Castrol, Inc. v. Quaker State Corp. - 977 F.2d 57 (2d Cir. 1992)

Rule:

A plaintiff's burden in proving literal falsity, in a false advertising claim brought pursuant to § 43(a) of the Lanham Act, 15 U.S.C.S. § 1125(a), varies depending on the nature of the challenged advertisement. Where the defendant's advertisement claims that its product is superior plaintiff must affirmatively prove defendant's product equal or inferior. Where the defendant's ad explicitly or implicitly represents that tests or studies prove its product superior, the plaintiff satisfies its burden by showing that the tests did not establish the proposition for which they were cited. The plaintiff can meet this burden by demonstrating that the tests were not sufficiently reliable to permit a conclusion that the product is superior.

Facts:

A Quaker State Corporation’s television commercial asserted that “tests prove” its 10W-30 motor oil provided better protection against engine wear at start-up. Its competitor, plaintiff Castrol, Inc. initiated the present action, asserting that no studies supported the commercial’s claim that "tests prove" Quaker State's oil provided better protection, and that this claim of test-proven superiority constituted false advertising. It sought preliminary and permanent injunctive relief and damages pursuant to § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), New York General Business Law §§ 349, 350, and common law unfair competition. The district court granted Castrol’s request for a preliminary injunction. Quaker State Corp. appealed. 

Issue:

Was plaintiff entitled to a preliminary injunction under the circumstances? 

Answer:

Yes.

Conclusion:

The appellate court affirmed the grant of preliminary injunction, holding that the plaintiff's burden as to a preliminary injunction was to show a probability of irreparable harm plus either the likelihood of success or serious legal issues coupled with a favorable balance of hardships. According to the court, a false advertising claim was established if plaintiff showed false or misleading claims - and an injunction, once issued, will be vacated only if the district court abused its discretion. In this case, the plaintiff’s evidence that the tests in question showed only that defendant's oil flowed to engine parts faster, not that it protected better, justified the district court's issuance of a preliminary injunction. Moreover, the court held that the injunction's scope was proper, as even without testing the claims, defendant's claim that its oil was superior was likely unprovable.