Despite celebrity endorsements from the likes of Dennis Miller and Alan Thicke, all that glitters isn’t gold when it comes to the marketing of precious metal investments. In March 2014, American Bullion, Inc., which is in the business of encouraging individuals to convert their retirement savings to gold and silver, brought suit against its competitor, Regal Assets, LLC, in the Central District of California, alleging a host of unsavory internet marketing practices. Last month, the Court ruled that American Bullion had indeed stated valid claims for, among other things, false advertising… More
Category Archives: False Advertising
If you happen to be in the Boston area this August, and you are sick of the Freedom Trail, here’s an idea for a little trademark trail. Start in Cambridge at Moody’s Falafel Palace and head downtown past Kneeland Street to the waterfront. Then hop on a Harbor Island ferry and get off at Spectacle Island, where a piece of a vintage White Tower Hamburger plate recently washed up on the beach.
The Rise of the Castle
Upton Sinclair’s 1906 novel, The Jungle, discouraged many Americans from eating ground beef, but the owners of
The Supreme Court issued a unanimous decision last week in Pom Wonderful LLC v. Coca-Cola Co., a case pitting the false advertising provisions of the Lanham Act against the beverage labeling standards of the federal Food Drug & Cosmetics Act (FDCA). Pom Wonderful, maker of 100% pomegranate juice and other pomegranate-based products, brought false advertising claims against Coca-Cola, accusing its Minute Maid Pomegranate Blueberry drink of misleading consumers into believing they were drinking more pomegranate and blueberry juice than they in fact were. Coca-Cola’s drink, in… More
Flummoxed By FLANAX: TTAB Cancels Trademark Registration Based On Misrepresentation As To Source Despite No Use In U.S. By Petitioner
In an interesting precedential decision, the Trademark Trial and Appeal Board (TTAB) canceled a registration for FLANAX despite the fact that the petitioner, Bayer Consumer Care AG, did not use FLANAX in the United States, but only in Mexico. The case illustrates that the “misrepresentation as to source” provision of the Lanham Act can be a useful tool in egregious cases, and can be asserted even when a registration is no longer vulnerable to cancellation based on likelihood of confusion grounds under Section 2(d) because of the passage… More
After a week at the International Trademark Association Annual (INTA) Annual Meeting in Hong Kong, and another spent exploring the city and its surrounds, it’s nice to be heading back to the comparatively quaint major city we call home. But as I fly through Siberian airspace, over the North Pole, and through Canada en route to Beantown, I have a few parting thoughts.
The Gateway to Everything
In its recent decision in Sussman-Automatic v. Spa World, the Eastern District of New York dismissed a plaintiff’s trademark infringement claims, while allowing its claims for false advertising based on the same conduct to survive. The decision explores the boundaries between a false advertising “bait-and-switch” scheme and the “initial interest confusion” theory in Lanham Act cases.
The Mr. Steam Bait-and-Switch
The plaintiff, Sussman-Automatic (“Mr. Steam”), is the maker of the “Mr. Steam” brand of shower and spa products. According to the complaint, Spa World ran a website which advertised the… More
Milk Dud? False Advertising Lawsuit Against Makers of Muscle Milk Illustrates Interplay Between Lanham Act, FTC and FDA
In a lawsuit recently filed in the Southern District of Florida, Global Beverage Enterprises, Inc. (“Global”), the manufacturer of specialty carbonated beverages like Mr. Q. Cumber Sparkling Cucumber Beverage, brought Lanham Act claims against CytoSport, Inc., alleging false advertising of CytoSport’s popular Muscle Milk line of beverages. The basis of the claim is that the Muscle Milk beverages contain no milk and, therefore, the product name is false and misleading. If the case sounds vaguely familiar, it might be because this is not the first time Muscle Milk products have… More
On April 30, 2014, the plaintiffs in Bezdek v. Vibram, a class action in the District of Massachusetts, filed for court approval of a class wide settlement. The case had been brought against Vibram, the Italian manufacturer of “five finger” minimalist footwear, by consumers who alleged that the company committed false advertising when promoting health benefits of its product for which there was allegedly no scientific support. Last year, Judge Douglas Woodlock denied Vibram’s motion to dismiss, and settlement negotiations followed.
Under the settlement terms, Vibram will pay a total… More
This Porridge is Just Right: Supreme Court Adopts “Zones of Interest” Standing in False Advertising Cases
When we last posted about Lexmark v. Static Control, we expected that the Supreme Court would endorse one of the circuit court tests to determine whether Static Control, the maker of a chip that facilitates printer cartridge remanufacturing, had standing to bring a false advertising claim against Lexmark, a company that makes printers and printer cartridges but is not strictly a competitor of Static Control. The case concerned Lexmark’s statements that the remanufacturing process and Static Control’s product were illegal and infringed on Lexmark’s intellectual property. Until now, the only… More
Social media has become a powerful marketing tool, allowing celebrities to develop their brands and images with the help of Facebook updates or Tweets that can reach millions of fans at the same time. Given the importance of social media as a brand-building medium, how should the law treat “fan accounts,” which are created by fans using a celebrity’s name? What protection does the law provide to celebrities trying to control usage of their personae and brands on social media platforms?
