A recent NAD decision serves as a good reminder of the basics of clearly defining your comparative claims. Are you comparing to your own previous generation product? To a competitor’s line or specific product? To other leading brands? Or the whole market? The broader the claim, the more powerful it may be seen by consumers. Some companies think it is riskier to name a specific competing product but as long as you have the right support for the claim, better to get specific than face a recommendation to discontinue an unintentionally broad claim. Claiming superiority (or parity) to “those other brands” likely means you have to prove your performance bests (or meets) at least 85% of the market. Of late, NAD has been suggesting that the basis of the comparison be called out clearly within the main claim itself and not reserved for the smaller print disclaimers. So toot your own horn (with the right substantiation of course) but do it with specificity.
As we blogged from the NAD conference, (or at least we think we did) FTC Chairwoman Edith Ramirez named cognitive claims as an area of national advertising enforcement priority for the FTC. These can be claims from foods or dietary supplements or learning products to boost the brain power in adults or kids. This is not a new but a continued trend we have blogged about before. Just last week the FTC announced a settlement with Word Smart requiring that in future the company have competent and reliable scientific evidence before making claims that its programs will help kids get better grades or improved SAT and ACT scores. The definition in the order of what constitutes such evidence is the more general requirement that substantiation be based on well designed and well conducted tests or other analyses by experts in the field with results that are not outliers but generally agreed upon by the relevant scientific community. Earlier this summer, the FTC entered into a settlement with the makers of a supplement for adults, Brain Strong, that promised improved memory, but in that case the order did require randomized controlled clinical trials of the product to support future claims. While the state of the FTC’s expected definition of competent and reliable evidence is up in the air, perhaps it is fair to say that for dietary supplements the FTC expects at least one RCT of the product at issue while for other products or plans, some lesser form of evidence may be acceptable if it is reasonable and reliable.
Pinterest®, since it first appeared on the scene in 2010, has been the darling of crafty do-it-yourselfers (DIYs), ambitious brides-to-be, fitness aficionados, foodies, and anyone else interested in creating their own little portfolio of images carefully curated from sites around the Internet. Pinterest has consistently presented itself as a tool that could be used by consumers for a natural, authentic experience, giving users full artistic and creative reign as they pinned images and designed boards. In fact, Pinterest has been notorious for cracking down on advertisers who use its offerings in any sort of spammy way, including now prohibited “Pin It to Win It” contests. The site has also received considerable attention for the thorny legal issues that are implicated by its “pin anything you want” philosophy, including copyright, trademark and right of publicity issues.
We reported on July 16, 2014 that John Wayne Enterprises, LLC (“JWE”), the entity owning the rights to the name, image, and likeness of John Wayne, a.k.a. The Duke, had sued Duke University in California federal court to protect JWE’s right to market alcohol products with the mark “Duke” or “Duke John Wayne.” Duke University had opposed JWE’s trademark applications before the Trademark Trial and Appeal Board (“TTAB”) in Virginia on the basis of potential deceptiveness, likelihood of confusion, and dilution of the university’s “Duke” marks.
On September 30, 2014, the California federal court handed Duke University a victory, by dismissing the suit of JWE for lack of personal jurisdiction and denying as moot JWE’s attempt to disqualify Duke’s counsel. JWE tried to argue that Duke’s opposition to JWE’s trademark application in Virginia was somehow enough to hale Duke into court in California. The California court said it was not so—Duke’s knowledge that JWE is a California corporation is not enough to show Duke purposefully directed activities at California or availed itself of California’s laws. The takeaway may be that while plaintiffs often seek a home-field advantage by filing in their own state, they need to think about whether the defendant can be forced to play there in the first place.
The case, now dismissed, is John Wayne Enterprises, LLC v. Duke University, et al., No. 14 Civ. 1020 (C.D. Cal.).
