Design Resources, Incorporated v. Leather Industries of America ( 2015 )


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  •                              PUBLISHED
    UNITED STATES COURT OF APPEALS
    FOR THE FOURTH CIRCUIT
    No. 14-1990
    DESIGN RESOURCES, INC.,
    Plaintiff - Appellant,
    v.
    LEATHER INDUSTRIES OF AMERICA; DR. NICHOLAS J. CORY; ASHLEY
    FURNITURE INDUSTRIES, INC.; TODD WANEK,
    Defendants - Appellees.
    Appeal from the United States District Court for the Middle
    District of North Carolina, at Greensboro.   William L. Osteen,
    Jr., Chief District Judge. (1:10-cv-00157-WO-LPA)
    Argued:   May 13, 2015                    Decided:   June 18, 2015
    Before NIEMEYER, DUNCAN and THACKER, Circuit Judges.
    Affirmed by published opinion. Judge Duncan wrote the opinion,
    in which Judge Niemeyer and Judge Thacker joined.
    ARGUED:    John Raymond Neeleman, LANE POWELL, PC, Seattle,
    Washington, for Appellant.    William Andrew Copenhaver, WOMBLE
    CARLYLE SANDRIDGE & RICE, LLP, Winston-Salem, North Carolina;
    Richard Dominick Milone, Jr., KELLEY DRYE & WARREN LLP,
    Washington, D.C., for Appellees.     ON BRIEF: Kristin Beneski,
    LANE POWELL, PC, Seattle, Washington, for Appellant.    Cameron
    Argetsinger, KELLEY DRYE & WARREN LLP, Washington, D.C., for
    Appellees Leather Industries of America and Dr. Nicholas J.
    Cory; Brent F. Powell, WOMBLE CARLYLE SANDRIDGE & RICE, LLP,
    Winston-Salem, North Carolina, for Appellees Ashley Furniture
    Industries, Inc. and Todd Wanek.
    DUNCAN, Circuit Judge:
    Plaintiff-Appellant Design Resources, Inc. (“DRI”), appeals
    the   district    court’s    entry    of       summary   judgment     in    favor   of
    Defendants-Appellees Leather Industries of America (“LIA”) and
    Ashley    Furniture   Industries,         Inc.    (“Ashley”),    on   DRI’s    false
    advertising claim under the Lanham Act, 15 U.S.C. § 1125(a).
    DRI alleged that an advertisement placed in a trade magazine by
    Ashley    (the   “Ashley    Ad”),    as    well    as    two   statements     by    Dr.
    Nicholas Cory, director of LIA’s research laboratory, which ran
    in articles in the same publication, were false and misleading.
    The district court granted summary judgment to LIA and Ashley,
    concluding that DRI had not presented sufficient evidence to
    establish a Lanham Act claim.              For the reasons that follow, we
    affirm.
    I.
    A.
    Appellee Ashley is the fifth largest furniture manufacturer
    in the United States.         J.A. 116.          In addition to manufacturing
    furniture, Ashley operates and licenses retail locations that
    bear its name, and it sells its furniture to other retailers,
    such as Costco and Walmart.               J.A. 986-88.         Appellee LIA is a
    leather    industry   trade    association,          which     owns   the    Leather
    2
    Research Laboratory (the “Laboratory”). 1                Dr. Nicholas Cory is a
    leather chemist and the director of the Laboratory.                        He and his
    lab provide labeling advice to companies who market leather and
    leather-look products, as well as testing services to determine
    such       products’     leather    content      for    purposes      of     federally
    mandated disclosure to consumers.
    Appellant DRI develops furniture coverings and sells its
    products        to    furniture    manufacturers.            In    late    2006,     DRI
    developed a “synthetic leather-look furniture covering product,
    which      it   initially      called   ‘Veneto’”        and      later    renamed   as
    “NextLeather®.”              Appellant’s   Br.    at     8.         NextLeather®      is
    “composed        of    61%    polyurethane,      22%     poly/cotton,        and     17%
    leather.”        
    Id. “[I]t has
    a polyurethane face on a fabric core
    and is backed with a thin layer of leather fibers adhered (i.e.,
    bonded) to its base or underside.”                     
