Claims that a product is "revolutionary," "never before seen," or providing a solution to an unsolved problem can be sometimes cavalierly regarded as puffery. We often find ourselves warning clients that the National Advertising Division (NAD) has sometimes required advertisers to have a reasonable basis for innovation claims (i.e., claims that their product is a breakthrough or somehow entering into a whitespace in a particular market segment). See Ganeden Biotech, Inc., NAD Case #4863 (June 2008); Park Labs, NAD Case #4935 (Nov. 2008); Imagenetix, Inc., NAD Case #5167 (April 2010); The Andrew Jergens Company, NAD Case #2979 (Oct. 1992); but see Iovate Health Sciences, Inc. Cold MD, NAD Case #4653 (April 2007); Pilot Corporation of America, NAD Case #3392 (May 1997); Maximum Human Performance, LLC, NAD Case #5631 (Sept. 2013). So, it caught our eye that the United States District Court for the Central District of California held that these sorts of claims when challenged in the context of a civil action under the Lanham Act were nonactionable as a matter of law. But, before you conclude that such claims are always fair game without even a modicum of substantiation supporting your belief that the product or service you're touting is in fact "revolutionary," consider the facts more carefully. Context still should dictate whether you should have a reasonable basis for believing your product or service to be entering a "white space" in your industry.
In R and A Synergy LLC v. Spanx, Inc., the court dismissed R and A's false advertising claims of innovation against Spanx. No. 2:17-CV-09147-SVW-AS, 2019 WL 4390564 (C.D. Cal. May 1, 2019). (There were other claims at issue in this case, but our focus here is on the claims about the innovation reflected in the advertised product.) In 2009, R and A Synergy introduced a sleeved undergarment designed to be worn under sleeveless tops called "Sleevey Wonders." Several years later, Spanx introduced its own undergarment sleeve product, called "Arm Tights." As part of its launch, Spanx described the product as "unlike any other layering options." The Spanx CEO even stated publicly that her company "invented" the product, filling a "white space" in the market. The CEO was further quoted in a newspaper article stating "[t]ights have been around for our legs for so many years, I was thinking, 'Why aren't there tights for our arms?'"
In response to R and A Synergy's suit for false advertising under the Lanham Act, the court found the statements concerning the innovative nature of the product to be non-actionable puffery. The court stated that "[m]erely advertising a product as being new, invented, filling a white space, and being unlike other layering options does not amount to an assertion of fact."
Before we get too comfy with these sorts of "innovation" claims, consider that the statements in the Spanx case were arguably made off-the-cuff by the CEO in an interview rather than in a traditional advertisement. The utterances appear to have been isolated comments and possibly not "statements" that rise to the level required under the Lanham Act. Also, the court suggested that there was no indication that those statements were "material" to consumers. The court held that as a matter of law consumers simply do not care who was the original source of the "general concept of 'sleeved undergarments.'" The court reasoned that even if R and A had properly alleged a false statement, and even if the statements were in fact false, they were of no consequence to sleeved undergarment purchasers.
WHY THIS MATTERS: Marketers will continue to make claims about the innovative and revolutionary nature of their products and services, and this case may serve as some comfort to the extent the substantiation for such claims is thin. That said, we're not convinced that this recent decision is reliable enough to conclude that "revolutionary" or "breakthrough" claims never require substantiation as a matter of law. Context is almost always likely to be a factor in how the statements will be interpreted, especially by the NAD. And, we also suspect that if the claims had been made expressly in advertising as opposed to in the press by Spanx's CEO, the court might have been less convinced that they were immaterial.
This article is presented for informational purposes only and is not intended to constitute legal advice.
