Court Opinion

ID: 221913
Source: CourtListenerOpinion
Date Created: 2011-07-26 19:57:50+00
Date Added: 2024-06-11T17:28:52.230404
License: Public Domain

NOT PRECEDENTIAL

                        UNITED STATES COURT OF APPEALS
                             FOR THE THIRD CIRCUIT

                           _____________________________

                                       No. 10-4587

                               QVC INC; QHEALTH INC,
                                               Appellants,

                                             v.

                          YOUR VITAMINS INC, d/b/a Procaps
                           Laboratories; ANDREW LESSMAN,

                           _____________________________

                     On Appeal from the United States District Court
                                          for the
                                   District of Delaware
                                 (C.A. No. 10-cv-00094)
                       District Judge: Honorable Sue L. Robinson

                      Submitted Under Third Circuit L.A.R. 34.1(a)
                                   on July 14, 2011

             Before: SLOVITER, FUENTES, AND FISHER, Circuit Judges.

                              (Opinion Filed: July 26, 2011)

FUENTES, Circuit Judge:

       Plaintiff-appellants QVC, Inc., and Qhealth, Inc. (collectively, “QVC”), appeal the

denial of their request for a preliminary injunction against defendant-appellees Your

Vitamins, Inc., and Andrew Lessman (collectively, “Lessman”). For the reasons given,

we will affirm the decision of the District Court.
                                             I.

       Because we write primarily for the parties, we set forth only the facts and history

that are relevant to our conclusion.1 Andrew Lessman owns a company called Your

Vitamins, Inc., d/b/a Procaps Labs, which sells a product called “Healthy Hair, Skin, and

Nails,” as well as various products containing reservatrol. He used to sell his vitamin

products on QVC, but, several years ago, switched to QVC‟s rival, HSN. Some time

after the switch, QVC introduced a supplement called “Healthy Hair, Skin, and Nails”

(“QVC‟s Healthy HSN”), the same name that Lessman uses for his own supplement.

QVC also sells several forms of a reservatrol supplement that compete with Lessman‟s

versions.

       In January 2010, shortly after the introduction of QVC‟s Healthy HSN, Lessman

posted several blog posts on his website, complaining about what he perceived to be the

unfairness of QVC‟s using the name of his product for its own. In addition to

complaining about QVC‟s conduct, Lessman alleged that (1) QVC‟s Healthy HSN is

over 90% additives; (2) “there is a significant body of troubling research that connects

hyaluronic acid, an ingredient in QVC‟s Healthy HSN, to cancer, that “it is totally useless

and potentially harmful,” and, while it “does not necessarily „cause‟ cancer...credible

research points to a relationship and mechanism, which should preclude its use in

vitamins”; (3) that Healthy Hair‟s silica is “more common[ly]” known as “sand or glass”

and “We also use silica in our Healthy Hair Skin & Nails, but because we recognize its

1
 The District Court has jurisdiction under 15 U.S.C. § 1121 and 28 U.S.C. §§ 1331,
1338, and 1367(a). We have jurisdiction under 28 U.S.C. § 1292(a)(1).

                                             2
solubility limitations, we include our soluble organic silicon”; and (4) that QVC‟s

reservatrol product includes 3 artificial colors, “is almost two-thirds additives,” comes

from polygonum cuspidatum, not Japanese knotweed, contains a Healthy Heart Blend,

“an all but meaningless list of seven different botanicals—NONE of which states a

standardization of any kind,” and (in drink form) contains 4 grams of sugar per serving

from “a mystery source.” He also made a number of general pejorative remarks about

QVC‟s products, calling them “ridiculous,” “embarrassing,” “sad,” and “disturbing.”

       QVC sued, alleging false advertising in violation of section 43(a) of the Lanham

Act, as well as bringing state-law claims. It sought an injunction against the continued

publication of Lessman‟s blog posts. The District Court denied the injunction, finding

that QVC had not shown a likelihood of success on the merits. QVC then brought the

present appeal.

