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Many retailers carry products with the phrase “As Seen on TV.” What if a product bearing that phrase, however, had not actually been seen on TV? A recent case in federal court in the Southern District of New York ponders that question.

In an advertising war between copper cookware competitors, plaintiff Emson sued its competitor Masterpan under the Lanham Act challenging claims made for the “The Original Copper Pan” (“OCP”). These claims included Masterpan’s use of the “As Seen On TV” logo; that the OCP was “original;” and that the OCP was “copper-infused,” “made of ultra-tough copper,” and made with “copper construction.” Emson alleged, among other things, that: (a) Masterpan falsely represented the OCP with its “As Seen On TV” label; (b) Masterpan’s “original” advertising deceived the public into believing that the OCP was the first copper pan of its kind; and (c) Masterpan mischaracterized the amount of copper in the OCP. Emson contended that these false claims diverted sales from Emson’s own “Gotham Steel” products, traded off its goodwill, and deceived consumers. Masterpan moved to dismiss Emson’s claims for lack of personal jurisdiction, improper venue, and failure to state a claim.

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Recently, we wrote about new faces at the FTC, which, for the first time in its history, has five new Commissioners in a calendar year. This unprecedented change has cast some uncertainty on how the FTC will approach consumer protection enforcement. Recent actions by the Commission, however, indicate that despite new leadership, the Commission’s focus…

The Federal Trade Commission (“FTC”) recently settled a case against a physician and his two clinics over allegedly deceptive and unsubstantiated claims relating to their “amniotic stem cell therapy.” The physician, Dr. Bryn Jarald Henderson, frequently appeared in his companies’ advertisements and claimed that this therapy, which purported to use stem cells derived from amniotic…

It seems like we (and the NAD) can’t get enough of “best.” In a recent case, the National Advertising Division (NAD) ruled that the advertiser, Mahindra USA, Inc., could not claim its products were superior without reasonable evidence.

Deere & Company, Inc. challenged Mahindra’s tractor advertisements as unsubstantiated superiority claims. Mahindra’s ads included “Best” claims such as: best-selling, best value, best warranty, best performance, “toughest tractors,” and superior engine oil. Additionally, Mahindra advertised consumer testimonials that expressed disappointment in the quality of John Deere tractors compared to Mahindra tractors.

Of course, context is king and “Best” advertisements can either be substantive claims, or considered mere “puffery.” (See here for a discussion on NAD and “best” claims). For some of the challenges in this case, Mahindra conceded its ads were substantive claims and argued that they were factually supported. For instance, Mahindra argued its best-selling claims were based on unbiased data. NAD agreed that a reasonable basis existed for the claims (although additional disclosures were necessary). For the majority of the challenged advertisements, however, Mahindra argued its statements were puffery. NAD rejected this defense in all but one instance and recommended discontinuation of the ads.

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Do you have the best wireless provider? If so, best in what sense—the best contract, the best devices, the best connectivity, the best value? That was the issue NAD recently addressed when it recommended that T-Mobile discontinue its “Best Unlimited Network” claim. AT&T challenged T-Mobile’s tagline in a recent NAD case, arguing that it was an unqualified superiority claim that T-Mobile couldn’t substantiate.

Now, the advertising world is no stranger to the word “best,” which we discussed in an earlier post on The Absolute Best Puffery Panel Ever. The problem arises when “best” is meant as a measurable claim, including its use here in connection with the phrase “unlimited network.” As NAD pointed out in this T-Mobile decision, wireless service providers should be able to tout the advantages that their innovations provide, but their claims must be substantiated to avoid misleading consumers. NAD reiterated in the T-Mobile decision that broad superiority claims (like “best” or “largest”) must be supported by reliable market data.

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video projectorMany of you are no doubt familiar with ANSI testing, which is often touted as the gold standard in assessing product performance. However, other types of third-party tests exist, even if they have not risen to the level of being an “industry standard.” A recent NAD decision sheds some light on when and how advertisers can use such tests in their advertising.

Epson America, Inc. was challenged by Texas Instruments, Inc. (TI) for advertising its 3-chip 3LCD projectors as superior to TI’s 1-chip DLP imagers. 3LCD and 1-chip DLP are the two leading types of projectors and compete based on a number of attributes. TI alleged that Epson improperly relied upon Color Light Output (CLO) as a measure of brightness performance. (CLO is a relatively new method of assessing the brightness of individual colors which can then be compared to the overall lumens, or white brightness of a projector. (Still with us?)). TI also alleged that Epson made overall image superiority claims even though it only tested specific performance attributes. Finally, TI also alleged that Epson inadequately disclosed its affiliation with native advertising websites.

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Risk-free trialThe FTC is no stranger to cracking down on businesses offering so-called “free” products, only to charge the consumer for them later on. It wasn’t long ago that we wrote about that exact issue. But a recent FTC complaint shows that the FTC is not only cleaning up businesses selling directly to consumers, but also businesses selling to other businesses.

