## Facts

- Time Warner Cable, Inc. (TWC) and DIRECTV, Inc. competed to provide high-definition (HD) television service in overlapping markets.
- DIRECTV launched a comparative HD advertising campaign (“SOURCE MATTERS”) using television commercials and Internet ads implying DIRECTV provided superior picture quality compared to “cable” or “OTHER TV.”
- The television commercials included statements suggesting consumers could not get the “best picture” without DIRECTV and that “settling for cable” was inferior.
- The Internet ads displayed a side-by-side comparison where “OTHER TV” appeared extremely blurry and pixelated while DIRECTV appeared exceptionally clear.
- TWC alleged the campaign conveyed that cable HD was inherently worse than DIRECTV HD, despite evidence that both could deliver comparable HD quality when the source signal was HD.
- TWC sued under Lanham Act § 43(a) for false advertising and sought a preliminary injunction in markets where TWC provided cable service.
- The district court granted a preliminary injunction, finding the ads likely literally false.
- DIRECTV appealed.

## Issues

1. Whether an advertisement can be “literally false” under the Lanham Act when it necessarily and unambiguously conveys a false message by implication, despite lacking an express false statement.
2. Whether grossly exaggerated visual depictions in comparative Internet ads are actionable literal falsity or non-actionable puffery.
3. Whether irreparable harm may be presumed at the preliminary-injunction stage where a plaintiff shows likely literal falsity in a comparative advertisement that obviously targets the plaintiff, even if unnamed.

## Decision

- The Second Circuit affirmed in part, vacated in part, and remanded.
- The court held that literal falsity may be established by necessary implication where the only reasonable interpretation of the ad’s words or images conveys a false message.
- The court upheld the injunction as to certain television commercials because, in context, they could be found to necessarily imply DIRECTV’s HD picture quality was superior to cable’s, contrary to the evidentiary record.
- The court vacated the injunction as to the Internet ads because the “OTHER TV” blurriness was so unrealistic and exaggerated that it constituted non-actionable puffery.
- The court approved a presumption of irreparable harm where a comparative ad is likely literally false and it is obvious to the audience that the ad targets the plaintiff in that market.

## Legal Principles

- Under Lanham Act § 43(a), an advertisement can be literally false without an express false statement if, in context, it necessarily and unambiguously implies a false message.
- When literal falsity is shown by necessary implication (i.e., the false message is the only reasonable interpretation), consumer survey evidence is not required to prove deception.
- Puffery includes visual depictions so grossly exaggerated that no reasonable consumer would treat them as objective factual claims; such puffery is not actionable under the Lanham Act.
- In comparative false advertising, a court may presume irreparable harm for preliminary injunctive relief when the plaintiff shows likely literal falsity and the advertisement is an obvious attack on the plaintiff’s product in the relevant market, even if the plaintiff is not named.

## Conclusion

The Second Circuit clarified that Lanham Act “literal falsity” can be proven by necessary implication, distinguished exaggerated comparative visuals as non-actionable puffery, and permitted a presumption of irreparable harm where a literally false comparative ad plainly targets a competitor, affirming an injunction for certain TV commercials but vacating it for the Internet ads.


Time Warner Cable, Inc. v. DIRECTV, Inc., 497 F.3d 144 (2d Cir. 2007)