Opinion ID: 199109
Heading Depth: 2
Heading Rank: 2

Heading: The Lanham Act False Advertising Claims

Text: 30 The false advertising prong of the Lanham Act provides: 31 (1) Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which-- 32 (B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person's goods, services, or commercial activities, 33 shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act. 34 15 U.S.C. § 1125(a). 6 A plaintiff can succeed on a false advertising claim by proving either that an advertisement is false on its face or that the advertisement is literally true or ambiguous but likely to mislead and confuse consumers. See Southland Sod Farms v. Stover Seed Co., 108 F.3d 1134, 1139 (9th Cir. 1997); Castrol, Inc. v. Pennzoil Co., 987 F.2d 939, 943 (3d Cir. 1993); Abbott Labs. v. Mead Johnson & Co., 971 F.2d 6, 13 (7th Cir. 1992). If the advertisement is literally false, the court may grant relief without considering evidence of consumer reaction. See United Indus. Corp. v. Clorox Co., 140 F.3d 1175, 1180 (8th Cir. 1998). In the absence of such literal falsity, an additional burden is placed upon the plaintiff to show that the advertisement, though explicitly true, nonetheless conveys a misleading message to the viewing public. See Sandoz Pharms. Corp. v. Richardson- Vicks, Inc., 902 F.2d 222, 228-29 (3d Cir. 1990). To satisfy its burden, the plaintiff must show how consumers have actually reacted to the challenged advertisement rather than merely demonstrating how they could have reacted. See id. at 229. 35 Clorox's amended complaint alleged that Proctor & Gamble's original and modified Doorstep Challenge television campaigns, as well as the promotional brochure, were false and misleading. Specifically, Clorox alleged that the Doorstep Challenge advertisements and promotions conveyed the false and misleading message to the Puerto Rican public that Ace con Blanqueador gets clothes as white or whiter than a detergent used with chlorine bleach. 7 Clorox also alleged that the name Ace con Blanqueador is literally false with respect to Ace liquid detergent. 36 The district court's analysis of the Lanham Act claim consisted of two paragraphs in which it reasoned that Clorox has failed to state a claim under the Lanham Act because it could not establish that Proctor & Gamble's advertisements contained false or misleading statements. In particular, it found that the tag line appearing in the modified campaign commercials, Compare with your detergent . . . Whiter is not possible, was not false because it compared Ace only to other detergents, not to detergents used with chlorine bleach. The court also stated that, Ace's comparison claim was not actionable under the Lanham Act because it was mere puffing. 37 The district court's dismissal was erroneous for several reasons. First, it ignored many of the allegations on the face of the complaint. It did not address Clorox's allegations directed at the advertisements in the original Doorstep Challenge campaign, or the promotional brochure, nor did it address Clorox's allegation that the name Ace con Blanqueador as applied to the liquid detergent is literally false. Second, it applied an overly-restrictive view of the requirements for pleading a false advertising claim under the Lanham Act, dismissing the allegation that the modified campaign was not false or misleading simply because it found the tag line, read in isolation, to be literally true. Finally, the district court erred in concluding that Clorox's allegations were directed at non-actionable puffery. We analyze Clorox's various allegations de novo, see Beddall, 137 F.3d at 16, focusing on (1) the allegations of literal falsity, (2) the allegations of misleading advertising, and (3) the concept of puffery.
