Creative Labs, Inc. v. Cyrix Corp.

Creative Labs, Inc. and Creative Technology Ltd. (collectively, Creative) (plaintiff) manufactured sound cards—devices that interacted with computer hardware and software to create sound effects. Sold under the mark Sound Blaster, Creative’s sound cards dominated the market. Under the mark Media GX, Cyrix Corporation (defendant) produced and sold a microprocessor that included an audio component known as XpressAUDIO. Cyrix advertised that XpressAUDIO was compatible or fully compatible with Sound Blaster. Tiger Direct, Inc. (defendant), a computer manufacturer that planned to introduce computers using the Media GX processor, advertised that its computers featured “integrated SoundBlaster 16/Pro compatible audio.” Compaq Presario 2100 computers used the Media GX processor, but Compaq did not advertise that its computers were Sound Blaster compatible. Creative tested 200 computer games on a Presario 2100 computer to assess the credibility of Cyrix’s compatibility claims concerning XpressAUDIO. Creative determined that 16 (8 percent) of the tested games did not run properly on the computer and that the computer did not support two functions supported by Sound Blaster, namely Adaptive Delta Pulse Code Modulation (ADPCM) and Musical Instrument Digital Interface (MIDI). That testing did not, however, establish that the 8 percent failure rate was due to incompatibilities between XpressAUDIO and SoundBlaster. Creative filed suit against both Cyrix and Tiger Direct (collectively, Tiger), asserting several claims including false advertising against Tiger under 15 U.S.C. § 1125(a). Creative also moved for, and obtained, a temporary restraining order against Tiger. Creative then moved for the court to preliminarily enjoin Tiger from false advertising. In opposition, Cyrix relied upon its own study indicating a failure rate of 2 percent instead of the 8 percent reported by Creative’s testing. Cyrix further argued that very few games used ADPCM and that XpressAUDIO did, in fact, support MIDI but that Compaq had turned off the MIDI feature on its Presario 2100 computers.