Friday, August 23, 2019

Weight Watchers competitor wins dismissal of TM claims over "millennials are calling [it] Weight Watchers 2.0" ad

Weight Watchers Int’l, Inc. v. Noom, Inc., 2019 WL 3890139, No. 18-cv-9637 (PKC) (S.D.N.Y. Aug. 19, 2019)

Noom markets “weight-loss services based on nutrition and lifestyle advice dispensed through a mobile app.” It ran some ads that mentioned Weight Watchers. “Broadly characterized, these advertisements described Noom as offering effective, modern weight-loss services that compared favorably to those of Weight Watchers.”  WW sued for false advertising and trademark infringement.  Almost astoundingly for a court in the Second Circuit, the court dismissed the trademark infringement claims as nominative fair use. It also dismissed some of WW’s false advertising theories but found that claims based on Noom’s statement that its service is “backed by 8 years of research and proven to be effective by several medical journals” were sufficiently pled.

One Noom Facebook ad stated: “You aren’t still on MySpace, so why are you doing Weight Watchers®?” and used the phrase, “A healthier you in 16 weeks.” Another: “I’ve tried Weight Watchers and nothing has worked!” Other Noom ads featured phrases like, “Lose weight for good,” and, “Most weight loss programs are based on unsustainable dieting” and “crash dieting.” Some Facebook ads included the text, “The program that millennials are calling Weight Watchers® 2.0” and “Millennials are calling it Weight Watchers® for the 21st century.”

False advertising:  The “... so why are you doing Weight Watchers®?” ads allegedly implied the false message that “consumers would lose more weight in 16 weeks using Noom that they would using Weight Watchers, or, alternatively, that Weight Watchers customers would lose no weight in 16 weeks.” The ads included the text, “A healthier you in 16 weeks,” followed by, “Join 45 million+ regular people learning to push past plateaus and tame temptation without starving or stressing out. Noom’s 16-week course gives you the behavior change tools to forgive, practice, and (finally) stick to a plan.” Additional phrases varied, but included “A smarter way to lose weight,” “noom. Weight loss for millennials” and “Lose Nothing But the Weight.”

The court found WW’s reading of the ads “strained.”  The challenged statements were puffery. They mentioned WW only in the context of comparing it to MySpace’s obsolescence. The ads didn’t imply that a Noom customer would lose more weight in 16 weeks than a WW customer would. The analogy between WW and MySpace was simply a vague claim of superiority.

“The Review of Sally W.”  A Noom Facebook ad quoted “Sally W.,” stating “I have lost more weight with Noom in 5 weeks than I lost in 10 months on Weight Watchers.” It apparently used a stock photo and didn’t state an original source for the review.  [The FTC would not be happy with this ad.]  WW argued that the ad falsely implied that Sally W.’s experience was typical. The court found this allegation implausible. The court thought that a reasonable consumer would perceive this as a review from a single customer with no special expertise in weight loss or other relevant areas.  “The Court takes judicial notice that customer reviews of businesses, products and services have become common on many websites and mobile apps, including Google, Facebook and Yelp. Reviewers frequently express their views in strong, personal terms.” 

The court reached this conclusion despite WW’s deployment of the FTC’s Endorsement Guide, which itself was based on consumer research indicating that a substantial percentage of consumers did receive typicality messages from similar ads.  [The court didn’t cite the FTC’s factual basis for its conclusions, just the relevant what-to-do guidance.] While it’s true that “courts have held that a ‘plaintiff may and should rely on FTC guidelines as a basis for asserting false advertising under the Lanham Act,’ ” it’s also true that “there is no private right of action under the FTC Act, and its disclosure obligations do not apply to Lanham Act claims.”  Even according “some weight” to the FTC’s guidance, it didn’t render the claim here plausible because the FTC was concerned with disclosures and disclaimers, not with the underlying ad statements themselves. 

