Stay ADvised: What's New This Week, July 25
In This Issue:
- NAD Concludes SharkNinja Hair Dryer Claims Are Mostly Hot Air
- Actress Mayim Bialik Gets Court to Grant Ban on CBD Endorsements With a "Big Bang"
- Home Inspectors Association Appeal Falls Flat as 10th Circuit Finds No Injury
- FTC Complaint Turns Up Heat on Grill Maker Over Repair Restrictions
NAD Concludes SharkNinja Hair Dryer Claims Are Mostly Hot Air
The National Advertising Division (NAD) recently weighed in on a challenge to claims made by SharkNinja about its HyperAir hair dryer. Dyson, which markets the competing Supersonic hair dryer, brought the challenge before NAD, asserting that a number of Shark's claims are simply not supported by the evidence.
First Dyson challenged head-to-head claims made by Shark on an infomercial that directly compared the HyperAir with the Supersonic. In the comparison, the announcer stated that the HyperAir, unlike the Supersonic, gives users "the ability to dry, straighten, smooth and shine without the need for separate tools." Dyson argued that the head-to-head comparison implied that its product doesn't come with attachments, that it requires users to "resort to separate hot tools" to get the same results, and that use of the separate hot tools can damage hair.
Though competitors can highlight even disparaging product differences if they are true, "an advertiser must clearly identify the conditions under which the claims are true," wrote NAD. Here the comparisons were not supported by the evidence, it concluded. The informercial conveyed both the message that the HyperAir comes with attachments that the Supersonic does not and that Dyson users must use separate hot styling tools that will damage hair. NAD concluded that neither of these messages was supported by the evidence and recommended Shark modify the head-to-head comparison to avoid conveying these unsupported comparative messages.
Additionally, the infomercial included a product demonstration showing consumers drying their hair with the HyperAir and three other hair dryers, including the Dyson. All but the HyperAir users had to use separate hot styling tools to finish their look. Dyson argued that this side-by-side portrayal conveyed the unsupported message that the HyperAir is faster and more efficient than the Supersonic and that Supersonic users need to use separate hot tools to finish their hair.
Shark countered that the product demonstration is focused on the HyperAir's special brush that allows users to straighten hair while drying, saving time and the need to switch to other tools. NAD found the message unsupported because the testing submitted by Shark failed to test the HyperAir with the advertised special brush as used in the demonstration and did not test against the Supersonic. Additionally, said NAD, the product demonstration conveyed both a message of convenience and comparative superiority over other products. Moreover, it is "well settled that advertisers are responsible for all messages conveyed by the advertising," not just the intended messages, so Shark must also support the message that the HyperAir styles hair faster than the Supersonic.
Further, NAD noted that comparative demonstrations "materially distort the capacity of the competitor's product." The portrayal of the Supersonic didn't accurately represent the consumer's typical experience with the product because Dyson's hair dryer comes with an attachment that can straighten hair, but this wasn't shown. NAD didn't buy Shark's argument that the point of the demonstration is to show that Shark users don't have to switch tools, while Dyson users do, because "the message reasonably conveyed is that Dyson Supersonic users must switch to a separate hot tool to achieve the same result." Taking all this into account, NAD recommended Shark discontinue the product demonstration or modify it to avoid these implied unsupported messages that the HyperAir dries and styles faster than the Supersonic and that the latter requires a separate hot tool to achieve the same result.
Regarding consumer endorsements claiming faster drying times, NAD found that Shark had not substantiated endorsers' claims that the product dries hair quicker and recommended the company discontinue them. Likewise, NAD asked Shark to discontinue the phrase "Saturday night hair" as used in the infomercial because, though standing alone it could be puffery, in the context of the infomercial it conveyed an unsupported comparative superiority claim.
NAD also recommended Shark modify drying time claims vis-à-vis traditional hair dryers to provide a clear and conspicuous disclosure about the basis of comparison to the main claim, finding a small video disclosure insufficient. It also recommended that Shark disclose clearly and conspicuously that certain before and after results necessitated the assistance of a stylist.
On one point, NAD gave Shark a break: it didn't think that consumers would interpret Shark's infomercial to convey the message that the Shark product repairs heat-damaged hair.
Have the vacuum wars now moved on to hair? Time will tell. Regardless, the case is a useful primer in how to depict comparative product demonstrations. The case also had one interesting side note which shows the ever-increasing attention paid by the NAD (and the FTC) to endorsements and testimonials—noting that if before drying and after styling photography showed hair styled by a professional and not the consumer, that requires disclosure since the results are not "typical" of what the consumer can expect to achieve.
Actress Mayim Bialik Gets Court to Grant Ban on CBD Endorsements With a "Big Bang"
Only two weeks after filing her complaint, Mayim Bialik, actress of "Big Bang Theory" fame, has succeeded in getting a Florida court to grant her a temporary restraining order blocking CBD marketers from using her name and likeness to market CBD products without her authorization.
Bialik, who holds a PhD in neuroscience in addition to an acting (and Jeopardy hosting) career, alleged in her complaint that multiple defendants intentionally use her name and likeness online to advertise CBD products with names like "Mayim Bialik CBD Gummies." She asserted that these ads create the false impression that she endorses these cannabidiol products, which is an unauthorized and uncompensated use of her name and publicity rights.
The complaint alleged that defendants' scam works by promoting unauthorized CBD products on social media or via sponsored news stories that misappropriate Bialik's name. It noted that defendants' modus operandi—from advertisement to purchasing page—"is the norm for this type of celebrity endorsement scam." Defendants use her name and reputation to give the CBD products credibility, "which she has spent years cultivating and earning," while inflicting harm on consumers who are lured to purchase the products by the use of Bialik's name, though she has never consented to such use.
