Seattle Trademark Lawyer

Bizarre comparison: Is it false advertising for BMW to pick on Volvo?

I thankfully don’t watch many commercials. But maybe I’m missing out.

From what I gather, this bizarre commercial first aired during the Super Bowl. But it’s new to me.

I think the commercial is bizarre because in an effort to promote its supposedly clean diesel SUV, BMW portrays an exhaust-belching car that unmistakably is an old Volvo. A diesel Volvo, apparently. 

While I appreciate BMW’s desire to contrast clean with dirty, did it have to select such a distinctive car design to pick on? It could have selected any number of nondescript cars to outshine. Instead, it portrays its competitor’s car as being almost evil. BMW’s shiny new offering by comparison looks like it might single-handedly save the planet.

It seems incredible that Volvo doesn’t have a problem with this. It really reminds me of the old “Polar Seltzer” commercial spoofing the Coca-Cola polar bears seen in Coke commercials during the Winter Olympics. Competing Polar Seltzer’s bears humorously reject a can of Coke upon being admonished by a sign to “Keep the Arctic Pure,” and reach instead for a can of Polar Seltzer. Nice gimmick, but Coke sued for false advertising because Polar Seltzer wrongly suggested Coke is impure. Coke famously won, and Polar had to change its ad.

If old diesel Volvos don’t actually spew soot like the conclusion of “Citizen Kane,” I think BMW is taking the same unfair advantage that Polar Seltzer took.

Folks may remember the false advertising trial we had last year in the Western District (STL posts here and here.)

Or perhaps the jury’s $10 million award, which the Western District reduced to just under $500k. The court also found the case was “exceptional” and awarded attorney’s fees.

At issue was plaintiff National Products, Inc.’s (NPI) claim that competitor Gamber-Johnson LLC made false statements in a promotional video that compared the safety benefits of Gamber’s emergency vehicle laptop mounting system with NPI’s system.

Both parties appealed Judge James Robart’s decision.

On Sept. 7, the Ninth Circuit affirmed. The opinion is short and sweet.

“NPI presented sufficient evidence to support its false advertising claim, including the jury findings of falsity and deliberateness. Therefore, the district court did not err in denying Gamber’s motions for judgment as a matter of law with respect to liability.

“The award of attorneys’ fees was not an abuse of discretion. Under the Lanham Act, the district court may award attorneys’ fees to the prevailing party ‘in exceptional cases.’ A case is ‘exceptional’ when the conduct is ‘willful, deliberate, knowing or malicious.’ Because sufficient evidence supported the jury’s finding of deliberateness, the district court did not abuse its discretion in awarding attorneys’ fees to NPI.

“The district court did not err in exercising its discretion to reduce the jury award of profits because the award was excessive.”

The case cite is National Products Inc. v. Gamber-Johnson LLC, Nos. 10-35826 and 10-36118 (9th Cir. Sept. 7, 2011).

Seattle yarn distributor Cascade Yarns, Inc., brought a false advertising case against its New York rival, Kitting Fever, Inc. (KFI). It alleges KFI falsely labels its yarns as containing “milk protein fiber” and that its use of the word “milk” deceives consumers into believing that KFI’s fiber is natural when it is not. (Statement from Cascade describing the dispute here).

Cascade moved for a preliminary injunction to enjoin KFI from such conduct.

On Aug. 8, Western District Judge Ricardo Martinez denied the motion because it wasn’t sufficiently clear that Cascade was likely to prevail on the merits.

In the court’s words: “The parties’ moving papers and arguments reveal disputes of fact that preclude the Court from determining whether Cascade is likely to prevail on the merits of a Lanham Act false advertising claim. First, the parties offer expert declarations providing contrary opinions on the fiber content of the subject yarns. Second, the experts contest the appropriate testing method in determining fiber content.” The court declined to decide the “falsity” element based on the limited record presented to it.

The court also found that Cascade had not carried its burden of establishing that consumers had been deceived by KFI’s use of “milk” on its labels.