[This reasoning is just wrong.  (1) The FTC disfavors “not typical” disclosures for ads of this type because its research showed that ads of this type are still misleading to many consumers, even with the disclosures, and (2) even if the FTC Guide was “about” disclosures, the point of the FTC guidance here is that, without sufficient disclosure to actually convey atypicality to consumers, these kinds of ads are misleading.  The FTC is substantively concerned with consumer deception under §5, not with disclosure in the abstract.  Given the evidence developed by the FTC—not for nothing, much of it in the weight loss context—it is at least plausible that the ad conveyed a typicality message.  Even taking judicial notice of the prevalence of reviews shouldn’t change that, especially since reviews are not the same thing as reviews endorsed and disseminated by the advertiser, who consumers may indeed consider to have (1) special expertise and (2) some constraints imposed by advertising law against deceiving them, thus making the advertiser’s selection of a review more trustworthy than a random review.]

“Lose Weight for Good” and “Permanent weight loss in the palm of your hands.” The relevant ads included the line “Noom’s 16-week course gives you the behavior change tools to forgive, practice, and (finally) stick to a plan.” And some touted “life-changing results.” WW argued that these ads conveyed a false message “that consumers will not regain the weight they lose by using Defendant’s Program for only 16 weeks, even after they stop using it.” But it wasn’t plausible that a reasonable consumer encountering the ads as a whole “would conclude that Noom guarantees permanent, lifelong weight-loss simply by subscribing to Noom.” This was just puffery.

The December 2018 Ads: These ads included the statements that “Most weight loss programs are based on unsustainable dieting,” “Most weight loss programs are based on crash dieting,” and a purported consumer stating, “I’ve tried Weight Watchers and nothing has worked.” This allegedly conveyed the false messages that WW used crash-dieting techniques and that the customers of WW would regain any weight that they lost. Noom argued that there was a 12-second gap between the “crash dieting” statements and a reference to WW. The court agreed that the challenged statements were puffery: “I’ve tried Weight Watchers and nothing has worked!” was too vague and broad to be falsifiable, and its “hyperbolic” character was reinforced by the next exaggerated statement: “Noom has literally been life-changing!”

Earlier references to “crash” or “unsustainable” dieting and results that “DON’T last” didn’t change matters. They were references to “unnamed weight-loss programs” but didn’t impute particular methods to WW, especially given the accompanying images of a woman eating pasta and a multi-layer chocolate cake being sliced and served, which served to make the claims more exaggerated.

“I yoyo dieted for years ....” This ad continued: “I counted the points. I followed the rules and it didn’t help me long term. I was just so tired of losing the weight and gaining it all back. But I found something new. It’s called Noom. It’s not a diet. It’s a totally different personalized program that uses psychology and small goals to change your habits so that you can lose the weight and keep it off for good.” WW argued that this ad impliedly conveyed a false message that the WW program is based on diet alone. The court disagreed; there was no express reference to WW, and even assuming that points/rules identified WW, the ad still didn’t plausibly convey that WW programs were “based on diet alone”; the relevant statements were about Noom not being a diet, not WW.

The “Coach Heather” E-Mail. This email from Noom had the subject line, “Why Weight Watchers failed you.” The email stated, “Weight Watchers doesn’t have an app which means it’s not only more expensive, it costs more time making room for it in your life.” The complaint alleged that this statement was literally false (since 2009!). However, the ad didn’t sufficiently allege that this email was commercial advertising or promotion, or even identify to whom it was sent.

Finally, WW’s allegations about Noom’s claims about research did survive. Noom’s website allegedly stated that its weight-loss program is “backed by 8 years of research and proven to be effective by several medical journals.” A Noom ad also stated: “Your course is backed by 8 years of research and proven to be effective by several medical journals.” WW alleged falsity/misleadingness because the Noom program has not been subject to “randomized, controlled studies, and at least three of the studies relied upon by [Noom] are preliminary or pilot studies involving only small groups of people,” rendering the “proven effective” statement false and misleading.

