Fara Sunderji

Last week, ABKCO Music & Records, Inc. filed suit against BEHR Paint Company over an Instagram post on the brand’s account that included The Rolling Stones song Paint It, Black. The post was from 2022, but ABKCO claims to have only discovered it recently. The post has now been deleted. According to the complaint, BEHR refused to provide ABKCO with any information regarding authorization for the use or to engage in any dialog about it, so ABKCO sued for copyright infringement. Specifically, ABKCO claims that BEHR “reproduced, distributed, transmitted, and publicly performed, and created a derivative work of, the ABKCO Recording, none of which acts were licensed or otherwise authorized.”  The damages amount is unspecified, but ABKCO claims that it regularly licenses the recording for commercial use for significant fees. This complaint serves as a good reminder that social media posts by brands are likely commercial uses that generally require any accompanying music to be licensed directly from the rights holder.  Brands are not free to do what they want any old time.  The built-in platform music libraries have terms, and they generally specify that the music is available for personal, non-commercial use only.   So feel free to post a picture of your dog on your personal account and add a song from The Rolling Stones without fear that Mick will want to see it painted black, but you can’t always get what you want for a brand account -- at least without paying a royalty.

Earlier this year, we blogged about effective influencer disclosures on Instagram. Our attention is now on TikTok with the help of a recent decision from the National Advertising Division. On October 13, 2025, the NAD released its decision in a challenge brough by Niagen Bioscience against Reus Research regarding its Cata-Kor NAD+ Core and Cata-Kor NAD+ Advanced supplements. The challenge addressed numerous advertising issues, including comparative claims, efficacy claims, establishment claims, health and safety claims and performance claims, but what really caught our eye was the NAD’s ruling on influencer endorsements – specifically on TikTok. Most brands are well aware that the FTC requires influencers to disclose their connection to a brand and that brands are generally responsible for ensuring compliance with the FTC’s Endorsement Guides. We’ve been hearing for years that #sponsored or #ad are the gold standards for disclosure. The FTC has also made clear through its FAQs that built-in social media tools are not necessarily effective for influencers to disclose their material connection to a brand. However, until now, the FTC has not specifically addressed any current or former built-in platform tools on the various popular social media websites. Lucky for us, this case gave the NAD the opportunity to review the built-in tool on TikTok and issue its opinion. If you are not familiar, below is what the “disclosures” look like when influencers use the built-in platform tool. All the way at the bottom of the screenshots – labels are automatically applied that state “creator earns commission” and “sponsored.” While the NAD found that the message “creator earns commission” is clear and its appearance (font color vs the background) is generally conspicuous, they concluded it is too small and could easily be missed. Unsurprisingly, the NAD also noted that if an influencer is promoting a brand audibly, then the disclosure should also be made verbally. For their part, the advertiser noted that it has recently updated its guidelines to require its influencers to: (1) say a disclosure in the video (“sponsored by Cata-Kor” or “ I earn a commission from this”); (2) add on-screen text in the first few seconds of the video and (3) include a disclosure in the caption (“#ad or #catakorapartner”). The challenger, however, noted that it reviewed hundreds of posts on TikTok and saw no verbal disclosures or disclosures via a hashtag. In end, the NAD made the recommendation that the advertiser should modify its influencer posts to include a material disclosure connection in a clear and conspicuous manner by both audio and written means. The disclosure must be unavoidable, which requires something more than the built-in tool.

