Earlier this month, NAD issued its first decision under its Fast-Track SWIFT program, its expedited review track for single well-defined advertising issues. (Here are more details on NAD’s Fast-Track SWIFT program.) In its first substantive Fast-Track SWIFT decision, NAD dealt with a dispute between energy bar manufacturers Kind and Clif and reviewed the claim “A Better Performing Bar–Clif Bar For Sustained Energy,” which appeared as the top AdWords result for internet keyword searches for “Kind Bars” and “energy bars.”

Kind argued that this constitutes an express claim comparing the performance of Clif Energy Bars (either generally or with respect to sustained energy) to the performance of Kind Bars or all energy bars on the market, that must be supported by head-to-head product testing. Clif argued that the claim was not appropriate for SWIFT treatment because the challenged claim was too complex. Specifically, Clif argued that expert testimony and a consumer perception survey were necessary to determine whether the word “better” conveyed a comparative performance message or was merely an expression of the advertiser’s opinion of its product, and that these questions could not be obtained within the shortened SWIFT timeline. NAD concluded that the claims were appropriate for SWIFT treatment because they did not require NAD to evaluate complicated product testing (the advertiser did not argue that it had product testing to support a comparative performance claim), and any legal arguments were limited because the challenge involved a single claim in a single context.


Continue Reading NAD Issues First Decision under Fast-Track SWIFT Program

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.


Continue Reading But Wait, There’s More! . . . Litigation: Federal Court Sustains Lanham Act Claims Against Allegedly False “As Seen On TV” Advertising

ToxicWhoopsy daisy.

Better Life, a maker of home cleaning products, recently ran evocative comparative video ads with a product demonstration to grab consumers’ attention and gain share. It’s a common enough advertising strategy, but one that Better Life in this case should have nipped in the bud, according to NAD.

The ads featured a time-lapse demonstration in which gerbera daisies were placed inside Better Life All Purpose Cleaner and in four other household cleaning products, including Windex®. During a sped-up 24-hour period, consumers watched as the daisies in the other four cleaning products tragically wilted and died, while the daisy in Better Life’s cleaner thrived. Beneath the video appeared this message: “Amazing things happen when you take the toxins out of the household cleaners.”

S.C. Johnson & Son, Inc. (SCJ), the maker of Windex® and other cleaning products, did not like to be tagged as a flower killer along with a germ killer, so it turned to the National Advertising Division (NAD). SCJ argued that the video denigrated and disparaged Windex® by falsely suggesting that it is toxic and harmful to consumers.


Continue Reading NAD Finds Support for Cleaning Products Claims Not All Sunshine and Daisies

A couple of years ago it felt like we were blogging about developments in cases involving “up to” claims up to 3x more often than just about any other topic.  To summarize the upheaval, for many years there were cases allowing an up to claim if an “appreciable number” of consumers could enjoy the claimed maximum benefits.  There are also state and local pricing laws requiring for sales claims that 10-15% of the sale goods be available at the highest advertised discount.  Then the FTC brought cases involving savings claims for installing new windows, which included some rather sobering consumer research in which consumers appeared not to understand even relatively clear disclosures regarding “up to” claims.  The cases settled with orders requiring that all or almost all of consumers be likely to achieve the maximum claimed savings.  As a result the advertising legal community was thrown into a frenzy not knowing if the upper limit in an up to claim had to be something everyone could attain or 10% could attain or something in between.  NAD largely stuck to its old standard, but in cases where the purchase required a significant investment seemed more aligned with the FTC’s view in the windows cases. But things seemed to settle down somewhat back to normal when the FTC did not follow with a flurry of new cases. 
Continue Reading NAD Ups the Ante on “Up To” Claims

In contrast to the Dollar Shave case we wrote about recently, NAD and NARB recently gave us an example of a case they found to be falsely disparaging, notwithstanding the humor and hyperbole throughout.

Everyone can agree that the DirecTV Rob Lowe ads (and their new series with Tony Romo) are hilarious.

https://www.youtube.com/watch?v=wl2uDi6Zju8

https://www.youtube.com/watch?v=dfavFFw194A

Rob Lowe is in all of his glory as a DirecTV subscriber. While an alternate reality version of Rob Lowe (e.g., creepy, painfully awkward, far less attractive, meathead, and scrawny arms) is a cable subscriber.
Continue Reading Humor and a Heartthrob Cannot Save the Day at NAD in False Disparagement Case

There is lore that the beauty industry does not challenge itself sufficiently before NAD, and for this reason NAD brings more monitoring challenges in this area. After the recent decision in a case brought by Unilever, we would not be surprised if we see more competitor challenges in this area. And advertisers on the receiving end of these challenges might not find them cruelty free.