For a “tests prove” claim, a plaintiff can show falsity by showing the tests aren’t “sufficiently reliable to permit one to conclude with reasonable certainty that they established the claim made.” By contrast, “[c]onclusions drawn from non-fraudulent data about subjects of legitimate scientific disagreement ‘are not grounds for a claim of false advertising under the Lanham Act.’” Noom’s arguments that it should be protected by the latter principle were more appropriate for summary judgment.  [And those arguments expose the very shaky foundations of ONY, the case cited by the court—deciding which science is more likely than not to be a correct account of the world is a basic judicial function in the modern age.  Among other things, ONY’s scope is/should be limited by the fact that the case involved (1) full disclosure of the underlying data and its limits (2) to doctors who understood the import of that disclosure and thus could draw their own conclusions about whether the results were real.  Previous courts interpreting ONY have understood those limits and I hope that if this case continues the court here does as well.] “The Court is unable to resolve at the pleading stage whether the research submitted by Noom proves the effectiveness of its weight-loss programs, whether that research is reliable, or whether the journals publishing the research are considered credible.”

Trademark infringement: The challenged ads were one with the text, “The program that millennials are calling Weight Watchers® 2.0” and a second stating, “Millennials are calling it Weight Watchers® for the 21st century.” Both ads were identified as “Sponsored” by Noom.  Noom argued nominative fair use.  In the Second Circuit, that’s evaluated by using the multifactor LOC test plus the Third Circuit NFU test as additional factors.  [Sigh.]

Strength and competitive proximity favored WW, but the other usual factors weren’t alleged/were neutral, and the parties’ marks were dissimilar. The alleged bad faith was only the prominence of the use of the WW mark, but those ads also were identified as being from Noom and used the stylized “noom.” logo.  As for the NFU factors, “Weight Watchers” was necessary to identify Weight Watchers, weighing in favor of nominative fair use.  [The court implicitly treats the Second Circuit’s use of the Third Circuit factor one, “whether the use of the plaintiff’s mark is necessary to describe both the plaintiff’s product or service and the defendant’s product or service, that is, whether the product or service is not readily identifiable without use of the mark,” as more like the Ninth Circuit version focusing only on whether the use identifies the plaintiff. Perhaps it would be even more likely to be NFU if Noom needed to use Weight Watchers to explain what Noom was, but it is enough that Noom needs to use the mark to identify Weight Watchers.  If NFU is going to be shoved into the multifactor, balancing LOC test, then it makes some sense that, like the other factors, this factor is a matter of degree.]

Next, “whether the defendant uses only so much of the plaintiff’s mark as is necessary to identify the product or service.” “Courts should consider whether the alleged infringer ‘stepped over the line into a likelihood of confusion’ by using a mark ‘too prominently or too often, in terms of size, emphasis or repetition.’” In these ads, the WW mark appeared once, in a sentence that runs above an image, with no additional marks or design elements owned by WW, and it included the “®” symbol, which the court apparently thought of as good faith-y (although its effect on whether consumers would think the ad came from WW is a bit ambiguous to me). “That the use of the mark is limited to one mention of the company name weighs in favor of nominative fair use.”

Finally, the court considered “whether the defendant did anything that would, in conjunction with the mark, suggest sponsorship or endorsement by the plaintiff holder, that is, whether the defendant’s conduct or language reflects the true or accurate relationship between plaintiff’s and defendant’s products or services,” giving weight not only to source confusion, but also to “confusion regarding affiliation, sponsorship, or endorsement by the mark holder.” Here, the ad text didn’t plausibly “suggest sponsorship or endorsement” of Noom by Weight Watchers. It attributed an opinion to a consumer demographic, suggesting that they “compared Noom to Weight Watchers” and perceived Noom to be “more contemporary.” That didn’t suggest endorsement or sponsorship, but rather that “Noom is a different and modern alternative to Weight Watchers.” Instead, this was “a comparative claim” … Weight Watchers is invoked once in the text, with a negative connotation that its services are outdated.  [Compare to the “if you like X, you’ll love Y” cases—though those cases split in result, and favor X when there are other indicators of similarity to X such as product trade dress; the court makes the point here that there aren’t any such indicators in these ads and instead a clear use of the Noom mark.]

TM claims dismissed. State law claims survived to the extent they matched up with the analysis above. Also, the NY §349 claim based on infringement was dismissed because it didn’t “plausibly allege a specific and substantial injury to the consuming public, beyond the purported infringement of the Weight Watchers mark.”

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