On October 30th, the FTC filed suit in Illinois against a number of cleaning product suppliers for violating the FTC Act, the FTC’s Telemarketing Sales Rule, and the Unordered Merchandise Statute. The complaint alleged that defendants, who sell office and cleaning supplies, called small businesses, hotels, municipalities, and charitable organizations, purporting to offer a free sample of their products. However, the samples were not free. Regardless of whether the consumer wanted the sample or not, the defendants would send one, and following not too far behind would be an invoice for that free sample.

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Seal of the Federal Trade CommissionA change in administration inevitably raises questions regarding the priorities and direction of federal agencies. To help set the record straight, Lesley Fair, a Senior Attorney with the Federal Trade Commission’s (FTC or Commission), Bureau of Consumer Protection, reminded us during last week’s NAD Annual Conference that the FTC has kept quite busy over the last year or so, with numerous enforcement cases arising out of the FTC’s Bureau of Consumer Protection. Ms. Fair also shared her views regarding the FTC’s key enforcement priorities that affect advertisers and marketers. Perhaps unsurprisingly, these priority areas generally relate to (i) advertising substantiation; (ii) use of social media, endorsements, and consumer reviews; (iii) matters involving privacy and data security; and (iv) allegations of financial deception. While such topics warrant serious consideration and attention for advertisers, one would be remiss in failing to mention that, in typical Ms. Fair fashion, she discussed these issues in a manner that not only kept the audience engaged, but largely entertained.

With respect to advertising substantiation, Ms. Fair took the opportunity to remind the audience that despite our obsession with smartphones—and our assumption that they can do almost anything except fold our laundry—the FTC will carefully scrutinize advertisers’ claims about their products, including health apps for smartphones, to ensure they are adequately substantiated. As an example, Ms. Fair mentioned the Commission’s January 2017 Settlement with Breathometer, Inc. and Charles Michael Yim in which the FTC alleged that marketers of two app-supported smartphone accessories, marketed to accurately measure consumers’ blood alcohol content (BAC), failed to adequately test the accuracy of the app and failed to notify customers that the app regularly understated BAC levels. In another smartphone settlement from December 2016, FTC v. Aura Labs, Inc. and Ryan Archdeacon, the FTC alleged that the marketer’s blood pressure app lacked reliable testing, and that the app’s readings were significantly less accurate than those taken with a traditional blood pressure cuff. In both of these cases, Ms. Fair suggested that FTC seemed particularly concerned due to potential safety issues arising from the lack of proper testing, especially where an intoxicated driver might get behind a wheel, or where a consumer may think his/her blood pressure does not present a health risk. These cases serve as a reminder that the FTC will evaluate substantiation with an especially critical eye where advertisers make health and safety-related claims.

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spaghetti with tomato sauceWe love to eat! Maybe this is why we blog about taste claims and substantiation a lot! See here and here. And since at least one of us is always on a diet, when we indulge we like to pick the best tasting options. A competitive taste superiority message is incredibly powerful, and as such developing the necessary substantiation is exacting and expensive. Dollars to (better) tasting doughnuts, your less delicious competitor will be watching your back and seeking to test the quality of that evidence. Every year multiple challenges involving taste preference claims and the testing that supports them land on NAD’s plate to assess. One just this week actually involved dueling taste tests and considered the important question of who are the right people to test? We blogged about this before here in a case involving cereal looking at the right age range of people to test – buyers or eaters of the product. NAD’s general mantra is “taste tests should sample consumers who customarily use the products being compared.” The most recent case involving pasta sauce delved more specifically into this question of the appropriate testing universe.…
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mascaraI love a good mascara case. And it’s been too long. The last time NAD looked at mascara, it was monitoring challenges over whether celebrities in mascara ads were merely spokesmodels or product demonstrations and concluded the latter. (See here and here and an earlier blog I wrote on this topic.) NAD recommended clear disclosure if the model used lash inserts or other enhancements beyond the mascara to plump and lengthen her lashes. This week came a case involving mascara that NAD found could not be cured with a disclaimer. Rather, a #1 selling claim must be supported with reliable and most recent data.

In this case, Benefit enjoyed the top spot in the prestige mascara category three years running with its They’re Real Mascara, until the latter part of 2016 and this year, when it was bested by Too Faced’s Better Than Sex Mascara. (Whether the latter name is a performance claim and whether it is supported are questions for another challenge!) Benefit promoted at point-of-sale and on the web that it was the best-selling prestige mascara in the US and the best-selling for three years, using a disclaimer identifying the source as the NPD Group dollar sales from July 2013-2016. Too Faced asserted that notwithstanding the source disclosure, readers would understand the claim to be based on current data, and its brand was the best-selling in dollars and units for 2016 full year and 2017. Benefit said the ads taken as a whole made clear the claims were based on past glories.

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