OGX makes shampoos, conditioners and related hair care products with a variety of what NAD termed “exotic” ingredients:  lines with argan oil from Morocco, coconut water, ‎keratin oil, biotin, cherry blossom ginsing, etc. Unilever said the product names were listed next to product benefits in a way that implied the benefit was due to the exotic ingredients. Unilever alleged the exotic ingredients were present at levels that would not deliver these benefits. OGX and its maker Vogue International did not provide evidence of what the exotic ingredients did. Instead, they said that the benefits were due to the formulas as a whole, that shampoo and conditioner clean hair generally, which make hair soft, fuller, etc. It voluntarily committed to redoing its packaging to separate the product benefits in the romance copy from the product name.


Continue Reading When Your Brand Name is a Claim—NAD Cleans and Straightens Without Support from Advertiser

We just read one of our favorite NAD decisions ever. And it just so happened to involve one of our favorite recent ad campaigns. We have blogged before about Dollar Shave Club, as a vehicle to talk about Restore Online Shopper’s Confidence Act (“ROSCA”) and a reminder of the legal issues with negative option plans. But we really just wanted to share the web ads because they are hilarious. If you have not seen them, stop reading this blog (yes, you read that right) and have a look.

And even if you have seen it before, you need to refresh your memory to put the NAD’s holding in context. (We promise we are in no way affiliated with the Dollar Shave people and get no pay-per-click revenues. We would like to have a beer with these guys, however.).


Continue Reading NAD Doesn’t Trim Back Humor with a Razor – Important New Ruling on Puffery

We love a good March Madness legal blog (see here and here and here)  and NAD gave us some great fodder this month deciding a case between two large daily fantasy sports league websites.   This one wasn’t exactly an upset like so many of the games this year leading to the Sweet 16.   DraftKings claimed it was the “largest US-based destination for daily fantasy sports.”  FanDuel cried foul.  There was no dispute that FanDuel is larger by a significant margin.  The issue was whether the company was US or non-US based, the key factor which would render the claim either literally true or literally false.  This case is a riff on Made in USA analysis.  Instead of focusing on where a good is manufactured, including its component parts, this case looked to the right definition for determining where a corporation is based.  The NAD noted that consumers “often care very much about the domestic nature of products that they purchase, and such sentiments are likely to also be felt about services that they patronize.  For example, for consumers concerned about unemployment in the United States, the fact that a competing company’s labor force resides in another country may be quite important when deciding which company’s website to patronize.”  As an aside, we are not so sure there are consumers who would base a purchase decision on where key executives sit or where key corporate decision are made, as opposed to where a company’s employees reside.  That said, there is certainly an advantage in claiming to be the largest or No. 1, as it may well convey a message that a company has passed the test by rising to the top in terms of market share.   And it is not unusual for a company to try to create a category in which it can be the champion.  NAD said such a claim is particularly impactful in this case because “consumers are attracted to ‘larger’ daily fantasy sports websites because they have larger pools of players and prizes.”
Continue Reading Fantasy League Competitors Battle on the NAD Court for Decision Over Who Can Claim “Largest US-Based Website”

It used to be that when you went to the movies you would try to get there a little early to catch all the trailers. But if you got there too early there would be that awkward time in a half-lit movie theatre with the folks you were with (and maybe your cellphone) waiting for everything to start. In recent years the movie theatres have helped us out by having content on the screen all the time. Of course that content was mostly advertising, and it turns out that someone was making that content. Actually, according to a recent complaint filed by the Antitrust Division of the Department of Justice, just two firms accounted for this content on nearly 88% of all movie screens in the country: National CineMedia, which is majority owned by the three largest exhibitors in the US, and Screenvision, which is partially owned by the fourth largest exhibitor. This past spring, NCM, which is on 51% of all movie screens in the US agreed to buy Screenvision. The Department of Justice was not amused, and filed a complaint this past week to block the deal.
Continue Reading In a World Where Advertising is Shown in Movie Theatres…

This blog reports frequently on the troubles Syringemarketers get into with the FTC, State AGs, the NAD, under the Lanham Act, or from class actions based on making allegedly false statements about their products or their competitors’ products.  A recent $113 million jury verdict in Texas reminds us that the antitrust laws can come into play as well for such conduct, if an actor with monopoly or market power can be said to be unlawfully excluding its rivals by its advertising or marketing techniques. 

Retractable Technologies (“Retractable”) developed a disposable retractable point or “safety” syringe designed to reduce the risk of accidental needle sticks for health care workers and to eliminate the possibility that syringes would be reused.  Among other things, these features would help reduce the risk that health care workers would be exposed to the HIV virus and that used syringes would be re-used for illegal drug use.  Becton Dickinson (“BD”) possessed a dominant share of the existing conventional disposable syringe market.  In response to Retractable’s introduction of the safety syringe, BD introduced its own safety syringe.  Litigation involving claims of patent infringement, monopolization, restraint of trade, and false advertising ensued.
Continue Reading Ouch, Treble Damages in False Advertising Cases?