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Third Circuit "Irons" Out Why Injunction Stands After False Advertising Claims Affirmed

Herald, Michael 2014 143 200.jpgIn Groupe SEB United States, Inc. v. Euro-Pro Operating LLC, 2014 U.S.App. LEXIS 23785 (3.d Cir, 2014) the United States Court of Appeals for the Third Circuit recently affirmed a District Court's decision to grant a preliminary injunction against a household consumer product brand for false advertising and violation of the Lanham Act, 15 U.S.C. § 1125(a). Plaintiff, SEB, sells various consumer products, including steam irons under the Rowenta brand name, namely the Rowenta Focus and the Rowenta Steamium. The Defendant, Euro-Pro, sells a competing brand of steam irons under the Shark brand name. The dispute involved in this case arises from the advertising claims on the packing of the two competing Shark irons, the "Shark 405" and "Shark 505". The Third Circuit ultimately concluded that the District Court was correct when it concluded that Shark's advertising claims were false and that it violated the Lanham Act.

The Shark 405 packaging included two advertising claims that were challenged. First, the text on the packaging asserts that the Shark 405 offers "MORE POWERFUL STEAM vs. Rowenta®†† at half the price." The "††" characters refer to a fine-print footnote on the bottom of the packaging, which states that the claim is "††[b]ased on independent comparative steam burst testing to Rowenta DW5080 (grams/shot)." Text on another part of the packaging also asserts that the Shark 405 delivers "#1 MOST POWERFUL STEAM*." Again, there is fine print that states the Shark 405 "*[o]ffers more grams per minute (maximum steam setting while bursting before water spots appear) when compared to leading competition in the same price range, at time of printing." The packaging for the Shark 505 made substantially the same claims.

SEB (Rowenta) sought a preliminary injunction to enjoin Euro-Pro (Shark) from making the claims on the Shark 405 and Shark 505. In defending the claim, Shark introduced as evidence a consumer survey report that showed consumers do not have a uniform understanding of the meaning of the phrase "more powerful steam." The District Court concluded that SEB established that the Shark claims are literally flase and that SEB demonstrated a likelihood of irreparable harm without the injunction. Specifically, the injunction required Euro-Pro to place stickers over the claims on the Shark packaging and remove the hang tags from the steam irons (which also contained false claims).

In affirming the District Court, the Third Circuit held that, "[i]n deciding whether an advertising claim is literally false, a court must decide first whether the claim conveys an unambiguous message and second whether that unambiguous message is false." The Court went on to note that a "literally false" message may be conveyed explicitly or implicitly, but unless the claim is unambiguous it cannot be literally false. In this case, the Third Circuit affirmed that when a product's packaging includes an advertising claim and unambiguously defines a claim term, the packaging's definition of the claim term applies to the claim's explicit message. Thus, the Court held, "what a product's packaging says a claim term means is in fact part of the claim's explicit message. If that explicit message is both unambiguous and false, the claim is literally false."

Both the District Court and Third Circuit rejected the consumer survey evidence offered by Euro-Pro in this matter. Because the claim in this case involved literal falsity, the Court affirmed that no evidence of actual consumer deception is necessary. Accordingly, a court is not required to use consumer evidence to define terms in advertising when their definitions are unambiguous by the terms of the advertising.

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