Opinion ID: 1274444
Heading Depth: 3
Heading Rank: 1

Heading: Television Commercials

Text: Section 43(a) of the Lanham Act provides, in pertinent part that: Any person who, on or in connection with any goods or services . . . uses in commerce . . . any . . . false or misleading description of fact, or false or misleading representation of fact, which . . . . (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, 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. 15 U.S.C. § 1125(a)(1). Two different theories of recovery are available to a plaintiff who brings a false advertising action under § 43(a) of the Lanham Act. First, the plaintiff can demonstrate that the challenged advertisement is literally false, i.e., false on its face. See GAC Int'l, Inc., 862 F.2d at 977. When an advertisement is shown to be literally or facially false, consumer deception is presumed, and the court may grant relief without reference to the advertisement's [actual] impact on the buying public. Coca-Cola Co., 690 F.2d at 317. This is because plaintiffs alleging a literal falsehood are claiming that a statement, on its face, conflicts with reality, a claim that is best supported by comparing the statement itself with the reality it purports to describe. Schering Corp. v. Pfizer Inc., 189 F.3d 218, 229 (2d Cir.1999). Alternatively, a plaintiff can show that the advertisement, while not literally false, is nevertheless likely to mislead or confuse consumers. See Coca-Cola Co., 690 F.2d at 317. [P]laintiffs alleging an implied falsehood are claiming that a statement, whatever its literal truth, has left an impression on the listener [or viewer] that conflicts with realitya claim that invites a comparison of the impression, rather than the statement, with the truth. Schering Corp., 189 F.3d at 229. Therefore, whereas plaintiffs seeking to establish a literal falsehood must generally show the substance of what is conveyed, . . . a district court must rely on extrinsic evidence [of consumer deception or confusion] to support a finding of an implicitly false message. Id. (internal quotation marks omitted). [3] Here, TWC chose to pursue only the first path of literal falsity, and the District Court granted the preliminary injunction against the television commercials on that basis. In this appeal, DIRECTV does not dispute that it would be a misrepresentation to claim that the picture quality of DIRECTV HD is superior to that of cable HD. Rather, it argues that neither commercial explicitly makes such a claim and therefore cannot be literally false.
DIRECTV's argument is easily dismissed with respect to the Revised Simpson Commercial. In the critical lines, Simpson tells audiences, You're just not gonna get the best picture out of some fancy big screen TV without DIRECTV. It's broadcast in 1080i. These statements make the explicit assertion that it is impossible to obtain the best picture i.e., a 1080i-resolution picturefrom any source other than DIRECTV. This claim is flatly untrue; the uncontroverted factual record establishes that viewers can, in fact, get the same best picture by ordering HD programming from their cable service provider. We therefore affirm the District Court's determination that the Revised Simpson Commercial's contention that a viewer cannot `get the best picture' without DIRECTV is . . . likely to be proven literally false. Time Warner Cable, Inc., 475 F.Supp.2d at 306.
