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GOLO, LLC v. Highya, LLC

United States District Court, E.D. Pennsylvania

May 4, 2018

GOLO, LLC, Plaintiff,
v.
HIGHYA, LLC; and BRIGHTREVIEWS, LLC, Defendants.

          MEMORANDUM

          Gerald Austin McHugh United States District Judge.

         This case demonstrates one of the challenges presented by new forms of online commerce-specifically, how to apply the Lanham Act to companies that generate income through websites that review the products of others, without selling any products of their own. Plaintiff GOLO, Inc. owns and operates a weight loss dieting program that can be purchased through its website. Defendants HighYa, LLC, and BrightReviews, LLC, are review websites that purportedly assist consumers in making a choice by evaluating the claims that companies like GOLO make about their products. Although Defendant HighYa has a marketing affiliation with a limited number of suppliers, both Defendants' principal source of revenue comes from ads posted by others on their website. Plaintiff contested the fairness and accuracy of Defendants' online reviews of its product, and Defendants then removed the review from one site and revised it on the other. Plaintiff nonetheless brings this action seeking recovery for injuries it allegedly sustained during the period the reviews were posted and unrevised. Plaintiff is proceeding under the Lanham Act and state law, arguing unfair competition and trade libel. Defendants now move to dismiss. Because I conclude that Defendants were not engaged in commercial speech in publishing the reviews, Plaintiff has failed to state a claim for unfair competition as a matter of law. Plaintiff's trade libel claim also fails because it lacks at least one essential element. Accordingly, this matter will be dismissed, without prejudice.

         I. Relevant Facts

         Defendants, HighYa, LLC, and BrightReviews, LLC, are two Washington state-based companies that operate consumer review websites with the purported aim of “trying to help you cut through all the marketing hype by gathering information from a wide variety of sources, bringing it together . . . and answering the ever-present question: Is this a scam, or is it legit?” Am. Compl. ¶ 29, ECF No. 14. Each offers two kinds of reviews of consumer products and services: editorial reviews, which are authored by Defendants, and reviews submitted by third-party commenters who have purportedly used the products and services at issue, and posted reviews underneath the editorial reviews. Defendants' websites allow third parties to comment on all reviews, and to provide a rating of the product from which Defendants present an “Average Customer Rating” ranging from 1 to 5 stars.

         Neither Defendant sells any products or services via their website, and both assert that they are independent and unbiased, with BrightReviews expressing that it is “unaffiliated with any company or brand” and Highya-at the time the reviews at issue were published-expressing a similar position while disclosing an advertising affiliation with BowFlex Max Trainer for transparency.[1] Instead, Defendants disclose that they derive most (for HighYa) or all (for BrightReviews) of their revenue from web traffic, specifically advertisement units provided by Google AdSense and Media.net. Id. ¶ 45.[2]

         Defendants further disclose on their websites that their authored reviews principally rely on “publicly available information, ” and not necessarily Defendants' own use or testing. For third-party reviews, Defendants provide guidelines and benchmarks for what constitutes a good review, which include encouraging “truthful accounts based on factual information” while “[p]roviding a personal experience /[t]elling your story, ” and prohibiting “exaggeration, or ‘stretching the truth, ' and self-promotion”-that is, companies seeking to artificially boost their rating on the website(s) by posing as consumers. Id. ¶¶ 33-34. Defendants retain the right to remove a review if they conclude that posters have not complied with these guidelines. Id. ¶¶ 35- 40. Additionally, companies may sign up for a business profile, through which they are alerted to posts about their product(s) and can reply to negative reviews as the official verified company. Id. ¶ 40.

