Wednesday, August 22, 2007

DIRECTV Commercial Likely to Be Proven “False by Necessary Implication”

This posting was written by William Zale, Editor of CCH Advertising Law Guide.

In a Lanham Act false advertising case, Time Warner Cable (TWC) is likely to succeed in proving “false by necessary implication” a television commercial in which celebrity William Shatner praised the “amazing picture quality of the DIRECTV HD” and asserted that “settling for cable would be illogical,” the U.S. Court of Appeals in New York has held.

The court joined other federal appellate circuits in holding that an advertisement can be literally false even though it does not explicitly make a false assertion, if the words or images, considered in context, necessarily and unambiguously imply a false message.

Settling for Cable “Illogical”

To interpret the controversial statement, “With what Starfleet just ponied up for this big screen TV, settling for cable would be illogical,” the court found it appropriate to look not only at that particular text, but also at the surrounding context of the commercial.

In light of Shatner’s opening comment extolling the “amazing picture quality of DIRECTV HD” and the announcer’s closing remark highlighting the unbeatable “HD picture” provided by DIRECTV, the line in the middle—“settling for cable would be illogical”—could be found to refer to cable’s HD picture quality, according to the court.

Since it would only be “illogical” to “settle” for cable’s HD picture if it was materially inferior to DIRECTV’s HD picture, TWC was likely to establish that the statement was literally false.

“The Best Picture”

TWC also was held likely to succeed in proving literally false DIRECTV's television commercial in which celebrity Jessica Simpson stated that a viewer could not get “the best picture—a “1080i” resolution high definition picture—without DIRECTV. This claim was flatly untrue, the court determined. The uncontroverted factual record established that viewers could, in fact, get the same “best picture” by ordering HD programming from their cable service provider.


The “puffery” defense to false advertising was another area in which the court refined its position. Because DIRECTV’s obviously hyperbolic Internet advertisements constituted mere puffery, TWC is unlikely to succeed on claims that the advertisements violated the Lanham Act. The Internet ads depicted DIRECTV's HD television service as clear and sharp, depicted “other TV” (defined by the website as “basic cable”) as unwatchably blurry, pixelated, and distorted.

The court decided that non-actionable puffery encompasses visual depictions that, while factually inaccurate, are so grossly exaggerated that no reasonable consumer would rely on them in navigating the marketplace. The Internet advertisements' depictions of cable were not just inaccurate; they were not even remotely realistic, the court observed. It was difficult to imagine that any consumer, whatever the level of sophistication, would actually be fooled into thinking that cable’s picture quality was so poor that the image was nearly entirely obscured. Because the Internet ads were puffery, a lower court’s preliminary injunction against them (CCH Advertising Law Guide ¶62,459) was vacated.

Presumption of Irreparable Harm

The third area in which the court moved beyond its precedents was by ruling that irreparable harm may be presumed for purposes of entering a preliminary injunction barring false advertising. TWC was entitled to a presumption of irreparable harm from DIRECTV’s commercials, the court said, in upholding the injunction against the commercials in markets served by TWC.

The likelihood of irreparable harm may be presumed (1) when a false advertising plaintiff demonstrates a likelihood of success in showing that a defendant’ comparative advertisement is literally false and (2) that, given the nature of the market, it would be obvious to the viewing audience that the advertisement is targeted at the plaintiff, even though the plaintiff is not identified by name.

DIRECTV's Shatner commercial explicitly disparaged the picture quality of “cable.” TWC was “cable” in the areas where it was the franchisee, the court noted. Even though Shatner did not identify TWC by name, consumers in the markets covered by the preliminary injunction would undoubtedly understand his derogatory statement, “settling for cable would be illogical,” as referring to TWC.

DIRECTV's Simpson commercial did not explicitly refer to “cable.” However, given the nearly binary structure of the television services market, it would be obvious to consumers that DIRECTV’ claims of superiority were aimed at diminishing the value of cable—which, as discussed above, was synonymous with TWC in the areas covered by the preliminary injunction.

The August 9 decision in Time Warner Cable, Inc. v. DIRECTV, Inc. will be reported in CCH Trade Regulation Reports and CCH Advertising Law Guide.

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