Mattress Firm, the nation’s largest mattress retailer, sued Tuft & Needle on Money in Texas Federal Court.  The complaint accuses Tuft & Needle of smearing Mattress Firm’s trademark with false adverting as a means to earn sales.

Mattress Firm claims Tuft & Needle’s advertisements allegedly called Mattress Firm greedy.  Further, falsely accusing the retail giant of perpetuating a “scam on consumers” based on gimmick marketing, unfair product markups, a “death spiral” return policy and selling “snake oil.”

The lawsuit makes it clear that Mattress Firm’s position that none of those assertions are true.

“Its entire business model is premised on a pervasive, nationwide blitz of billboards, commercials, and online advertisements containing lies, speculation, and conjecture about ‘Big Mattress,’ and specifically Mattress Firm,” the complaint said.

Mattress Firm is based in Houston, Texas, and has grown to become the largest mattress retailer in the country since it was founded in 1986, operating 3,500 stores in 49 states, according to the complaint. It now owns the rights to the Mattress Firm trademark and has spent $300 million in marketing efforts in 2017 alone, the suit says.

In 2014, the Phoenix, Arizona-based startup Tuft & Needle came onto the scene with its bed-in-a-box mattress, which allows customers to purchase their mattresses online instead of in stores and have them delivered, vacuumed sealed, in boxes to their homes.

The suit claims that in order to drive website traffic to their website, Tuft & Needle allegedly launched an ad campaign across multiple platforms, including on Google’s search engine, purposely designed to inflict reputational and economic harm on its rivals and primarily Mattress Firm.

While purporting to provide “the truth” about the mattress industry, Tuft & Needle allegedly capitalized on Mattress Firm’s brand to perpetuate its alleged smear campaign composed of misrepresentations about “Big Mattress,” the suit claims. In those ads, Tuft & Needle would allegedly lie about the quality of rival products, their competitors’ pricing and Mattress Firm’s honesty, the suit says.

For example, one Tuft & Needle ad claims that the “typical” mattress costs only $300 to make, but retailers like Mattress Firm sell them for $3,000. Tuft & Needle purportedly says in its ads the $3,000 statistic is based on industry averages for mattresses of comparable quality. But Mattress Firm claims in its suit that the statement is false “under any metric,” and in 2015 fewer than 5 percent of queen-sized mattresses that were sold in the United States cost more than $2,000.

The suit says Mattress Firm welcomes fair competition, but Tuft & Needle cannot bait customers using the Mattress Firm name and imagery, and then provide false and misleading information in the guise of honesty and transparency.

Mattress Firm is asking the court to permanently bar Tuft & Needle from using false statements in any of its ads, and the company seeks actual and treble damages, including Tuft & Needle’s profits, plus interest and attorneys’ fees.

The suit asserts defamation claims, unfair competition and business disparagement claims under Texas common law, false advertising claims under the federal Lanham Act and trademark dilution claims under state business statute.

Representatives for Tuft & Needle and Mattress Firm didn’t immediately respond Monday to requests for comment.

Mattress Firm is represented by Melanie B. Rother and Peter C. Tipps of Norton Rose Fulbright.

Counsel information for Tuft & Needle wasn’t immediately available Monday.

The case is Mattress Firm Inc. v. Fosbrooke Inc. d/b/a Tuft & Needle, case number 4:17-cv-03107, in the U.S. District Court for the Southern District of Texas.

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