         That was the course initially taken here, as Plaintiff, GOLO, LLC, participated in Defendants' business profile program and took issue with two editorial reviews about its weight loss and wellness program, which it considered negative. The GOLO program includes a meal plan and a “Release Supplement, ” in addition to a booklet and “other behavioral tools.” Id. ¶ 3. Plaintiff sells the program through its website and customer service department exclusively, using a combination of television, radio, print and digital marketing. Consequently, a subset of Plaintiff's customers arrive at its website and purchase its product after performing internet searches and reading reviews of Plaintiff's product online. Relevant to the analysis here, Plaintiff's website contained a description of its program, backed by references to research purportedly supporting the merits of the program. Defendants published editorial reviews primarily, if not exclusively, critiquing the statements in that description, as it appeared on Plaintiffs website. See Pl.'s Exs. A, C, ECF No. 14 (at ECF page numbers 26-47, and 52-60).

         According to the Amended Complaint, Defendant HighYa published its editorial review article in March 2016, which spurred dozens of comments from purported users of the GOLO program. The average customer rating was 2.8 out of 5 stars. The link to that article was posted across different social media platforms, one of which contained the statement: “Weight-loss #scams are everywhere. Is GOLO one of them?”[3] In July 2016, representatives from GOLO began corresponding with those from HighYa requesting that the alleged “incorrect, false, and misleading information” in the review be remedied. See Pl.'s Ex. B, ECF No. 14 (at ECF page numbers 48-51). Plaintiff takes issue with three such pieces of information: arguing that (i) the title, “GOLO Weight Loss Diet Reviews - Is it a Scam or Legit?” was misleading, and should instead have been “GOLO Weight Loss Diet Reviews - Does it really work?”; (ii) much of the information in the review was incorrect because it was based on an outdated version of the GOLO program site; and (iii) the focus of the GOLO program was not simply combatting “insulin resistance, ” as the review states. Id. ¶¶ 72, 75, 77. The alleged false, misleading, and offending portions of the review were eventually removed from HighYa's website and social media platforms. But Plaintiff complains of injuries arising from the one-year period that the unrevised version remained on HighYa's website.

         The BrightReview article was not published until January 2017. That article appeared in a form similar to the HighYa review, with an editorial review at the top of the page, and user comments at the bottom. The average customer rating presented there was 2 out of 5 stars, with three purported users giving what Plaintiff considers “highly negative ‘reviews, '” one of which claimed that using GOLO resulted in 30 pounds of weight gain and a 25 point increase in his blood sugar level. Id. ¶ 86. Plaintiff alleges that the editorial review authored by Defendant BrightReviews (as distinguished from third-party product users) was also “replete with inaccuracies, misleading statements, and blatant falsehoods.” Id. ¶ 87. As an example, Plaintiff alleges that the following are false statements:

• “The 2010 study [was] performed with diabetics, not otherwise healthy individuals looking [sic] optimize insulin . . . [T]his seems to be their target market;
• None of [GOLO's] studies appear to be peer reviewed for accuracy . . .; and
• [W]e didn't encounter any clinical evidence on leading medical websites . . . that directly linked insulin management . . . and weight loss.”

Id. ¶ 88 (citations omitted). Plaintiff contends that those were false statements because “in truth, the 2010 study was performed on non-diabetics also; diabetics are not Plaintiff s target market; many studies of the ingredients in [their supplement] have been peer reviewed; and there is significant clinical evidence linking insulin management and weight loss.” Id. ¶ 89. Plaintiff acknowledges that Defendant BrightReviews ultimately took down this review on or about June 7, 2017, but contends that, in the interim, both Defendants' websites reaped the benefits of the alleged “sham review” business model. Specifically, Plaintiff contends that Defendants' websites represent a new brand of websites that are “designed to appear trustworthy, [and to] resemble internet versions of more traditional consumer review publications.” Am. Compl. ¶ 58. But in reality, they are websites owned by or secretly related to the competitors of the products Defendants review. Id. ¶¶ 59-60.

         Plaintiff asserts a claim for false advertising under the Lanham Act, what appears to be a trademark infringement claim under the Lanham Act, and state law claims for trade libel and unfair competition. Defendants move to dismiss all claims, arguing that Plaintiffs have failed to raise a cognizable claim under relevant federal and state unfair competition laws.

         II. ...


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