Monday, May 23, 2011

Whirlpool Not Enjoined From Advertising “Steam Dryers”

This posting was written by Jody Coultas, Editor of CCH State Unfair Trade Practices Law.

LG Electronics U.S.A., Inc. was denied injunctive relief against Whirlpool Corporation in an Illinois Consumer Fraud and Deceptive Business Practices Act (CPA) and Uniform Deceptive Trade Practices Act (DTPA) claim alleging Whirlpool’s advertisements of “steam dryers” were false and misleading.

Both companies manufacture steam dryers but use different methods for creating steam. The case concerned the definition of “steam” and whether the Whirlpool dryer actually created steam.

A jury in the federal district court in Chicago rejected the CPA claim, but found that Whirlpool violated the DTPA by representing its dryers as having characteristics it did not have and creating a likelihood of confusion for consumers. LG sought a nationwide injunction barring Whirlpool from using the word “steam” in describing the dryers, or requiring Whirlpool to make clear how the dryers worked.

Irreparable Harm

LG failed to establish conduct by Whirlpool that was likely to result in damage, according to the court. In its request for injunctive relief, LG argued that the jury’s finding of a violation of the DTPA created a presumption of irreparable harm, such that an injunction should follow, and that the four-factor injunction test was satisfied.

Injunctive relief is awarded upon a finding of a likelihood of harm by the conduct found to have violated the DTPA. However, LG did not have to prove harm to establish a violation of the DTPA, and the jury verdict did not establish that LG faced a likelihood of harm sufficient for an injunction.
The verdict was general and did not specify which practices it found to create a likelihood of confusion for consumers. Further, the jury did not find that Whirlpool’s practice were likely to damage LG.

Injunctive relief was inappropriate in this case because LG could not establish that it was likely to be damaged by Whirlpool’s marketing of its steam dryers, according to the court.

Use of Steam

Contrary to LG’s assertions, the Whirlpool steam dryer did, in fact, use steam. Thus, the advertising neither violated the DTPA nor was likely to harm LG in a manner cognizable under the CPA.

This finding was consistent with the jury verdict because the jury had found Whirlpool engaged in conduct that created a likelihood of confusion. Because Whirlpool’s advertising for its steam dryers did not violate the CPA or DTPA and was not likely to harm LG, injunctive relief was denied.

The May 9 decision in LG Electronics USA, Inc. v. Whirlpool Corp. appears at CCH State Unfair Trade Practices Law ¶32,254.

Further details regarding CCH State Unfair Trade Practices Law appear here.

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