Advertising in Cuba? Not Yet, Says Uncle Sam

cubanPresident Obama has created a lot of buzz about opening the Cuban market to Americans, but it is a long way from buzz to profits.  On December 17, 2014, the President and various members of his administration announced sweeping changes in the 50-plus year economic embargo against Cuba.  Normalization of diplomatic relations, increased travel, the ability to use U.S. debit and credit cards, increased commerce, and a number of other changes almost makes one want to break out a Cuban cigar right here in the nation’s capital and start ginning (or rumming, to create a word) up advertisements for the Cuban market.

But that would be premature given what the “buzz” currently allows.  Lighting up the Cubano is still illegal (indeed, even having it in the U.S. is illegal).  Although U.S. law currently allows limited commercial exports to Cuba (mostly agricultural goods and medicines), and the President has proposed expanding trade, a number of major hurdles stand in the way of full scale trade:  Continue Reading

FTC Puts More Governors on Auto Disclosures

That’s perhaps exactly what the FTC tried to avoid by bringing two new auto disclosure enforcement actions late last week.  Both actions seek to enforce existing orders, though in the one instance the parties agreed to settle while in the other the parties will have their day in court.  The FTC has been coming down hard on auto dealers of late and these two cases are no exception.

Both cases focused on the need for and adequacy of disclosures regarding automobile sale, leasing, and rebate offers.  According to the FTC’s complaints, the defendants failed to adequately disclose certain terms and conditions including the following:

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‘Tis the Season–for “Made in the USA” Claims

Made in the USAWith the holiday season in full swing, marketers are tirelessly seeking ways to convince you that their product is the perfect gift for everyone on your holiday list.  Although the bearded man of the hour at this time of the year is, of course, Santa Claus, many sellers try to ensure a competitive advantage by invoking the spirit of another hirsute man:  Uncle Sam.  But if you’re thinking about abandoning a red and green color scheme this year for red, white, and blue and plastering your products with “Made in the USA” or “American Made,” some recent California litigation reminds us that sellers should be careful when they feel the patriotic spirit overtaking the holiday spirit.

As we have noted several times previously on this blog, “Made in the USA” claims are tricky animals that can come back and sneak up on you like a whack from the stick-bearing Krampus (the nasty European sidekick to Santa Claus best known for walloping children with bundles of birch branches).  The Federal Trade Commission (“FTC”) has been active in this area, bringing a number of cases over the years to enforce its standard that to be able to make an unqualified  “Made in USA” or “Our products are American made” claim, without any limits or qualifications, a product must be “all or virtually all” made in the U.S., i.e., all significant parts that go into the product must be of U.S. origin and all processing must take place in the U.S.  The FTC guidance in this area has made it clear, however, that truthful qualified “Made in USA” claims, such as “Made in USA of foreign and domestic parts” or “Assembled in USA of parts from China” are permitted.

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Do Not Shoot Yourself in the Foot by Making Admissions in Your Disclaimer

paintballThere may come a time (but hopefully not) where you need to write a website disclaimer, email, Facebook post, whatever trying to dispel consumer confusion and head off an advertising lawsuit.  How might you do that?  Keep editing if your first draft looks something like this:  “We have learned that some customers are confused and think that we sell ABCompetitor’s Cool Toys.  Please take note that we are not related to ABCompetitor.”

Let’s see how this played out in a recent order issued by the Northern District of California in United Tactical Systems, LLC v. Real Action Paintball, Inc., Case No. 14-cv-04050-MEJ.

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Do Not Taste the Agony of Defeat with a Flawed Preference Claim

Personally, we knew there were problems with this claim before NAD did. We are big fans of the sweet taste of Fruity Pebbles (along with Cap’n Crunch and Smacks).  When Malt-O-Meal claimed it was the “National Taste WINNER Fruity Dyno-Bites Preferred over Post Fruity Pebbles,” we were, shall we say, dubious. (As an aside, there is a blessing and a curse to the practice of an advertising lawyer in that we are both advising about claims and often the intended audience and consumers of these same claims. Sometimes this means we are better informed and actually have a “reasonable consumer” perspective. And sometimes we are just biased in favor of products we like!

The NAD decision starts with a nice reminder of the gold star basics as outlined in the ASTM Standard Guide for Sensory Claim Substantiation for taste tests —double blind use of paired comparisons, a geographically representative sample size (using at least two markets in each of the four census regions), similarly purchased products (including similar expiration dates), presentation of the tested products in substantially the same manner and prepared according to the instructions, and allowance for cleaning of the palate before tasting each product, producing statistically significant results. Continue Reading

Giving Thanks and Asking a Favor

It’s the time of year for reflection and we want to pause and give thanks to each of you for being such loyal readers. In particular, many of you have reached out to us at conferences and other events to tell us how much you appreciate our small little corner of the worldwide web. And while blogging is ordinarily for us a labor of love that sort of encouragement goes a long way on those occasional days when we’d much rather go home and sit on the couch than post another blog.

