“tests prove X” claim can’t be falsified by showing not-X, court (wrongly) rules

Dyson, Inc. v. SharkNinja Operating LLC, No. 14-cv-09442
(N.D. Ill. Apr. 26, 2017)
Dyson and Shark compete in the market for vacuum cleaners. When
Shark began running an infomercial for its competing vacuum in September 2014,
Dyson’s margin on its DC65 vacuum fell from $300 per vacuum to less than $100
per vacuum. The September 2014 infomercial claimed “more suction and deep
cleans carpets better than Dyson’s best vacuum,” with a super, “Shark NV650 v.
Dyson DC65 based on ASTM F558 measured at the hose and ASTM F608 embedded
dirt.” There were also similar print ads and short TV ads. The packaging and, at
some point, Shark’s website also made similar claims.
The CEO said, in the infomercial: “I have the independent
lab tests to back it up. We asked independent testing facilities to conduct the
one and only industry-recognized test of carpet cleaning, and we went head to
head with Dyson’s best. Both vacuums were tested on four of the most commonly
owned carpet types in America. And when all was said and done, the independent
lab tests proved without question that our new Shark Rotator Powered Lift-Away
deep cleans carpets better than Dyson’s best $600 vacuum.” The super read,
“Independent LAB TESTS PROVE . . . Dramatization footage of ASTM F608 embedded
dirt (NV650 in carpet/low pile mode) Shark NV650 vs. Dyson DC65.” In October
2014, a revised infomercial said similar things until the statements were
removed in August 2015.
The general principles that come out of this: Dyson argued that
Shark’s advertisements referencing “independent” tests were false, because the
tests were performed by Intertek, an entity that was not independent of Shark
because Shark paid it $1 million per year for various tests. The court evaluated
falsity by what “a linguistically competent” person would think independent
means “according to ordinary usage.” That would mean “free from outside
control” and “not beholden to.” Dyson didn’t submit sufficient evidence to go
to a jury. “[T]he mere fact that a customer pays for a service does not mean
the service provider is controlled by the customer. In considering
independence, the issue is not whether Intertek is paid but whether Shark is
such an important customer as to make up a material portion of Intertek’s
business.” Dyson didn’t put forth evidence on this question. Contacts between
Intertek and Shark, including an Intertek employee’s email to Shark about a
Dyson ad and discussions about the proper settings to test the vacuums, didn’t
show that Shark controlled Intertek clearly enough to avoid a jury. Thus, Dyson
couldn’t get summary judgment on its claim.
The court rejected Dyson’s claim based on the ad statement
that Shark’s vacuum deep cleaned carpets better than “Dyson’s best” vacuum. Though
a new vacuum called the Ball Multi-Floor supposedly became Dyson’s “best” in
April 2015, Dyson didn’t provide evidence of its bestness, and in any event Shark
always disclosed via an asterisk the Dyson model on which it was basing its
comparison, not the Ball Multi-Floor. “[T]he court will not ignore the portion
of Shark’s ad that explicitly states that DC65 is the Dyson vacuum to which
Shark was referring.” Summary judgment for Shark.
Dyson argued that Shark had no independent tests to prove
the superiority of its vacuum from July 8 to August 12, 2014, because Shark did
not receive the final report establishing that its vacuum was superior until the
latter date. The court agreed that Dyson had shown falsity: Dyson’s packages
made the superiority claim, and Shark didn’t show that an earlier version of
the report supported its claim. Hark argued that the information on the
packaging could not have affected the purchasing decision of customers because,
at that time, the vacuums were available for sale only on the website, so
customers would not have seen the claim on the box until after they had made
the purchase decision. “A reasonable jury could conclude that a statement on a
box that the customer could not see until after he purchased the vacuum was not
material to the purchase decision.” (Dyson made the same argument about stale
claims of its own on Dyson packages sold through its website.)
As to the “tests prove” claims, Dyson argued that even if it
failed to show that Shark’s test is invalid, Dyson could still win by putting
forth its own tests showing that Shark was no better than the Dyson. Shark
rejoined that the only way to prove a claim that “tests prove x” was false was
by showing the tests do not prove x. If Dyson were right, its claims would
survive summary judgment. The Seventh Circuit rule is the standard one: “If the
challenged advertisement makes implicit or explicit references to tests, the
plaintiff may satisfy its burden by showing that those tests do not prove the
proposition; otherwise, the plaintiff must offer affirmative proof that the
advertisement is false.”
Surprisingly to me, the court agreed with Shark. “[A] claim
that the ‘test proves x’ is literally false only if the test does not (reliably)
prove x.” Shark’s valid independent tests supported its statements. “That Dyson
conducted other tests that reached a different conclusion does not make Shark’s
statements about its tests false.”
RT: What if VW advertised that emission tests proved its cars
met emissions standards? Wouldn’t we say that those tests didn’t “prove” X,
which could be falsified by other evidence? In my opinion, there are two claims
here—the tests prove claim, which adds credibility to X on its own, and X. I
have always understood that the statement “tests prove X” claims both that
tests prove X and that X is, in fact, true; otherwise why would the tests be
relevant? Separately, this result seems problematic from a pure statistical
perspective. Suppose Shark had a valid test
that showed superiority at the 95% confidence level, but Dyson had 19 valid
tests that showed no superiority at the 95% confidence level. A 95% confidence
level suggests that the test will only be wrong one out of twenty times; with
that evidence, a jury should be able to conclude that Shark’s test, though
valid, did not “prove” Shark’s claim.
Nonetheless, the court granted Shark’s motion for summary
judgment as to claims where this was the key argument.

Shark argued that Dyson had unclean hands due to Dyson’s
continued use of the phrase “Twice the Suction” to describe its vacuums after
that claim became stale. But this conduct didn’t arise out of the same
transaction from which this case arises, so summary judgment for Dyson on this
defense was merited. Also, “[t]he conduct about which Shark complains in its
affirmative defense is conduct the parties are already fighting about in
another lawsuit. To apply the unclean hands doctrine here (or there) would
leave the alleged wrongs without remedy.” 

from Blogger http://ift.tt/2oPBaYN

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