The issue of whether the Revised Shatner Commercial is likely to be proven literally false requires more analysis. When interpreting the controversial statement, With what Starfleet just ponied up for this big screen TV, settling for cable would be illogical, the District Court looked not only at that particular text, but also at the surrounding context. In light of Shatner's opening comment extolling the amazing picture quality of [] DIRECTV HD and the announcer's closing remark highlighting the unbeatable HD picture provided by DIRECTV, the District Court found that the line in the middlesettling for cable would be illogicalclearly referred to cable's HD picture quality. Since it would only be illogical to settle for cable's HD picture if it was materially inferior to DIRECTV's HD picture, the District Court concluded that TWC was likely to establish that the statement was literally false. DIRECTV argues that the District Court's ruling was clearly erroneous because the actual statement at issue, settling for cable would be illogical, does not explicitly compare the picture quality of DIRECTV HD with that of cable HD, and indeed, does not mention HD at all. In DIRECTV's view, the District Court based its determination of literal falsity not on the words actually used, but on what it subjectively perceived to be the general message conveyed by the commercial as a whole. DIRECTV contends that this was plainly improper under this Court's decision in American Home Products Corp. v. Johnson & Johnson, 577 F.2d 160 (2d Cir.1978). TWC, on the other hand, maintains that the District Court properly took context into account in interpreting the commercial, as directed by this Court in Avis Rent A Car System, Inc. v. Hertz Corp., 782 F.2d 381 (2d Cir.1986). TWC argues that under Avis Rent A Car, an advertisement can be literally false even though no combination of words between two punctuation signals is untrue, if the clear meaning of the statement, considered in context, is false. Given the commercial's repeated references to HD picture, TWC contends that the District Court correctly found that settling for cable would be illogical literally made the false claim that cable's HD picture quality is inferior to DIRECTV's. To appreciate the parties' dispute, it is necessary to understand the two key cases, American Home Products and Avis Rent A Car. The American Home Products case involved a false advertising claim asserted by McNeil Laboratories, Inc., the manufacturer of Tylenol, against American Home Products Corporation, the manufacturer of the competing drug Anacin. One of the challenged advertisements was a television commercial, in which a spokesman told consumers: Your body knows the difference between these pain relievers [showing other products] and Adult Strength Anacin. For pain other than headache Anacin reduces the inflammation that often comes with pain. These do not. Specifically, inflammation of tooth extraction[,] muscle strain[,] backache[,] or if your doctor diagnoses tendonitis [,] neuritis. Anacin reduces that inflammation as Anacin relieves pain fast. These do not. Take Adult Strength Anacin. Am. Home Prods., 577 F.2d at 163 n. 3 (notations of special effects omitted). Another advertisement, which appeared in national magazines, advised readers: Anacin can reduce inflammation that comes with most pain. Tylenol cannot. With any of these pains, your body knows the difference between the pain reliever in Adult-Strength Anacin and other pain relievers like Tylenol. Anacin can reduce the inflammation that often comes with these pains. Tylenol cannot. Even Extra-Strength Tylenol cannot. And Anacin relieves pain fast as it reduces inflammation. Id. at 163 n. 4. The print advertisement visually depicted the aforementioned pains as spots located on a human body, correlating to tooth extraction, muscle strain, muscular backache, tendonitis, neuritis, sinusitis, and sprains. Id. To ascertain the meaning of these advertisements, the district court turned to consumer reaction surveys. See id. at 163. Based on these surveys, it found that: (1) the television commercial represented that Anacin is a superior pain reliever generally, and not only with reference to the particular conditions enumerated in the commercial or to Anacin's alleged ability to reduce inflammation; (2) the print advertisement claimed that Anacin is a superior analgesic for certain kinds of pain because Anacin can reduce inflammation; and (3) both advertisements represented that Anacin reduces inflammation associated with the conditions specified in the ads. Id. at 163-64. The district court determined that the first two claims were factually false. Id. at 164. Although the district court did not definitively decide the veracity of the third claim, it reasoned that because the three claims [were] `integral and inseparable,' the advertisements as a whole violated the Lanham Act. Id. (internal quotations and citation omitted). American Home Products appealed, arguing that since the advertisements did not contain an express claim for greater analgesia, they could not violate § 43(a), even if consumers mistakenly perceived a different and incorrect meaning. See id. This