    Id. The use
    of leather
    fibers as backing, as opposed to “single-piece leather ‘splits’
    . . . , represented an improvement in the ability of a leather-
    look product to mimic real leather . . .                       because it made the
    material more pliable and allowed it to drape more fluidly over
    1
    There was a factual dispute below concerning LIA’s
    ownership of the Laboratory.    The district court did “not find
    that factual dispute material” to its decision and therefore
    “reache[d] its legal conclusion without resolving [the] issue.”
    J.A. 1760 n.2. Because we affirm the district court’s grant of
    summary judgment to LIA, this factual question is not relevant
    to our analysis either, and therefore need not detain us.
    3
    a furniture frame.”        Appellant’s Br. at 8.
    In December 2006 and January 2007, DRI requested labeling
    advice and composition testing of its NextLeather® product from
    Dr. Cory at LIA’s laboratory.          Dr. Cory advised that the product
    could “ABSOLUTELY NOT!” be characterized or marketed as leather.
    J.A. 261.     He cited the Federal Trade Commission’s Guides for
    Select Leather and Imitation Leather Products (“FTC Guides”),
    which    specify    that    products    containing     ground       or    shredded
    leather, rather than comprising “wholly the hide of an animal[,]
    should not be represented, directly or by implication, as being
    leather.”    J.A. 261 (quoting 16 C.F.R. § 24.2(f) 2).              Instead, Dr.
    Cory suggested, DRI could label NextLeather® as “[n]ot leather,”
    “[r]econstituted leather,” or “[b]onded leather.”               J.A. 261.
    In early 2007, DRI began marketing NextLeather® as “bonded
    leather,” disclosing the product’s composition on a label in
    compliance   with    the    FTC   Guides.     DRI   viewed    its     product   as
    innovative and believed that “NextLeather® was the first and
    only such product marketed as ‘bonded leather.’”                J.A. 1289-90.
    In   preparation    for     the   Spring    High    Point    Market      in   North
    2
    Dr. Cory referred to the FTC Guides in place in 2006,
    which remained in effect throughout the underlying litigation.
    In 2007, the FTC sought public comment on whether to revise the
    Guides, 72 Fed. Reg. 28,906, 28,907 (May 23, 2007) (to be
    codified at 16 C.F.R. pt. 24), but in 2008, decided to retain
    them unchanged, 73 Fed. Reg. 34,626, 34,630 (June 18, 2008) (to
    be codified at 16 C.F.R. pt. 24).
    4
    Carolina--an        important,        annual       furniture         industry       event--DRI
    sold    samples        of      NextLeather®            to   25        leading        furniture
    manufacturers.             Those manufacturers would then debut furniture
    products made with NextLeather® at the Spring High Point Market,
    from March 26 to April 1, 2007.
    In the weeks leading up to and following the Spring High
    Point       Market,        Ashley     placed       a    series        of   full-page           ads
    in Furniture Today, a widely read trade magazine.                              According to
    DRI, one of the ads--which ran in the March 12, March 31, and
    April 30, 2007 issues--contained false statements about DRI and
    NextLeather®.          In relevant part, the text of the ad read as
    follows:      “Is It REALLY LEATHER? . . . Some upholstery suppliers
    are using leather scraps that are mis-represented as leather
    . . . .        Know    What     You    Are     Buying[.]         REMEMBER       .    .     .   The
    Overseas Manufacturer Has NO Liability In The U.S.A.                                 You Do!”
    J.A. 274, 281, 283 (third ellipsis in original).
    On    July     2,    2007,     Furniture        Today   published        an       article
    written by Joan Gunin and entitled, “Chemist fears confusion
    over imitators may hurt category.”                     J.A. 86.        This article (the
    “Gunin Article”) quoted Dr. Cory as saying the following:                                      “To
    call [leather alternatives such as bonded leather] ‘leather’ is
    outright       deception,           outright       fraud.        .     .   .        It’s       not
    leather. . . . It’s a synthetic that has leather fibers glued to
    the underside.”            J.A. 86 (second ellipsis in original).
