“STEP RIGHT UP:” TRENDS, TRICKS AND TRAPS OF ADVERTISING LAW TODAY By: Charles M. Hosch Lauren T. Becker

WHO IS WATCHING? WHO IS LISTENING? Your customers, ideally. But also: 1.Your competitors Lanham Act Section 43(a) (“no false representations in commerce) 2.Federal Trade Commission (no “false,” “misleading” or “deceptive” statements, acts or practices) 3.State Attorneys General (state-based “little FTC Acts”)

WHAT ARE YOU SAYING? (ARTICULATE THAT FIRST) 1.“Puffery” -nobody would believe; or -can’t be verified 2.Express claims Objective, or objectifiable 3.Implied claims Not stated outright, but the point gets across 4.Establishment claims (e.g., “Tests show…”) “Tests” have to “show,” whether or not the underlying claim is true

TELLING THE TRUTH “People say I gave them hell, but I never did. I just told the truth and they thought it was hell.” -- Harry S. Truman Opinions? Can objective facts “transform” an opinion into a claim? “Half-Truths:” Based on verifiable facts… (e.g., new”….but insignificantly so? (or “contains XYZ…but not much of it?) Omissions? Long list of advantages compared to competitor… ….but omits equally long list of disadvantages? “So and so prefers Brand A” …but doesn’t say “because we give it away to them for free”

PROVING IT FTC Rule: Must Have “Prior Substantiation” of Any Claim Without reasonable “prior substantiation,” FTC views as per se misleading TIP: Focus on your proof. What’s in your file?

4 MORE PRACTICAL TIPS 1.WATCH FOR “HOT” WORDS AND PHRASES Many words or phrases carry interpretive regulations, or bodies of law, as baggage. “Made in USA” “Safe” (or its cousin “effective”) “100%” “Fat Free” “No [this]” or “No [that]” “New”

2.CHECK THE MECHANICS OF HOW THE AD RUNS Many laws address irritating means of message delivery. Telemarketing rules (vary some by states) Door-to-door sales Autodialing Negative solicitations Contests, prizes and give-aways 4 MORE PRACTICAL TIPS (cont’d)

3.WATCH FOR SPECIAL INDUSTRY RULES Special rules for consumer goods, pharma, electronics, other industries 4 MORE PRACTICAL TIPS (cont’d)

4.CONSIDER THE INTENDED AUDIENCE e.g., Special rules for marketing to children Your competitor WILL know ….even if you don’t mention it by name (“Kinder and gentler than whom?”) -- Nancy Reagan, watching George H.W. Bush accept the Republican nomination in MORE PRACTICAL TIPS (cont’d)

“SELF-REGULATION” OF ADVERTISING: The New Trends

BBB members can bring complaints here Alternative to litigation, FTC and state AGs Quick Complaint, response, 2 more rounds, staff decision in 75 days Decisions published in “case reports” (press releases)

Clearly a trend toward use of “self- regulatory” bodies like these Decisions give helpful guidance on how claims are evaluated Made quickly, with lower cost, and no inter-party discovery Relatively sophisticated decision-makers But…..

Underlying disputes (and governing principles) still the same. …..merely shifts the fight to a different forum “Informality” and “speed” may cut against you ……suppose you need discovery from other side (for proof, or defense) Advantages may be illusory ……if the decision will have to go to the FTC eventually, then must prepare thoroughly anyway, with no savings

UTOPIA? Probably not. But: Any map of the world that doesn’t have Utopia on it isn’t a map worth having anyway. -- Oscar Wilde