Court disagreed. It first observed that [§ ] 43(a) of the Lanham Act encompasses more than literal falsehoods; implied falsehoods are also prohibited. Id. at 165. The Court emphasized, however, that when an advertisement relies on clever use of innuendo, indirect intimations, and ambiguous suggestions, instead of literally false statements, the truth or falsity of the ad usually should be tested by the reactions of the public. Id. It provided district courts with the following guidance for analyzing a claim of implied falsity: A court may, of course, construe and parse the language of the advertisement. It may have personal reactions as to the defensibility or indefensibility of the deliberately manipulated words. It may conclude that the language is far from candid and would never pass muster under tests otherwise appliedfor example, the Securities Acts' injunction that thou shalt disclose; but the court's reaction is at best not determinative and at worst irrelevant. The question in such cases iswhat does the person to whom the advertisement is addressed find to be the message ? Id. at 165-66 (quoting Am. Brands, Inc. v. R.J. Reynolds Tobacco Co., 413 F.Supp. 1352, 1357 (S.D.N.Y.1976)). Applying these principles to the facts of the case, the American Home Products Court determined that the district court's use of consumer response data was proper because the claims of both the television commercial and the print advertisement [were] ambiguous. Id. at 166. This obscurity, the Court explained, [wa]s produced by several references to `pain' and body sensation accompanying the assertions that Anacin reduces inflammation. Id. Therefore, [a] reader of or listener to these advertisements could reasonably infer that Anacin is superior to Tylenol in reducing pain generally (Claim One) and in reducing certain kinds of pain (Claim Two). Id. Given this rather obvious ambiguity, the Court concluded that the district judge was warranted in examining, and may have been compelled to examine, consumer data to determine first the messages conveyed in order to determine ultimately the truth or falsity of the messages. Id. (footnote omitted). American Home Products dealt with a claim of implied falsity. See id. at 165 (We are dealing not with statements which are literally or grammatically untrue. . . . Rather, we are asked to determine whether a statement acknowledged to be literally true and grammatically correct nevertheless has a tendency to mislead, confuse or deceive.  (quoting Am. Brands, Inc., 413 F.Supp. at 1357)). In Avis Rent A Car, the false advertising action was premised on a theory of literal, not implied, falsity. In the facts of that case, Avis Rent A Car System, Inc., the self-proclaimed Number 2 in the car rental business, sued Number 1 Hertz Corporation over an advertisement that proclaimed, in large bold print, that Hertz has more new cars than Avis has cars. Avis Rent A Car, 782 F.2d at 381-82. Below a picture of mechanics unloading new cars into an airport parking lot, the advertisement went on to explain: If you'd like to drive some of the newest cars on the road, rent from Hertz. Because we have more new 1984 cars than Avis or anyone else has carsnew or old. . . . Whether you're renting for business or pleasure, chances are you'll find a domestic or imported car you'll want to drive. Id. at 382. At the bottom of the ad was Hertz's slogan,  The # 1 way to rent a car.  Id. At the time the advertisement was published, Hertz only had about 97,000 1984 model cars, whereas Avis had a total of approximately 102,000 cars. See id. at 383. However, 6776 cars in Avis's fleet were in the process of being sold and were no longer available for rental. Id. at 384. Thus, the literal truth or falsity of the claim that Hertz has more new cars than Avis has cars turned on whether the statement referred to the rental fleets or the total fleets of the two companies. Id. at 383. The district court found that because the advertisement said cars, and not cars for rent, it had to be read as referring to the companies' total fleets and, as such, was literally false. See id. at 384. This Court held that the district court's finding was clearly erroneous. It pointed out that the parties had made their reputations as companies that rent cars, not companies that sell or merely own cars, and that the advertisement had appeared in publications that would come to the attention of prospective renters, not car buyers or financial analysts. Id. at 385. Moreover, the advertisement featured a large picture of an airport rental lot and made three specific references to rentals. See id. Taking this context into consideration, the Court concluded that the claim that Hertz has more new cars than Avis has new cars could only be understood as referring to the companies' rental fleets. The Court elaborated: Fundamental to any task of interpretation is the principle that text must yield to context. Recognizing this, the Supreme Court long ago inveighed against the tyranny of literalness. In his determination to go by the written word and to ignore the context in which the words were used, the district judge in the present case failed to heed the familiar warning