Dyson, Inc. v. SharkNinja Operating LLC

CourtDistrict Court, N.D. Illinois
DecidedJune 9, 2018
Docket1:14-cv-09442
StatusUnknown

This text of Dyson, Inc. v. SharkNinja Operating LLC (Dyson, Inc. v. SharkNinja Operating LLC) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dyson, Inc. v. SharkNinja Operating LLC, (N.D. Ill. 2018).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION ) DYSON, INC., ) ) Plaintiff, ) Case No.: 1:14-cv-09442 ) v. ) Judge: Hon. Gary S. Feinerman ) SHARKNINJA OPERATING LLC and ) JURY TRIAL DEMANDED SHARKNINJA SALES COMPANY, ) ) Defendants. ) )

DYSON’S MOTION FOR JUDGMENT AS A MATTER OF LAW REGARDING SHARK’S CLEANABILITY BAR GRAPH AND APPORTIONMENT Dyson moves, at the close of the evidence and pursuant to Fed. R. Civ. P. 50(a), for judgment as a matter of law. Despite having been fully heard, Shark has presented insufficient evidence for a reasonable jury to conclude that (1) Shark’s “Bar Graph” claim in its infomercial was not a false advertisement under Section 43(a) of the Lanham Act, and (2) Shark’s profits on the NV650 should be apportioned. Dyson requests that the Court issue judgment as a matter of law that Shark is liable for false advertising under the Lanham Act, and that Shark’s profits may not be apportioned based on the alleged “drivers of demand” identified by Shark in this case. I. LEGAL STANDARD Under Rule 50(a), judgment as a matter of law should be granted if “a party has been fully heard on an issue during a jury trial and the court finds that a reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue.” Fed. R. Civ. P. 50(a). In a Rule 50(a) motion, “the court should give credence to the evidence favoring the nonmovant as well as that “evidence supporting the moving party that is uncontradicted and unimpeached, at least to the extent that that evidence comes from disinterested witnesses.” Reeves v. Sanderson Plumbing Prod., Inc., 530 U.S. 133, 151 (2000). II. ARGUMENT A. Dyson Is Entitled To Judgment As A Matter Of Law That Shark’s Bar Graph Is A False Advertisement To prevail on Counts I, II, and III of its First Amended Complaint,1 Dyson must prove: (1) that Shark made a false statement of fact in a commercial advertisement about its NV650; and (2) that Dyson has been or is likely to be injured as a result of the false statement, either by direct diversion of sales from itself to defendant or by a loss of goodwill associated with its products.2 See Hot Wax, Inc. v. Turtle Wax, Inc., 191 F.3d 813, 819 (7th Cir. 1999). In view of the evidence presented at trial, no reasonable jury could find that the infomercial portion displaying the carpet

