False Advertising Disputes

131 Pages·2009·6.33 MB·English

ARNOLD & Porter
llp
ROUNDTABLE
BREAKFAST SERIES
Lawyers Partnering with Business
False Advertising Disputes:
Benefits, Challenges, and Risks of Making and
Defending Against False Advertising Claims
October 22, 2009
ROUNDTABLE
BREAKFAST SERIES
Lawyers Partnering with Business
False Advertising Disputes:
Benefits, Challenges, and Risks of Making and Defending Against
False Advertising Claims
Table of Contents
Agenda ....................................................................................................................................................Tab 1
Presentation Slides .................................................................................................................................Tab 2
Speaker Biographies: Mary Engle, David Mallen, Michael Mazis, and Randy Miller .............................Tab 3
“Copy Testing Issues in FTC Advertising Cases,” By Michael Mazis .....................................................Tab 4
“Reference Guide on Survey Research,” By Shari Seidman Diamond ...................................................Tab 5
“Chicken Raised Without Antibiotics: The Latest Lanham Act Deception Case ....................................Tab 6
to Bring Down a National Advertising Campaign,” By Randy Miller
Lanham Act Litigation Checklist ..............................................................................................................Tab 7
Arnold & Porter Consumer Advertising Law Blog .................................................................................Tab 8
Arnold & Porter’s Consumer Protection and Advertising Law Brochure ...............................................Tab 9
ROUNDTABLE
BREAKFAST SERIES
Lawyers Partnering with Business
False Advertising Disputes:
Benefits, Challenges, and Risks of Making and Defending
Against False Advertising Claims
Agenda
7:30–8:00 a.m. Registration and Continental Breakfast
8:00–8:15 a.m. Welcome and Introduction of Panel
8:15 a.m. Panel Discussion Addressing:
– Identifying and challenging implied claims in advertising litigation
– Lessons learned from recent cases
– Comparison of the self-regulatory process to litigation
– How false advertising cases play out at the Federal Trade
Commission (FTC) and the National Advertising Division of
the Council of Better Business Bureaus, as well as those cases
involving the Lanham Act, consumer class action, and state
attorneys general
– The perspective of the regulators: recent developments at FTC
– How surveys are used (and misused) in advertising disputes
– Defenses: puffery, primary jurisdiction, voluntary cessation, truth,
and counterclaim
10:00 a.m. Questions and Answers
10/22/09
The FTC’s Advertising Priorities
Mary K. Engle
Associate Director for Advertising
Practices
U.S. Federal Trade Commission
Arnold & Porter Roundtable Breakfast
Series
McLean, VA
October 22, 2009
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Current Priorities
 National advertising
 Health claims
 Functional foods
 Updating order substantiation
requirements in health-related cases
 Green marketing
 Endorsements and testimonials
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10/22/09
National Advertising, Especially
Advertising Making Health Claims
 Health claims are becoming more
prevalent in food advertising – so we are
giving increased scrutiny to food
advertising
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2
10/22/09
Health Claims Cases
 Kellogg(Mini Wheats) (consent order 2009)
 Advertisers must be careful when transforming research findings
into advertising claims
 Airborne (consent judgment 2008)
 Implied claims, including claims made through visual depictions,
can be misleading
 RRiittee AAiidd aanndd CCVVSS((ccoonnsseenntt jjuuddggmmeennttss 22000099))
 Retailers are liable for the claims they make –especially the health
benefit claims –about their store-brand products
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Kellogg’s Frosted Mini-Wheats
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3
10/22/09
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Frosted Mini-Wheats
 Kelloggs’ ads claimed that the cereal was
“cclliinniiccaallllyy sshhoowwnn ttoo iimmpprroovvee kkiiddss’
attentiveness by nearly 20%”
 Only half of the kids in the study showed
any improvement in attentiveness; only 1
in 7 improved by 18% or more and only 1
in 9 impproved byy 20% or more
 Kids who ate Frosted Mini-Wheats were
compared against kids who only had
water
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4
10/22/09
AAiirrbboorrnnee
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Net impression
 We look at the
entire ad,
including all
graphics and
visual elements
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5
10/22/09
 Earlier ads made express
cold prevention claims
 Later ads made the same
claims through implication
 Order included up to $30
million in refund program,
including private class
action settlement
FTC v. Airborne Health, Inc. et al.(Stipulated Final Order 2008)
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Dissenting Statement
 Commissioner Rosch issued a dissenting
ssttaatteemmeenntt iinn tthhee AAiirrbboorrnnee ccaassee
 Did not support permitting the run-out of
product labeling for several months
 Believed that the Complaint and Order
should have addressed assertions of the
pprroodduucctt’ss “iimmmmuunnee--bboooossttiinngg” qquuaalliittiieess
 Believed that corrective advertising was
necessary to remove lingering
misperceptions about the product
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10/22/09
Improvita, Rite Aid, CVS
 FTC sued Improvita, manufacturer of
AAiirbborne kknockk-offff prodductt solldd bby RRiitte
Aid and other retailers
 FTC settled with Rite Aid (Germ Defense)
($500,000 in consumer redress) and CVS
(AirShield) ($2.8 million in consumer
rreeddrreessss))
 Complaints included allegations as to
immunity-boosting claims; no run-out
provisions in orders
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Functional Foods
 Health benefit claims for foods – “functional
foods”
 Claims such as boost the immune system,
assist with memory and brain function, boost
metabolism, protect the heart, etc.
 Claims must be supported by strong science
 AAddss sshhoouulldd nnoott oovveerrssttaattee wwhhaatt tthhee rreesseeaarrcchh
shows
 We have concerns with disease prevention or
treatment claims not approved by FDA
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