On March 11, a Manatt cross-disciplinary team comprised of members of its Litigation and Advertising practices, again defeated efforts by H&R Block, represented by O’Melveny & Myers, to have the centerpiece of TurboTax’s 2013 advertising campaign enjoined. As described by Forbes.com:
“For the second time in less than two months, the District Court of the Western District of Missouri dealt H&R Block a legal depantsing, refusing to grant injunctive relief preventing Intuit, the maker of TurboTax software, from airing commercials that poke fun at the experience level of H&R Block’s tax preparers.”
In denying H&R Block’s efforts to obtain relief, the Court carefully reviewed the TurboTax television commercials, one featuring a plumber and the second featuring a retail store clerk, which were designed to highlight the fact that H&R Block actually advertises for and hires tax preparers with no tax experience necessary. After a lengthy hearing in which live testimony from the key witnesses was heard, the court found the express claims in the ads, for which Intuit (the maker of TurboTax) sought Manatt’s strategic advertising guidance, were literally true. These included the fact that major tax stores like H&R Block advertise for tax preparers with no experience necessary, that TurboTax hires only “real” tax experts (IRS enrolled agents, CPAs, and tax attorneys) to answer consumers’ tax questions, and that more Americans used TurboTax to file federal returns than all the major tax “stores” combined.
H&R Block also asserted that the ads conveyed “impliedly” false messages about the relative expertise of its tax preparers – that H&R Block hires preparers who are incompetent or unskilled. As is often the case with Lanham Act matters involving false advertising, this case turned on consumer perception survey evidence that H&R Block introduced allegedly showing that the ads were misleading in this way. Following cross-examination of H&R Block’s survey expert and the testimony of a rebuttal witness who critiqued H&R Block’s survey, the court found in its Opinion on literally every point argued by the Manatt team: that the consumer survey was unreliable and that there was no evidence that the ads were misleading in any respect. The court’s opinion provides a detailed analysis of the consumer perception survey and will undoubtedly be cited in the future as significant precedent in Lanham Act cases.