And now comes the favor part. We were very excited to learn that we made this year’s ABA Journal’s Blawg 100 which makes us eligible to become a member of their blogging Hall of Fame. But to get there we need your votes! We considered several strategies to make that happen. We could pay you to vote but then we’d have to disclose or risk violating the Endorsement Guides. We could offer you a free notebook and in very small print indicate that in accepting this offer you’re also voting for our blog, but there’s those pesky FTC Disclosure guides.  Someone in our marketing department suggested we just submit fake votes, but the NY AG hates astroturfing. Finally we could just say we won but, well, that would be flat out deceptive. So we’re reduced to just asking nice.

If you have a few minutes to vote, click here. You will need to register your email with the ABA Journal (according to their FAQs to prevent voter fraud!) and then you can find our blog under the dropdown menu called Torts/Consumer. You can only lodge one vote per blog but you can vote for more than one blog and so while you’re there we’d encourage you  read and to vote for our friend Rebecca Tushnet’s Lanham Act Blog (43(B)log) in the IP category or her textbook coauthor Eric Goldman’s blog in the Tech category. (They are in different categories, we don’t love Rebecca or Eric that much!) Thanks. And we look forward to another year of blogging.

TCPA Autodialers 101: What Makes an Autodialer and What’s Next from the FCC

Telemarketers are all too aware that automatic telephone dialing systems (“autodialers”) are a hot topic in the litigation world. The Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227, and the Federal Communications Commission’s (“FCC”) implementing rules, 47 C.F.R. § 64.1200, prohibit making any autodialed call or text message to cell phones without the called party’s prior express consent (with express written consent required for marketing calls). However, as we have noted previously, no one seems to know the full extent of devices that are properly classified as autodialers under the TCPA. As a result, parties have been fighting over the proper meaning of autodialer in the courts, and numerous petitions have been submitted to the FCC requesting clarification. As our TCPA Alert highlights, the lawsuits continue to pour in, while the FCC prepares clarifications and guidance that could remove some of the uncertainty. Continue Reading

Is It Safe To Use Seals to Promote Your Product? NAD Says Foo to FuHu

sealEveryone loves an award.  It is one thing when a marketer promotes its own product but to be able to back promises with a seal, a certificate, or other third-party recognition of greatness gives extra confidence to consumers that this is a product they can really trust.  There has been much talk recently about dos and don’ts with use of seals.  ‎The FTC has brought multiple cases when companies offering seals allegedly fail to research and properly certify the companies it does business with to ensure compliance with the articulated award standards, including in cases involving green seals and Made in USA.  Last week we wrote about a similar case involving the TRUSTe COPPA safe harbor seal. NAD recently examined use of seals from a different angle, considering whether by use of a seal a marketer was conveying an overly broad promise about its product. The case reminds us of principles the FTC articulated in its Green Guides that a marketer is responsible to define and explain what a seal means to its consumers unless it is patently clear from the seal itself. Like many things we advertising lawyers do, this is often easier said than done! Continue Reading

Redskins Will Get Their Day in the “Rocket Docket” Court

The federal district court in Alexandria, Virginia denied a motion to dismiss the Redskins trademark case, making it clear that the “Rocket Docket” is open for business and ready to hear cases brought by parties who are dissatisfied with decisions made by the Trademark Trial and Appeal Board (TTAB).  Pro-Football Inc. v. Blackhorse, 14-cv-01043, U.S. District Court, Eastern District of Virginia (Alexandria).

Parties who are dissatisfied with TTAB decisions can initiate “de novo” proceedings in a unique federal court — the district court in Alexandria known as the Rocket Docket.  That court, which is across the street from the Patent and Trademark Office (PTO), is called the “Rocket Docket” because cases there proceed from filing to trial in less than one year under accelerated procedures – that’s more than twice as fast as other federal courts around the country.

The background of this dispute is well known:  The Redskin’s federal trademark protection provides the Redskins with lucrative rights in the famous name, and the power to exclude others from using the same name in the marketplace.  Earlier this year, the TTAB cancelled the Redskins’ federal trademark registrations on the basis that it disparages Native Americans in violation of the Lanham Act.

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The Unavailability Rule: After the Turkey and Stuffing, Avoiding the Bait-and-Switch?

While many focus important questions such as whether or not to brine the turkey and whether to cook the stuffing inside or outside of the bird, many of our clients focus on bigger issues of whether the holiday sales season will put the company in the red or the black.  What used to be just a push for Black Friday, and then extended to include Cyber Monday, now includes pre-Black Friday and specials through December.  In this busy shopping season, retailers are trying to drive traffic, sell merchandise, and clear out winter inventory in anticipation of the coming year.  Shoppers are looking for a bargain and that perfect gift.  Sunday papers, email inboxes, and television commercials all boldly proclaim the greatest sales of the year, and consumers definitely take notice.  With fast moving inventory and quickly changing stock levels, there are times when a retailer might run out of certain items.  Retailers in this position need to pay careful attention to consumer protection laws.

In 2011, as part of its systematic review of all of the agency’s rules and guides, the FTC opened a public note and comment period for the Retail Food Store Advertising and Marketing Practices Rule, better known as the “Unavailability Rule,” to consider whether the rule should be expanded to cover other retailers.  On November 19, 2014, the Commission decided to keep the Rule unchanged.  This means that the Unavailability Rule still only applies to retail food stores. Still, other retailers would be wise to take this Rule’s guidance to heart. Continue Reading

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