    5
    A week later, on July 9, 2007, Furniture Today published an
    article written by Susan Andrews and entitled, “For consumers’
    sake, let’s not call it ‘bonded leather.’”                           J.A. 108.        This
    article    (the    “Andrews     Article”)         referred     to    “[n]ew    composite
    fabrics    now    called      ‘bonded    leather,’”          which   “have    a    surface
    layer of vinyl or polyurethane, a center layer of fabric, and a
    backing that contains some leather fibers . . . glued onto the
    fabric for a look that is similar to the back of a leather
    hide.”     J.A. 108.       The article’s author advocated against using
    the term “bonded leather” to refer to these products by arguing
    that the term is “bound to confuse consumers, who are likely to
    hear only the word ‘leather.’”                    J.A. 108.          The article then
    quoted Dr. Cory as saying that calling these products bonded
    leather “is deceptive because it does not represent its true
    nature.       It’s     a   vinyl,       or    a   polyurethane        laminate      or   a
    composite,       but   it’s    not   leather.           If    you    tar    and    feather
    someone, does that make them a chicken?”                     J.A. 108.
    B.
    In February 2010, DRI filed suit against Ashley, Todd Wanek
    (Ashley’s president and CEO), LIA, and Dr. Cory.                             It asserted
    false     advertising      claims       under     the    Lanham      Act,     15   U.S.C.
    § 1125(a), as well as various violations of North Carolina and
    6
    Washington law. 3       In September 2012, the district court granted
    Wanek’s and Dr. Cory’s motions to dismiss for lack of personal
    jurisdiction.        J.A. 161.        While these two individuals are listed
    as Appellees in this case, DRI does not seek review of the
    district court’s September 2012 order.                    See Appellant’s Br. at
    26.
    DRI made the following arguments before the district court.
    Regarding      the    Ashley    Ad’s    statement--that       “[s]ome      upholstery
    suppliers are using leather scraps that are mis-represented as
    leather”--DRI        asserted    that       “[a]ll    informed    readers”    of    the
    Ashley    Ad   knew    that     the    ad    was     “referring   to    DRI   and   its
    NextLeather® bonded leather” because DRI was the only company
    selling the kind of product described.                  J.A. 47.       It argued that
    the ad was false because DRI was not marketing its product as
    leather, but rather as “bonded leather.”                  J.A. 47.
    With respect to the Gunin Article, DRI characterized the
    statement by the LIA Laboratory director, Dr. Cory--that calling
    bonded leather “leather” is deceptive--as “explicitly accus[ing]
    3
    Specifically, DRI alleged violations of the North Carolina
    Unfair and Deceptive Trade Practices Act and the Washington
    Consumer Protection Act, as well as several claims under both
    North Carolina and Washington law: tortious interference with
    business relations, civil conspiracy, negligence and fraudulent
    concealment, negligent misrepresentation, breach of contract,
    breach of the duty of good faith and fair dealing, and punitive
    damages. J.A. 55-63.
    7
    DRI of . . . selling a counterfeit product.”                              J.A. 50.       DRI
    maintained        that   “there     could      be    no    doubt”    that    “Dr.    Cory’s
    defamatory statements were referring to DRI and NextLeather®,”
    J.A.       50,   and   that   the   statement         was    false   because       DRI   was
    selling NextLeather® as bonded leather, rather than as leather.
    DRI also contended that Dr. Cory’s statement in the Andrews
    Article--that the term “bonded leather” is deceptive as applied
    to some products--was false because the FTC Guides allowed, and
    Dr.    Cory      had   advised,     DRI   to       label    the   product     as    “bonded
    leather.”
    Finally, DRI argued that the defendants’ statements damaged
    DRI’s “actual and potential customer relationships.”                               J.A. 55.
    It pointed to a decline in sales of NextLeather® to furniture
    manufacturers following publication of the ad and articles, and
    it asserted that it was “forced to spend substantial sums to
    address [the] resulting damage.”                   J.A. 55.
    DRI moved for partial summary judgment, and Ashley and LIA
    cross-moved for summary judgment.                     The district court granted
    Ashley’s and LIA’s motions for summary judgment in August 2014.
    Relevant here, the district court determined that DRI failed to
    present sufficient evidence to establish that the Ashley Ad, the
    Gunin Article, or the Andrews Article were false or misleading. 4
    4
    The district           court      also      rejected      DRI’s     arguments    in
    (continued)
    8
    Regarding the Ashley Ad, the district court held that DRI
    failed to establish that the ad was false on either of the
    grounds DRI presented.       As an initial matter, DRI failed to show
    that the contested statement--that “[s]ome upholstery suppliers
    are using leather scraps that are mis-represented as leather”--
    conveyed   the    message   that    DRI     was   selling   NextLeather®     as
    leather.     See J.A. 1779–84.      The court reasoned that “a reader
    of Ashley’s ad would have had to make at least two sizeable
    inferences” in order to glean this message from the ad.                    J.A.
