This case demonstrates one of the challenges presented by new forms of online commerce-specifically, how to apply the Lanham Act to companies that generate income through websites that review the products of others, without selling any products of their own. Plaintiff GOLO, Inc. owns and operates a weight loss dieting program that can be purchased through its website. Defendants HighYa, LLC, and BrightReviews, LLC, are review websites that purportedly assist consumers in making a choice by evaluating the claims that companies like GOLO make about their products. Although Defendant HighYa has a marketing affiliation with a limited number of suppliers, both Defendants' principal source of revenue comes from ads posted by others on their website. Plaintiff contested the fairness and accuracy of Defendants' online reviews of its product, and Defendants then removed the review from one site and revised it on the other. Plaintiff nonetheless brings this action seeking recovery for injuries it allegedly sustained during the period the reviews were posted and unrevised. Plaintiff is proceeding under the Lanham Act and state law, arguing unfair competition and trade libel. Defendants now move to dismiss. Because I conclude that Defendants were not engaged in commercial speech in publishing the reviews, Plaintiff has failed to state a claim for unfair competition as a matter of law. Plaintiff's trade libel claim also fails
I. Relevant Facts
Defendants, HighYa, LLC, and BrightReviews, LLC, are two Washington state-based companies that operate consumer review websites with the purported aim of "trying to help you cut through all the marketing hype by gathering information from a wide variety of sources, bringing it together ... and answering the ever-present question: Is this a scam, or is it legit?" Am. Compl. ¶ 29, ECF No. 14. Each offers two kinds of reviews of consumer products and services: editorial reviews, which are authored by Defendants, and reviews submitted by third-party commenters who have purportedly used the products and services at issue, and posted reviews underneath the editorial reviews. Defendants' websites allow third parties to comment on all reviews, and to provide a rating of the product from which Defendants present an "Average Customer Rating" ranging from 1 to 5 stars.
Neither Defendant sells any products or services via their website, and both assert that they are independent and unbiased, with BrightReviews expressing that it is "unaffiliated with any company or brand" and Highya-at the time the reviews at issue were published-expressing a similar position while disclosing an advertising affiliation with BowFlex Max Trainer for transparency.
Defendants further disclose on their websites that their authored reviews principally rely on "publicly available information," and not necessarily Defendants' own use or testing. For third-party reviews, Defendants provide guidelines and benchmarks for what constitutes a good review, which include encouraging "truthful accounts based on factual information" while "[p]roviding a personal experience / [t]elling your story," and prohibiting "exaggeration, or 'stretching the truth,' and self-promotion"-that is, companies seeking to artificially boost their rating on the website(s) by posing as consumers. Id. ¶¶ 33-34. Defendants retain the right to remove a review if they conclude that posters have not complied with these guidelines. Id. ¶¶ 35-40. Additionally, companies may sign up for a business profile, through which they are alerted to posts about their product(s) and can reply to negative reviews as the official verified company. Id. ¶ 40.
That was the course initially taken here, as Plaintiff, GOLO, LLC, participated in Defendants' business profile program and took issue with two editorial reviews about its weight loss and wellness program, which it considered negative. The GOLO program includes a meal plan and a "Release Supplement," in addition to a booklet and "other behavioral tools." Id. ¶ 3. Plaintiff sells the program through its website and customer service department exclusively, using a combination of television,
According to the Amended Complaint, Defendant HighYa published its editorial review article in March 2016, which spurred dozens of comments from purported users of the GOLO program. The average customer rating was 2.8 out of 5 stars. The link to that article was posted across different social media platforms, one of which contained the statement: "Weight-loss # scams are everywhere. Is GOLO one of them?"
