New York, NY – March 24, 2014 – A five-member panel of the National Advertising Review Board (NARB) has recommended that Honeywell International, Inc., discontinue two claims for the company’s programmable thermostats – “Universally Compatible” and “Universal Compatibility – works with virtually any system type.”
NARB is the appellate unit of the advertising industry’s system of self-regulation.
Nest Labs, Inc., a maker of competing programmable thermostats, challenged the claims before the National Advertising Division (NAD). NAD is an investigative unit of the advertising industry’s system of self-regulation, and is administered by the Council of Better Business Bureaus.
The challenged claims were made primarily on product information sheets, retailer shelf labels, and retailer websites.
NAD found that the one of the messages reasonably conveyed by the challenged universal compatibility claims is that the Honeywell products are compatible with all or virtually all heating and cooling systems. NAD found that Honeywell had not provided a reasonable basis to support the message and recommended that the claims be discontinued. Honeywell appealed NAD’s recommendation.
Before NARB, Honeywell argued that the NAD and NARB panels should require proof of consumer confusion when an advertiser uses a word consistent with both the best-fitting dictionary definition and industry-standard usage.
The NARB panel noted in its decision, however, that “the record in this case does not establish industry-standard usage for the term ‘Universal’ and the panel does not believe that the definitions cited by Honeywell are necessarily the ‘best-fitting’ ones when ‘Universal’ is used to modify ‘Compatible’ or ‘Compatibility.’
Long-standing NAD/NARB precedent establishes the right of the NAD and NARB panels to determine, in the absence of consumer perception evidence, what messages are reasonably conveyed by advertising. There is an exception when a product’s name is challenged, but the challenged claims in this case did not involve a product name and the exception was not applicable, the panel noted.
Honeywell, in its advertiser’s statement, said the company “respectfully disagrees with the panel’s decision. Because Honeywell’s use of ‘universal’ is consistent with a standard dictionary definition and with use by others in the industry, Honeywell continues to believe that purchasers of thermostats understood ‘universal’ as Honeywell intended it. Nevertheless, Honeywell respects the self-regulatory process and will implement the panel’s recommendation.”