Osmose Inc. v. Viance LLC, 11th Cir, No. 09-15563 (07/30/2010)

Press releases on tests of competing product enjoined as false advertising.

The U.S. Court of Appeals for the 11th Circuit upheld a district court injunction relating to press releases that falsely represented data as to the quality of treated wood. Viance LLC produces a treatment to protect outdoor wood products from insects, fungus, and decay. When another company, Osmose, Inc., began marketing a competing product, Viance hired an independent scientist and an investigative firm to analyze the competitor's product. Purportedly based on its investigations, Viance issued press releases claiming that Osmose's product "failed to prevent decay." After the investigative firm distanced itself from the press releases by noting, among other things, that its tests were not random, but were based on samples provided to it by Viance, Osmose sued Viance for false advertising under Section 43(a) of the Lanham Act. In upholding the lower court's injunction enjoining Viance from claiming or implying that Osmose's product was inferior, the 11th Circuit held that Osmose could prove literal falsity in the press releases by showing that the studies cited by Viance did not in fact establish the claims in the press releases. The lower court had found that, although the press releases had unambiguously stated that the investigator had raised serious safety concerns about using the Osmose product on wood, the Actual reports explicitly stated that the tests should not be considered as either acceptance or rejection of the wood quality. Thus, the Appellate Court found the evidence supported a conclusion that the claims in the press releases were literally false.

Case Law Alert - 4th Qtr 2010