of Judge Learned Hand that [t]here is no surer way to misread any document than to read it literally, as well as his oft-cited admonition that it is one of the surest indexes of a mature and developed jurisprudence not to make a fortress out of the dictionary. These and similar invocations against literalness, though delivered most often in connection with statutory and contract interpretation, are relevant to the interpretation of any writing, including advertisements. Thus, we have emphasized that in reviewing FTC actions prohibiting unfair advertising practices under the Federal Trade Commission Act a court must consider the advertisement in its entirety and not . . . engage in disputatious dissection. The entire mosaic should be viewed rather than each tile separately. . . . Similar approaches have been taken in Lanham Act cases involving the claim that an advertisement was false on its face. Id. at 385 (citations omitted). At first glance, American Home Products and Avis Rent A Car may appear to conflict. American Home Products counsels that when an advertisement is not false on its face, but instead relies on indirect intimations, district courts should look to consumer reaction to determine meaning, and not rest on their subjective impressions of the advertisement as a whole. Avis Rent A Car, on the other hand, instructs district courts to consider the overall context of an advertisement to discern its true meaning, and holds that the message conveyed by an advertisement may be viewed as not false in the context of the business at issue, even though the written words are not literally accurate. On closer reading, however, the two cases can be reconciled. In American Home Products, we did not say that context is irrelevant or that courts are myopically bound to the explicit words of an advertisement. Rather, we held that where it is clear that . . . the language of the advertisement[] is not unambiguous, the district court should look to consumer response data to resolve the ambiguity. Am. Home Prods., 577 F.2d at 164. In Avis Rent A Car, we concluded that there was no ambiguity to resolve because even though the statement, Hertz has more new cars than Avis has cars, did not expressly qualify the comparison, given the surrounding context, it unmistakably referred to the companies' rental fleets. Avis Rent A Car, 782 F.2d at 384. These two cases, read together, compel us to now formally adopt what is known in other circuits as the false by necessary implication doctrine. See, e.g., Scotts Co. v. United Indus. Corp., 315 F.3d 264, 274 (4th Cir.2002); Clorox Co. Puerto Rico v. Proctor & Gamble Commercial Co., 228 F.3d 24, 34-35 (1st Cir.2000); Southland Sod Farms v. Stover Seed Co., 108 F.3d 1134, 1139 (9th Cir.1997); Castrol Inc. v. Pennzoil Co., 987 F.2d 939, 946-47 (3d Cir.1993) ( Pennzoil Co. ). [4] Under this doctrine, a district court evaluating whether an advertisement is literally false must analyze the message conveyed in full context, Pennzoil Co., 987 F.2d at 946, i.e., it must consider the advertisement in its entirety and not . . . engage in disputatious dissection, Avis Rent A Car, 782 F.2d at 385 (internal quotation marks omitted). If the words or images, considered in context, necessarily imply a false message, the advertisement is literally false and no extrinsic evidence of consumer confusion is required. See Novartis Consumer Health, Inc. v. Johnson & Johnson-Merck Pharm. Co., 290 F.3d 578, 586-87 (3d Cir.2002) (A `literally false' message may be either explicit or `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.' (quoting Clorox Co. Puerto Rico, 228 F.3d at 35)). However, only an unambiguous message can be literally false. Id. at 587. Therefore, if the language or graphic is susceptible to more than one reasonable interpretation, the advertisement cannot be literally false. See Scotts Co., 315 F.3d at 275 (stating that a literal falsity argument fails if the statement or image can reasonably be understood as conveying different messages); Clorox Co. Puerto Rico, 228 F.3d at 35 ([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. . . .). There may still be a basis for a claim that the advertisement is misleading, Clorox Co. Puerto Rico, 228 F.3d at 35, but to resolve such a claim, the district court must look to consumer data to determine what the person to whom the advertisement is addressed find[s] to be the message, Am. Home Prods., 577 F.2d at 166 (citation omitted). In short, where the advertisement does not unambiguously make a claim, the court's reaction is at best not determinative and at worst irrelevant. Id. Here, the District Court found that Shatner's assertion that settling for cable would be illogical, considered in light of the advertisement as a whole, unambiguously made the false claim that cable's HD picture quality is inferior to that of DIRECTV's. We cannot say that this finding was clearly erroneous, especially given that in the immediately preceding line, Shatner praises the amazing picture clarity of DIRECTV HD. We accordingly affirm the District Court's conclusion that TWC established a likelihood of success on its claim that the Revised Shatner Commercial is literally false.