If you’re a child, you can lie to your parents. If you’re married, you can lie to your spouse. It’s pretty much expected and seldom results in much more than the occasional spanking or night spent sleeping on the sofa. Lying in industry surveys and using the survey results in your advertising, however, can have serious repercussions – like being sued. (Unique Sports Products Inc. v. Ferrari Importing Co.)
Unique and Ferrari both produce string used to string tennis rackets. Like most industries, the tennis racket folks have a trade association which, in this instance, is the U.S. Racket Stringers Association (we are not making this up). Each year the Association, which has approximately 7,000 members, randomly selects 1,000-2,000 to participate in a survey that, among other things, ranks the various tennis racket strings. The survey results are published in racket string magazines (we are not making this up either).
Unique alleges that Ferrari manipulated the Association’s surveys by paying several of its employees and their family members to join the Association, falsely claiming to be tennis racket stringers, and to give the company’s string the highest ratings and competitors’ string low ratings. In some instances, the paid prevaricators were allegedly instructed to pass their survey forms to company executives who completed and submitted them. Given the relatively small sample size, this had the effect of skewing the survey results and, again allegedly, causing Ferrari’s string to be falsely ranked No. 1. Two of the company’s former executives have provided sworn declarations to this effect.
Unique sued, claiming unfair competition and violation of the Georgia State Uniform Deceptive Trade Practices Act. The two declarations are attached as exhibits to Unique’s Complaint. To top it off, the Department of Homeland Security is investigating the use of false identities by Ferrari (we are making this up).
We await the court’s decision to wrap up any loose ends (pun intended).
THE LESSONS TO BE LEARNED: (1) as we have repeatedly advised, never count on keeping anything secret; and (2) be nice to any employee with knowledge of company wrongdoing – or they may rat you out.