    1780.    Because the ad does not use the term “bonded leather,”
    “the reader would first have to ascertain that the ad references
    bonded leather, as opposed to . . . any other similarly produced
    products.”       J.A. 1780-81.     Second, the reader would “have to
    infer that the ad was referring solely to DRI’s NextLeather®.”
    J.A. 1782.     DRI also failed to establish its alternative theory
    of   liability    with   respect   to   the   ad--that   the   ad   was   false
    because it misled consumers--because it did not show that “a
    single consumer was misled” by the ad.            J.A. 1784.
    Turning to the Gunin and Andrews Articles, the court held
    that neither article contained a false statement of fact.                 As to
    Dr. Cory’s statement in the Gunin Article--that referring to
    support of its state law claims, granting summary judgment to
    the defendants on all of them. See J.A. 1792-1807.
    9
    bonded leather as “leather” would be “outright fraud”—-the court
    pointed out that this statement was true because bonded leather
    contains only scraps or shavings of leather, rather than whole
    hide.       Additionally, DRI offered no “evidence linking the quote
    in    the    Gunin     article        with    a    single    customer’s        refusal     to
    purchase NextLeather® or general customer confusion about Dr.
    Cory’s statements.”             J.A. 1774.         As for the Andrews Article, the
    court held that Dr. Cory--in stating that using the term “bonded
    leather”       is    “deceptive”--was          “giving      his     opinion     on   how    a
    customer would perceive the term bonded leather” because he “did
    not claim to know the law, did not reference the law, and did
    not     maintain       that     using    such       term    would     result    in     legal
    liability.”         J.A. 1777.        DRI timely appealed.
    II.
    We review de novo the district court’s grant of summary
    judgment,       “viewing        the     facts       and     drawing    all      reasonable
    inferences          therefrom      in   the       light    most     favorable    to”     the
    nonmoving party.          PBM Products, LLC v. Mead Johnson & Co., 
    639 F.3d 111
    , 119 (4th Cir. 2011).                    Summary judgment is proper only
    if there is no genuine issue of material fact and the moving
    party is entitled to judgment as a matter of law.                            Fed. R. Civ.
    P.    56(a).         “[I]t    is      ultimately      the    nonmovant’s        burden     to
    persuade us that there is indeed a dispute of material fact.                               It
    10
    must provide more than a scintilla of evidence--and not merely
    conclusory allegations or speculation--upon which a jury could
    properly find in its favor.”                CoreTel Va., LLC v. Verizon Va.,
    LLC, 
    752 F.3d 364
    , 370 (4th Cir. 2014) (citation omitted).
    III.
    On    appeal,     DRI   argues   that      the   district      court   erred   in
    granting      summary    judgment      to    Ashley    and     LIA    because   DRI’s
    evidence with respect to the Ashley Ad, the Gunin Article, and
    the       Andrews   Article      was    sufficient        to      establish     false
    advertising claims under the Lanham Act, 15 U.S.C. § 1125(a). 5
    In the discussion that follows, we begin with a brief overview
    of the governing legal framework, and then consider each of the
    purportedly false statements in turn.
    A.
    A plaintiff asserting a false advertising claim under the
    Lanham Act must establish that:
    (1)   the  defendant  made  a  false  or misleading
    description of fact or representation of fact in a
    commercial advertisement about his own or another’s
    product; (2) the misrepresentation is material, in
    that it is likely to influence the purchasing
    5
    DRI also argues on appeal that the district court erred in
    granting summary judgment to Ashley and LIA on its claim under
    the North Carolina Unfair and Deceptive Trade Practices Act. We
    have considered DRI’s arguments with respect to this claim and
    find them to be without merit.
    11
    decision; (3) the misrepresentation actually deceives
    or has the tendency to deceive a substantial segment
    of its audience; (4) the defendant placed the false or
    misleading statement in interstate commerce; and (5)
    the plaintiff has been or is likely to be injured as a
    result of the misrepresentation, either by direct
    diversion of sales or by a lessening of goodwill
    associated with its products.
    PBM 
    Products, 639 F.3d at 120
    (emphasis added) (quoting Scotts
    Co. v. United Indus. Corp., 
    315 F.3d 264
    , 272 (4th Cir. 2002)).