“Cascade argues that labeling the fiber ‘Milk’ is not accurate because the proper name is either ‘Azlon’ or ‘Polylactide’. Cascade further maintains that using the word ‘Milk’ is deceptive because it ‘implies [that] the milk protein fiber is a natural product’ although it is not natural. KFI counters by arguing that Cascade provided no support for its contention. The Court agrees with KFI. Cascade has failed to meet its burden of demonstrating that a significant portion of consumers have been misled by the word ‘Milk.’ Accordingly, Cascade is not entitled to a preliminary injunction on this basis of consumer deception.”

The case cite is Cascade Yarns, Inc. v. Knitting Fever, Inc., No. 10-861 (W.D. Wash. Aug. 8, 2011) (Martinez, J.).

In Trafficschool.com, Inc. v. Edriver Inc., defendants own and manage DMV.org, a for-profit, advertising-driven Web site that provides visitors with information about renewing driver’s licenses, buying car insurance, beating traffic tickets, and the like.

Plaintiffs market and sell a traffic school and driver’s ed courses to consumers. They compete with defendants for revenue generated from sponsored links.

Plaintiffs sued for false advertising on the ground that defendants got an unfair leg up on the competition by misleading consumers into believing that defendants’ DMV.org Web site is a government Web site (“DMV” being a common abbreviation for Department of Motor Vehicles).

At trial, the Central District of California held that defendant had engaged in false advertising in violation of Section 43 of the Lanham Act and imposed a permanent injunction but did not find the case was “exceptional” as needed to award attorney’s fees.

Both sides appealed. On July 28, the Ninth Circuit agreed that defendants had violated the Lanham Act. Indeed, it found defendants’ conduct was so misleading to consumers that the district court erred in not awarding fees. 

“Defendants challenge the district court’s finding that their deception was willful — and thus ‘exceptional’ under Horphag [Research Ltd. v. Garcia, 475 F.3d 1029 (9th Cir. 2007)] and Lindy Pen [Co. v. Bic Pen Corp., 982 F.2d 1400 (9th Cir. 1993)]. But the district’s willfulness finding is supported by evidence that defendants planned to mislead site visitors and knew that their conduct confused consumers. Defendants associated their website with URLs and search terms that falsely implied DMV.org was a government site. They had in their possession hundreds of emails sent by consumers who contacted DMV.org thinking it was a state agency. And DMV.org’s director of customer service testified that he voiced concerns about these emails to senior management.

“Defendants claim that they reacted by ‘explain[ing] away any confusion’ and adding disclaimers to the bottom of each web page. But defendants knew that the disclaimers were ineffective, because adding them didn’t end the stream of emails sent by consumers who thought they’d contacted their state DMV. There was overwhelming proof that defendants knew their statements confused consumers and did little or nothing to remedy it. The district court could reasonably infer that they willfully deceived the public.”

The case cite is Trafficschool.com, Inc. v. Edriver Inc., __ F.3d __, 2011 WL 3198226, Nos. 08-56518, 08-56588, 09-5533 (9th Cir. July 28, 2011).

In March, Western District Judge Richard Jones entered a permanent injunction against defendant “roof broker” James Garcia in the false advertising case of CertainTeed Corp. v. Seattle Roof Brokers. (Past STL posts here and here).

The order permanently enjoins Mr. Garcia and his unincorporated entities from stating in any advertising promoting his roofing business that “CertainTeed products ‘have a history of premature failure’” and “that CertainTeed products will fail or will not pass a resale inspection after 15-20 years, or any other statements in which Mr. Garcia represents that the majority of CertainTeed roofs will fail or will not pass an inspection after a particular term of years.”

On July 8, the court awarded CertainTeed its attorney’s fees in the amount of $114,681.50. Since it found Mr. Garcia had violated the Consumer Protection Act, the court did not need to determine that the case was “exceptional” for purposes of awarding fees under the Lanham Act.

The court found: “…. CertainTeed has not attempted to claim fees for much of the time its attorneys expended in this litigation. This is in part because CertainTeed acknowledges that it did not prevail on every claim or every request for relief from the court. In part, however, CertainTeed declined to claim certain fees simply to ensure that its overall fee request was reasonable. The court finds that CertainTeed could have reasonably claimed an award higher than the one it requested.”

The case cite is CertainTeed Corp. v. Seattle Roof Brokers, No. 09-0563 (W.D. Wash. July 8, 2011) (Jones, J).