Photo by Sarah Robertson The Dorsey Trademark, Copyright + Advertising team is back from the 2025 International Trademark Association Meeting. It was one for the books. We mixed and mingled with old and new colleagues and as well as our friends from around the world. In between all the meetings and social events, we did manage to attend a few of the important panels and of course, our committee meetings. Here are the highlights: AI-Driven Advertising: Copyright Issues in the New Frontier – This was a lively and engaging panel that focused on managing the chaos that the burgeoning use of AI by companies and independent contractors has caused relating to ownership and authorship of AI-created content. The panel several times reiterated the mantra: Be Fair, Be Bold, Be Reasonable. They encouraged companies to ask whether they actually need to own the content that is created. They also discussed contract clauses “from the wild” and pointed out what works and what can be unreasonable. The most important takeaway was to make sure that whoever is using AI to create content is documenting the process carefully, regardless of whether it is a vendor or an employee. This is because the Copyright Office will require an explanation as to the use of AI to determine whether, and how much of, a work is registrable. USPTO Update: Fireside Chat with Acting Under Secretary of Commerce for Intellectual Property and USPTO Acting Director Coke Morgan Stewart – Acting Director Stewart answered questions about the PTO’s direction under the current administration. She indicated that the USPTO has explained to the administration that as a fee generating agency – rather than a taxpayer funded agency – the USPTO should not be subject to current cost-cutting measures. Despite this, Acting Director Stewart believes the agency can continue to reduce pendency and maintain quality without filing open positions. She also indicated the USPTO is looking into the use of AI to help with review of design marks and to detect fraud. Our neighbors to the North, the Canadian Intellectual Property Office (CIPO), also provided updates about the examination process and efficiency, indicating that they hoped to clear their backlog in just a few months. Greenwashing, Greenhushing and Sustainably: INTA’s Brands and Sustainability Committee met at this year’s conference to discuss the hot topics of greenwashing and greenhushing. If you are not familiar, greenwashing is essentially the false marketing of green/environmental or sustainable claims. Most recently, we’ve seen a lot greenwashing in the context of aspirational claims, namely brands striving to be carbon neutral or reduce their emissions by a certain year. Greenhushing, on the other hand, is when brands do good for the environment, but don’t publicize it. Greenhushing can occur for various reasons including, fear of accusations of greenwashing, consumer perception that “green” products are more expensive or inferior, or even for political reasons. While we didn’t make any promises or claims, the committee was proud to support a digital business card initiative and encourage the use of reusable water bottles to help make the conference more sustainable for all. Crafting Successful Agreements with Branding Agencies: A roundtable discussion took place between practitioners from Canada, the UK, and US on how brands can best partner with their creative agencies and areas of best drafting practices for agreements between the two. Discussion of the scope of services and consideration of AI-generated work product dominated the conversation, including how best to allocate risk created by the use of AI particularly where this work product is specifically contemplated or where influencers are involved. Discussion of the extent of preliminary clearance work members of the group were carrying out on behalf of agencies, or that agencies were otherwise expected to conduct, also took place. An overall downward trend in full, in-depth trademark search orders more generally, as shared by the one of the leading search companies present, was also covered. The unique risks attached to working with smaller agencies, including the absence of enterprise software licenses, was also discussed. Law and Policy | Rules of the Road in Engaging with Celebrities, Influencers, and Fans: This session brought a global perspective to how companies interact with and negotiate with celebrities and influencers in relation to the promotion of their brands. The panelists focused on how they prioritize and make use of time and resources depending upon the nature and length of a promotion, as well as the potential impact of the promotional activities on their brands. Interestingly, in Argentina, many companies create specific scripts that must be used by influencers to help minimize regulatory and legal risks. Aside from potential pitfalls in agreements, the panelists also discussed deepfakes and artificial intelligence and the impact on their promotional activities and on their brands, as well as issues with poor influencer behavior and even taxation issues. Truly, an ever-evolving area as technology becomes even more intwined in the influencer landscape. Successfully Mediating IP Disputes: Key Insights and Practical Tips – INTA’s ADR Committee hosted a panel discussion on trademark mediation, highlighting the growing value of mediation in resolving IP disputes. Panelists emphasized its advantages over litigation, including lower costs, reduced risk, and the opportunity for creative, business-focused solutions. They discussed the qualities of effective mediators, such as neutrality, communication skills, and business acumen, and considered whether mediators should propose solutions or simply facilitate dialogue. The consensus favored a balanced approach that maintains neutrality while offering constructive suggestions. The discussion also addressed the importance of preparation, confidentiality, and having decision-makers present. Challenges of virtual mediation were noted, including distractions and reduced engagement, as well as the supportive but limited role of AI. Real-world examples illustrated the need for mediators to guide the process while allowing parties to retain control over outcomes. Annual Review of Trademark Cases: Always an attendee favorite, this session featured an overview of trademark decisions over the last 12 months lead by Theodore Davis of Kilpatrick Townsend and John Welch of The TTABlog fame. Notable decisions include those upholding the validity of the Lanham Act’s “names clause” (requiring written consent to register a mark containing a person’s name) under the First Amendment (Vidal v. Elster, 602 U.S. 286 (2024)), confirming that inaccurate patent claims may provide grounds actionable false advertising claims (Crocs, Inc. v. Effervescent, Inc., No. 22-2160 (Fed. Cir. 2024)), holding mere use of a party’s name in a judicial proceeding is not actionable under Lanham Act (Dieujuste v. Sin, No. 24-1522-cv (2d Cir. 2025)), confirming that the TTAB’s “something more” doctrine applies only to the relatedness of goods to services and not to goods to goods (In re Samsung Display Co., Ltd., No. 90502617 (T.T.A.B. 2024)), and clarifying that product color resulting from practicing an expired patent cannot also have trademark significance because the color is functional under the expired patent (CeramTec GmbH v. Coorstek Bioceramics LLC, No. 2023-1502 (Fed. Cir. 2025)). John Welch also recounted his top losing TTAB arguments, with the number one slot belonging to arguments that attempt to impart in real-world limitations to goods/services in an application/registration (since the TTAB typically only considers the goods/services as listed), and listed some of his pet peeves, such as using the word “trademark” as a verb (ironically used as such by the Supreme Court in its Elster decision).