38 Clorox challenged two features of Proctor & Gamble's advertising campaign as literally false. First, Clorox alleged that the television commercials that aired in the original and modified campaign claimed that Ace gets clothes as white or whiter than chlorine bleach. According to Clorox, that claim is literally false because tests prove that chlorine bleach whitens better than detergent used alone. Second, Clorox alleged that the name, Ace con Blanqueador, is literally false with respect to Ace liquid detergent because it falsely suggests that Ace liquid contains whitener or bleach. 39
40 Whether an advertisement is literally false is typically an issue of fact. See Mead Johnson & Co. v. Abbott Labs., 209 F.3d 1032, 1034 (7th Cir. 2000) (denying petition for rehearing and amending prior panel opinion). At least two factual questions must be answered in evaluating the accuracy of any particular advertisement. First, a factfinder must determine the claim conveyed by the advertisement. See United Indus. Corp., 140 F.3d at 1181 (applying clearly erroneous standard to review of district court's factual determination regarding the claim conveyed by an advertisement for roach bait); Johnson & Johnson v. GAC Int'l, Inc., 862 F.2d 975, 979 (2d Cir. 1988). Once the claim made by the advertisement has been determined, the factfinder must then evaluate whether that claim is false. See Castrol, 987 F.2d at 944. 41 In the case at hand, the parties focus their attention solely upon the first of these factual determinations. The complaint asserts that in head-to-head whitening tests, Clorox achieved by far, superior results to Ace. Clorox also emphasizes that Ace's own boxes state that in certain cases, for better results, the consumers must use chlorine bleach. In reviewing the motion to dismiss, we therefore assume as true that chlorine bleach whitens better than Ace and that a contrary claim would be literally false. The primary dispute between the parties is not which product whitens better, 8 but rather whether any of Proctor & Gamble's advertisements make a claim of whitening superiority over chlorine bleach. 42 Although factfinders usually base literal falsity determinations upon the explicit claims made by an advertisement, they may also consider any claims the advertisement conveys by necessary implication. See Southland Sod Farms, 108 F.3d at 1139; Rhone-Poulenc Rorer, 19 F.3d at 129. A claim is conveyed by necessary implication when, considering the advertisement in its entirety, the audience would recognize the claim as readily as if it had been explicitly stated. For instance, a factfinder found that an advertisement that claimed a motor oil provided longer engine life and better engine protection without explicitly mentioning competitors nonetheless drew a comparison by necessary implication vis aa vis those competitors. See Castrol, 987 F.2d at 941, 946. This is not to say, however, that all messages implied by an advertisement will support a finding of literal falsity by a factfinder: 43 The greater the degree to which a message relies upon the viewer or consumer to integrate its components and draw the apparent conclusion, however, the less likely it is that a finding of literal falsity will be supported. Commercial claims that are implicit, attenuated, or merely suggestive usually cannot fairly be characterized as literally false. 44 United Indus. Corp., 140 F.3d at 1181. Similarly, a factfinder might conclude that the message conveyed by a particular advertisement remains so balanced between several plausible meanings that the claim made by the advertisement is too uncertain to serve as the basis of a literal falsity claim, though even in that case it could still form the basis for a claim that the advertisement is misleading. See id. at 1182; Abbott Labs., 971 F.2d at 14. 45 In reviewing the dismissal in the present case, however, we are not required to determine what claim was actually conveyed by the advertisements because we are not factfinders. Instead, we must evaluate whether the complaint, as supplemented by the advertising copy, alleges facts that would allow a rational factfinder to conclude that Proctor & Gamble's advertisements make a superiority claim either explicitly or by necessary implication. We must draw all reasonable inferences as to the claim made in the advertisements in favor of Clorox. See Southland Sod Farms, 108 F.3d at 1139; see also Rhone-Poulenc Rorer, 19 F.3d at 129; U.S. Healthcare, Inc. v. Blue Cross, 898 F.2d 914, 922 (3d Cir. 1990). Dismissal would only be proper if no reasonable factfinder could conclude that the advertisements, viewed in the light most favorable to Clorox, make a claim of whitening superiority for Proctor & Gamble's product. 46 We conclude that Clorox has stated a claim that Proctor & Gamble's original Doorstep Challenge commercials are literally false. These commercials juxtapose a tag line, Whiter is not possible, with images of consumers who normally used bleach to achieve white clothes and who are favorably impressed by the results obtained from using Ace alone. The overall theme of the commercials is that bleach is unnecessary if clothes are washed with Ace, and, in fact, many of the consumers visited by Zamora are congratulated at the end of the commercials for passing the Ace whiteness challenge without chlorine. Some of the commercials also suggest that eliminating chlorine from the laundry process will save consumers time or money, or curtail the negative side effects of washing clothes with chlorine. A factfinder could reasonably conclude that, viewed in their entirety, these advertisements claim that Ace is equal or superior in whitening ability to a detergent and bleach combination. 47 The modified Doorstep Challenge campaign continued the same visual comparisons, as well as the congratulatory comments for passing the Ace whiteness challenge without chlorine, but added the words Compare your detergent to the Whiter is not possible tag line shown at the bottom of the screen at the end of the commercials. Although this change may render the comparative claim of the advertisements more ambiguous, we nonetheless conclude that it remains reasonable to interpret these advertisements as making by necessary implication a superiority claim for Ace over chlorine bleach. Consequently, the court erred in dismissing Clorox's literal falsity claims with respect to both Doorstep Challenge campaigns. 48
49 Clorox also alleged that the name, Ace con Blanqueador, as applied to liquid Ace, is literally false. According to Clorox, the word blanqueador implies that liquid Ace has whitening capabilities like bleach. Clorox alleged that this is literally false because in its liquid form Ace does not contain bleach or whitening agents. Instead, it contains only a color enhancer. Clorox emphasizes that liquid Ace uses the same formula as Tide with Bleach Alternative whose name, unlike blanqueador, clearly signifies the absence of bleach. Proctor & Gamble responds that blanqueador means whitener, and that the name cannot be literally false because tests show that the agents added to liquid Ace produce greater whiteness than detergents without those agents. 50 Clorox's allegations about the use of the name Ace con Blanqueador for the liquid detergent state a claim for literal falsity. Although blanqueador, meaning whitener, is broad enough to encompass both bleach and non-bleach whitening agents, the question remains whether liquid Ace is properly described as containing whitening agents of any sort. Clorox has alleged that it is not, insisting that Ace's ingredients are properly termed color enhancers. Although the distinction between a whitening agent and a color enhancer eludes us, we must credit that allegation in this appeal from a 12(b)(6) dismissal. If Clorox succeeds in proving that liquid Ace contains only an enhancer, rather than a whitener, and if it further establishes the other elements of a false advertising claim, see supra note 6, it will be entitled to relief under the Lanham Act because Proctor & Gamble's designation of Ace liquid detergent as Ace con Blanqueador would be literally false.
