No longer will companies targeted in comparative ads need expensive consumer surveys to show the ads give a false impression in order to block their use. Demonstrating an ad is "unambiguously" false is sufficient, and an ad can be blocked even if a rival isn't specifically named.
"What this means as a practical matter is that more cases may now proceed where the plaintiff decides to put its bet on a judge agreeing that the net impression of a particular advertisement is so obviously false that they can obtain an injunction without spending the time and money for a survey," said Doug Wood, an advertising attorney for Reed-Smith.
Pictures can be 'puffery' too
The judges also ruled that the license to use verbal "puffery" -- claims such as "the best pizza in New York" -- can also apply to "grossly exaggerated" images that no consumer likely would take as fact.
The circumstances of the case, brought by DirecTV rival Time Warner Cable, are pretty unusual, because the two parties settled their dispute several weeks ago and someone forgot to tell the judges. The ruling was made by a three-judge appellate panel in the 2nd Circuit Court, in which a large number of ad-related cases are decided.
In 2006, DirecTV began airing a campaign in which stars stepped out of their movies and TV shows to talk about high definition, or HD.
Portraying Daisy Duke in "The Dukes of Hazzard," Ms. Simpson said, "Hey, 253 days at the gym to get this body, and you're not gonna watch me on DirecTV HD? You're not gonna get the best picture out of some fancy big-screen TV without DirecTV. It's broadcast in 1080i. I don't totally know what that means, but I want it." Originally, a narrator added, "For picture quality that beats cable, you've got to get DirecTV." Later the spot was revised to say, "For an HD picture that can't be beat, get DirecTV."
Mr. Shatner was featured in a "Star Trek" episode saying, "Settling for cable would be illogical," and the spot ended with the same slogans. Internet ads featured a very fuzzy picture identified as "other TV" next to a clearer one identified as "DirecTV."
Time Warner wasn't mentioned by name, but it sued, challenging the campaign's accuracy despite the changes to the original slogan. DirecTV argued that the revised ads never said its picture was better than cable's and called the internet banner ads "puffery."
All about context
A district-court judge in December stopped DirecTV from running the TV spots and internet banners. In its ruling yesterday, the appellate panel affirmed the ban on the TV spots but reversed the decision on the internet spots, saying no one would believe the fuzzy picture shown represented a real cable picture.
"We hold that an advertisement can be literally be false even though it doesn't explicitly make a false assertion if the words or images considered in context necessarily and unambiguously imply a false image," the ruling said.