For years now we’ve been blogging about how much the FTC and even the SEC on occasion love scrolling Instagram posts to see what influencer are up to. This post is about another three letter organization who likes to scroll to confirm advertiser and influencer compliance with the FTC’s now very well-known Endorsement Guides. If You Don't Know Now You Know - The National Advertising Division or the NAD was founded in 1971 as an independent self-regulatory, non-profit organization, whose mission it is to ensure adverting claims are truthful and accurate. The NAD is part of the BBB National Programs, an independent non-profit organization that oversees more than a dozen national industry self-regulation programs. Advertisers can bring challenges against one another and the NAD also initiates its own challenges.  Participation is voluntary (this is not a court of law) and there is no possibility for fines or damages, but the NAD is friends with the FTC and refers cases on occasion. With that introduction out of the way, we are here to update you on a recent case filed by the NAD itself against Skims, the underwear, lounge wear and shapewear brand. While this blog probably won’t make you look slimmer, this post might just give your brand’s influencer advertising a clearer and more conspicuous look . Like many brands, Skims hires celebrities to promote the brand on social media. The case focused on whether social media posts by Lana Del Ray and Brittany Mahomes adequately disclosed the financial relationship between the influencers and the brand. At the outset, the NAD noted that: The FTC’s Endorsement Guides state that when there exists a connection between the endorser and the seller of the advertised product that might materially affect the weight or credibility of the endorsement, and that connection is not reasonably expected by the audience, such connection must be disclosed clearly and conspicuously. With that in mind, the NAD reviewed Instagram posts by Lana Del Ray that show her wearing Skims products, which either mentioned the brand by name or tag @skims in the caption of the post. The Brittany Mahomes’s posts feature her and her family wearing Skims products, but no specific mention of the brand in the caption of the post and while she tagged the brand in the picture, she did not tag @skimms in the caption. The NAD found that neither influencer had complied with the FTC Endorsement Guides. In reference to Lana Del Ray’s posts with the tag, the NAD stressed that: The FTC has further made it clear that tagging a brand you are wearing in a social media post is an endorsement of the brand. However, tagging a brand does not constitute a sufficient material connection disclosure, as an influencer could be tagging a brand simply because they like it and want their followers to be able to find it. The FTC makes it clear that just like any other endorsement, a social media post tagging a brand may require a material connection disclosure if the influencer has a relationship with that brand. As for Brittany Mahomes, the NAD put itself in the shoes of a reasonable consumer and found that even though the photos show the celebrity and her family with hair and makeup done, they are not so highly stylized that a consumer would understand them to be a paid advertisement campaign on direct viewing. Disclosures are still necessary. So we’ve told you what the influencers did and did not do (and you can see above how Brittany Mahomes corrected her post), but what about Skims? For their part, Skims followed three key practices that all brands should follows: Skims contractually required its influencers to comply with the Enforcement Guides. Skims provided its influencers with instructions on how to comply – suggesting the use of #ad and/or #sponsored Skims monitored their influencers and in the case of Lana Del Ray, contacted her team when they saw that she was not providing adequate disclosures. None of the three letter organizations that spend time on social media expect your brand’s influencers to be perfect, but the brand is ultimately responsible for its influencers’ behavior and engaging in these three best practices will go a long way to clearer and more conspicuous disclosures.

Earlier this week we met up in lower Manhattan with friends, colleagues and many news faces at the 2024 National Advertising Division (“NAD”) conference. As always, it was great to see and hear from experienced practitioners, the NAD attorneys as well as representatives from the Federal Trade Commission on hot topics in advertising ranging from green washing to privacy and dark patterns to subscriptions. If you didn’t make it this year, we prepared a quick cheat sheet to keep you informed: Artificial Intelligence – AI is now part of daily life and so it is not shocking the NAD attorneys and the FTC representatives spent a good amount time discussing the legal implications of this emerging technology. If we learned nothing else from the conference this year, we learned that the FTC is spending time learning and thinking about AI. In particular, we heard that the FTC is looking into platform AI tools and we should expect to hear some statements on those in the coming months. FTC Commissioner Melissa Holyoak talked about targeted enforcement actions instead of sweeping rules as the agency grapples with the complexities of the technology and the many, many ways in which businesses are applying AI. The agency seems concerned that AI can and has been used to perpetrate fraud (we have already seen some FTC enforcement on this front). At the same time, it also knows that AI is here to stay and can be used in very beneficial ways (think how voice cloning helps those unable to speak). Samuel Levine, Director of the Bureau of Consumer Protection at the FTC also spoke about the enforcement action against Rite Aid, which concluded with a stipulated order prohibiting the company from using facial recognition technology for security or surveillance for five years to settle charges that the retailer failed to implement reasonable procedures to prevent harm to consumers in its use of AI technology in its stores. Consumers Reviews – Consumer reviews have been a hot topic at the NAD conference for a number of years now. You’d think it would cool off. Not that case this year because the FTC accounted its Final Rule Banning Fake Reviews and Testimonials just a few months ago. The rule is effective October 21, 2024. Violations of the rule will allow the FTC to seek civil penalties of up to $51,744 per violation as well as other relief. One of the most interesting parts of the rule relates to review suppression and how companies can legally withhold reviews based on certain criteria. Influencers – We got to hear from Emese Gormely, a real live content creator and podcast host. She told her tales from the front lines of Instagram and sponsored content. We also heard from a panel of legal experts on current trends in influencer marketing. The controversial topic of platform disclosure tools reared its head and we saw first-hand how some platforms have disclosures tools that may look clear and conspicuous on their own platforms, but when you share the content to other platforms, those disclosures disappear, rending the tools completely ineffective. Also, disclosures that leave us guessing at the sponsor’s identity are probably ineffective. In addition, the panel discussed how sometimes content paid for by brands featuring influencers still needs disclosure even it is shared on the brand’s social media feed. Until next time…

