Tuesday, May 08, 2018

exercise company affiliation and ad revenue don't make diet review into commercial speech

GOLO, Inc. v. HighYa, LLC, 2018 WL 2086733, No. 17-2714 (E.D. Pa. May 4, 2018)

The court here declines to apply the Lanham Act to “companies that generate income through websites that review the products of others, without selling any products of their own.” GOLO sells a weight loss dieting program that can be purchased through its website. Defendants are review websites that purportedly assist consumers; HighYa has a marketing affiliation with a limited number of suppliers (e.g., BowFlex Max Trainer), but both defendants’ principal source of revenue comes from ads.  GOLO contested the fairness and accuracy of defendants’ online reviews, leading to revision on one site and removal on the other, but GOLO wanted to recover for the initial period.

Defendants’ editorial reviews principally rely on “publicly available information,” rather than defendants’ own use or testing. GOLO’s website contained a description of its program, backed by references to research purportedly supporting the merits of the program. Defendants’ editorial reviews primarily, if not exclusively, critiqued the statements in that description. HighYa’s editorial review spurred dozens of comments from purported users, with an average customer rating of 2.8 out of 5 stars. The link “was posted” across different social media platforms, one of which contained the statement: “Weight-loss #scams are everywhere. Is GOLO one of them?”

GOLO alleged that the title, “GOLO Weight Loss Diet Reviews – Is it a Scam or Legit?” was misleading; much of the review was was based on an outdated version of the GOLO program site; and  the focus of the GOLO program was not simply combatting “insulin resistance,” as the review states. The challenged portions were eventually removed.

The BrightReview article appeared in a similar form. The average customer rating was 2 out of 5 stars, with three purported users giving “highly negative ‘reviews.’ ” GOLO challenged statements about its study evidence and claims.

GOLO alleged that the websites were “designed to appear trustworthy, [and to] resemble internet versions of more traditional consumer review publications”  but were owned by or secretly related to the competitors of the products defendants review.

False advertising and false association claims only apply to commercial speech. Though there was a specific product reference, the articles still weren’t ads.  On their face, the reviews didn’t promote any competing product, and didn’t explicitly propose a commercial transaction. The court analogized to Tobinick v. Novella, 848 F.3d 935 (11th Cir. 2017). As there, the defendants “gained no direct economic benefit from readers of the reviews’ decision,” and “[t]he content of the reviews had no direct bearing on the revenue generated by traffic to the site.”  To the extent that the reviews were based only on the content of GOLO’s website, “[t]he value of such a review to consumers may be limited,” but that didn’t make it an ad.  Ad-based financial benefit was merely incidental to the content.

The Lanham Act does allow liability “if websites purporting to offer reviews are in reality stealth operations intended to disparage a competitor’s product while posing as a neutral third party.”  However, GOLO hadn’t plausibly pleaded that these review sites were shams.

Although “in the absence of discovery, a plaintiff’s ability to confirm what might be well-founded suspicion is limited,” that wasn’t enough here.  The court considered the general content of the sites, including the fact that defendants responded to GOLO’s objections by amending the reviews and specifically advising readers that changes to the reviews were based on further information provided by GOLO. “Such conduct does not plausibly support an inference that the purpose of the reviews is to create an advantage for competing products.” Defendants also disclosed the commercial relationship with BowFlex and other commercial affiliations, which made the allegedly covert competition less plausible.  And to the extent that GOLO pled that defendants’ revenues were a product of web traffic, the favorable/unfavorable nature of a review seemed irrelevant; sellers might even promote favorable reviews.

Nor did the affiliation with BowFlex render this a Lexmark situation in which “one competitor directly injures another by making false statements about his own goods or the competitor’s goods and thus inducing customers to switch.” “The review discussing GOLO’s dieting program does not at all reference, or provide a direct link to any exercise equipment, let alone to Bowflex.” Even if there were a prompt to try exercise, it doesn’t follow that diet and exercise compete; GOLO designed its program to work with exercise.  While direct commercial competition isn’t an “absolute” requirement, these observations bore on the plausibility of the conclusory allegation that defendants’ websites were covert competitors.

With Lanham Act false advertising and state coordinate claims out of the way, only a Pennsylvania trade libel claim remained.  But Pennsylvania has a one-year statute of limitations for trade libel claims, running from the date of the first publication. GOLO alleged that HighYa’s initial review was posted in “March 2016,” and filed on June 16, 2017. GOLO argued that the revised version of the article was published within the limitations period, and that it was re-published when HighYa posted links to it through its social media accounts. But the only HighYa social media post referenced dates back more than a year before filing, and GOLO didn’t object to the revised article.

As for user comments, GOLO’s allegation that HighYa was the true source of the comments “on information and belief” was insufficient in the context of the other allegations.

As to BrightReviews, GOLO didn’t adequately plead falsity. Each challenged statement was prefaced with language indicating that they are observations based primarily on GOLO’s website: “ ‘The 2010 study [was] performed with diabetics, not otherwise healthy individuals looking to optimize insulin...[T]his seems to be their target market;...None of [GOLO’s] studies appear to be peer reviewed for accuracy...;...and [W]e didn’t encounter any clinical evidence on leading medical websites...that directly linked insulin management...and weight loss.’ ” Though GOLO argued that these statements were inaccurate, it didn’t address whether those observations could reasonably and fairly been made based upon the information posted on its website at the time.

GOLO also argued that the reviews created a false impression that its product was a scam, citing low the average user rating; HighYa’s Twitter post, which stated, “Weight-loss #scams are everywhere. Is GOLO one of them?”; the initial title of the article, “GOLO Weight Loss Diet Reviews – Is it a Scam or Legit?”; and the fact that the reviews would appear prominently in web searches for GOLO. But in the context of the review, the court didn’t see an accusation of “a scam in the illegal, fraudulent sense, as compared to communicating that the product might not produce its intended result.”

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