These questions are at… More
Today’s consumers depend on “crowd-sourced” review websites like Angie’s List and Yelp, which permit users to post and read reviews of goods and services. Businesses feel a corresponding pressure to encourage favorable reviews on such websites. But what happens when the website intervenes to regulate the reviews it hosts, perhaps (for example) by deleting reviews that appear phony or suspicious? Can a business sue the website for deleting reviews that would otherwise reflect positively on its goods or services?
Judge George A. O’Toole, Jr. of the U.S…. More
A recent opinion from the Western District of Virginia sets forth a useful framework for analyzing a variety of Lanham Act claims based on false commercial speech uttered in social media.
In October 2012, “Jim Chung” created a LinkedIn profile for himself. Chung identified himself as a 2010 graduate of Tsinghua University, a resident of Xinjiang, China, and a Software Engineer for the U.S. company AvePoint, Inc. Chung used his LinkedIn profile to connect with customers, software professional groups and fellow AvePoint employees. As with any LinkedIn… More
A recent decision resolving an advertising dispute between Campbell Soup Company and Tropicana Products, Inc. reinforced what we know to be empirically true: simply claiming to be the “best” really doesn’t mean much at all. See Tropicana Products, Inc., NAD Case Report No. 5610 (July 3, 2013). It’s usually just hyperbole, a tool in the advertiser’s toolbox too vague to put a competitor at a disadvantage, mere “puffery” in legal parlance.
The Challenged Commercial
The dispute, which was brought by Campbell before the National Advertising Division,… More
The Supreme Court has recently agreed to hear argument in Lexmark v. Static Control that will strike at the very heart of false advertising jurisprudence by asking who is allowed to bring false advertising claims. The Lanham Act states that such claims may be brought “by any person who believes that he or she is or is likely to be damaged by” an alleged misrepresentation “in commercial advertising or promotion.” Courts have varied in interpreting that language to determine exactly who is an appropriate plaintiff.
Summary of Claims Giving Rise to Dispute
This case was brought over a decade… More
Dot Com Disclosures 2.0: FTC Updates Online Disclosure Guidelines to Address Changes in Digital Advertising
Nearly thirteen years after issuing guidelines governing online advertising, the Federal Trade Commission (“FTC”) recently updated its so-called Dot Com Disclosures to take account of the many changes to the online world that have occurred over those intervening years. Whereas most digital advertising thirteen years ago was popping up or scrolling across our computer screens, today’s digital advertising is far more integrated into our online culture—whether as email offers to invitation-only flash sales (“50% off; today only!”), sponsored Twitter feeds, solicited blog reviews, or advertisements dressed up to… More
Amazon has recorded another success in its battle with Apple over use of the term APP STORE. The U.S. District Court in California has granted Amazon’s motion for summary judgment on Apple’s claim of false advertising arising from Amazon’s use of the term APP STORE (or APPSTORE in practice) in connection with Amazon’s online store selling applications for Android devices and the Kindle Fire.
“Raw” Row: NAD Declines Recommending Discontinuance of IN THE RAW Product Claim for Stevia Sweetener
Cargill Health & Nutrition, the maker of TRUVIA sweeteners, recently brought a false advertising challenge against its competitor Cumberland Packing Corp. over Cumberland’s use of the product name STEVIA IN THE RAW. See Cumberland Packing Corp., NAD Case Report No. 5525 (November 29, 2012). Cargill brought the challenge before the National Advertising Division, a self-regulatory program administered by the Better Business Bureau. According to Cargill, STEVIA IN THE RAW conveys a literally false message to consumers that the product is comprised solely of stevia, a naturally-occurring sweetener. In fact, STEVIA… More
In August of this year, Warner Brothers finally announced the release of Age of the Hobbits, Peter Jackson’s long-awaited follow-up to his Lord of the Rings trilogy, based on J.R.R. Tolkien’s famous fantasy novels. Age of the Hobbits tells the tale of a clever group of diminutive Indonesian tribesmen who convince Chinese actress Bai Ling to save them from a hoard of cannibals mounted on flying Komodo dragons.