Bialik alleged violations of the Lanham Act's provisions on false association and false advertising and Florida's law prohibiting unauthorized appropriation of name or likeness as well as common law right of publicity.
The order temporarily bars the defendants from using Bialik's name or likeness for any purpose. It also authorizes Bialik to issue subpoenas and depose the social (and traditional) media companies where these ads have appeared, including GoDaddy, Google, SF Weekly and more.
The defendants are unnamed, complicating Bialik's ability to proceed against them, though the complaint provides IP addresses, affiliate identifications and in some cases email addresses.
What really gives the court's order some teeth is the authorization to subpoena media outlets where the advertisements appeared in order to obtain information about the defendant entities. And it should come as no surprise that the court issued the restraining order so swiftly. Fake celebrity endorsements of CBD products are everywhere these days—from Tom Hanks to Clint Eastwood, who last year won a $6 million award against a Lithuanian company accused of such conduct.
Home Inspectors Association Appeal Falls Flat as 10th Circuit Finds No Injury
Finding that the plaintiff failed to show evidence of commercial injury, the U.S. Court of Appeals for the 10th Circuit affirmed a lower court's grant of summary judgment against a home inspector trade organization that had argued it was harmed by a competitor's allegedly false claim that its members were "educated, tested, verified, and certified."
Only two national independent home inspector trade organizations compete to offer membership to independent home inspectors—the professionals who inspect real estate: InterNACHI and ASHI. After ASHI sued InterNACHI in 2019 for defamation, InterNACHI counterclaimed under Section 43(a) of the Lanham Act, alleging that ASHI's five-year-old tagline—"Educated, Tested, Verified. Certified"—is false advertising and deceptive because not every ASHI inspector meets that advertised criteria.
The district court held that InterNACHI failed to show that it suffered any injury as a result of ASHI's tagline. InterNACHI appealed, arguing that the district court incorrectly concluded that no reasonable jury could find that it was harmed by ASHI's tagline and erred in refusing to apply a presumption of harm as a result of the direct competition between the parties.
To demonstrate that it suffered injury, InterNACHI first pointed to a survey showing that some may be deceived by ASHI's tagline, but the panel reasoned that the survey showed that consumers, not home inspectors, would be deceived by the tagline. To prove harm, InterNACHI's evidence had to show that things like its revenue, membership or web traffic had been injured after ASHI used the tagline, but the company offered no such evidence.
The court was also unpersuaded by InterNACHI's argument that the increase in ASHI's membership following its adoption of the tagline showed it was harmed, reasoning that the increase might be attributable to other causes. Importantly, InterNACHI did not provide any evidence that its membership numbers suffered following ASHI's use of the tagline in question. The court also rejected as "unsupported and conclusory" a declaration by InterNACHI's founder about the harm to the trade association caused by the slogan.
"At the summary judgment stage, InterNACHI must do more than merely speculate that it has been harmed—it must provide evidence from which a reasonable jury could conclude that an injury to InterNACHI has occurred," wrote the panel.
As for InterNACHI's arguments that the court should presume harm because ASHI is its sole competitor, the 10th Circuit noted that a direct competitor must still show some evidence of causation and injury, even with the presumption in place. And InterNACHI had not done so.
Injury continues to get center stage, as the court explained that to avoid summary judgment and state a claim under the Lanham Act, a plaintiff must show that its commercial interest or business reputation was injured and that the injury was caused by the defendant's misrepresentations. As the 10th Circuit put it: "A plaintiff bringing a Lanham Act claim 'cannot obtain relief without evidence of injury. '"
FTC Complaint Turns Up Heat on Grill Maker Over Repair Restrictions
In what the Federal Trade Commission (FTC) said is its "third right-to-repair lawsuit in as many weeks," the Commission has taken action against a grill maker accused of including illegal provisions in its warranty which restrict customers' right to repair their purchased products.
A recent FTC administrative complaint accused Weber-Stephen Products (Weber) of violating the FTC Act and the Magnuson-Moss Warranty Act by allegedly conditioning the warranty on its gas and electric grill products on use of "genuine Weber parts."
For instance, one provision in a Weber user manual voids warranties if consumers use or install third-party parts by stating that "[t]he use and/or installation of parts on your WEBER products that are not genuine WEBER parts will void this warranty, and any damages that result hereby are not covered by this warranty."
The FTC notes that violative warranty terms like those allegedly used by Weber harm consumers in a number of ways:
- Restricting consumer choices, since consumers buy products with warranties to protect their own interests, not those of manufacturers.
- Costing consumers more money by potentially forcing more expensive options, in violation of the Warranty Act which prohibits these clauses unless the required parts are offered free of charge.
- Undercutting independent businesses by infringing on the right of third-party repairers and manufacturers to compete "on a level playing field."
- Reducing resiliency by making it harder to ensure that consumers get replacement parts as needed.
According to the FTC, the proposed agreement and consent order would prohibit Weber from further warranty violations including telling consumers that their warranties are void following use of third-party parts. The order would authorize the FTC to seek penalties of up to $46,517 per violation.
The order would also obligate Weber to recognize consumers' right of repair with specific language stating that "using third-party parts will not void this warranty." Finally, it would bind Weber to provide notice to consumers that their warranties remain in effect even if they use or install third-party products on their grills.
As the Commission itself pointed out, the FTC's been hot on the trail of companies illegally restricting consumers' right of repair from increased enforcement activity in this area to a recent right to repair report to Congress to issuing a Policy Statement on Repair Restrictions Imposed by Manufacturers.