    Because the plaintiff must establish all five elements of the
    claim, failure to establish any one element is fatal to the
    claim.     The parties here focus their arguments on the first
    element--whether        the   defendants            made    false     or    misleading
    assertions    of    fact.      Because         we    find    that    DRI    failed    to
    substantiate this element with respect to any of the contested
    statements, we limit our analysis accordingly.
    For    false   advertising      liability         to   arise,    the    contested
    statement must be false, and it must be a representation of
    fact.     Regarding falsity, the statement “must be either false on
    its face or, although literally true, likely to mislead and to
    confuse     consumers     given     the    merchandising            context.”        
    Id. (quoting C.B.
       Fleet    Co.     v.       SmithKline       Beecham       Consumer
    Healthcare, L.P., 
    131 F.3d 430
    , 434 (4th Cir. 1997)).                       Thus, the
    plaintiff can show falsity in either of these two ways.                         First,
    a statement that is false on its face--or literally false--“may
    be either explicit or conveyed by necessary implication when,
    12
    considering       the   advertisement          in    its    entirety,        the       audience
    would     recognize      the     claim    as       readily     as     if    it     had      been
    explicitly stated.”            
    Id. (quoting Scotts,
    315 F.3d at 274).                       “In
    analyzing whether an advertisement . . . is literally false,”
    courts must “determine, first, the unambiguous claims made by
    the advertisement . . . , and second, whether those claims are
    false.”      
    Scotts, 315 F.3d at 274
       (quoting      Novartis           Consumer
    Health, Inc. v. Johnson & Johnson-Merck Consumer Pharm. Co., 
    290 F.3d 578
    , 586 (3d Cir. 2002)).
    Second, the plaintiff can show that, although a statement
    may be true on its face and not false by necessary implication--
    it is otherwise false by implication because it would likely
    mislead consumers of the product the statement concerns.                                     The
    plaintiff     must      support    a     theory       of    implied        falsehood        with
    evidence that the advertisement “tend[s] to mislead or confuse
    [such] consumers.”         
    Id. at 273
    (quoting Johnson & Johnson Merck
    Consumer Pharm. Co. v. Smithkline Beecham Corp., 
    960 F.2d 294
    ,
    297 (2d Cir. 1992)) (internal quotation mark omitted).                                      Such
    evidence    of    consumer      confusion          must    “account    for       the    .   .   .
    allegations in the case”--or, show that the statement misled
    consumers in the way the plaintiff claims it did; otherwise, it
    “fail[s]     to      provide      the     required          evidence        of     [implied]
    falsity.”    PBM 
    Products, 639 F.3d at 122
    .
    13
    In     addition       to    being        false,       the    statement         must      be   a
    representation of fact, or, a “specific and measurable claim,
    capable of being proved false or of being reasonably interpreted
    as a statement of objective fact.”                            Pizza Hut, Inc. v. Papa
    John’s        Int’l,      Inc.,     
    227 F.3d 489
    ,         496      (5th     Cir.      2000)
    (quoting Coastal Abstract Serv., Inc. v. First Am. Title Ins.
    Co.,    
    173 F.3d 725
    ,    731    (9th     Cir.    1999))          (internal       quotation
    marks omitted).             By contrast, statements “of general opinion
    [are]        not     actionable         under     [§     1125].”             
    Id. To be
      a
    representation of fact, the statement must “admit[] of being
    adjudged true or false in a way that . . . admits of empirical
    verification.”             
    Id. (quoting Presidio
    Enters. v. Warner Bros.
    Distrib. Corp., 
    784 F.2d 674
    , 679 (5th Cir. 1986)) (internal
    quotation          mark   omitted).            With    this        framework        in    mind,      we
    discuss each purportedly false advertisement in turn.
    B.
    1.
    We    agree       with    the     district       court          that    DRI      failed      to
    substantiate          a   claim    that    the     Ashley          Ad   is     either     literally
    false or impliedly false.                  Beginning with literal falsity, DRI
    argues        on     appeal       that     the        ad’s     statement--that                “[s]ome
    upholstery          suppliers     are     using       leather       scraps       that     are     mis-
    represented as leather,” e.g., J.A. 274--was literally false by
    necessary          implication.           It     argues       that        “[s]ome        upholstery
    14
    suppliers” refers to suppliers of bonded leather generally and
    to    DRI--as   supplying        NextLeather®--specifically,              and    that    the
    ad’s audience would have recognized these references “as readily
    as if [they] had been explicitly stated.”                            PBM 
    Products, 639 F.3d at 120
    (quoting 
    Scotts, 315 F.3d at 274
    ).                           In particular,
    DRI    argues       that    the     ad’s     reference          to     NextLeather®       is
    unmistakable         when   viewed      in   the    broader          context    in   which
    consumers would have understood it.                       DRI then contends that,
    having necessarily implied a reference to bonded leather and
    DRI’s NextLeather®, the ad communicates the false messages that
    bonded leather was being marketed as leather and that DRI was
    marketing NextLeather® as leather.
