“STEP RIGHT UP:” TRENDS, TRICKS AND TRAPS OF ADVERTISING LAW TODAY

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

2. 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”)

3. 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

4. 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”

5. 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?

6. 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”

7. 4 MORE PRACTICAL TIPS (cont’d) • 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

8. 4 MORE PRACTICAL TIPS (cont’d) • 3. WATCH FOR SPECIAL INDUSTRY RULES • Special rules for consumer goods, pharma, electronics, other industries

9. 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 1988

10. “SELF-REGULATION”OF ADVERTISING: • The New Trends

11. 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)

12. 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…..

13. 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

14. 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