The United States Court of Appeals for the Second Circuit has recently clarified the standards for false advertising under the Lanham Act. The court has now indicated that an advertisement can still be false even when it does not explicitly include any false assertions if the entire advertisement, taken as a whole, conveys a false message. But the court also expanded the concept of “puffery” to include advertisements featuring inaccurate images that are so grossly exaggerated that no reasonable consumer would believe them to be true. These dueling concepts may make it more difficult for businesses to discern where the line is drawn with respect to advertising that attacks the competition.
Time Warner Cable, Inc. v. DirecTV, Inc., 2007 WL 2263932 (2d Cir. 2007), arose out of a dispute between Time Warner and DirecTV over a marketing campaign DirecTV conducted touting its HDTV picture quality in comparison to cable TV. Time Warner alleged that two television ads run by DirecTV, as well as internet advertisements, constituted false advertising under section 43(a) of the Lanham Act.
One TV advertisement featured Jessica Simpson as her Daisy Duke character from the “The Dukes of Hazzard” movie, with Simpson telling viewers “Hey, 253 straight days at the gym to get this body and you're not going to watch me on DirecTV HD? You’re just not going to get the best picture out of some fancy big screen TV without DirecTV. It’s broadcast in 1080i. I totally don't know what that means, but I want it.” Another ad featured William Shatner, as Captain Kirk from “Star Trek,” in a conversation taking place on the bridge of the Starship Enterprise:
Mr. Chekov: Should we raise our shields, Captain?Captain Kirk: At ease, Mr. Chekov. [addressing viewers] Again with the shields. I wish he’d just relax and enjoy the amazing picture clarity of the DirecTV HD we just hooked up. With what Starfleet just ponied up for this big screen TV, settling for cable would be illogical.
Mr. Spock: [Clearing throat.]
Captain Kirk: What, I can’t use that line?
The court noted that under section 43(a), liability may be established when an ad is literally false or it is likely to mislead or confuse consumers. With respect to the Jessica Simpson ad, the ad indicates that the best quality picture, in 1080i resolution, could only be obtained from DirecTV. The court agreed with Time Warner that this was literally untrue, given that the same picture resolution could be obtained by ordering HDTV programming from a cable company.
In considering the Shatner ad, the court broke new ground. The court’s analysis focused on Shatner’s statement that for HDTV, “settling for cable would be illogical.” The court adopted what it called the “false by necessary implication” doctrine, which requires a court to evaluate whether an advertisement is literally false by considering the message conveyed by the entire advertisement and not limiting its analysis to the specific statements contained in the ad. While none of the statements in the ad, in isolation, were literally false, the court concluded that the entire Shatner ad conveyed a false message – that DirecTV’s HDTV picture was superior to cable’s HDTV picture.
The court, however, rejected Time Warner’s contention that DirecTV’s internet ads were false. The advertisements featured a split screen, with one side highly distorted that purportedly depicted a cable TV picture. The court noted that the ads, which included images of sports figures, were “not just inaccurate; they are not even remotely realistic.”
The court concluded that the internet ads were acceptable because they so distorted what a cable image would look like that no viewer could think it was an accurate depiction. In doing so, the court accepted DirecTV’s contention that the ads constituted puffery, which cannot form the basis of a claim under section 43(a).
Puffery is generally defined as subjective claims that cannot be proven true or false and includes exaggeration or overstatement expressed in broad, vague, and commendatory language. The court expanded this concept to apply to the grossly distorted images featured in the DirecTV ads. The ads depicted the cable TV picture as a series of large, colored square blocks laid out in a grid that nearly entirely obscured any image. The court concluded that this was obvious hyperbole, stating that “it is difficult to imagine that any consumer, whatever the level of sophistication, would actually be fooled by the Internet advertisements into thinking that cable’s picture quality is so poor that the image is nearly entirely obscured.”
While the court’s expansion of the concept of puffery may allow more freedom to advertisers, the court’s treatment of DirecTV’s television ads indicates that taking care not to make false statements in an ad may not be enough to avoid a charge of false advertising.