Pennsylvania Federal Court Holds Consumer Review Website Was Not Engaged in Commercial Speech
A federal district court in Philadelphia ruled last month that product reviews featured on two consumer-review websites were not commercial speech in the case of GOLO, LLC v. HighYa, LLC, No. 17-2714 (E.D. Pa.). On that basis, the court dismissed the Lanham Act claims asserted by the plaintiff. Then, just yesterday, the court denied the plaintiff's motion for leave to file an amended complaint, holding that the proposed amendments "would be futile," as they would not provide a basis for concluding that the reviews constituted commercial speech.
The plaintiff in the case, GOLO, LLC, is the owner and marketer of a popular diet program sold exclusively online. GOLO brought suit against HighYa, LLC and BrightReviews, LLC, two companies that own and operate consumer-review websites that reviewed the GOLO diet in a manner not to GOLO's liking. GOLO asserted that the defendants' websites were really offering "fake reviews."
Specifically, GOLO alleged that the reviews of the GOLO diet were, in fact, attempts to divert internet traffic from GOLO's website to the defendants' websites, where potential consumers would then be encouraged to purchase products from advertisers or other businesses with which the defendants had commercial relationships. Based on that theory, GOLO brought claims for false advertising and trademark infringement under Section 43(a) of the Lanham Act.
The court rejected GOLO's theory in its entirety, holding that the supposedly uncomplimentary reviews of the GOLO diet could not be subject to claims under the Lanham Act because they were not commercial speech. The court's decision was based on two grounds:
First, the court held that, while GOLO did allege that the websites (under some circumstances) make money from GOLO's competitors—specifically, by receiving money whenever visitors would "click through" ads for those competitors placed on the sites through Google's AdSense program—GOLO did not adequately allege any connection between the portions of the reviews it found objectionable and any revenue generated by the reviews. In particular, the court held that, because the websites generate revenue through web traffic, and negative reviews do not necessarily garner any more traffic than positive reviews, GOLO had failed to plausibly allege any connection between what the websites said about its diet and a commercial purpose.
Second, the court held that GOLO's allegations that the defendants' websites were "shams that disguise an underlying financial scheme that [d]efendants are pursuing to [p]laintiff's detriment" were too "weak" and insubstantial to entitle GOLO to discovery to pursue that theory. In that regard, the court noted that the websites fully disclose any affiliate relationships they have with specific products, which "undercuts [p]laintiff's surmise that [d]efendants are engaged in some form of covert competition."
The main import of this case lies in the court's willingness to extend to the defendants' websites protections long afforded to more traditional review publications such as Consumer Reports. It is well established that the Lanham Act's prohibitions on false advertising do not and cannot reach product "reviews [that] may disparage the quality . . . of products." Wojnarowicz v. Am. Family Ass'n, 745 F. Supp. 130, 142 (S.D.N.Y. 1990). That result is mandated by contemporary First Amendment doctrine, which provides that non-commercial speech, even when it is false or misleading, cannot be subject to a regime of strict liability like that imposed by the Lanham Act. On that basis, courts routinely reject false advertising lawsuits against traditional review publications.
GOLO's gambit in this case was that it could persuade the court that the defendants' websites should be treated differently because they lack the format and pedigree of those other publications. The court rejected that invitation, and, as a result, affirmed that the internet is a place where a wide variety of voices should be free to express their views about products and services.
Ballard Spahr Of Counsel Paul Safier represented HighYa, LLC and BrightReviews, LLC in this matter.
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