    We find DRI’s literal falsity argument confounding.                                At
    bottom, DRI asserts that, even though the ad refers only to
    products      marketed      as     leather,        it     unmistakably         refers     to
    products      not    marketed     as    leather,        but    as    bonded    leather    or
    NextLeather®.         In order to arrive at this conclusion, one has to
    follow DRI’s winding inquiry far outside the face of the ad,
    which the concept of literal falsity by necessary implication
    does not allow us to do.                And, one has to be willing to accept
    that    the     ad     means      the    opposite         of    what     it     says,     an
    interpretation we find insupportable.
    In evaluating claims asserting literal falsity by necessary
    implication, courts have emphasized the limits of this theory of
    15
    liability,     holding       that       not     “all      messages     implied      by    an
    advertisement         will           support        a       finding        of      literal
    falsity.”      Clorox Co. P.R. v. Proctor & Gamble Commercial Co.,
    
    228 F.3d 24
    , 35 (1st Cir. 2000).                        “The greater the degree to
    which a message relies upon the viewer or consumer to integrate
    its components and draw the apparent conclusion, . . . the less
    likely    it   is    that       a     finding      of     literal    falsity      will    be
    supported.”       
    Id. (quoting United
    Indus. Corp. v. Clorox Co., 
    140 F.3d 1175
    , 1181 (8th Cir. 1998)).                   And “[c]ommercial claims that
    are implicit, attenuated, or merely suggestive usually cannot
    fairly be characterized as literally false.”                           
    Id. In other
    words, a false advertising claim cannot rely on the consumer to
    draw inferences that an ad only hints at or merely suggests.
    A    false     advertising         claim      can,    however,    depend      on    the
    consumer to draw conclusions that are logically necessary from
    an ad’s statements.          In Castrol Inc. v. Pennzoil Co., a Pennzoil
    advertisement made two claims--first, that motor oil viscosity
    breakdown leads to engine failure, and second, that Pennzoil’s
    product   “outperforms          any    leading      motor    oil     against     viscosity
    breakdown.”       
    987 F.2d 939
    , 947 (3rd Cir. 1993).                            Though the
    advertisement       did   not       “specifically         mention    its   competitors,”
    the court determined that the advertisement “left the consumer
    with the obvious conclusion that Pennzoil is superior to the
    other leading brands in protection against engine problems,” and
    16
    thus “Pennzoil did, by implication, compare its effectiveness
    against engine wear to that of its competitors.”                                       
    Id. at 946.
    Put    differently,        a    claim           of        literal       falsity       by    necessary
    implication        could        stand           where           the     contested          conclusion
    necessarily flowed from the ad’s statements.
    Although DRI acknowledges that the Ashley Ad “d[id] not
    specifically use the words ‘bonded leather,’” it argues that the
    ad nevertheless necessarily implied a false message regarding
    bonded      leather    and      NextLeather®               because       “it     is    indisputable
    . . . that the market understood [the Ashley Ad as targeting
    bonded      leather].”         Appellant’s                Br.     at    31.      DRI       urges    that
    consumers      would     have       understood              this       implication         given     the
    broader      market    context         of       the        Ashley       Ad,     pointing      to     the
    following     evidence         in    support:               (1)       another    Furniture         Today
    article,     published         on    March       30,        2007--between         the       first    and
    second publications of the Ashley Ad--noting that “Ashley is
    urging buyers to ‘be aware’ of bonded leather,” Appellant’s Br.
    at    31;   J.A.   1678;       (2)     a    survey          by        Ashley’s    expert      witness
    showing that viewers of the ad understood it to refer to bonded
    leather,     Appellant’s         Br.       at    32;        (3)       email   exchanges       between
    Ashley and Dr. Cory suggesting that Ashley sought to disparage
    bonded leather, 
    id. at 32;
    J.A. 321, 332; and (4) testimony by
    DRI’s owner and president and by a furniture manufacturer to the
    effect that “DRI was the only company offering a product like
    17
    NextLeather® and marketing it as ‘bonded leather,’” Appellant’s
    Br. at 32; see also J.A. 1289-90; 1496-1500.
