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Dyson, Inc. v. Sharkninja Operating LLC

United States District Court, N.D. Illinois, Eastern Division

June 9, 2018

DYSON, INC., Plaintiff,
v.
SHARKNINJA OPERATING LLC and SHARKNINJA SALES COMPANY, Defendants.

          ROBIN A. MCCUE, MEGAN M. NEW, BRIAN A. VERBUS KIRKLAND & ELLIS LLP GREGG F. LOCASCIO, P.C. KIRKLAND & ELLIS LLP COUNSEL FOR PLAINTIFF DYSON, INC.

          DYSON'S MOTION FOR JUDGMENT AS A MATTER OF LAW REGARDING SHARK'S CLEANABILITY BAR GRAPH AND APPORTIONMENT

          HON. GARY S. FEINERMAN JUDGE

         JURY TRIAL DEMANDED

         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 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:

         (Image Omitted)

(Id. )[3] Mr. Rosenzweig's voiceover and the visually contemporaneous Bar Graph inform consumers 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.)

         Second, and importantly, the actual third-party testing that Shark received from Intertek contradicts the internal testing that Shark relied on to support its Bar Graph, and actually shows that the DC65 outperformed the NV650 on the one carpet panel Shark used in creating the Bar Graph (i.e., multi-level carpet). (Cf. TX-129 (resulting in an average 50.8 geomean for the DC65 on multi-level carpet) with TX-127 (resulting in an average 46.3 geomean for the NV650 on multi-level carpet).) In other words, the “independent” tests that Shark refers to in the advertisement show that the DC65 actually picked up more dirt than Shark's NV650 on the carpet reflected in Shark's Bar Graph, a fact that both Ms. Medler and Mr, Rosenzweig admitted. (Trial Tr. at 815:6- 10; 1690:22-1691:18.) Shark's statement that the independent lab tests “prove without question” that the NV650 removed 42 grams of dirt and the DC65 removed 37 grams of dirt from multi-level carpet is false.

         In view of this unqualified testimony from Shark's head of testing, its former General Counsel, and its CEO that the Bar Graph is based on internal, not “independent, ” tests, and in view of the Intertek test reports that contradict the Bar Graph, no reasonable jury could find that the Bar Graph was true.[4]

         2. Dyson Has Been Injured As A ...


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