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SharkNinja Operating LLC v. Dyson Inc.

United States District Court, D. Massachusetts

August 3, 2016

SHARKNINJA OPERATING LLC, Plaintiff,
v.
DYSON INC. and DYSON LTD., Defendants.

          ORDER ON MOTIONS FOR SUMMARY JUDGMENT

          ALLISON D. BURROUGHS DISTRICT JUDGE.

         The parties, SharkNinja Operating LLC (“SharkNinja”), and Dyson Inc. and Dyson LTD (together, “Dyson”), are competitors in the household vacuum market. In this action, each accuses the other of disseminating false and misleading advertising about their respective vacuum products, in violation of the federal Lanham Act, 15 U.S.C. § 1125(a), and Massachusetts state law.

         In 2013, Dyson launched an advertising campaign claiming that certain of its vacuums had “twice the suction of any other vacuum” on the market. In July 2014, however, SharkNinja released a vacuum called the Shark Powered Lift-Away (the “Shark Lift-Away”). SharkNinja claims that Dyson’s “twice the suction” advertising claims became literally false no later than July 2014, when the Shark Lift-Away was introduced, because Dyson vacuums did not, in fact, have “twice the suction” of the Shark Lift-Away. In its First Amended Complaint, [ECF No. 40] (“Compl.”), SharkNinja asserts claims for false advertising in violation of the Lanham Act, 15 U.S.C. § 1125(a)(1)(B) (Count I); deceptive trade practices in violation of Mass. Gen. Laws, ch. 93A (Count II); and false advertising in violation of Mass. Gen. Laws, ch. 266, § 91 (Count III).

         Dyson filed counterclaims [ECF No. 59] for false advertising in violation of the Lanham Act (Count I), and violations of Mass. Gen. Laws, ch. 93A (Count II), which arise out of SharkNinja’s advertising campaign for its Shark Rocket upright stick vacuum (the “Shark Rocket”). Specifically, the packaging for the Shark Rocket claimed that the product “deep cleans carpets better vs. a Full Size Dyson.” Dyson, however, alleges that the Shark Rocket does not clean carpets better than every full-sized Dyson vacuum, and that SharkNinja’s advertising claims are therefore false and misleading.

         Before the Court are the parties’ cross-motions for summary judgment. For the reasons set forth in this Memorandum and Order, SharkNinja’s Motion for Summary Judgment [ECF No. 171] is ALLOWED IN PART and DENIED IN PART. Dyson’s Motion for Summary Judgment [ECF No. 169] is DENIED.

         I.FACTS[1]

         A. Dyson’s campaign: “Twice the Suction”

         In July 2013, Dyson launched its “twice the suction” (“TTS”) advertising claims in connection with its DC41 vacuum cleaner. Dyson’s advertisements, which appeared in print, television, and internet advertising, as well as on point of purchase displays in some retail locations, and on packaging for the DC41, claimed that the DC41 had “twice the suction of any other vacuum.” Subsequently, Dyson also included the TTS claim on advertisements for its DC65 vacuum, which became available in a limited release in January 2014, and nationwide in March 2014.

         On May 7, 2014, counsel for SharkNinja sent a letter to in-house counsel at Dyson, advising him that in July 2014, SharkNinja intended to launch a new vacuum, and that the performance capabilities of this new vacuum would render Dyson’s TTS claim literally false. According to SharkNinja’s counsel, testing on the new Shark vacuum proved that the DC65 no longer had “twice the suction of any other vacuum.” SharkNinja’s letter, however, did not enclose any test results. The letter further stated that upon launch of the new Shark vacuum, SharkNinja expected Dyson to remove its TTS advertising claim from the market.

         SharkNinja began selling its new vacuum, the Shark Lift-Away, on July 8, 2014. On July 9, 2014, SharkNinja’s general counsel sent another letter to Dyson’s general counsel, informing him that the Shark Lift-Away was officially on the market, and that testing demonstrated that Dyson’s TTS claim was literally false. Again, however, SharkNinja did not enclose any test results with its letter, nor did it provide Dyson with a sample Lift-Away vacuum product for testing purposes.

         Shortly after the launch, Dyson purchased three Shark Lift-Away units directly from SharkNinja’s website. Those vacuums were delivered to Dyson’s U.S. offices on July 22, 2014, and were subsequently sent to Dyson’s U.K. office for internal testing. Dyson completed its internal testing in early August, 2014. Dyson also purchased additional Lift-Away vacuums, which it sent to a third-party testing facility. Dyson received the results of those third-party tests in early September, 2014. In addition, SharkNinja provided Dyson with its own third-party test results on September 10, 2014, which purportedly showed that the DC65 and the DC41 did not have “twice the suction” of the Shark Lift Away. Thus, no later than early September, 2014, Dyson had received both internal and third-party test results confirming that the Shark Lift-Away had more than half the suction of the DC65 and the DC41. Dyson now concedes, as a factual matter, that the launch of the Shark Lift-Away rendered its TTS claim literally false as of July 8, 2014.

         The parties dispute what happened over the next several months. Dyson argues that once it realized the TTS claim had become “stale, ” it took prompt, commercially reasonable steps to remove that advertising claim from the marketplace. SharkNinja, in contrast, contends that Dyson dragged its feet. For example, Dyson did not begin “stickering over” the TTS claim on product packaging in stores until November 17, 2014. SharkNinja argues that as a result of Dyson’s dilatory response, the false TTS claim remained on the market until early 2015, and that it hindered sales and market growth of SharkNinja’s Lift-Away vacuum.[2]

         B. SharkNinja’s campaign: “Cleans Carpets Better vs. a Full Size Dyson”

         On September 9, 2013, SharkNinja launched an upright stick vacuum known as the “Rocket, ” which SharkNinja marketed as a light-weight alternative to full-size upright vacuums. SharkNinja sells the Rocket in a variety of ways, including through television infomercials, via website sales, and in retail stores.

         For some period of time, the product packaging box for the Rocket vacuum contained a promotional statement claiming that the Rocket “deep cleans carpets better vs. a full size Dyson*”. The asterix corresponds to a qualifying footnote, which stated “*Based on the Dyson DC40 ASTM F608 (imbedded dirt removal on carpet).” Although the “cleans carpets better vs. a full size Dyson*” claim appeared on five out of the six box panels for the Rocket vacuum, the footnote appeared only on one side panel, at the very bottom, in tiny print.[3]

         Dyson argues that the disclaimer is too small and discreetly placed for consumers to take notice of it, and that as a result, SharkNinja’s claim that the Rocket “deep cleans carpets better vs. a full size Dyson*” necessarily communicates to consumers that the Rocket outperforms every full-sized Dyson upright vacuum, and not just the DC40. Dyson further alleges that this claim is demonstrably false, because the Rocket did not clean carpets better than all Dyson upright vacuums - specifically, the DC65 and the Dyson Ball Multi-Floor performed better than the Rocket.

         II. LEGAL STANDARD

         A. False advertising ...


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