51 In addition to its claims of literal falsity, Clorox has alleged in its complaint that the Ace advertising campaign, even if true or ambiguous, makes an implied claim that is misleading to consumers. This second theory of recovery under the Lanham Act is independent of a literal falsity theory. See, e.g., Coca-Cola, Co. v. Tropicana Prods., Inc., 690 F.2d 312, 317 (2d Cir. 1982). Unlike the requirements of a claim of literal falsity, the plaintiff alleging a misleading advertisement has the burden of proving that a substantial portion of the audience for that advertisement was actually misled. See Rhone-Poulenc Rorer, 19 F.3d at 134 (citing U.S. Healthcare v. Blue Cross, 898 F.2d 914, 922 (3d Cir. 1990)). An advertisement's propensity to deceive the viewing public is most often proven by consumer survey data. See id. at 129-30. 9 Clorox appended to the amended complaint a consumer survey prepared by David Whitehouse of Gaither International/Puerto Rico, Inc. 10 The survey consisted of a series of open-ended questions followed by several follow-up probes. In reliance on the survey, the complaint alleges that: 52 In open-ended questions, 35% of respondents of its scientifically valid survey responded that the main message of the Doorstep Challenge Campaign was that, with ACE, there is no need to use other products for maximum whitening performance. In addition, when the respondents were asked if 'the Detergent in the Ad (ACE) Leaves Clothes as White or Whiter than If One Uses Bleach,' 47% totally agreed and 20% somewhat agreed with that statement. Plainly, the Doorstep Challenge Campaign has been amply shown to be likely to cause consumer deception. 53 Clorox has also alleged in its complaint that in its promotional activities and advertisements, Proctor & Gamble deceiv[ed] and confus[ed] the public, causing consumers to wrongly believe they are buying a detergent that possesses the same qualities and characteristics as a detergent used with CLOROX. 54 The court was required to credit Clorox's allegations. It could not conduct its own evaluation of the advertising copy because whether advertising is misleading depends on what message was actually conveyed to the viewing audience. Smithkline Beecham Corp., 960 F.2d at 298; see also Rhone-Poulenc Rorer, 19 F.3d at 129. In deciding whether a message is misleading, the message conveyed is discerned by public reaction, not by judicial evaluation. McCarthy § 27:56; see also Castrol, 987 F.2d at 947 ([I]n cases where the issue is whether a statement . . . has a tendency to mislead, confuse, or deceive . . . [,] the court's reaction is at best not determinative and at worst irrelevant.) (internal quotation marks omitted). That is, absent some other defect in its proof of the elements of a false advertising claim, see supra note 6, if Clorox's consumer survey data (or Proctor & Gamble's own market research data) shows that the advertisements deceive[d] a substantial portion of the intended audience, U.S. Healthcare, 898 F.2d at 922, Clorox is entitled to relief under the Lanham Act. 11 Hence, the claims asserting misleading advertising were improperly dismissed. 12 55 Proctor & Gamble offers one last defense of the court's ruling, pointing to Mead Johnson & Co. v. Abbott Labs., 201 F.3d 883, modified by, 209 F.3d 1032 (7th Cir. 2000) as a case that stands for the proposition that a consumer survey could not be used to show that an advertisement that is clear and unequivocal on its face otherwise conveyed a misleading message. According to Proctor & Gamble, its tag line in the modified campaign clearly and unequivocally does not compare Ace with Clorox and, therefore, Mead Johnson prevents Clorox from using a survey to prove that a comparison was made. We need not decide whether we would agree with Mead Johnson in a factually similar case. This case is of a different order. 56 Mead Johnson addressed whether a label was misleading in claiming its product to be the 1st Choice of Doctors. See 201 F.3d at 883-84. The plaintiff argued that its surveys demonstrated that consumers interpreted first to mean that more than 50% of doctors preferred that brand rather than interpreting first to mean that a plurality of doctors preferred the brand. See id. at 884-85. These distinctions were important because, though the latter interpretation of the label was true, the former was false. See id. at 884. 