    In   making   this   argument,    DRI    asks   us   to   reach   entirely
    outside the face of the ad and into the context surrounding the
    ad’s   publication     to    uncover    a     false    message   it   argues   is
    necessarily implied.        Far from making the argument that the ad’s
    statements logically require the conclusion that the ad concerns
    bonded leather, DRI, or NextLeather®, DRI instead relies on the
    consumer to scrape together that conclusion from reading other
    articles from the publication and having knowledge that only DRI
    was marketing a product like the one described in the ad.                   This
    expectation is made all the more unreasonable given the fact
    that the Ashley Ad mentions neither DRI nor its NextLeather®
    product, and instead, directly refers to a category that would
    exclude bonded leather and NextLeather®--products marketed with
    the unqualified term “leather.”              Thus, DRI stretches the concept
    of literal falsity beyond its bounds in urging us to conclude
    that the ad means the opposite of what it says.                    In so doing,
    DRI fails to establish that the Ashley Ad is literally false.
    Turning to implied falsity, DRI argues that, even if the
    Ashley Ad is not false on its face or by necessary implication,
    it is otherwise false by implication because it misled consumers
    about its NextLeather® product.               For support, DRI again points
    to the survey conducted by Ashley’s expert witness, maintaining
    18
    that   it     shows    that   consumers     understood       the    ad    to   be    about
    bonded       leather,      which,    “at    the      time    was    synonymous        with
    NextLeather®.”         Appellant’s Br. at 40.
    But     to     “provide      the    required       evidence       of    [implied]
    falsity”--that the contested statement confused consumers--the
    proffered evidence must “account for the . . . allegations in
    the case,” PBM 
    Products, 639 F.3d at 122
    --here, that the Ashley
    Ad confused consumers about NextLeather®.                         DRI fails to make
    this required showing.              The survey made no mention of DRI or
    NextLeather®.         Rather, it asked consumers who had attended the
    Spring High Point Market between 2004 and 2013 what message they
    thought the ad conveyed and to which specific suppliers they
    thought the ad referred.              The survey results showed that “zero
    respondents gave an answer that could be interpreted as a belief
    that DRI or NextLeather were specifically mentioned as[,] . . .
    [or]     implied      or    suggested      to     be[,]     the    supplier     of     the
    upholstery material described” in the ad.                          J.A. 424.         Thus,
    because       DRI’s     claim    depends        on   consumer       confusion        about
    NextLeather®, and the survey on which DRI relies demonstrates no
    confusion about DRI or its product, DRI fails to substantiate a
    theory of implied falsity in the Ashley Ad.
    2.
    We also agree with the district court that DRI failed to
    provide sufficient support for a false advertising claim with
    19
    respect    to   Dr.      Cory’s   statement       in    the   Gunin     Article.          DRI
    argues that Dr. Cory’s statement--that “[t]o call [alternative
    leather products such as bonded leather] ‘leather’ is outright
    deception,      outright     fraud,”       J.A.    86--is        literally     false       by
    necessary implication.            DRI contends that the statement must be
    understood as “referring specifically to NextLeather®” because,
    in the same article, Dr. Cory described the characteristics of
    bonded leather, and that description “applies to NextLeather®.”
    Appellant’s Br. at 45.               Thus, DRI maintains, “any reasonable
    juror would conclude that [Dr.] Cory was calling DRI’s use of
    the     term    ‘bonded       leather’--not            ‘leather’--‘deceptive              and
    fraudulent.’”        
    Id. However, the
    statement that calling bonded leather products
    “leather”      is   deceptive     unambiguously          communicates       the    message
    that using the unqualified term “leather” for products that are
    not   leather       is   misleading.         Nothing       on     the   face      of     this
    statement suggests that the use of the term “bonded leather”--by
    DRI or anyone else--is misleading.                      And DRI acknowledges that
    its     NextLeather®       product    is    not        leather    as    that      term     is
    understood in the furniture upholstery industry, but is instead
    a     “synthetic         leather-look       furniture            covering      product.”
