UPDATE: Craig Ehlo knew it, and now Jewel Food Stores knows it: you don’t mess around with Mike

A quick update on our earlier blog about a lawsuit involving a supermarket that congratulated Michael Jordan on his Hall of Fame induction in an ad and included a $2 off coupon for steaks without his consent.  A jury just awarded Michael Jordan $8.9 million in damages which was close to the $10 million sought by his counsel and a whole lot more than the $126,900 defendants suggested was the appropriate damage amount.  Jordan could buy a whole lot of steak with that much money but has announced he’ll donate the award to local Chicago charities.  A damage award this high should make advertisers particularly cautious before invoking celebrity names.

NAD Finds Something Fishy With Claims That Contradict

By Jason Hollinger (MusselsUploaded by Amada44) [CC BY 2.0], via Wikimedia Commons

In a CRN challenge, NAD recently reviewed claims for Omega XL, an omega-3 fatty acid supplement, sourced from mussels rather than fish. The supplement was backed with lots of science, including product specific testing. So much so that NAD upheld the strong claim that it was “supported by over thirty years of clinical research.” So far all is going swimmingly well. But NAD recommended that the advertiser discontinue its claim that the product was also a “breakthrough secret,” reasoning that nothing that had been studied for that long could be novel or surprising. This is a good reminder of the need to step back and look at the ad in context and not only as a series of isolated claims, lest your claims combined provide a potential oxymoron like a 30 year breakthrough.

‎While NAD upheld many of the challenged efficacy claims, a few other notes are worth adding to make sure you have your sea legs on when it comes to reviewing dietary supplement claims. NAD said the advertiser could promise you “get back what joint pain and inflammation are limiting you from doing because Omega 8 works” but recommended discontinuing the promise that the supplement makes it “easy for you” to do so. NAD found some consumers might read “easy” to mean that the pain relief would come quickly, while some of the studies suggested it took several weeks for significant pain reduction. In a prior case, NAD suggested ads for dietary supplements should not refer to them as being “prescribed,” because a consumer might misconstrue the product as being as effective as a prescription medicine. In this case, NAD ok’d the use of terms like “dose” and “potency,” however finding that without consumer perception evidence, NAD was not prepared to conclude that these words implied something similar.  Continue Reading

FTC Reminds Marketers to Keep It Clean

It’s Summer in the City and the back of my neck, and just about everything else, is getting dirty and gritty.  The FTC, however, just announced two cases reminding advertisers to keep it clean on claims that their products can sanitize.

The FTC sued Angel Sales, Inc. and Zadro Health Solutions, as well as the two companies’ principals, alleging that the companies’ claims that their ultraviolet light devices could kill everything from foot fungus to MRSA were unsubstantiated and therefore deceptive.  The companies settled the FTC’s charges by agreeing to substantial monetary judgments and injunctive relief prohibiting such claims in the future.  In 2011, the FTC settled similar charges against Oreck for its UV vacuum cleaner.

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In a Juicy Decision, NAD Tells How to Distinguish Your Product ‎Sweetly from the Competition

Del Monte took on Dole over a fruit cocktail cup ad set in a gym where one spandex clad woman pokes a hole in her fruit cup and says it is “in syrup so I like to drain it.”‎ Her spinning buddy says “Well these Dole Fruit Bowls are 100% fruit juice so . . . I drink it!” A voiceover says “Dole Fruit Bowls, the only national brand packed in 100% juice” with a super clarifying Dole’s “regular” line is packed with juice.

The challenger said it is implied that the syrup is unfit for consumption while the Dole juice packed bowls are healthier. While NAD views comparative advertising very strictly, in this case, NAD concluded that the advertiser was promoting a unique truthful benefit about its product and was not falsely disparaging the competing product. While NAD often finds unintended implied claims can be supported by the visuals, the fact that the women were shown in a health club in work out gear did not convey the message that one fruit bowl was healthier than another.  Probably critical to the finding was the fact that before the challenge started, Dole discontinued earlier versions of the same ad that referred to the competing product as having “sugary syrup” or “goo.” (While we have not conducted an exhaustive search, we would be hard pressed to find an example of a NAD case referring to a competing product as “goo” that was upheld.)  Because the prior ads were discontinued before the challenge got going (and Dole committed not to repeat), under its own rules‎, NAD did not consider these ads or claims but only the less-gooey current version.  Continue Reading

FDA Warns About Celebrity Social Media

Kim Kardashian is everywhere. But there were some bumps in the road when she took to social media on behalf of the drug company Duchesnay, Inc. to promote its morning sickness drug Diclegis. On Instagram, Ms. Kardashian breathlessly told her followers “OMG. My morning sickness has been bad. My doctor prescribed me Diclegis, and I felt a lot better.” The FDA was not impressed. It issued a warning letter saying the post is false and misleading.