57 After first finding the plaintiff's survey misleading if not meaningless, the court identified a deeper problem: the use of a survey in the first place. Id. at 885. Although agreeing that surveys are accepted ways to probe for things such as confusion about the source of goods, for confusion depends on the effect of a phrase or trade dress on the consumer, the court reasoned that surveys should not be used to determine the meaning of words, or to set the standard to which objectively verifiable claims must be held. Id. at 886. Based upon these objections, the court held that the survey could not support a conclusion . . . that [the message conveyed by the advertisement] either was false or implied a falsehood. Mead Johnson, 209 F.3d at 1034. 58 Procedurally, Mead Johnson is different than this case. That court's evaluation of the merits of the survey was based on a record established during a three day hearing on a motion for a preliminary injunction, which was granted. See Mead Johnson, 201 F.3d at 884. As noted, see supra note 12, it would not be appropriate to undertake a similar analysis of the Clorox survey on the limited record subject to review after a 12(b)(6) dismissal. 59 Also, the advertising slogan in Mead Johnson was a single phrase printed on the label of a can of infant formula. Proctor & Gamble points us to a similar phrase in its advertising, the tag line Compare with your detergent . . . Whiter is not possible, as though the two slogans were comparable. Proctor & Gamble's tag line, however, is an integral part of a television commercial with substantial text and images. There is a fundamental difference between a slogan on a can label that communicates its meaning to consumers solely through the printed text, and a tag line shown on the screen at the end of a television commercial that communicates its message to consumers through a combination of audio-visual and textual media. Because we decline to read Proctor & Gamble's tag line separately from the entirety of the commercials, Mead Johnson is factually inapplicable to the present case.
60 Finally, the statements, Compare with your detergent . . . Whiter is not possible, and Whiter is not possible, are not non-actionable puffing. 'Puffing' is exaggerated advertising, blustering, and boasting upon which no reasonable buyer would rely . . . . McCarthy § 27:38. A specific and measurable advertisement claim of product superiority . . . is not puffery. Southland Sod Farms, 108 F.3d at 1145 (claim that turfgrass seed requires 50% less mowing was not puffery); see also Castrol, Inc., 987 F.2d at 946 (claim that motor oil provides longer engine life and better engine protection was not puffery). Whether the Doorstep Challenge campaign conveys the message that Ace gets clothes whiter than chlorine bleach, or compares Ace with other detergents without implying that it whitens better than chlorine bleach, the claim is specific and measurable, not the kind of vague or subjective statement that characterizes puffery. Indeed, Proctor & Gamble concedes in its brief that its claim in its modified campaign, Compare with your detergent . . . Whiter is not possible, is not puffery. It contends that it is a true statement supported by its studies comparing Ace con Blanqueador with other detergents. 61 The original campaign tag line, Whiter is not possible, is a closer call on the puffing issue. Standing alone, that statement might well constitute an unspecified boast, and hence puffing. In context, however, the statement invites consumers to compare Ace's whitening power against either other detergents acting alone or detergents used with chlorine bleach. Despite this ambiguity, it is a specific, measurable claim, and hence not puffing. 62 Proctor & Gamble's promotional brochure, on the other hand, contained statements like, hit the white spot with just one shot, Dare to pass the test. Wash with Ace and nothing else, Say goodbye to the complications of cloro and other cleaners, and Resist the 'bombs.' Put your ACE con Blanqueador to the test. We agree with Proctor & Gamble that each of these statements, viewed in isolation, is precisely the type of vague, unspecified boasting that typifies puffery. Nonetheless, the promotional brochure also states, Whiter is not possible, the same statement that appears as the tag line on the original Doorstep Challenge television commercials. As in the television commercials, that statement may be literally false. Accordingly, the brochure cannot be dismissed as mere puffery.