In late November 2012, the FTC issued a notice that it was considering how to update its “Fred Meyer Guides.” Also at issue in that notice was whether the Guides were necessary at all. All of these questions were raised by the Commission as a result of changes in law (like the Supreme Court’s decision in Volvo Trucks v. Reeder-Simco), and in the economy (like, well, the Internet) since the last update to the Guides in 1990. We discussed the notice when it came out in December of 2012, so take a look at that for a trip down memory lane, a brief discussion of Sections 2(d) and 2(e) of the Robinson-Patman Act, and a nice picture of Mr. Fred Meyer himself. But, by way of background, those sections of the Act apply when suppliers, like manufacturers, provide different promotional payments or services to different resellers. In contrast, the main section of the Act, Section 2(a), relates to differences in prices to those resellers.
As a result of the notice, the Commission received seven sets of comments from a fairly wide range of organizations and practitioners including the Antitrust Section of the ABA, the American Antitrust Institute, the Food Marketing Institute, and the National Automobile Dealers Association among others. The easiest question turned out to be whether the Guides were needed at all – all of the commenters agreed that there was a continuing need for the Guides. Also, none recommended that the Guides be overhauled as a result of changes in the law or the economy. As a result, the Commission concluded that the Guides should remain substantially the same.
We are close to live blogging from the annual NAD Advertising Law Conference and for those who could not join us, we wanted to share highlights from its opening — keynote speaker FTC Chairwoman Edith Ramirez. The FTC typically uses this conference to lay out its enforcement priorities relevant to national advertisers and gives us all a peek into the crystal ball for the coming year. So here’s what we heard. Continue Reading
The fine print disclosure is as iconic as the Yankees, Mom and Apple Pie. But pity the poor disclosure as it’s had a rough time of late. First, the FTC came out with its revised Dot.com disclosures (read about those here) In general they advocated clearer and more prominent disclaimers and also asked advertisers to think hard about whether the information should be in the body of the claim itself rather than in a disclosure.
Now the FTC has turned its attention to disclosures on television and print advertising. “Operation Full Disclosure” resulted in warning letters being sent to 20 of the largest 100 advertisers in the country (and 60 companies overall) alerting them to the fact that the FTC believes they failed to make adequate disclosures in their TV and print ads. The letters also asked them to notify the FTC about their response to the letter. (The FTC has indicated that the response has been “extremely positive.”) Continue Reading
Not to be outdone by last year’s changes to Federal Communication Commission rules under the Telephone Consumer Protection Act (“TCPA”), the Federal Trade Commission (“FTC”) has teed up a number of issues that may be the focal point of big changes to the Telemarketing Sales Rule (“TSR”). Similar to the TCPA rules, the TSR includes the FTC’s version of Do-Not-Call rules and restrictions on the use of prerecorded message calls. Unlike the TCPA rules, the TSR imposes certain disclosure and other requirements for outbound calls, some inbound calls, and upsells on both outbound and inbound calls. When the FTC announced on July 31, 2014, that the TSR has come due for review, it asked for public comment on issues that suggest the FTC is considering restrictions on telephone “data pass” and broader application of negative option and other disclosure requirements to inbound calls currently exempt from the scope of the TSR. While the ongoing stream of lawsuits filed under the TCPA continues, it is worth taking a closer look at the FTC’s Rule Review, Request for Public Comments (“Request”) to determine what additional restrictions/requirements could be on the horizon for telemarketers. Continue Reading
The annual NAD, and CARU conference on advertising issues begins next Monday September 29 in New York City. (For a link to the conference click here). We’ll be there and we suspect many of you will be too. We had so much fun at our party last year that we’re doing it again. So, if you’re attending the conference or if you’re already in the NYC area or you just want an excuse to go to NYC you are welcome to attend a party we and some of our Venable colleagues are throwing Tuesday night at El Vez from 6:00 – 8:00 pm near the conference. You can see the invite and RSVP here. Hope to see you at the party!
Advertisers seek out third-party certifications and endorsements for their environmental efforts as a means of providing credibility to green claims made to consumers. Indeed, the FTC’s Green Guides make clear that companies who choose instead to “self-certify” must make that fact clear to consumers precisely because consumers may view self-certification with more skepticism.
But can an environmental seal also operate as a shield against legal liability? Chiquita may be about to find out. The Seattle-based Water and Sanitation Health (WASH) Group has taken issue with green bananas (no one likes the green ones, do they?) and filed a lawsuit against Chiquita alleging that the Company’s claim that its bananas are grown in an ecologically friendly and sustainable manner is deceptive. Continue Reading