Section 43(a) of the Lanham Act prohibits the use of any “false or misleading description of fact” in promotional statements that “misrepresents the nature, characteristics, [or] qualities” of products or services. 15 U.S.C. § 1125(a)(1).

To state a false advertising claim under section 43(a), a plaintiff must first plausibly allege the falsity of the challenged statement. See Merck Eprova AG v. Gnosis S.p.A., 760 F.3d 247, 255 (2d Cir. 2014).

In addition to falsity, the plaintiff must also plausibly allege materiality, i.e., “that the false or misleading representation involved an inherent or material quality of the product.” Apotex Inc. v. Acorda Therapeutics, Inc., 823 F.3d 51, 63 (2d Cir. 2016) (internal quotation marks omitted).

Finally, the plaintiff must plausibly assert that the defendant placed the false or misleading statement in interstate commerce, and that the plaintiff has been injured as a result of the misrepresentation, either by direct diversion of sales or by a lessening of goodwill associated with its products. Merck Eprova, 760 F.3d at 255.

False statements that are puffery, however, are non-actionable under the Lanham Act. See Lipton v. Nature Co., 71 F.3d 464, 474 (2d Cir. 1995); Bose Corp. v. Linear Design Labs, Inc., 467 F.2d 304, 310-11 (2d Cir. 1972) (finding statement that “countless hours of research” led to the superior quality of defendant's stereo speakers to be largely “puffing”).

“Complete” and “Accurate” False Advertising Claims Against UpCodes

In International Code Council, Inc. v. UpCodes Inc., No. 21-826, 2022 WL 3008706 (2d Cir. Jul. 29, 2022), International Code Council (“ICC”), a nonprofit organization that develops model building codes known as “International Codes” or “I-Codes.”

ICC accused a competitor, UpCodes, of making false statements, such as promising that its customers would glean a “complete understanding” of relevant codes (“completeness” claims), or that its products are “[a]lways up to date” and its users will “never work from outdated code” (“accuracy” claims).

The Southern District of New York dismissed all of the false advertising claims as puffery. Int'l Code Council, Inc. v. UpCodes, Inc., 2021 WL 1236106, (S.D.N.Y. Mar. 1, 2021).

Two Forms of Puffery

On appeal, the Second Circuit agreed that some of UpCodes's statements about “completeness” were non-actionable puffery, but that other statements about “accuracy” could not be so determined to be puffery, at least at this pleadings stage of the proceedings.

We have recognized two forms of puffery: The first encompasses “[s]ubjective claims about products, which cannot be proven either true or false,” Time Warner, 497 F.3d at 159 (quoting Lipton, 71 F.3d at 474). It often manifests as “exaggeration[s] or overstatement[s]” that mention “nothing specific,” but rather amount to “general claim[s] of superiority” “expressed in broad, vague, and commendatory language” that are “considered to be offered and understood as an expression of the seller's opinion only.” Id. at 159-60 (quoting Castrol Inc. v. Pennzoil Co., 987 F.2d 939, 945 (3d Cir. 1993) and Pizza Hut, Inc. v. Papa John's Int'l, Inc., 227 F.3d 489, 497 (5th Cir. 2000)). The second form of puffery involves “exaggerated, blustering, and boasting statement[s]” that are objective-and therefore technically provable-but “upon which no reasonable buyer would be justified in relying.” Id. at 160 (quoting Pizza Hut, Inc., 227 F.3d at 497).

Whether a puffery defense against a false advertising claim can be resolved on a motion to dismiss depends in part on the type of puffery at issue: If the challenged advertisements fall under the first form of puffery-subjective statements of opinion which cannot be proven false-then courts treat them as non-actionable puffery as a matter of law. A plaintiff cannot state a false advertising claim based on such a statement because, by definition, it cannot be proven false. See Groden v. Random House, Inc., 61 F.3d 1045, 1051 (2d Cir. 1995) (“[S]tatements of opinion are generally not the basis for Lanham Act liability.”); see also ONY, Inc., 720 F.3d at 496 (defining “statements of pure opinion” as “statements incapable of being proven false”).

On the other hand, when an advertisement might fall within the second form of puffery-statements that are provable but are so exaggerated that no reasonable buyer would be justified in relying on them-the court must evaluate how a reasonable buyer would react. This often requires extrinsic evidence of consumer impact. See Time Warner, 497 F.3d at 158. Such a fact-intensive inquiry typically should not be resolved on a motion to dismiss. In some cases, however, a statement may be technically false but so patently hyperbolic that any allegations that it misled consumers are facially implausible, thereby making the false advertising claim ripe for dismissal on puffery grounds. See Iqbal, 556 U.S. at 678; cf. Fink v. Time Warner Cable, 714 F.3d 739, 741-42 (2d Cir. 2013) (holding that plaintiffs' claims “lack the facial plausibility necessary to survive a motion to dismiss” and that “[i]t is well settled that a court may determine as a matter of law that an allegedly deceptive advertisement would not have misled a reasonable consumer”). This distinction may be demonstrated by example: If a bubblegum brand advertised that its gum permits chewers to “blow a bubble as big as the moon,” the statement would be literally false, but it is facially implausible that any reasonable buyer could justifiably rely on that claim. A court could thus dismiss a Lanham Act challenge based upon it. Yet, if the company falsely advertised that you could “blow a bubble bigger than your own head,” it is plausible that a reasonable buyer could be misled. The statement might qualify as puffery, but only if consumer evidence introduced at summary judgment or trial showed that “no reasonable buyer would be justified in relying on it in navigating the marketplace.” Time Warner, 497 F.3d at 161 (internal quotation marks omitted).

Int'l Code Council, Inc. v. UpCodes Inc., 2022 WL 3008706 (2d Cir. Jul. 29, 2022).

Subjective Statement of Opinion?

With respect to UpCodes's claims of “completeness,” whether users could glean a “complete understanding of relevant material” from UpCodes's website are “subjective statements of UpCode's opinion” which cannot be proven either true or false. “False advertising claims challenging this type of puffery are appropriately resolved at the pleadings stage.” Int'l Code Council, Inc. v. UpCodes Inc., No. 21-826, 2022 WL 3008706 (2d Cir. Jul. 29, 2022).

Patently Hyperbolic?

As for UpCodes's claims of “accuracy” could be provable as false; they could fall under the second form of puffery only if they are such “exaggerated, blustering, and boasting statement[s]” that “no reasonable buyer would be justified in relying” on them. Time Warner, 497 F.3d at 160 (quoting Pizza Hut, Inc., 227 F.3d at 497). But UpCodes's assurances that its products are “[a]lways up to date” and that its users will “never work from outdated code” are not so “patently hyperbolic” that it would be implausible for buyers to rely on them. The court noted that extrinsic evidence of the statements' effect on consumers would be necessary, so it would be inappropriate to resolve this fact-intensive inquiry at the pleadings stage.

Affirmed in Part and Reversed in Part

Thus, the Second Circuit affirmed the dismissal of ICC's false advertising claims premised on UpCodes's statements about “completeness” as nonactionable puffery, but reversed the dismissal of the false advertising claims premised on UpCodes's statements about “accuracy.”

The attorneys at Thomas P. Howard, LLC litigate Lanham Act cases nationwide including in Colorado.