Just in time for your health-focused new year’s resolutions, the FTC released an updated guide for marketers: The Health Products Compliance Guidance. This guide last issued in 1998 under a more narrow title, focusing on dietary supplements. The world of health has changed a lot since 1998. While the larger concepts in this updated guide may seems like nothing new, the FTC has helpfully walked us through more than fifty examples applying the concepts to modern products and forms of advertising. If your company advertises health-related products or services, we suggest reading this business guide cover-to-cover with a nice glass of green juice. The FTC makes every effort to draft their guides with non-lawyers in mind. If you only have a few minutes between your next walking meeting and your morning matcha, we’ll take you through the highlights: The foundational rules remain the same – (1) Advertising must be truthful and not misleading and (2) Before disseminating an ad, advertisers must have adequate substantiation for all objective product claims conveyed, expressly or by implication, to consumers acting reasonably. The FTC and FDA share jurisdiction on health-related products – Just because your products fall under FDA law does not mean you can ignore the FTC. The agencies coordinate their enforcement and regulatory efforts and the FTC’s jurisdiction extends to all advertising claims, even those made on labeling, for which the FDA has primary responsibly. However, the FTC gives deference to the FDA and health claims that meet the FDA “significant scientific agreement” standard will be presumed to be substantiated under FTC law. Health claims require competent and reliable scientific evidence – Randomized, controlled, human clinical trials (“RCTs”) are the most reliable form of evidence and are generally the type of substantiation that experts would require for health benefit claims. It is important to note that anecdotal evidence about the individual experiences of consumers, including surveys of consumer experiences, are never sufficient to substantiate claims about the effects of a health product. Similarly, public health recommendations from advisories from medical organizations cannot serve as a substitute for RCTs. Let the basic principles of scientific research guide your studies – The FTC’s guide recommends that advertisers ensure that the research upon which they rely for any health-related claims complies with the basic principles relied on by the scientific community for research. These key concepts include the use of control groups, randomization, double blinding, reliance on statistically significant results, and reliance on meaningful results. Match your claim to your study – The Guides note that this is common problem for advertisers: valid studies, but those studies don’t support the claim being made. Another warning to take to heart is that claims should be carefully worded to avoid overstating the certainty of science in areas where the science is still emerging. If there are significant limitations or inconsistences within the scientific literature, your consumers should be made aware. Advertising in the form of consumer or expert testimonials still require substantiation – As FTC guidance has repeated over and over again: advertisers should not make claims through consumer testimonials or expert endorsements that would be deceptive or deemed unsubstantiated if the advertiser made them directly. The Guide closes with two overarching recommendations: To ensure compliance with FTC law, marketers of any health-related product should follow two important steps: 1) Consider what express and implied messages consumers are likely to take from your ads. Where appropriate, carefully qualify your claims – in other words, clearly explain the limited circumstances in which the advertised benefits or results apply; 2) Carefully review the support for each claim to make sure it is scientifically sound, adequate in the context of the surrounding body of evidence, and relevant to the specific product and advertising claim. Cheers to a healthy 2023.

More and more, we see trademark applications being filed for cultural phenomena, viral sensations and catchy hashtags. We’ve covered this topic before. Do you remember #covfefe? A recent non-precedential decision issued just after Thanksgiving once again confirmed that common laudatory phrases are often incapable of functioning as trademarks. The TTAB’s decision in In re Monday Night Ventures LLC was simple: TACO TUESDAY is indeed tasty, but it is not a trademark for beer. The Board found that TACO TUESDAY failed to function as a trademark for beer because it is a widely used message. In reviewing the Examiner’s refusal, the Board’s set out to answer the following question: We must assess whether Applicant’s proposed mark, TACO TUESDAY, functions as a mark based on whether the relevant public would perceive TACO TUESDAY as identifying the source or origin of the beer. To perform the failure-to-function analysis, the Board reviewed the evidence of record, which consisted of the specimens of use (including a beer menu), the mark as shown on a mockup of a beer can and lots of third-party use of Taco Tuesday submitted by the Examiner. The third-party use fell into two categories: (1) general uses of Taco Tuesday to refer to events on Tuesdays featuring tacos and drinks, including beer and (2) uses of Taco Tuesday on or in connection with beer. Notwithstanding the voluminous evidence of third-party use, the Applicant contended that the failure-to-function refusal was “illogical and incongruous” because TACO TUESDAY is not informational when applied to beer. The Board disagreed. After reviewing the evidence, the Board concluded that Taco Tuesdays often involve beer consumed with tacos. “Thus consumers are accustomed to encountering ‘Taco Tuesday’ in the context of beer.” While the beer menu specimen was adequate and did not show use of the mark in an informational manner, the Board found that Taco Tuesday cannot function as a trademark because of the environment in which it is perceived by consumers. While we surely did not need the Board to tell us that Taco Tuesdays and beer are a great pairing, the decision does provide helpful guidance for would-be trademark applicants of cultural phenomena. Common phrases are often incapable of functioning as trademarks, especially when applied to goods or services that are complementary to the phrase. It is a pretty safe bet that the USPTO would also likely reject TACO TUESDAY for margaritas, but would such a refusal extend to wine? I think wine and tacos are great together, but we’d be wise to see how many restaurants and wineries do a taco-wine pairing before fling an application. In fact, checking the internet before making a trademark filing for one of these types of marks is a great suggestion. While you might be first to file, that doesn’t mean the USPTO will let you have exclusive rights. A better strategy for one of these catch phrase trademarks might be to apply it to goods and services which are actually illogical and incongruous with the phrase. So go and enjoy some tacos and beer – it is Tuesday after all.

Trust and estate attorneys regularly advise their clients to enter into prenuptial agreements to protect the valuable assets each spouse brings to the marriage as well as how to distribute community property in the event of a divorce. Brand collaborations with celebrities, influencers or other brands are much like marriages, but brand collaborations are even more unlikely to last. Why not plan for the split, whether it be a conscious uncoupling or a Page 6 kind of divorce, with a prenup? . . . . Click here to see the rest of Fara’s article on IPWatchdog.

This week, the FTC finalized an order settling a complaint alleging that an online fashion retailer blocked negative reviews of its products on its e-commerce site. The penalty: a $4.2 Million fine, 10 years of record keeping obligations and 20 years of compliance monitoring. The charge: the retailer automatically published four and five star reviews and put lower star reviews on hold. The Director of the FTC’s Bureau of Consumer Protection noted that “Fashion Nova is being held accountable for these practices, and other firms should take note.” So what should other online retailers be doing to avoid deceiving consumers? First, implement a fair customer review publishing policy that accurately reflects the views of all customers who submit reviews. The order gives a few tips for circumstances where it might be appropriate to hold back a review (and when it would not), but on the whole, relevant reviews must be published so consumer can get the full picture. The FTC has also released some tips for brands operating in this space: Soliciting and Paying for Online Reviews: A Guide for Marketers. And if your brand employs another company to help with its online reviews, make sure they are following the guidance in the FTC’s Featuring Online Customer Reviews: A Guide for Platforms. Ultimately, your company can be held responsible for actions undertaken by contractors you employ to help manage the publication of reviews for your brand.

