Sleep Number no more: false advertising but not TM claims get TRO

Select Comfort Corp. v. Tempur Sealy International, Inc.,  No. 13–2451, 2013 WL 6767821 (D. Minn. Dec. 23, 2013)

Select Comfort, which sells Sleep Number/Select Comfort mattresses, sought a TRO against Mattress Firm (one of the defendants), a mattress retailer that sells a number of different brands, including Tempur-Pedic, Sealy, and Serta.  It’s one of the largest Tempur-Pedic retailers, and it doesn’t sell Select Comfort, though it once did.  Select Comfort alleged that Mattress Firm falsely advertised about the Sleep Number bed, had salespeople who disparaged the quality and warranties of Sleep Number beds, falsely told customers it ended its agreement with Select Comfort, and improperly used Select Comfort trademarks.

Mattress Firm disputed Select Comfort’s allegations and claimed to have remedied any issues through prompt action.  The key TRO issue was likely success in showing that the alleged representations were commercial advertising or promotion, using the Gordon & Breach test ((1) commercial speech; (2) by a defendant who is in commercial competition with the plaintiff; (3) for the purpose of influencing consumers to buy defendant’s goods or services; and (4) disseminated sufficiently to the relevant purchasing public).  Mattress Firm primarily argued that the statements at issue weren’t directed to a sufficiently substantial portion of the mattress-buying public and not part of an organized campaign to penetrate the market.  The court disagreed, since Select Comfort identified “flyers and representations” across a number of states.  “While there may be millions of customers compared to the small number of examples provided in Select Comfort’s complaint, at this phase, the geographic spread and consistency of the representations is adequate to create a reasonable inference that the statements are sufficiently widespread to constitute commercial advertising or promotion.”  Thus, Select Comfort showed likely success on the merits of its false advertising claim.

As for trademark infringement, Select Comfort alleged that Mattress Firm used its marks in internet search engines and third-party websites.  On the Mattress Firm website, no Select Comfort marks/ads appeared.  And if consumers searched only for “Select Comfort,” “Sleep Number,” or “Mattress Firm” there was no direct overlap.  However, if a consumer searched for both parties’ marks, or typed “Does mattress Firm sell Select Comfort beds?” the results would include a link to the Mattress Firm website.  (In other words: not even broad matching, but matching on the defendant’s own trademark!  Eric Goldman should love this. The opinion isn’t clear whether the link is a paid ad or organic result, but it shouldn’t matter in the slightest—whatever trademark use is, this ain’t it.)  The link goes to Mattress Firm’s website, where it’s immediately clear that Mattress Firm doesn’t sell Select Comfort.  Select Comfort argued that consumers would be diverted (even though that doesn’t describe diversion, just selection from alternatives), but the court didn’t think that was enough to justify the extraordinary measure of a TRO.  (And what would the order be?  If the results are organic, how could they bind Google?)

Select Comfort also alleged that Mattress Firm paid third-party sites that include links “relating to Select Comfort products which ultimately lead consumers to Mattress Firm’s website.”  At this stage, there wasn’t enough information to find likely success on the merits.

Having found likely success for false advertising, the court found that “loss of goodwill and reputation can constitute irreparable harm,” and “misleading comparisons can diminish a product’s value in the minds of a consumer.”  Given Select Comfort’s showing that there were inaccurate comparative flyers and sales associates making representations that Select Comfort customers were dissatisfied with the low quality/mold in Select Comfort’s products, it was suffering irreparable harm.  (Query whether this is consistent with eBay: is the court inferring irreparability from likely success on the merits?)  But Select Comfort failed to show irreparable harm on trademark infringement because “there is a very narrow universe of search scenarios whereby a consumer might be re-directed to Mattress Firm’s website, and once such a consumer is, he will know immediately that he cannot purchase Select Comfort products at Mattress Firm.”  (Why this is reparable is left as an exercise for the reader.)

The court determined that a narrow restraining order was justified, requiring Mattress Firms to communicate to its stores about avoiding specific claims (that Mattress Firm dropped Sleep Number; that Sleep Number has mold problems/lawsuits based on mold; that Sleep Number offers a shorter warranty than its actual 25-year warranty; and that Sleep Number beds use “cheap foam” or “commodity foam”).  Mattress Firm was ordered to stop using any materials containing these representations, including flyers submitted as evidence to the court.  This didn’t require unreasonable efforts and, if Mattress Firm was correct that it didn’t engage in false advertising/had already ceased any such conduct, the letter/email wouldn’t cause any harm.  But requiring Mattress Firm to control all websites with possible trademark issues was too much.  Mattress Firm was working “to remove any residual coding which may result in the Google search result with the title ‘Select Comfort—Mattress firm’ and a link to the Mattress Firm website.” Requiring Mattress Firm to enjoin all efforts with third-party advertisers was premature.
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