The BrightReview article was not published until January 2017. That article appeared in a form similar to the HighYa review, with an editorial review at the top of the page, and user comments at the bottom. The average customer rating presented there was 2 out of 5 stars, with three purported users giving what Plaintiff considers "highly negative 'reviews,' " one of which claimed that using GOLO resulted in 30 pounds of weight gain and a 25 point increase in his blood sugar level. Id. ¶ 86. Plaintiff alleges that the editorial review authored by Defendant BrightReviews (as distinguished from third-party product users) was also "replete with inaccuracies, misleading statements, and blatant falsehoods." Id. ¶ 87. As an example, Plaintiff alleges that the following are false statements:
• "The 2010 study [was] performed with diabetics, not otherwise healthy individuals looking [sic] optimize insulin ... [T]his seems to be their target market;
• None of [GOLO's] studies appear to be peer reviewed for accuracy ...; and
• [W]e didn't encounter any clinical evidence on leading medical websites ... that directly linked insulin management ... and weight loss."
Id. ¶ 88 (citations omitted). Plaintiff contends that those were false statements because
Plaintiff asserts a claim for false advertising under the Lanham Act, what appears to be a trademark infringement claim under the Lanham Act, and state law claims for trade libel and unfair competition. Defendants move to dismiss all claims, arguing that Plaintiffs have failed to raise a cognizable claim under relevant federal and state unfair competition laws.
II. Standard
Under Rule 12(b)(6), a plaintiff is required to plead factual allegations sufficient "to raise a right to relief above the speculative level ... on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Bell Atl. Corp. v. Twombly ,
III. Discussion
A. Plaintiff fails to state a Lanham Act claim, as well as a Pennsylvania Unfair Competition claim.
Section 1125(a)(1) of the Lanham Act provides a federal avenue for two types of unfair competition claims: false advertising under § 1125(a)(1)(B) and false association or trademark infringement under § 1125(a)(1)(A). See, e.g. , Lexmark Int'l, Inc. v. Static Control Components, Inc. ,
As a threshold matter, "every circuit court of appeals to address the scope of [Lanham Act claims for false advertising and false association] has held that they apply only to commercial speech." Farah v. Esquire Magazine ,
Here, Defendants' editorial reviews certainly refer to GOLO's dieting program, satisfying the second factor. The question then is whether those reviews satisfy the often interrelated first and third factors, which speak to the overarching issue of whether this truly is commercial speech as that term has been construed in connection with the Lanham Act. On their face, the reviews do not promote any competing product, and do not explicitly propose a commercial transaction. They simply offer an analysis of Plaintiff GOLO's product, and in doing so, do not go so far as to make any specific recommendations to consumers.
The Eleventh Circuit's decision in Tobinick v. Novella ,
That line of reasoning is persuasive here, where I find that the heart of Plaintiff's grievance is with the content of the reviews. Beginning with the article posted on HighYa's website, Plaintiff's concerns that the article assessed an outdated version of the website, that the title could be less suggestive, and that it does not accurately report the focus of the program stems from Plaintiff's larger concern that HighYa's methodology lacked rigor. For example, whereas the initial article predicated its description, assessment, and critiques of Plaintiff's program on Plaintiff's website alone, the current version, which Plaintiff did not take issue with in its Amended Complaint, reflects that HighYa went a step further and interviewed a representative from Defendant. See GOLO Customer Reviews , HighYa, https://www.highya.com/golo-reviews (last visited Apr. 26, 2018) ("We had the opportunity to speak with the company and learn more about their approach to weight loss, all aimed at helping you find answers to your most important questions and overall [sic] capture their vision for their customers").
The same is true of Plaintiff's grievances with the article posted by BrightReviews. Though Plaintiff insists the reviews are "replete with inaccuracies, misleading statements, and blatant falsehoods," Defendants couch the statements therein with qualifying language, primarily deriving their opinions from statements on Plaintiff's website. The value of such a review to consumers may be limited, but on its face the review certainly does not propose any form of commercial transaction nor does it embody the typical characteristics of an advertisement. As in Tobinick , the goal of the reviews is that "consumers can make more informed decisions."