Earlier this week the FTC announced that it had sent more than 700 Notice of Penalty Offense letters to major advertisers, leading retailers, large consumer product companies and major ad agencies to put everyone on notice that fake consumer reviews and other misleading endorsements will not be tolerated. The letters also placed the recipients on notice that significant civil penalties will be imposed on those who use these deceptive tactics. In fact, the letters referenced the FTC’s power to impose fines up to $43,792 per violation. To be clear, just because a business received a letter does not mean the FTC suspects any wrong doing. The FTC suspects that fake reviews and other misleading endorsement are widespread, especially on social media. Fresh from the 2021 NAD conference, we did not find this announcement surprising at all. Readers of our blog will know that consumer reviews have been a focus of both the FTC and the NAD for many years. Whether your brand received one of these letters or not, the FTC wants you to know that it will not tolerate any of the following: falsely claiming an endorsement by a third party misrepresenting whether an endorser is an actual, current, or recent user continuing to use an endorsement without good reason to believe that the endorser continues to subscribe to the views presented misrepresenting that an endorsement represents the experience, views, or opinions of users or purported users using an endorsement to make deceptive performance claims failing to disclose an unexpected material connection with an endorser misrepresenting that the experience of endorsers represents consumers’ typical or ordinary experience The FTC also specifically stated that “positive consumer reviews are a type of endorsement, so such reviews can be unlawful, e.g., when they are fake or when a material connection is not adequately disclosed.” While much is unknown about what will happen in 2022, it is highly likely that we will be seeing an FTC crackdown on false and misleading reviews with the steep monetary penalties.

At the end of September and beginning of October we spent some extra screen time attending the annual NAD Conference that once again was held virtually in New York. We heard from a number of great speakers, including the Hon. Rebecca Kelly Slaughter, Commissioner at the Federal Trade Commission, Mary Engel, EVP at BBB National Programs, Katherine Armstrong, the Deputy Director of NAD and in-house counsel from The Clorox Company, Campbell Soup Company and T-Mobile USA, Inc. If you could not spare the screen time, don’t worry – here’s a quick wrap-up of the highlights: Ad Claims for Political, Diversity and other Social Issues – Brands jumping in on social movements is nothing new, but in recent years and especially in the past 18 months, we’ve seen a rise in brands posting online and otherwise showing support for various social issues. In fact, a brand staying silent on certain issues can speak volumes these days. So for us advertising attorneys, the question becomes do you need to substantiate social media posts on a brand site that aren’t even selling products, but are showing support for a social movement? One example given was a simple Instagram post with the copy STOP ASIAN HATE. The panelists did a great job moving through a series of questions to assess if the brand in question actually stands with the Asian community – is it appropriate for the company to enter this conversation? What has the company done for the Asian community to date? Would a single monetary donation be enough? Should we look at the history of the company’s philanthropy? What about diversity hiring and retention practices? All great questions to ask if you are asked to review such a post for your brand. Another tip, if you are joining the conversation, make sure you prepare reactive messaging ahead of time in case questions are raised about the position taken by the company. A brand’s consumers may well put the brand to the test by asking what they have done and/or looking at the company’s history of actions or inaction. Consumer Reviews – In the past year, both the FTC and NAD have spent time and resources on ad claims related to consumer reviews. For example, in late 2020, the FTC settled with Sunday Riley, a cosmetics company, over allegations that its CEO directed employees to create fake profiles and post reviews for the company’s products on Sephora. While no monetary fines were imposed, the company agreed to twenty years of on-demand compliance monitoring. Earlier this year, NAD dealt with two consumer review cases addressing the quantification of reviews (e.g., “over 110,000 5-star product review!”) – the takeaway is to make sure you count properly and don’t double count. The panel also gave some tips about addressing unsubstantiated claims in reviews – consider responding on the review website, if that’s possible. Just make sure the response contains only substantiated statements. Influencers – This would not be an NAD conference if there wasn’t a lively discussion about influencers. In terms of new guidelines and rules, NAD released its own tips for influencer marketing earlier this year. Then, Instagram and TikTok each released branded content rules for their own platforms. Social media platforms are clearly trying to evolve past the FTC’s initial take that built-in tools are not an effective disclosure. Whether the FTC will agree in the next set of its guidelines is TBD. In any case, the guiding principles of influencer marketing remain: Truth. Substantiation. Disclosure. Health Claims – Health and safety has been a key focus for everyone since the pandemic started. The FTC and NAD are no different and in fact, both have put more resources into stopping and preventing unfair and deceptive health claims. This past year the FTC sent more than 400 warning letters for COVID-related claims. But not everything was COVID-related. We saw enforcement actions for CBD products, supplements and, last month, the FTC announced a set of cease and desist (as opposed to warning) letters that it issued along with the FDA, directed to companies making diabetic treatment claims without the necessary scientific substantiation. These letters were a bit unique in that they invoked a seldom-used authority of the FTC Act to impose civil penalties for future violations. This is an example of the FTC putting a bit more teeth behind its letters. Until next year...

