Thursday, July 22, 2010

Let it bleed: tape falsity claims lose

Intertape Polymer Corp. v. Inspired Technologies, Inc., 2010 WL 2776562 (M.D. Fla.)

Intertape sued Inspired; Inspired counterclaimed for trademark infringement and false advertising. The court found no likelihood of confusion on the trademark claims: Inspired’s “FrogTape” green painter’s tape (with frog logo) using “Paint Block” polymer versus Intertape’s bluish-teal “Bloc-IT” painter’s tape with the phrase/acronym “PST”/“Paint Shock Technology” and Intertape’s “LILI Low-Environmental Impact Line From Intertape,” which uses a different frog logo but which is not painter’s tape. As to the painter’s tape, the court emphasized the differences in the main marks—FrogTape versus Bloc-IT, as well as other differences in the overall appearances of the products/marks as presented to consumers. LILI, the court found, was in a different product category. Summary judgment for Intertape because no reasonable trier of fact could find likely confusion.

False advertising: according to Inspired, Intertape knew from repeated testing that Bloc-IT failed to outperform FrogTape, but advertised to the contrary. Thus, a memo noted that FrogTape outperformed Bloc-It on painted wallboard; an email revealed “higher than normal paint bleed” with Bloc-It but noted that FrogTape continued to remain within “normal standard deviation”; an internal study revealed that its sales force was getting “mixed results” with Bloc-it and that they could not “consistently demo the tape”; and an independent testing agency concluded that competitors’ products repeatedly outperformed Bloc-It.

Nonetheless, Intertape made aggressive marketing claims. It made a presentation to Lowe’s claiming “Best in Class” performance, with “industry leading bleed resistance” and “does not require special handling” compared to FrogTape’s “good bleed resistance,” “must be stored in special container,” “subject to moisture contamination and product failure.” (The court expressed doubt that statements to Lowe’s were “advertising and promotion,” but assumed they were for purposes of the motion.)

Other materials stated that Bloc-IT “Solves paint bleed problem” and “allows for CLEAN EDGES Every time.” Intertape also issued a back-patting press release to investors, among others, with similar claims that painters could count on Bloc-IT “for clean crisp paint lines every time.” The press release claimed new technology and proprietary chemistry that “STOPS THE BLEED and ensures clean lines every time.” Inspired argued that these and similar statements were false.

The court concluded that these statements were not shown to be literally false or were puffery. Even assuming literal falsity, Inspired failed to show materiality.

The technological superiority claims were “ambiguous puffery,” in part because they were ungrammatical. In any event, Inspired didn’t show that Bloc-IT was inferior. (I’m not sure why the internal documents weren’t evidence for this, other than that some of the claims didn’t specify what the tape was superior to.) “Best in class” was used to identify both parties’ tapes, and “class” was an inherently ambiguous term anyway; it wasn’t clear how many types of products were included in the class. “Industry leading bleed resistance” compared to FrogTape’s “good bleed resistance” was not literally false. Though the performance tests appeared to reveal inferiority, “industry leading” was “classic puffery and, similar to the term ‘class,’ invites significant ambiguity as to, inter alia, the breadth of the ‘industry’ to which the statement refers.” And “good bleed resistance” was literally true, and anyway just an indeterminate expression of opinion.

This strikes me as a candidate for falsity by necessary implication. It’s the contrast that makes the implication. But the court reasoned that, even if the statements taken together conveyed a superiority message, that statement was not a specific, measurable claim that could reasonably be interpreted as an objective fact.

The same with the rest of the statements. “New technology” wasn’t false, and “any masking tape, depending on the skill of the painter, type of paint, surface, etc., could arguably ‘allow for clean edges every time.’” Innovation didn’t show that Bloc-It fails to “solve” or “stop” bleeding or fails to “promote” smooth lines. (Again, didn’t the internal communications say something about that?) Finally, “delivering performance results not yet seen” and “the line is picture perfect, crisp and straight” were puffery or opinion.

Even assuming literal falsity, Inspired didn’t show materiality. Sales of Bloc-IT, without more, are not evidence of a material effect on retailers’ or end consumers’ purchasing decisions. There must be evidence that Intertape “misrepresented an inherent quality or characteristic of the product.” (It does seem to me that bleed resistance is pretty close to the core of what one would want from painters’ tape, as underscored by these claims’ prominence in the advertising across multiple media and by representatives’ concerns that they couldn’t consistently demo the tape, which suggests they thought they couldn’t sell the tape without bleed resistance. I would think a reasonable factfinder could infer materiality from these facts alone.)

In a footnote, the court expressed some doubt that Innovation had prudential standing, citing Phoenix of Broward, Inc. v. McDonald's Corp., 489 F.3d 1156 (11th Cir. 2007), for the proposition that “direct competitors did not have standing to assert false advertising claim under Lanham Act where there was only [an] attenuated link between false advertising statements and harm.” I note that this case involved direct comparative advertising. I’m left to wonder what it would take for standing on this theory.

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