U.S. appellate court upholds order blocking DirecTV ads

NEW YORK (Reuters) - A U.S. appeals court on Thursday upheld a lower court's decision that prohibits satellite television operator DirecTV Group Inc. DTV.N from airing advertisements that claimed superior service in markets where Time Warner Cable Inc. TWC.N operates.

The U.S. Court of Appeals for the Second Circuit, however, also set aside part of the lower court’s order, saying the way it had been worded “could be construed to prohibit the unfavorable comparison of even Time Warner Cable’s analog programming.”

Analog programming refers to basic cable packages, as opposed to digital packages that allow expanded programming and additional features such as high definition (HD) or video on demand.

The ads, which featured ex-Star Trek actor William Shatner and pop star Jessica Simpson, aired last December and in January. They ended with the tag line: “For an HD picture that can’t be beat, get DirecTV.”

Time Warner Cable filed the lawsuit in December, saying the DirecTV campaign asserted “false advertising and deceptive business practices.”

In February, Judge Laura Taylor Swain of the U.S. District Court in the Southern District of New York granted a preliminary injunction against DirecTV preventing it from running ads in Time Warner Cable’s markets that disparaged the quality of Time Warner’s high-definition programming.

DirecTV was also ordered then to take down any similar advertisements on its Web site, or other sites.

Reporting by Paritosh Bansal