Last week we quickly pivoted from watching the 24/7 "Map Show" to spending our screen time learning at the ANA 2020 Marketing Law Conference. It was a great three days in Chicago in our pajamas of educational seminars. If you didn’t make it this year, don’t worry – here’s a quick wrap-up of the highlights: Influencers – This has been a hot topic at the law conference for many years now. So you may be asking, haven’t we already covered influencers from every possible angle? You might think so, but there are still lessons to be learned in influencer advertising and things in this area are always changing. But some things never change - the keywords for influencers and the advertisers who hire them are transparency and flexibility. Influencer contracts are highly recommended, the more specific the better, so that influencers understand very clearly what’s expected of them. Also, did you hear that #ad is back? It is transparent, simple and works in almost any situation, but influencers and brands have long shunned it, while lawyers loved it. Are we finally all going to agree on something? Consumer Reviews – With access to brick and mortar stores limited in 2020, online shopping and consumer reviews became increasingly important. For that reason we are often fielding questions from clients about using consumer reviews in advertising. The quick take from the conference is that advertisers should be careful about filtering or reordering reviews on their own sites. Original Content – How are media companies creating and promoting original content during the pandemic? In-house counsel from new and old media discussed. Production of film and television has mostly resumed, but with strict testing and physical distancing protocols. In many cases, studios are also using remote recording or asking talent to step into the role of videographer at home. To promote content, COVID-friendly solutions included sending influencer boxes (with proper posting guidelines, of course), creating virtual concert and art experiences, and drive-in viewings. Bottom line: creative people are finding creative solutions to the pandemic’s challenges. Promotions – Most promotions, sweepstakes, contests, and games have gone virtual, and yes, state laws around promotions still apply in addition to platform rules, so remember to check both to ensure compliance with all applicable laws. Remember the basic tenets of promotion law, which is to remove at least one of the following elements to avoid an illegal lottery: prize, chance, and consideration. Beware that even a giveaway or gift with purchase can potentially create the element of chance if supplies are limited. Product Claims and Labeling – Claim substantiation was a focal point this year, particularly concerning food, beverage, and nutritional supplement labeling, as many warning letters have been sent and lawsuits filed against companies that produce products with claims of mitigating the novel coronavirus and promoting additional health benefits or immunity from a number of ailments. Remember that implied claims are scrutinized along with express claims, so look to the context as well as the wording to make sure that you aren’t communicating anything about the product that is unsubstantiated. CBD and Alcohol Marketing – While the FDA continues to work on regulations governing CBD, uncertainty surrounding the marketing of CBD products remains. FDA has been taking enforcement action against sellers of products containing CBD making health, drug and/or false claims. However, it is generally tolerating sales of CBD products, such as tinctures, gummies and dietary supplements, where no such claims are being made, even if the products are technically unlawful under the Food, Drug and Cosmetic Act. In actions involving CBD product claims, courts are making inconsistent rulings on whether to stay those actions until the FDA’s regulations are issued. On the alcohol side, the impact of the pandemic on longstanding ways of doing business may end up having a beneficial effect in causing a reconsideration of the archaic U.S. regulatory structure for the sale and marketing of alcoholic beverages (i.e., the current three tier system of producers/distributors/retailers) as well as standards for the advertisement and marketing of alcoholic beverages. Looking Ahead to 2021 – Aren’t we all?! In 2021, we can expect that the FTC will be releasing an updated version of its Endorsement Guides to address the changes (especially in social media) since the last version released in 2009. Will we see aggressive enforcement following the release of the updated guides? Maybe, but it is clear that the FTC and other regulators are expanding their enforcement focus beyond just advertisers to others in the chain, such as influencers, ad agencies, PR agencies, publishers and even retailers. The NAD is also looking ahead to 2021 and we can likely expect to see NAD-initiated actions in new industries – potentially consumer electronics or appliances and other areas that we don’t often see in competitor challenges at the NAD. We hope to see everyone in person on November 15, 2021 in San Diego!

The FTC recently announced a regulatory review of its Endorsement Guides, which provide guidance to marketers to ensure that endorsements and testimonials for products and services are not misleading, particularly as to whether there is a “material connection” between the endorser and the marketer. The Guides interpret laws the FTC administers, and are therefore advisory in nature, but the FTC can take action under the FTC Act if an endorsement or testimonial is inconsistent with the Guides. The Guides were last revised in 2009 and have gotten quite a workout in the past decade due to the rise of influencer marketing and the increasing role of consumer reviews in the advertisement and promotion of goods and services. In 2017, the FTC staff issued a helpful set of FAQ’s that addressed many of the technological advances that took hold of the marketing world in the prior ten years. In the Request for Public Comment on the Guides, the FTC is seeking input on a wide range of issues including: Whether changes in technology or the economy require changes to the Guides Have consumer perceptions regarding endorsements changed since the Guides were last revised and, if so, do these changes warrant revising the Guides What disclosures of material connections currently being used in social media are likely not understood by consumers Whether incentives in the form of free and discounted products bias consumer reviews, even when a favorable review is not required to receive the incentive Whether composite ratings that include reviews based on incentives are misleading, even when reviewers disclose incentives in the underlying reviews Whether children are capable of understanding disclosures of material connections Are there alternatives, such as individual enforcement actions under the FTC Act, which would be more effective or equally effective in addressing those practices? Do the Endorsement Guides describe any practices that are not deceptive or unfair, and if so, which practices and why are they not deceptive or unfair? While the Request for Public Comment also asks whether there is a continuing need for the Endorsement Guides and whether changes should be made to reduce the burdens or costs imposed on businesses or endorsers, the Endorsement Guides will likely endure, even if there are more specific examples given or tweaks about how disclosures should be made. The mention of disclosure of material connections when children are involved is interesting - the Request indicates that “the FTC has received complaints that young children may not understand disclosures of material connections.” This may indicate that more specific guidance or rules may be issued when endorsements or reviews are used to market goods and services to minors. Similarly, the requests regarding alternatives, including individual enforcement actions, and whether any covered practices are not deceptive are both interesting questions that could yield some lively response from cutting edge marketers. The TMCA will be following continuing developments at the FTC on the Endorsement Guides – stay tuned!

