Thursday, September 22, 2016

"unique" and "innovative" are puffery

LoggerHead Tools, LLC v. Sears Holdings Corp., 2016 WL 5080028, No. 12-cv-9033 (N.D. Ill. Sept. 20, 2016)

LoggerHead sued Sears under the Lanham Act and Illinois state law for false advertising; the court granted summary judgment to Sears.  LoggerHead sells a hand tool, the Bionic Wrench, which Sears sold from 2009.  In 2012, Sears sought a Bionic Wrench replacement to be sold under the Sears Craftsman brand and sent LoggerHead’s patent to a patent lawyer, who identified another patented tool that could be used as a model for a replacement wrench and that (he opined) would not infringe.  In late 2012, Sears began retailing the Max Axess Locking Wrench (MALW).

In DTC ads for the MALW, Sears stated: “[i]f you want maximum versatility in a single wrench, then you’ll love the latest innovation from Craftsman, the Max Axess Locking Wrench.” The product packaging for the MALW shows a picture of the wrench, the term “Unique Design,” and, underneath that, the phrase “Adapts to a wide range of fastener sizes and grips fasteners on all sides to prevent rounding.” The packaging also contains a dotted line going from the writing to the picture of the wrench.  Sears issued a press release with similar claims.
Craftsman package
LoggerHead argued that, taken in context, these features were literally false: (1) the “Unique Design” statement, (2) “Adapts to a wide range of fastener sizes and grips fasteners on all sides to prevent rounding” statement, (3) the illustration of the MALW and (4) the white line connecting them.  First, because the MALW copied its design from the Bionic Wrench, it wasn’t unique. Second, the “unique” claim was connected to the claim, “Adapts to a wide range of fastener sizes and grips fasteners on all sides to prevent rounding,” also false as a uniqueness claim, as was the connection between the “unique” claim and the image of the MALW’s tool head.

The court found no literal falsity in the uniqueness claim “given that there are admitted differences between the MALW and the Bionic Wrench.”  Plus, “unique” has previously been deemed puffery.  Although “unique design” might not be literally false, it could be misleading, but LoggerHead didn’t provide any consumer perception evidence.

What about “latest innovation from Craftsman” in the ads?  Sears argued that this couldn’t be false advertising because of Dastar, but the Supreme Court did not “hold that a false claim of origin is the only way to violate [the Lanham Act].” Gensler v. Strabala, 764 F.3d 735, 736 (7th Cir. 2014). Still, this statement wasn’t literally false, since it didn’t say what the innovation was, and courts have also found “innovative” to be puffery.

As for the press release, LoggerHead argued that it falsely stated: “Despite some visual similarities to other tools on the market, Craftsman Max Axess Locking Wrench operates in a different way, using a mechanism design[ed] in the 1950s.” LoggerHead claimed literal falsity because the MALW uses a mechanism designed by LoggerHead, and also alleged that the press release falsely implied that the MALW is made in America, when it is made in China.

Sears argued that the press release wasn’t commercial advertising or promotion.  The court thought that the press release had characteristics of commercial speech (product references, economic motivation for the speech) despite not being in a traditional ad format, but there was no evidence that the press release was sufficiently disseminated to the relevant purchasing public, even though it was posted on Sears’ website.

As for falsity, the press release didn’t say that the MALW was made in America and LoggerHead didn’t explain why the release was misleading on that point. The phrase “operates in a different way” was subjective and not literally false, since the MALW concededly contains some features that the Bionic Wrench does not, such as a locking mechanism. 

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