Daisy Duke and Captain Kirk won't get to tout the alleged superiority of DirecTV's high-definition picture in Time Warner Cable markets.
The U.S. Court of Appeals for the Second Circuit upheld a lower-court injunction against a pair of now-familiar ads touting the satellite service, concluding that they were false and misleading and could hurt TWC's business. But it reversed the lower court's decision that Web ads making similar claims were false and misleading, saying instead that they were too unbelievable to be taken seriously as guidance for multichannel-video-purchasing decisions.
In its ruling, the court said ads can be false even without making explicit false statements if the implication is sufficiently clear.
The decision came a couple weeks after the two sides agreed to settle their legal battle over the ads -- they had not announced the settlement -- so the Daisy ads were going to be pushing up daisies anyway, but the court ruling stands as a warning to others about claims of satellite's superior picture.
"The decision speaks for itself," said TWC spokesman Alex Dudley. "Nonetheless, we were pleased that we were able to settle the litigation satisfactorily." He declined to disclose the terms.
DirecTV said in a statement: "This opinion has no relevance in this case because the parties had already settled the outstanding litigation on a basis that is mutually satisfactory. The specific terms are confidential."
The decision was rooted, in part, in the court's conclusion that "There is no dispute, at least on the present record, that the HD programming provided by TWC and DirecTV is equivalent in picture quality." It even put in a plug for cable analog service, quoting a Federal Communications Commission fact sheet saying that analog is “high enough in quality to provide enjoyable viewing with barely perceptive impairments.”
The TV ads, part of DirecTV's “Source Matters” campaign, featured Jessica Simpson as Daisy Duke claiming that to get the best HD picture, viewers needed DirecTV. Initially, the ad ended with the tag line, "For picture quality that beats cable, you've got to get DirecTV." That was changed after TWC objected, to, "For an HD picture that can't be beat, get DirecTV."
The William Shatner commercial featured him as Captain Kirk and contained the line: "With what Star Fleet just ponied up for that big-screen TV, settling for cable would be illogical."
The Web ads contained a split screen of an exaggerated, essentially indecipherably pixilated image and a sharp one, with the clear picture attributed to DirecTV and the other to "other TV," plus a directive to "find out why DirecTV's picture beats cable."
TWC sought an injunction against the TV and Internet ads, saying that they were false. A lower court agreed and enjoined them. DirecTV appealed.
The Second Circuit concluded that there was no demonstrable difference between the satellite- and cable-delivered HD and that the TV ads falsely asserted there was, even when they were modified to take out the explicit reference to cable.
"An advertisement can be literally false even though it does not explicitly make a false assertion if the words or images, considered in context, necessarily and unambiguously imply a false message."
But it concluded that the lower court erred in enjoining the Web ads, saying that they constituted "nonactionable 'puffery,’" which is something that while factually inaccurate is so exaggerated that no reasonable person would "rely on them in navigating the marketplace."