Gigi Hadid’s done it, P. Diddy’s done it and now Kim Kardashian. Like any good social media influencer, Kim Kardashian posts photos of herself on her Instagram account. Back in October of 2018, she posted a rare picture of her husband, Kayne West, smiling with her by his side. To date more than 2.2 million people have liked the photo, but at least one person would have hit the dislike button if it was available. That person is Saeed Bolden, the photographer of the picture, who filed a complaint for copyright infringement against Kim and her company Skims Body, Inc. in the Eastern District of New York just last week. The bare bones complaint alleges that the photo was posted without permission. It further states that “Defendants have been willful, intentional, and purposeful, in disregard of and indifference to Plaintiff’s rights.” While the complaint doesn’t state a specific amount of damages, it does request that Plaintiff be awarded actual damages, attorneys’ fees and Defendants’ profits. Here, it seems that Bolden is not eligible for statutory damages because he did not register the photograph until April of 2019, more than three months after the June 2018 first publication date and many months after the alleged infringement began in October 2018. So, what’s the connection to Kim’s shapeware line Skims Body, Inc.? Well, the complaint says that Kim’s Instagram account is Skim’s Instagram account. A quick review of the grid shows that Kim does promote Skims on her page, but Skims also has its own separate account. Was this a clever way to inflate the calculation of profits? Maybe, but we will probably never know… The case was filed by the well-known copyright lawyer Richard Liebowitz, who has filed and mostly settled innumerable copyright lawsuits on behalf of photographers. Barring any fatal deficiencies in the Kardashian complaint, we wouldn’t be surprised to see a resolution of Bolden’s case against Kardashian based on an undisclosed settlement.

Last week, we blogged about Fiji Water being sued for posting a meme of the Fiji Water Girl and using cardboard cutouts of her image in advertising. Well, Fiji Water is splashing back – They filed a cross-complaint alleging breach of contract, promissory estoppel and false promise.  The facts alleged in the cross-complaint fill in some of the missing details and contradict the allegations from the complaint filed by Ms. Kelly Steinbach, aka the Fiji Water Girl.  In fact, the complaint reads much like a soap opera plot line.  Contrary to Steinbach’s complaint, Fiji Water alleges that it entered into a contract with Steinbach in which she granted Fiji Water the right to use her name, likeness and performance in connection with her acting as a Fiji Water Brand Ambassador.  The cross-complaint includes a screenshot of a post from Ms. Steinbach’s Instagram account with her standing next to one of the allegedly unauthorized cardboard cutouts and an Instagram story featuring another of the cutouts.  Of course, the post has since been deleted from Steinbach’s account and the story is no longer available.  What’s more, the not so “fake” consulting agreement that Fiji Water alleges Ms. Steinbach signed includes a restriction that Steinbach not authorize the use of her name or likeness in connection with advertising any other food or beverage products for one year. However, additional screen shots in the cross-complaint show Steinbach doing just that for a dog food brand and for another bottled water promoting the soap opera The Bold and the Beautiful.  On information and belief, Fiji Water alleges that Steinbach took the only copy of the signed consulting agreement from its offices and destroyed it! The cross-complaint is full of other dramatic allegations and is worth a read. We’ll be following this real live soap opera and will keep you updated.

Last week, we blogged about Gigi Hadid getting sued for reposing a photo of herself on Instagram and the post received a lot of interest. So we thought we’d also let you know about Fiji Water Company, LLC getting sued for posting a meme on its social media feeds featuring the “Fiji Water Girl.”  You remember the Fiji Water Girl, don’t you? She was that woman wearing a blue dress holding a tray of Fiji Water bottles in the background of what seemed like every red carpet photo from this year’s Gold Globe Awards on January 6.  Kelly Steinbach, or Kelleth Cuthbert as she is professionally known, went viral that night as photos from the red carpet and then memes started popping up all over social media.  According to the complaint filed by Ms. Steinbach’s attorneys in California Superior Court on January 31, she was hired by a staffing agency to model on the red carpet.  The complaint further alleges that the day following the Golden Globes, Fiji Water sought to capitalize on Steinbach’s popularity by creating a “worldwide cardboard cutout marketing campaign.”  The life-size cutouts of Steinbach appeared in stores in LA and other places around the world. Fiji Water also posted a few memes on their Instagram and Twitter account, but those posts have since been taken down. Fiji Water’s affiliate also filed two trademark applications for FIJI WATER GIRL on January 7. Steinbach alleges that all of this was done without her permission, despite Fiji’s efforts to have her sign an agreement in the days following the Globes. The complaint contains some strange details, including an allegation that “during Steinbach’s [January 9] visit to Fiji Water’s Los Angeles office, Fiji Water pressured Steinbach into video recording a fake signing of a fake document to simulate Steinbach signing on as a Fiji Water Ambassador for use in the event an agreement was reached between Steinbach and Fiji Water in the near future.”  Steinbach’s attorneys go on to note that “the fake document Steinbach fake signed in the potential future promotional video was not an agreement” and “the fake document was not signed by Fiji Water and was later destroyed by Steinbach.”  The complaint contains a claim for misappropriation of likeness and right of publicity under California Civil Code Section 3344 and common law. Steinbach’s damages claim asks for Fiji’s profits, unspecified punitive damages and compensatory damages. So how much is Steinbach thinking she’ll get?  Well, the complaint puts the value of the brand exposure at about $12 million for just January 6 and 7.  We’ll be watching this case and will keep you updated, but cases like this tend to settle for undisclosed amounts, leaving us with little to no case law on memes. Luckily, memes, when used on social media by brands like Fiji Water, aren’t all that innovative in the eyes of the law.  The ability to control the use of one’s name, likeness, voice, and other personal attributes is known as the right of publicity.  If you want to use someone’s image or likeness in advertising (and brand social media accounts are likely advertising), you will probably need to get their permission. Right of publicity is governed by state law, and California, New York and Tennessee (hi Elvis) have some of the most developed bodies of law in this area.  So before your brand starts posting the latest meme featuring the image or likeness of someone other than your brand ambassadors, you should think carefully (and creatively) about how to join the conversation without using a name, likeness, voice, or other personal attributes that might cost your brand unspecified damages in a lawsuit.

