In a recent NAD case Honeywell International, Inc. challenged claims made by Nest Labs, Inc. for its Nest Programmable Thermostats in print and internet advertising. Honeywell challenged several performance-related “up to” claims (claims that convey performance-capacity/energy-savings “up to” a certain percentage point). Rather than run through each claim in the 30+ page decision and the arguments on each side in their entirety, it is perhaps most ‘energy efficient,’ if you will, to evaluate NAD’s decisions related to the max performance claims.
Regarding several of Nest’s performance-related “up to” claims, the NAD took a tougher position more in line with a recent FTC case involving energy savings claims for replacement windows. In the last few months, NAD decided cases sticking to older substantiation requirements that a substantial number of consumers must be able to experience the maximum promised results. Here, NAD held that “up to” claims like those made by Nest require substantiation that a majority of consumers using the product under ordinary operating conditions will achieve the maximum touted results, and concluded Nest’s data did not meet this standard for its “cuts AC runtime up to 30%” claim. It may well be that NAD is sticking with the older more liberal standard for up to performance claims for ordinary consumer goods that do not require a significant investment and where the claims do not relate to savings from environmental benefits. Windows are expensive and the promised savings were based on energy efficiency. In this NAD case presumably a home thermostat is a pricey item and also promised dollar savings based on greater energy efficiency. At least in these such cases, the FTC and the NAD seem aligned on the tougher substantiation standard. It is too soon to tell if NAD has generally turned chilly toward its longstanding standard more generally but stay tuned here to see which way the air is blowing.