                                                  II.

       To determine whether to grant a preliminary injunction, “a district court must

consider: (1) whether the movant has shown a reasonable probability of success on the

merits; (2) whether the movant will be irreparably injured by denial of the relief; (3)

whether granting preliminary relief will result in even greater harm to the nonmoving

party; and (4) whether granting the preliminary relief will be in the public interest.” Iles

v. de Jongh, 638 F.3d 169, 172 (3d Cir. 2011). We review a district court‟s denial of a

preliminary injunction for abuse of discretion. PennMont Securities v. Frucher, 586 F.3d

242, 245 (3d Cir. 2009).

                                              3
       Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), forbids the use in

commerce of “any...false or misleading representation of fact which...misrepresents the

nature, characteristics, [or] qualities...of another person‟s goods, services, or commercial

activities.” QVC alleges that Lessman‟s blog posts contain characterizations of its

products which are false or misleading. In order to establish liability under § 43(a), QVC

must show, among other elements, that Lessman‟s “commercial message or statement is

either (1) literally false or (2) literally true or ambiguous, but has the tendency to deceive

consumers.” Novartis Consumer Health, Inc. v. Johnson & Johnson-Merck Consumer

Pharmaceuticals Co., 290 F.3d 578, 586 (3d Cir. 2002); accord Castrol, Inc. v. Pennzoil,

987 F.2d 939, 943 (3d Cir. 1993). The District Court analyzed Lessman‟s blog posts

under both frameworks and concluded that QVC had not shown them to be either literally

false or literally true, but with the tendency to deceive.

           A. Literal falsity

       “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.” Novartis, 290 F.3d 578,

587-88 (3d Cir. 2002). False-advertising jurisprudence presumes that when a defendant

has made a literally false statement, consumer confusion will result. Therefore, “[w]hen

consumer deception can be determined by examining the challenged name or advertising

on its face, the plaintiff is excused from the burden of demonstrating actual deception

through the use of a consumer survey.” Id. at 587. However, “only an unambiguous

message can be literally false. The greater the degree to which a message relies upon the

                                               4
viewer...to integrate its components and draw the apparent conclusion...the less likely it is

that a finding of literal falsity will be supported.” Id. Further, while “misdescriptions or

false representations of specific characteristics of a product” may be actionable,

“exaggeration or overstatement expressed in broad, vague, and commendatory language,”

commonly known as “puffery,” is not. Castrol, 987 F.2d at 945.

       The District Court considered all the evidence and concluded that QVC had not

made a showing that it was reasonably likely to demonstrate that Lessman‟s blog posts

were literally false. In particular, the District Court found that QVC had not shown that

Lessman‟s statements of fact—concerning the percentage of additives in QVC‟s Healthy

HSN, the existence of a “relationship” (albeit not a causal one) between hyaluronic acid

and cancer, the presence of silica in QVC‟s Healthy HSN, and the composition of QVC‟s

reservatrol products—were false. QVC objects that the District Court failed to consider

Lessman‟s factual statements in their full context, including Lessman‟s general negative

remarks about QVC‟s products, but the context did not render Lessman‟s statements

literally false. Whether a consumer, considering both Lessman‟s factual claims and his

general rhetoric about QVC, might potentially be misled by his blog posts, must be

considered separately.

       Like the District Court, we find Lessman‟s remarks concerning the relationship

between hyaluronic acid and cancer the most troubling of his statements. If his

statements concerning that relationship had been literally false, his later statement that the

levels of the acid in QVC‟s Healthy HSN were so low that it nonetheless would not have

an effect would not be sufficient to save him from a finding of literal falsity. One cannot

                                              5
escape liability for a literally false claim by pointing to a later disclaimer. See SmithKline

Beecham Cons. Healthcare, L.P., v. Johnson & Johnson-Merck Cons. Pharm. Co., 906

F.Supp. 178, 186 (S.D.N.Y. 1995). However, we agree with the District Court that

Lessman‟s statements concerning hyaluronic acid, while somewhat difficult to parse,

cannot be read as unambiguously false.

