The International Code Council creates and publishes model building codes, which are often incorporated into federal, state, and local law. ICC also revises the codes regularly and publishes updates, and it sells the codes through its online store. UpCodes, which is a competitor to ICC, operates a website that also sells the ICC codes (apparently without authorization from ICC).
ICC sued Upcodes, alleging various claims, including copyright infringement and false advertising. In a decision last spring (which was just brought to my attention by Rebecca Tushnet's terrific blog), the United States District Court for the Southern District of New York, considered UpCodes' motion to dismiss the false advertising claims.
ICC alleged that UpCodes falsely advertised that the codes provided by UpCodes were "always up to date" and that users would "never work from outdated code" and would be able to "understand all the requirements for your jurisdiction in one place." ICC also alleged that UpCodes falsely claimed that the codes they provide are "kept up-to-date with all the amendments integrated natively into the code." ICC said that these claims are false because of numerous errors in the codes that UpCodes provides.
ICC brought its claims for false advertising under both the Lanham Act and New York law. Under the Lanham Act, a marketer is liable for false advertising when it makes a "false or misleading description of fact, or false or misleading representation of fact, which . . . misrepresents the nature, characteristics, qualities" of the marketer's or another's products or services. In addition to proving that a false statement was made, the plaintiff must also show that the false representation was "likely to influence purchasing decisions." New York law similarly requires that the false statement be material to a purchasing decision.
As an initial matter, the court didn't buy ICC's argument that UpCodes made false claims that its codes are "kept up-to-date with all the amendments integrated natively into the code" simply because its codes may have errors. Noting that the UpCodes website does, in fact, include some integrated amendments, the court held that, "The claim that UpCodes offers integrated amendments is not rendered false by the fact that 'some but not all' amendments are posted, or that in some instances, the amendments contain errors."
But what about ICC's claim that UpCodes advertised that the codes it supplies are complete and accurate? Here, the court held that those statements are non-actionable puffery. The court explained that the Second Circuit has defined puffery as:
- "Subjective claims about products, which cannot be proven either true or false";
- "An exaggeration or overstatement expressed in broad, vague, and commendatory language . . . considered to be offered and understood as an expression of the seller's opinion only; or
- "An exaggerated, blustering, and boasting statement upon which no reasonable buyer would be justified in relying."
The court emphasized that, even if a statement is provable, it can still be puffery if it is only understood as an expression of the seller's opinion or if it is a statement upon which reasonable consumers would not rely.
The court held that UpCodes' statements that it provides "a complete understanding of the relevant material," its code library is "always up to date," and customers will "never work from outdated code" are all puffery because "they are exactly the type of 'exaggerated' and 'boasting' statements 'upon which no reasonable buyer would be justified in relying.'" While the court acknowledged the importance of maintaining accurate codes and the negative consequences that can result from working from outdated codes, the court said that, no reasonable buyer "would take UpCodes's representations of accuracy and completeness to mean that the codes are instantaneously updated and at all times error-free." Because consumers understand that codes are ever-changing, the court concluded that, "there is no danger of consumer deception, and hence, no basis for a false advertising claim."
Ordinarily, when a claim is provable or disprovable, the advertiser is responsible for ensuring that the claim is truthful, and for having substantiation to back it up. It's almost never going to be the case that an objective claim, that relates to a material aspect of a product, is going to be puffery.
Here, however, the court determined that even if the advertiser's claims about completeness and accuracy were false, they are still puffery, because reasonable consumers would necessarily understand -- because of the ever-evolving nature of the codes -- that the claims couldn't be true. While this may be an easier argument in the context of printed material that necessarily goes out-of-date after it is published, another court could certainly have determined that consumers would reasonably believe, in the face of specific statements about completeness and accuracy, that an online resource could, in fact, be kept up-to-date. At the end of the day, however, the key question is going to be how reasonable consumers interpret the statement, in light of the context in which the statement is made.
International Code Council v. UpCodes, 2021 WL 1236106 (S.D.N.Y. 2021).
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