119 F. Supp. 3d 39
E.D.N.Y2015Background
- Cablevision and Verizon sued each other over competing WiFi-related advertising; each moved for a preliminary injunction seeking to enjoin the other’s ads.
- Verizon marketed FiOS with ads claiming the “fastest WiFi available,” based on router throughput studies and the combination of its FiOS 500/500 Mbps service with the FiOS Quantum Gateway router.
- Cablevision promoted access to a “1.1 million hotspots” WiFi network; ~1 million of those hotspots originated from residential customers’ dual-SSID routers (public SSID broadcast from home routers).
- Cablevision introduced a WiFi-only mobile device, Freewheel (a configured Moto G), and advertised it as a “phone”/“smartphone” and compared it to cellular service.
- Key disputes: (1) whether Verizon’s “fastest WiFi” ads are literally or implicitly false (router throughput vs. Internet wireless speed); (2) whether Cablevision’s “1.1 million hotspots” and “better data network” claims are misleading because most hotspots are residential; (3) whether Freewheel ads mislead consumers into thinking they are buying cellular service.
- The magistrate judge held evidentiary hearings and denied both parties’ motions for preliminary injunctive relief.
Issues
| Issue | Plaintiff's Argument (Cablevision / Verizon) | Defendant's Argument (Verizon / Cablevision) | Held |
|---|---|---|---|
| Whether Verizon’s “Fastest WiFi” ads are literally false | Cablevision: “WiFi speed” refers to router performance; Verizon relied on router tests and therefore the claim is misleading | Verizon: Consumers use “WiFi” to mean wireless Internet speed; FiOS (service tier + router) delivers faster wireless Internet | Denied — Cablevision failed to show likely success; evidence showed FiOS delivers faster wireless Internet and Verizon amended attributions to moot prior specific study claim |
| Whether Cablevision’s “1.1 million hotspots” claim is misleading | Verizon: Most hotspots are residential and not truly public; ads suggest public locations, so claim is implicitly or literally false | Cablevision: Residential dual-SSID routers produce publicly accessible hotspots at distances; sidewalks/streets can access them, so claim is accurate | Denied — court found hotspots can be publicly accessible and the claim was not literally/implicitly false; some misleading website text was discontinued by Cablevision |
| Whether “better data network” promotion is false | Verizon: Cablevision’s network is not better because Verizon has broader geographic cellular coverage | Cablevision: “Better” can refer to bandwidth/speed when on WiFi versus cellular; term is vague puffery | Denied — term “better” is non-actionable puffery and not clearly false |
| Whether Freewheel ads cause consumer confusion (implied falsehood) | Verizon: Ads may lead consumers to believe Freewheel offers ubiquitous cellular coverage and is equivalent to cellular service, causing irreparable customer loss | Cablevision: Freewheel is a smartphone that functions over WiFi; ads were revised after focus-group feedback and include limiting language | Denied — Verizon produced no reliable extrinsic consumer-confusion evidence; Cablevision’s post-focus-group revisions undercut confusion claim |
Key Cases Cited
- Red Earth LLC v. United States, 657 F.3d 138 (2d Cir. 2011) (elements for preliminary injunction)
- Time Warner Cable, Inc. v. DIRECTV, Inc., 497 F.3d 144 (2d Cir. 2007) (distinguishes literal vs. implied falsehood in Lanham Act advertising claims)
- Schering Corp. v. Pfizer Inc., 189 F.3d 218 (2d Cir. 1999) (explains need for extrinsic evidence for implied falsity claims)
- Faiveley Transp. Malmo AB v. Wabtec Corp., 559 F.3d 110 (2d Cir. 2009) (irreparable harm as critical factor for preliminary injunction)
- Coca-Cola Co. v. Tropicana Prods., Inc., 690 F.2d 312 (2d Cir. 1982) (consumer deception presumed for literal falsehoods)