Wait a second. Does that sound right? Actually, the Warner Brothers film is called
The Federal Trade Commission released its much anticipated “Green Guides” earlier this month. As discussed here, on Foley Hoag’s Law & the Environment blog, the guides seek to rein in the use of specious environmental marketing claims by ensuring that marketers have competent and reliable scientific evidence to back up express and implied environmental claims. As with other FTC guides (e.g., its 2009 Endorsement and Testimonial Guides), the Green Guides are quite specific, providing detailed guidance on a number of… More
The Federal Trade Commission recently finalized changes to its investigative procedures. The changes are intended to streamline a process that has, in recent years, become increasingly lengthy and unwieldy. The driving force behind the changes, which will become effective November 9, 2012, is the ever-increasing pace of technology, in particular its effect on the amount of electronic data that a respondent must comb through when it finds itself the target of a Commission investigation.
The Current Process
Typically, the Commission commences an investigation by serving a… More
A federal district court in Massachusetts was recently sucked into a false advertising dispute between manufacturers of competing vacuums and steam cleaners over alleged violations of Section 43(a) of the Lanham Act. The plaintiff, Euro-Pro Operating LLC (“Euro-Pro”), which manufactures the popular “Shark” steam mop and “Shark Navigator” vacuum, filed suit against the defendant, TTI Floor Care North America (“TTI”), alleging false advertising and unfair competition in connection with certain superiority claims made in infomercials for TTI’s “TwinTank” steam mop and “WindTunnel” vacuum cleaner.
*75% is only the author’s opinion. Actual likelihood may vary.
In the midst of one of the most brutal heat waves in recent history, the FTC has published a research study taking window manufacturers to task for, among other things, making aggressive “up to” claims regarding savings on air conditioning bills. (In case you were one of the millions sweltering without power, here is one of the ads that the FTC focused on in its report.)
According to the FTC, the key take-away of the study is that “when marketers use the phrase… More
Spring Cleaning: FTC Announces Settlement with Oreck Corporation Regarding Vacuum Cleaner and Air Purifier Claims
The Federal Trade Commission has been busy. On the heels of its $40 million settlement with Skechers, one of the largest of its kind, the Commission yesterday announced that it has settled with Oreck Corporation regarding allegedly unsubstantiated claims that the company made regarding its Halo vacuum cleaner and ProShield Plus portable air purifier. Oreck has agreed to pay $750,000, which will be disbursed to affected consumers via $25 refund checks, and has further agreed to refrain from making certain identified advertising claims without adequate substantiation. As is customary in these types of proceedings, Oreck has neither admitted nor… More
Shape-up or Ship-out: FTC Sends Tough Message to Marketers of Toning Shoes But Fails to Clarify Murky Standard
After much hype on Twitter regarding an action against a “major marketer of consumer goods,” the Federal Trade Commission today announced that it has settled with Skechers USA, Inc. over allegedly deceptive claims that the company made concerning its Shape-ups and other “toning shoes.” The settlement was part of a broader agreement resolving a multi-state investigation led by Attorneys General in Ohio and Tennessee and comes roughly eight months after a similar FTC action against Reebok. For its part, Skechers denies the allegations made by the FTC and Attorneys General and states… More
Frank Fazio, a disgruntled iPhone 4S user from New York, recently filed a federal class action lawsuit against Apple in California, alleging that the Siri feature of the iPhone 4S does not work as advertised. For those of you who still use pay phones, Siri is a virtual assistant that uses voice recognition to answer questions and perform tasks that would otherwise require typing, such as making calls, sending text messages, scheduling meetings, and getting directions. Mr. Fazio alleges that he purchased an iPhone 4S in November 2011 based on representations made by Apple regarding the Siri feature but began noticing problems right away.
On September 28, the FTC announced that Reebok has agreed to pay $25 million to settle a lawsuit alleging that Reebok’s EasyTone shoes were advertised in a deceptive manner. According to the FTC’s press release, the funds will be made available for consumer refunds either directly from the FTC or through a court-approved class action lawsuit.
The FTC’s complaint alleges that Reebok’s ads deceptively represented “that laboratory tests show that when compared to walking in a typical walking shoe, walking in EasyTone footwear will improve muscle tone and strength by 28% in… More
False advertising is an expensive business model. In a recent case involving infomercials for coral calcium supplements which allegedly cure cancer (among other things), the First Circuit affirmed an order requiring the defendants to disgorge nearly $50 million in gross revenues — not just profits — on the ground that the “consumer loss” was an appropriate measure of damages.
But false advertising can be expensive for plaintiffs, too. Companies whose competitors are engaging in unfair or deceptive advertising practices often face a dilemma — take action and run up their own legal bills, or stand quietly by and watch… More
In what would appear to be the final chapter of the battle between online giant eBay and luxury jeweler Tiffany, a Southern District of New York judge has bounced Tiffany’s false advertising claim, the only claim remaining following a Second Circuit decision earlier this year.
On remand, the district court focused on whether eBay’s advertisements about the availability of Tiffany merchandise on its site misled or confused customers since at least some purportedly Tiffany products were counterfeit. Tiffany conceded that there was no… More