Plaintiff counters that Defendants' reviews are nonetheless commercial speech because they are meant to affect the readers' purchasing decisions-that is, to encourage readers to buy certain products, steer clear of others, and click on surrounding advertisements and related links, with some of those "clicks" financially benefitting the Defendants. But I am persuaded by the Eleventh Circuit's analysis in Tobinick that such financial benefit is merely incidental to the content of the reviews.
Plaintiff is correct that liability can arise under the Lanham Act if websites purporting to offer reviews are in reality stealth operations intended to disparage a competitor's product while posing as a neutral third party. See, e.g. , Cannella v. Brennan ,
The question then becomes whether Plaintiff has plausibly pleaded that Defendants' review sites are shams that disguise an underlying financial scheme that Defendants are pursuing to Plaintiff's detriment. The initial Complaint barely made such an allegation. The Amended Complaint, filed in response to a motion to dismiss, makes a weak attempt to assert such a claim.
First, even though this Motion is pending under Rule 12, I find it proper to consider the content of the sites in placing Plaintiff's allegations in proper perspective, given that Plaintiff relies upon postings from Defendants' websites. See Pryor ,
Nor am I persuaded that Defendant HighYa's affiliation with BowFlex Max Trainer renders this a situation in which "one competitor directly injures another by making false statements about his own goods or the competitor's goods and thus inducing customers to switch," which would be actionable under the Lanham Act. See Lexmark Int'l, Inc. ,
To be clear, direct commercial competition is not an absolute requirement of a Lanham Act claim, Lexmark Int'l, Inc.,
In the final analysis, I conclude that Defendants' reviews of Plaintiff's product do not qualify as commercial speech, with the result that Plaintiff's Lanham Act claims and state law unfair competition claim must be dismissed.
B. Plaintiff also fails to state a claim for trade libel under Pennsylvania law.
A claim for trade libel under Pennsylvania law requires a plaintiff to plead (1) a false statement, (2) that the publisher either intends the publication to cause pecuniary loss or reasonably should recognize that the publication will result in pecuniary loss, (3) that there is actually pecuniary loss, and (4) actual malice-that is, that the publisher either knew that the statement was false or acted in reckless disregard of its truth or falsity. Brooks Power Sys., Inc. v. Ziff Commc'ns, Inc. ,
Critically, Pennsylvania has a one-year statute of limitations for trade libel claims, running from the date of the first publication, whether that be an upload to a website or otherwise. See Phila. Newspapers, LLC ,
As to BrightReviews, Defendants argue that Plaintiff has failed to adequately plead that the statements made in their review were false, that they were made with actual malice, or that the statements in the reviews resulted in a pecuniary loss. I need not reach the issues of pecuniary loss and actual malice because I conclude that Plaintiff has not adequately pled falsity. I reach that conclusion because each of the statements GOLO takes issue with are prefaced with language indicating that they are observations based primarily on GOLO's website. See Amend. Compl. ¶ 88 (" 'The 2010 study [was] performed with diabetics, not otherwise healthy individuals looking to optimize insulin ... [T]his seems to be their target market; ... None of [GOLO's] studies appear to be peer reviewed for accuracy ...; ... and [W]e didn't encounter any clinical evidence on leading medical websites ... that directly linked insulin management ... and weight loss.' ") (emphasis added). Plaintiff's contest the ultimate accuracy of these statements, but fail to address whether those observations could reasonably and fairly been made based upon the information posted on its website at the time. See id. ¶ 89.