1 The parties agree that Dyson’s state law claims, Counts II and III, rise and fall with its Lanham Act claim, Count I. (05/29/2018 9:37 pm M. New email to L. Ross.) 2 Hot Wax sets out five elements that a plaintiff must prove to establish false advertising liability: (1) a false statement of fact by the defendant in a commercial advertisement about its own or another’s product; (2) the statement actually deceived or has the tendency to deceive a substantial segment of its audience; (3) the deception is material, in that it is likely to influence the purchasing decision; (4) the defendant caused its false statement to enter interstate commerce; and (5) the plaintiff has been or is likely to be injured as a result of the false statement, either by direct diversion of sales from itself to defendant or by a loss of goodwill associated with its products.” 191 F.3d at 819. Here, Shark does not challenge factors (2)– (4). (See Dkt. 707 at 3 (“The parties agree that the second and fourth factors are inapplicable in this case.”); id. at 3 n.1 (“With the Court’s determination that the period of alleged liability begins on August 25, 2014, SharkNinja submits that the third factor is also no longer at issue.”).) In its Renewed Motion for Directed Verdict, Shark purports to contest materiality. (Renewed Motion at 3 n.1.) Shark’s backpedaling should be rejected. First, Shark admitted in a document filed with the Court that this factor “is … no longer at issue.” (Dkt. 707 at 3 n.1.) Second, Shark stated to the U.S. District Court for the District of Massachusetts that “Suction and, relatedly, cleaning ability are the raisons d’etre for a vacuum cleaner, and as such, the materiality of the [‘Twice the Suction’] claim is presumed.” SharkNinja Operating LLC v. Dyson, Inc., No. 1:14-cv-1372, Dkt. 173 at 11 (D. Mass. Feb. 29, 2016). Third, the evidence shows that Shark’s claim that its vacuum cleaner “cleans carpets better” than Dyson’s DC65 was “likely to influence the purchasing decision.” (See, e.g., (Trial Tr. (Barrocas) at 1253:8- 1254:4 (describing carpet cleaning as a “very important” aspect of a vacuum cleaner); Trial Tr. (Rosenzweig) at 1690:3-18 (admitting that Shark thought the claim would be “impactful to consumers”); see also Trial Tr. (Bilger) at 730:17 – 731:1.) cleanability bar graph—which claims that independent lab tests show that Shark’s NV650 out- cleaned the Dyson DC65 by a margin of 42 grams to 37 grams (“Bar Graph”)—does not constitute false advertising. Further, based on the evidence presented, no reasonable jury could find that this false claim did not harm Dyson. 1, The Bar Graph Was A False Statement Of Fact Shark tells consumers that “independent lab tests prove” that the Shark Rotator Powered Lift-Away actually deep cleans carpets better than “the latest $600 Dyson” and simultaneously displays the Bar Graph purporting to show the alleged extent to which the Shark cleans better. (See TX-13 at 11:16-19; TX-12 at 10:03-10:15; TX-11 (screenshot of Bar Graph from TX-12).) Specifically, the Bar Graph purports to show the results of a carpet cleaning test where the NV650 picked up 42 grams of dirt, as compared to the DC65’s 37 grams of dirt:

SHARK® HAS fm ~MORE : ry SUCTION POWER BETTER tT Sm DEEP CLEANING □ RMR THAN $600 DYSON”

ee a ie □□ =n Mr. Rosenzweig’s voiceover and the visually contemporaneous Bar Graph inform consumers

3 Shark’s counsel has suggested that this claim is not a “literal falsity” claim, but rather would only be impliedly false, because according to Shark’s counsel the Bar Graph “didn’t on its face claim to be based on independent testing.” (Trial Tr. 2527:19-22.) Setting aside that this argument cannot pass the straight-face test, it is demonstrably wrong. The infomercial itself states “independent lab tests prove” and the exact same time the Bar Graph is displayed. It is

that independent lab tests proved the NV650’s carpet-cleaning superiority over the DC65 to the specific and substantial degree represented in the graph itself. The evidence has shown without question that the Bar Graph was a false statement of fact. First, as quoted above, the advertisement says that the Bar Graph claim is based on independent lab tests. That is indisputably false. In fact, Mr. Rosenzweig admitted that “[t]here’s

no doubt this is wrong.” (Trial Tr. (Rosenzweig) at 1783:12–13 (emphasis added).) Shark witnesses testified that the data that Shark relied upon to generate and produce the Bar Graph was actually the result of internal—as opposed to “independent”—testing conducted by Shark itself. For example, Shark’s director of testing, Karyn Medler, admitted after watching the Bar Graph segment of Shark’s infomercial that the Bar Graph was not based on independent testing but was instead “supported from internal testing.” (Trial Tr. (Medler) at 814:8–16.) Shark’s former general counsel, Jennifer McCabe, who was responsible for reviewing and approving Shark’s infomercial, confirmed that the Bar Graph was never supported by independent tests. (Trial Tr. (McCabe) at 1947:2-4.)

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Bluebook (online)
Dyson, Inc. v. SharkNinja Operating LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dyson-inc-v-sharkninja-operating-llc-ilnd-2018.