Select Comfort Corporation v. John Baxter, 996 F.3d 925

Background

Plaintiffs (Select Comfort et al.) own and heavily advertise SLEEP NUMBER and related trademarks and sell adjustable air mattresses via stores, phone, and online; Defendants (personalcomfortbed.com and related entities) sell lower‑priced competing beds online and by call center.
Plaintiffs alleged Defendants used identical or confusingly similar marks in paid search terms, URLs, embedded links, and online ads to divert consumers, and that Defendants’ call‑center statements sometimes compounded confusion and made false representations.
The district court granted summary judgment barring an initial‑interest (presale) confusion theory as a matter of law, concluding mattress purchasers were sophisticated and instructing the jury that likelihood of confusion must exist at the time of purchase.
At trial the jury found SLEEP NUMBER famous but rejected infringement and dilution, held Plaintiffs had no trademark rights in “NUMBER BED,” and found for Plaintiffs on seven of fifteen false‑advertising claims, awarding about $160,000 on those claims.
On appeal the Eighth Circuit held that initial‑interest confusion is a viable theory in this Circuit and that consumer sophistication is generally a fact question for the jury; it reversed the summary‑judgment ruling and the purchase‑time‑only jury instruction and remanded.
The Court also reversed the false‑advertising instruction that allowed a presumption of materiality from a finding of literal falsity, and it affirmed denial of a late amendment seeking to add an ab initio genericness counterclaim.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether initial‑interest (presale) confusion is actionable in the Eighth Circuit	Initial‑interest confusion is a recognized form of likelihood of confusion and should be available here given online diversion evidence	Theory is not recognized/applicable; Sensient bars it where consumers are sophisticated	Court held initial‑interest confusion is actionable in this Circuit and may be submitted to a jury where consumer sophistication is disputed
Whether consumer sophistication can be decided as a matter of law	Consumers (mattress/online shoppers) are not necessarily sophisticated; jury should decide	Consumers are sophisticated because mattresses are expensive; summary judgment proper	Court held sophistication is typically a jury question; summary judgment on that basis was error
Whether literal falsity permits a presumption of materiality in false‑advertising claims	Literal falsity supports presumption that the statement was material to consumers	Literal falsity suffices to presume materiality; instruction proper	Court held it was error to instruct that literal falsity alone shifts burden on materiality; remanded for new trial on the seven affected claims
Whether district court abused discretion denying Defendants leave to amend to assert SLEEP NUMBER generic ab initio	Defendants sought to add ab initio genericness defense late	Plaintiffs argued amendment prejudicial and improper against incontestable mark	Court found no abuse of discretion in denying amendment because it would require new discovery and was untimely

Key Cases Cited

Sensient Technologies Corp. v. SensoryEffects Flavor Co., 613 F.3d 754 (8th Cir.) (discussed initial‑interest confusion and consumer sophistication)
Insty*Bit, Inc. v. Poly‑Tech Indus., 95 F.3d 663 (8th Cir.) (Lanham Act amendment permits post‑sale confusion claims)
Checkpoint Sys., Inc. v. Check Point Software Techs., Inc., 269 F.3d 270 (3d Cir.) (explains initial‑interest confusion and its protective rationale)
SquirtCo. v. Seven‑Up Co., 628 F.2d 1086 (8th Cir.) (sets nonexclusive likelihood‑of‑confusion factors)
Porous Media Corp. v. Pall Corp., 110 F.3d 1329 (8th Cir.) (discusses presumptions in false‑advertising element proof)
Johnson & Johnson Vision Care, Inc. v. 1‑800 Contacts, Inc., 299 F.3d 1242 (11th Cir.) (materiality is distinct from literal falsity)