“Excessive use of professional reviewers” might be false advertising

Interlink Products Int’l, Inc. v. F & W Trading LLC, No.
15-1340, 2016 WL 1260713 (D.N.J. Mar. 31, 2016)
 
The parties compete to sell showerheads; Interlink claims
rights in the marks AQUASPA, AQUASTORM, AQUADANCE, and SPIRALFLO for showerheads.
 It sued F&W for false advertising,
trademark infringement, and related claims, and F&W counterclaimed for
false advertising etc. based on Interlink’s allegedly false representations of
compliance with the Energy Policy Act, which sets flow rate requirements for
showerheads. 
 
On the counterclaims, F&W argued that the product
instructions constituted actionable “advertising or promotion” because they
“serve the purpose of influencing the customer who purchased the item to
continue purchasing Interlink showerhead products and to also influence other
potential customers who become aware of them through contact with the initial
purchaser.” The court disagreed, finding that product inserts were post-sale
and didn’t influence consumers in their purchasing choices.
 
Interlink argued that F&W shouldn’t be allowed to
proceed on claims based on Interlink’s alleged violation of the Energy Policy
Act, because F&W didn’t plead that it itself complied with the standards
and couldn’t plausibly allege damages. 
The court disagreed.  If consumers
chose Interlink over F&W based on the allegedly false claims, F&W may
have suffered damages.
 
Tortious interference: F&W argued that Interlink
purposely used black image backgrounds instead of white ones in its Amazon
sales, against Amazon policy.  But “F&W
provides no support for its argument that the violation of a website’s image
requirements gives a third-party user of the website a cause of action for
unlawful competition. Interlink’s compliance with Amazon’s image requirements
is a matter Amazon.com and Interlink.”
 
The court did decline to dismiss claims based on Interlink’s
alleged failure to mark showerheads with their country of origin, given
F&W’s admission that at least some of its showerheads were also not marked;
F&W argued that it was now in full compliance with the law, which was
enough to avoid dismissal.
 
Turning to Interlink’s claims, Interlink alleged that
F&W used Interlink’s pictures and product descriptions, thus falsely
advertising their own products.  F&W
argued that the pictures used showed the different functions of the showerhead
and that Interlink didn’t allege that the functions were unavailable in
F&W’s products or that the F&W products were inferior.  But Interlink’s argument was that F&W was
misrepresenting that their product was in fact Interlink’s product (or that
they were of the same nature and quality), and that’s a violation of
§43(a).  (Ah, but (1)(a) or (1)(b)?)
 
Defendants also allegedly misrepresented that AQUAFLOW was a
registered trademark; defendants rejoined that the ® symbol was used by mistake
and that they’d ceased using the trademark symbol. Citing McCarthy’s statement
that the “use of … the ® adjacent a mark not federally registered is … a form
of false advertising which may result in serious repercussions,” the court
found that Interlink had pled a plausible claim for false advertising.  (Why is this plausibly material?)
 
Interlink also alleged that defendants manipulated product
reviews, and thus numerical product ratings, “through the excessive use of
professional reviewers” who were flooded with free samples, leading to reviews
that “are inherently biased and tend to favor the seller.” That was enough to
state a claim for implied falsity.  (What
exactly is the falsity?  Assuming that
the free sample was disclosed, is “bias” something more than puffery?)
 
Interlink also sufficiently alleged false advertising by
pleading that: (1) defendants advertise that the installation of their dual
showerhead requires “absolutely no tools”; (2) this statement is “literally
false”; and (3) the product instructions “clearly instruct the purchasers to
use” tools.
 
However, as a non-consumer (purchases made for purposes of
this litigation didn’t count), Interlink lacked standing under New Jersey
consumer protection law.
 
The court also found Interlink’s trademark confusion claims
based on defendants’ AQUAFLOW compared to its marks AquaSpa and SpiralFlo
plausible.  Given how descriptive those
terms are, that seems like a troubling result, but the court here doesn’t seem
inclined to ask for much from either side here. 
Interlink also alleged trade dress infringement of a trade dress
comprising:
 
(1) The use of circular pictures
arranged in a vertical column showing the various function modes of the
showerheads, together with the terminology used to describe the functions and
the font and positioning of the function descriptions beneath the pictures;
(2) photographs of Interlink’s
products;
(3) the look, feel and style of the
presentation of product images;
(4) the non-functional aspects of
the design of the products, specifically the shape of the shower handle, head
and shower jet design …; and
(5) the trademarks used in
connection with the products.
 
Interlink adequately alleged non-functional elements—the package
design’s use of circular pictures in a vertical column with certain fonts,
words, and pictures, along with Interlink’s trademarks. 

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