In the alternative, Plaintiff argues that Defendants' reviews also created a false impression that Plaintiff's product was a scam, citing low the average user rating; Defendant HighYa's Twitter post, which stated, "Weight-loss # scams are everywhere. Is GOLO one of them?"; the initial title of the article, "GOLO Weight Loss Diet Reviews-Is it a Scam or Legit?"; and the fact that the reviews would appear prominently in web searches for GOLO. See Pl.'s Sur-Reply 5, ECF No. 21. But when read in the context of the article, which is attached as an exhibit to the Amended Complaint, I am not persuaded that the impression conveyed is that Plaintiff's program is a scam in the illegal, fraudulent sense, as compared to communicating that the product might not produce its intended result. That is pivotal where, as here, the product concerns weight loss, because, whether a weight loss product or program produces that result is the essential question. See Am. Compl. 75 (stating that the review should have been titled "GOLO Weight Loss Diet Reviews-Does it really work?"). Thus, pleading that BrightReviews posed the question and allowed users to weigh in would not suffice to support a claim proceeding on a false
IV. Conclusion
In sum, Plaintiff having failed to adequately allege that Defendants' reviews qualify as commercial speech and thus failed to state a claim for false advertisement or trademark infringement, and Plaintiff also having failed to state a claim as trade libel under state law, I will grant Defendants' Motion to Dismiss in its entirety.
Notes
That list now includes Casper Mattress, Casper Wave Mattress, Casper Pillow, and InvenTel's HD Mirror Cam. See Advertiser Disclosure , HighYa Reviews, https://www.highya.com/advertiser-disclosure (last visited Apr. 24, 2018). HighYa explains that its affiliations only result in direct compensation if a user arrives at the affiliate's web page for that product through a link on the HighYa review page belonging to that product. See id.
These programs place advertisements next to content on websites based on numerous factors, and compensate the owners of those websites based on the relevant pay scheme arrangement, i.e. , per user clicks on the advertisements.
The link has since been removed. Defendant HighYa apparently concedes that it would have been the party responsible for the specific wording of the link. By way of context, however, the term "scam" was not uniquely attached to GOLO. As noted above, Defendants' websites purport to globally address the question: "Is this a scam, or is it legit?"
Whereas Count I expressly cites § 1125(a)(1)(B), Count II, which has virtually the same title, makes no reference to the statute. But based on the factual allegations referenced, Defendants conclude that Plaintiff is advancing a § 1125(a)(1)(A) false association claim. Plaintiff has not disputed that interpretation, and I will proceed accordingly.
The Pennsylvania common law cause of action for unfair competition is identical to claims under the Lanham Act, sans the federal interstate commerce requirement. See, e.g. , R.J. Ants, Inc. v. Marinelli Enters., LLC ,
How well the Defendants accomplish that goal is open to question. Defendants might have failed to collect information from "a wide variety of sources" as represented on their site, but that does trigger application of the Lanham Act. In Tobinick , the underlying research was also minimal, in that the defendant physician's critique was based his solely on a description of plaintiff's medical clinics provided by an article in the Los Angeles Times.
Compare Compl. ¶ 49 (alleging that HighYa's business profiles are "merely a ploy to create dialogue with the companies whose products are reviewed, as well as a false perception that [its] reviews are legitimate or scientific") (emphasis added) with Am. Compl. ¶¶ 43, 56-66 (presenting a series of generalized allegations to imply that Defendants operate a fake review business).
Plaintiff's separate allegation, based "[o]n information and belief," that Defendants' reviews "may also ... be designed to foster payment from companies whose products are reviewed negatively," Pl.'s Resp. Br. 9 n.4, ECF No. 18 (emphasis added), is also undercut by the fact that the review was revised without any such demand for payment.
The parties argue at length about whether the user comments provide a basis for Plaintiff's trade libel claim, with Plaintiff contending it need only plead that that Defendant HighYa was the true source of those comments "on information and belief." Preliminarily, I note that Plaintiff has not identified any specific comment that can be analyzed as false, leading to pecuniary loss, or made with actual malice. Beyond that, in the specific context of this case, based upon the implausibility of Plaintiff's conclusory allegations that the websites are shams, I am not inclined to give weight to Plaintiff's equally conclusory allegations that the third-party reviewers and commenters do not exist.
Although I do not reach the issue of malice, the carefully worded nature of the statements in the reviews certainly weighs against the sufficiency of the malice allegations in the Amended Complaint.