    Appellant’s Br. at 8.             Therefore, we agree with the district
    court    that   Dr.      Cory’s   statement       cannot      qualify    as    false       or
    misleading because it is true, and accordingly conclude that DRI
    20
    has failed to support its false advertising claim with respect
    to the Gunin Article.
    3.
    Finally, we agree with the district court that DRI failed
    to provide sufficient evidence to demonstrate that Dr. Cory’s
    statement    in   the    Andrews    Article    was   a    false    or   misleading
    representation     of    fact.      As    discussed       above,   this    article
    advocated against use of the term “bonded leather” as “bound to
    confuse consumers,” and it quoted Dr. Cory as saying that the
    term   “is   deceptive    because    it   does    not    represent      [the]   true
    nature” of the products it is used to describe.                          J.A. 108.
    Instead, such products are more accurately described as “vinyl,”
    “polyurethane laminate,” or “composite,” rather than with a term
    that includes the word “leather.”             J.A. 108.
    The district court concluded that this statement expressed
    an opinion “on how a customer would perceive the term bonded
    leather.”     J.A. 1777.         DRI argues that, even if Dr. Cory’s
    statement conveys an opinion, it is still actionable under the
    reasoning of Milkovich v. Lorain Journal Co., 
    497 U.S. 1
    (1990).
    In that case, the Supreme Court held that opinion statements are
    not automatically protected against defamation claims because,
    for example, the statement, “‘In my opinion Jones is a liar,’ .
    . . implies a knowledge of facts which lead to the conclusion
    that Jones told an untruth.”              
    Id. at 18.
           The Court reasoned
    21
    that “[i]t would be destructive of the law of libel if a writer
    could escape liability for accusations of [defamatory conduct]
    simply      by     using,       explicitly     or    implicitly,       the     words     ‘I
    think.’”         
    Id. at 19
    (quoting Cianci v. N.Y. Times Pub. Co., 
    639 F.2d 54
    , 64 (2d Cir. 1980)).
    If we were to extrapolate the Milkovich rule to the Lanham
    Act context, we could draw from it that statements of opinion
    may not automatically be protected from false advertising claims
    if   they        “imply     a    knowledge     of    facts     which    lead     to     the
    conclusion” that the statement were true.                      
    Id. at 18.
           By this
    reasoning, DRI’s argument is unpersuasive, however, because Dr.
    Cory’s statement does not imply a basis in facts leading to the
    conclusion that consumers are or have been deceived by the term
    “bonded leather.”               It communicates only the hypothesis--yet to
    be proved or disproved--that “bonded leather” has the potential
    to confuse consumers.
    More         pertinent       to    our    analysis        than    the     Milkovich
    defamation        rule    are      decisions       rendered    in     the    Lanham    Act
    context, which, as discussed above, have held that statements
    “of general opinion [are] not actionable under [§ 1125].”                             Pizza
    
    Hut, 227 F.3d at 496
    .                  Rather, an actionable statement must
    “admit of being adjudged true or false in a way that . . .
    admits of empirical verification.”                  
    Id. An example
    of a type of
    statement        not     “admit[ting]     of       empirical    verification”          that
    22
    courts have recognized is “[a] prediction, or statement about
    the future, [which] is essentially an expression of opinion”
    that is not actionable.       
    Presidio, 784 F.2d at 680
    ; see also 
    id. at 678-79.
    In the context of an article suggesting that a marketing
    term is “bound to confuse” consumers, stating that the term is
    “deceptive”    is    merely   putting       that   point    a    different        way.
    Unlike   stating     that   the   term      “has   been    shown     to    deceive”
    consumers,          which     might           “admit[]          of         empirical
    verification,” Pizza Hut, 
    227 F.3d 496
    , merely calling a term
    “deceptive” suggests only that it is the speaker’s view that the
    term has the potential to deceive.             In other words, a prediction
    about a term’s power to deceive expresses only an opinion about
    the   term’s     likely     effect     on     consumers;        it    is     not     a
    representation      of   fact--false     or   otherwise--and         is    thus    not
    actionable under the Lanham Act.                See 
    Presidio, 784 F.2d at 680
    ; Pizza Hut, 
    227 F.3d 496
    .          Therefore, DRI has also failed to
    substantiate its claim as to Dr. Cory’s statement in the Andrews
    Article.
    IV.
    For the foregoing reasons, the judgment of the district
    court is
    AFFIRMED.
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