        We defer to the District Court‟s factual findings in this matter, and see no basis for

a holding of clear error. Given those findings, and the District Court‟s application of the

correct legal standard, we find no abuse of discretion with respect to QVC‟s claims of

literal falsity.

            B. Misleadingness

        In contrast to claims of literal falsity, “where the advertisements are not literally

false, plaintiff bears the burden of proving actual deception by a preponderance of the

evidence. Hence, it cannot obtain relief by arguing how consumers could react; it must

show how consumers actually do react.” Sandoz Pharm. Corp. v. Richardson-Vicks, Inc.,

902 F.2d 222, 228-29 (3d Cir. 1990). “The success of the claim usually turns on the

persuasiveness of a consumer survey.” AT&T Co. v. Winback and Conserve Program,

Inc., 42 F.3d 1421, 1443 (3d Cir. 1994). The only evidence QVC offers for consumer

reaction to Lessman‟s blog posts is the comments which appeared on those posts,

purportedly left by consumers. The District Court examined all the sixty-odd comments

posted and found that only a handful suggested that consumers had been misled into a

materially false belief about QVC‟s products. In sum, it concluded that the evidence was

                                               6
inadequate to show that QVC was reasonably likely to prevail on the issue of

misleadingness.

       We agree.2 We also note that, even were the comments more abundant, this sort

of evidence will often be of only limited value. Comments left on blog posts can be very

difficult to authenticate. The use of false identities in Internet forums is now a well-

known tactic for attacking corporate rivals. See, e.g., Brad Stone and Matt Richtel, The

Hand That Controls the Sock Puppet Could Get Slapped, N.Y. TIMES, July 16, 2007

(“John Mackey, the chief executive of Whole Foods Market...used a fictional identity on

the Yahoo message boards for nearly eight years to assail competition and promote his

supermarket chain‟s stock.”). Even if a poster is “legitimate,” doubts will often remain as

to the sincerity of the comment. See, e.g., Trolling for Your Soul, THE ECONOMIST, Mar.

31, 2011 (“„Trolling‟—posting wilfully inflammatory, off-topic or simply stupid

remarks—plagues blogs and other online forums.”). And, finally, even if a poster is

genuine and making a comment in good faith, whether he or she would fall in to the

universe of consumers whose opinions are relevant (i.e., those who are or potentially

might be purchasers of the products in question) often cannot be known. See Merisant

2
  QVC argues that even a single instance of confusion may be sufficient to establish
liability. However, every case it cites for this proposition concerns deception under the
other branch of the Lanham Act—that is, with respect to trademark confusion. Even in
that context, this proposition is not necessarily accepted. See Louis Vuitton Malletier v.
Dooney & Bourke, Inc., 561 F. Supp. 2d 368, 385-86 (S.D.N.Y. 2008). Giving full
weight to the relevant handful of blog comments, we will not disturb the District Court‟s
finding that they were “insufficient to satisfy plaintiff‟s burden that the advertising tends
to deceive or mislead a substantial portion of the intended audience.” AT&T, 42 F.3d at
1443 (internal citation omitted).

                                              7
Co. v. McNeil Nutritionals, LLC, 242 F.R.D. 315, 319 (E.D. Pa. 2007) (citing Pittsburgh

Press Club v. United States, 579 F.2d 751, 758 (3d Cir. 1978)). Given these

considerations, it was especially appropriate for the District Court to give the blog

comments only limited weight.

       Ultimately, the District Court correctly concluded that QVC had not shown on the

record at the time that it was reasonably likely to prevail on the merits of this action and

therefore that it was not entitled to a preliminary injunction.

                                             III.

       For the foregoing reasons, we will affirm the decision of the District Court and

remand for further proceedings.

                                              8