches, Bissell argued that it was prejudiced by incurring marketing
expenses, but didn’t show that any specific expenses were connected to any
Dyson delay. “[U]nder Bissell's own
version of [the] facts, Bissell was able to sell OS Vacuum Cleaners for years
before Dyson challenged the current models, which indicates, if anything, that
Bissell may have profited from any delay on the part of Dyson.” And the court borrowed Illinois’s three-year
statute of limitations under the UDTPA/CFDTPA and found that Dyson acted
promptly when it knew or should have known of its claims (including by engaging
in testing to disprove the filtration claims).
Any follow up on this case? I understand there has been a decision, but I can't find it.
ReplyDeleteDo you have an update of this case? I heard that there has been a decision, but I can't find it anywhere.
ReplyDeleteThe opinion appears to have been vacated because of the parties' settlement. The materials should be up on the RECAP website.
ReplyDeleteThanks. Do you have a link to the site?
ReplyDeleteYou can search for the case on http://archive.recapthelaw.org/
ReplyDelete