So what was wrong with Kardashian’s ungrammatical post? It trumpeted only the positive and said nothing of the risks associated with taking the drug. Similarly, the post is misleading because it fails to provide a full description of the drug’s approved indications for use (“treatment of nausea and vomiting of pregnancy in women who do not respond to conservative management”), including the limitations on its use that it had not been studied in women with certain conditions. Ms. Kardashian may plead ignorance, saying she does not know about the drug’s risks or any limitations on its use, but the manufacturer, Duchesnay, cannot make such a plea and so it got the warning letter.   Continue Reading

First Amendment Protects Certain Truthful, Non-Misleading Statements about Off-Label Drug Uses

The Food and Drug Administration (FDA), along with other federal authorities, has been zealous in prohibiting drug companies from making promotional statements about their drugs with respect to uses (indications) for which FDA has not granted approval. FDA’s long-held view has been that “off-label” promotion is unlawful, even if the statements are truthful and non-misleading. A new court decision casts a dark First Amendment cloud over FDA’s absolutist position.

On August 7, 2015, Judge Paul A. Engelmayer of the U.S. District Court for the Southern District of New York entered a preliminary injunction against FDA, allowing Amarin Pharma to engage in truthful and non-misleading speech regarding an off-label use of Amarin’s Vascepa. Judge Engelmayer ruled that Amarin’s planned truthful and non-misleading speech is afforded protection under the First Amendment, relying heavily on the decision of the United States Court of Appeals for the Second Circuit in United States v. Caronia (as referenced in our December 2012 alert). Continue Reading

Payment Processing Alert for Internet Retailers: The October 2015 EMV Shift Will Complicate Your Chargeback Management Efforts

By Petr Kratochvil [CC0], via Wikimedia Commons

What if your chargebacks increased by 40%, practically overnight?  This is one estimate by payments industry experts of the potential impact on card-not-present (CNP) merchants that could result from the October 2015 shift to EMV chip technology in the U.S. market.  Payments companies are worried that many CNP merchants, including Internet retailers, aren’t prepared to absorb the onslaught of new fraud that will move to the CNP environment when fraudsters are shut out of card present retail.  The payments industry expects a direct correlation between the increase in fraud resulting from the EMV shift and an increase in chargebacks.

EMV is a security standard designed to protect in-store card swipes from card replication and counterfeit by use of a chip embedded in the card and in card acceptance terminals.  EMV, which stands for its three original creators (EuroPay, MasterCard, and Visa), is now run by a joint consortium of the major card networks.  The U.S. market is the last major market to deploy EMV.  When the U.K. market adopted EMV chip technology several years ago, analysts calculated that fraud in the card present retail environment dropped by almost half while fraud in the CNP environment doubled.  It is that lesson that has many in the U.S. worried, notwithstanding advancements in card authentication and other fraud detection tools in the CNP environment developed since then.  Continue Reading

Age-Gating Your Website: Do Not Make it a Scandal

‎”Gates” as scandals probably started with Watergate but many other embarrassments followed suit with a similar gating moniker. Nipple-gate or Janet Jackson’s Superbowl wardrobe malfunction, Zoe Baird’s Nanny-gate are just a few. Age-gating your website to make sure it is COPPA-compliant should not give rise to messy press and finger-pointing. ‎Web designers and marketers need to remember that kids are smart and make reasonable efforts to thwart their efforts to evade your controls. A few recent CARU cases are instructive.

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Website Owners: No Safe Harbor from Copyright Liability for Infringing Content Posted by Third Parties on Your Site If You Are Not Following DMCA Formalities

Did you know that, under the U.S. copyright law, if a third party uploads or posts copyrighted material to your website, and the third party did not have authorization to do so from the copyright owner or exclusive licensee of that material, your organization can be held strictly liable for copyright infringement as the operator of the website where it was posted or uploaded?

This is alarming but true – there is strict liability in copyright law.  This means that, even if your organization did not put the infringing content on your website, or did not even know it was there, you can be held strictly liable for infringing content uploaded to your website by another.

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FCC Releases Long-Awaited TCPA Ruling

On July 10, 2015, the Federal Communications Commission (“FCC”) released its much-anticipated Telephone Consumer Protection Act (“TCPA”) declaratory ruling, expanding on the positions announced at its June 18 Open Meeting on important TCPA issues.  The ruling resolves 21 requests for clarification, and, in particular, confirms that an “automatic telephone dialing system” (i.e., an autodialer) includes devices that do not “currently” or “presently” have the capacity to dial random or sequential phone numbers without human involvement.  This will be a controversial ruling.  In fact, ACA International immediately filed a lawsuit in the U.S. Court of Appeals of the D.C. Circuit following the release of the ruling, alleging that the ruling expands the scope of the TCPA further than Congress intended.  Over the next week, we will be exploring the ruling in more detail, but today we analyze arguably the most controversial issue:  the definition of autodialer.  Continue Reading