Select Comfort Corp. v. Tempur Sealy International, Inc.

Citations: 988 F. Supp. 2d 1047; 2013 WL 6767821; 2013 U.S. Dist. LEXIS 179629Docket: Civil No. 13-2451 (DWF/SER)

Court: District Court, D. Minnesota; December 22, 2013; Federal District Court

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A Motion for a Temporary Restraining Order has been filed by Select Comfort Corporation against Mattress Firm Holding Corp. The motion is currently directed only at Mattress Firm, excluding Tempur Sealy International. The Court has granted the motion in part and denied it in part. 

Select Comfort, which designs and sells mattresses and bedding products under the trademarked Sleep Number® brand, claims to have developed a strong reputation and goodwill through extensive advertising. Mattress Firm, a major mattress retailer in the U.S., previously sold Select Comfort products until October 2009 when their Retail Partner Agreement ended. Select Comfort alleges that Mattress Firm is now engaging in false advertising and deceptive practices harmful to its business, including misleading statements by Mattress Firm’s salespeople regarding the quality and warranty of Sleep Number beds. Specific allegations include claims that Sleep Number beds are of poor quality, linked to warranty issues, and made from inferior materials, alongside incorrect statements about warranty duration. Select Comfort contends these actions are damaging its sales and reputation, justifying the request for a temporary restraining order.

Select Comfort claims that Mattress Firm made false statements regarding Select Comfort and Sleep Number beds, disseminated through advertising flyers and improper use of Select Comfort trademarks in paid Google advertisements and third-party shopping sites. Select Comfort supports its allegations with online advertisement images. Mattress Firm contests these claims, arguing any issues have been resolved or are being addressed, and asserts that Select Comfort should pursue a standard lawsuit rather than seek a temporary restraining order (TRO).

The Court evaluates requests for a TRO based on four factors: 1) likelihood of the moving party’s success on the merits; 2) threat of irreparable harm to the moving party; 3) balance of harm between the parties; and 4) public interest. Granting a preliminary injunction is considered extraordinary, and the burden of proof lies with the party seeking relief.

To demonstrate a likelihood of success in a false advertising claim, a plaintiff must prove five elements: 1) a false statement of fact in a commercial advertisement; 2) the statement deceived or had the tendency to deceive a substantial audience; 3) the deception is material and likely influences purchasing decisions; 4) the defendant caused the false statement to enter interstate commerce; and 5) the plaintiff suffered or is likely to suffer injury due to the false statement. False statements fall into two categories: those that are literally false and those that, while perhaps true or ambiguous, mislead consumers in context.

The key issue in the motion is whether Select Comfort can demonstrate that its alleged representations amount to "commercial advertising or promotion." Since the statute does not define this term, courts apply a four-part test: 1) the speech must be commercial; 2) the speaker must be a competitor; 3) the intent must be to influence consumer purchases; and 4) the dissemination must reach a significant segment of the relevant market. Mattress Firm argues that the statements cited by Select Comfort do not target a substantial portion of mattress buyers and lack an organized marketing campaign. However, the court finds Select Comfort has provided sufficient evidence of widespread representations across multiple states, indicating a likelihood of success on its false advertising claim.

Regarding trademark infringement, the plaintiff must prove valid trademarks and that unauthorized use creates a likelihood of confusion. Six factors are considered to assess this likelihood: strength of the mark, similarity to the infringing mark, competition between products, intent to confuse, customer care level, and evidence of actual confusion. The parties agree on the validity of Select Comfort's trademarks but dispute whether Mattress Firm's actions create confusion. Select Comfort claims Mattress Firm uses its trademarks in online searches, suggesting that Mattress Firm misleads consumers into thinking they can purchase Select Comfort products. However, it is undisputed that there are no direct advertisements for Select Comfort on Mattress Firm's website, and searches for Select Comfort do not yield overlapping results. The potential confusion arises when consumers search for both "Select Comfort" and "Mattress Firm," where results link to Mattress Firm's site but clarify that it does not sell Select Comfort products.

Select Comfort contends that consumers may choose to purchase beds from Mattress Firm instead of Select Comfort beds, but this alone does not demonstrate a likelihood of confusion or irreparable harm sufficient to justify a temporary restraining order. The court references a previous case where the defendant sold both products and misrepresented them, noting Select Comfort has not established a likelihood of success on its trademark infringement claim. While Select Comfort claims Mattress Firm pays third-party websites that link to its products, the court finds insufficient evidence at this stage to assess the likelihood of success regarding trademark issues. However, Select Comfort has shown a likelihood of success for its false advertising claim. 

For irreparable harm, the court states that the movant must prove harm that is certain and imminent, which is not compensable by monetary damages. The court acknowledges that a loss of goodwill can constitute irreparable harm and agrees that misleading comparisons can reduce a product’s perceived value. In this context, Select Comfort has demonstrated that incorrect comparisons and negative representations by Mattress Firm could lead to irreparable harm.

Conversely, Select Comfort fails to show irreparable harm regarding its trademark infringement claims, as the likelihood of consumers being misled to Mattress Firm’s website is minimal, and consumers will recognize they cannot buy Select Comfort products there. 

Regarding the balance of harms and public interest, the court concludes that a narrow restraining order against Mattress Firm for false advertising will not cause undue hardship. Implementing such an order is feasible for Mattress Firm, and if they are indeed not engaging in false advertising as they assert, the order would not harm them.

Enjoining false advertising and comparisons serves the public interest, yet requiring Mattress Firm to control all websites related to potential trademark issues is premature. Mattress Firm is actively working to eliminate residual coding leading to misleading Google search results involving "Select Comfort. Mattress Firm," and there are no instances of Select Comfort branding on its website. The Court finds that the balance of factors supports Select Comfort’s claims of false advertising but not its trademark infringement claims. 

Consequently, the Court partially grants Select Comfort’s Motion for a Temporary Restraining Order: 

1. Mattress Firm is enjoined from making specific false representations about Select Comfort and its products, including misleading claims about product offerings, warranty duration, and material quality.
2. Mattress Firm must inform its sales staff to cease these representations and clarify the status of its relationship with Select Comfort and the qualities of Sleep Number products.
3. Mattress Firm is ordered to stop using any materials containing the prohibited representations.
4. The motion for a preliminary injunction regarding trademark infringement is denied, including claims related to internet search advertisements.
5. Select Comfort is required to post a bond of $25,000 within seven days as per Federal Rules of Civil Procedure Rule 65. 

The Court will reconvene on January 10, 2014, to address these matters further.

Select Comfort's First Amended Complaint includes twelve claims: 1) unfair competition under 15 U.S.C. 1125(a); 2) false advertising under 15 U.S.C. 1125(a); 3) deceptive trade practices per the Minnesota Uniform Deceptive Trade Practices Act; 4) unlawful trade practices under the Minnesota Unlawful Trade Practices Act; 5) false statements in advertising under the Minnesota False Statement in Advertising Act; 6) consumer fraud under the Minnesota Consumer Fraud Act; 7) unjust enrichment; 8) unfair competition through product disparagement; 9) deceptive trade practices via product disparagement under the Minnesota Uniform Deceptive Trade Practices Act; 10) business defamation; 11) tortious interference with prospective economic advantage; and 12) trademark infringement under 15 U.S.C. 1114(1), the Lanham Act. However, the Court focuses solely on the claims for false advertising and trademark infringement due to the parties' briefing. The Court finds the cases cited by Mattress Firm to be factually and legally distinguishable from the present case, specifically noting that statements in Fashion Boutique of Short Hills, Inc. v. Fendi USA, Inc. were limited to one store and primarily hearsay and non-disparaging.