Earlier this week, a company called Xclusive-Lee, Inc. filed a complaint in federal court against the fashion model Gigi Hadid (real name Jelena Noura Hadid) alleging willful copyright infringement when Gigi reposted a photo of herself on her own Instagram account.  According to the complaint, Xclusive is the copyright owner of the photo and claims that Gigi should have known better than to post copyrighted photos to her social accounts because she’s been sued for this before. The complaint further alleges that Gigi’s Instagram feed is full of similarly “uncredited photographs” that were posted without a license or permission from the copyright holders. Although the photo in question has been removed from her feed, the exhibits to the complaint show that the post garnered more than 1.6 million likes. The plaintiff also threw in a claim for contributory copyright infringement based on Gigi’s 43 million Instagram followers, who presumably (?) went on to copy and redistribute the photo themselves. The complaint doesn’t really make it clear. What is clear is that Gigi is not alone.  As readers of this blog know, other celebrities have been sued for this exact same reason, including P. Diddy. Brands, influencers and other advertisers can also easily find themselves in hot water by reposting unlicensed photos on their Instagram accounts, whether they are photos of themselves, others or even photos with no people at all.  Copyright law is pretty clear that copyright holders retain the exclusive right to reproduce and display their works.  The concept of “fair use” that everyone talks about is narrower than you might think  -- it’s a complex analysis of multiple factors that may not excuse social media posts made for commercial benefit. Despite the suggestion in Xclusive’s complaint, attribution or credit won’t solve the problem either. So make sure you have permission before posting. Formal written licenses are not always necessary, a quick DM chat with the copyright owner providing consent works just as well.

American Airlines recently scored a major win by convincing the Copyright Office to reverse its refusal of an application to register the “American Airlines Flight Symbol.” American Airlines reached its final destination after overcoming myriad delays.  The Copyright Office rejected American Airlines’ copyright application three times on the ground it did not contain a sufficient amount of original and creative artistic or graphic authorship to support a copyright registration.  According to the Copyright Office, it receives half a million applications annually, but only declines to register less than 20,000 on this basis.  First, a Copyright Office Registration Specialist refused registration; second, an Attorney-Advisor for the Copyright Office denied American Airlines’ First Request for Reconsideration; and third, the Copyright Office Review Board denied American Airlines’ Second Request for Reconsideration.  In fact, the Review Board noted that “the Work falls just below the threshold for creativity required by the Copyright Act.”  With no other options left, American Airlines filed a lawsuit seeking judicial review of the decision under the Administrative Procedures Act (“APA”).  The complaint referenced widespread disapproval of the decision amongst copyright practitioners, including an informal poll during a June 2018 meeting of the Copyright Society of the USA.  In a presentation by Karyn Temple, the Acting Register of Copyrights, she asked an audience whether anyone agreed with the refusal.  Apparently, no one raised their hand and then, according to the complaint, Ms. Temple conceded, “I think the main drafter of that one actually even kind of regrets that decision.”  Only one month after it filed the complaint, American Airlines dismissed the suit, reporting that the Copyright Office had agreed to again review its refusal of the work. After conducting an additional review of the design, the Copyright Office has now reversed its three prior refusals of the application finding that the work does indeed contain the requisite level of creativity.  So, why the change?  The decision purportedly hinges on American Airlines’ submission of a higher-quality image of the work showing “additional detail that had not been clear from the original deposits.”  With this new version of the design, the Copyright Office Review Board found a number of elements showing sufficient creativity, including an “aircraft tail element [that] is oriented on an angle,” a “bird-head element [that] hovers just below the center of the aircraft tail element” with a “three-dimensional appearance that causes the bird-head element to appear to be above and separated from the aircraft tail,” and multiple colors with different gradients and shading “further heightening the illusion of depth.”  Notably, the Board limited American Airlines’ level of protection by stating that “the resulting protection is thin, protecting only the Work’s original and creative elements ‘against only virtually identical copying.’”  Interestingly, at least to our eyes, the original deposit copy of the work is not all that different than the higher-quality version that apparently swayed the Copyright Office.  The shading, gradients, and bird-head elements are all visible. The Board also took pains to indicate that “there are no third requests for reconsideration,” despite the upgrade it afforded American Airlines.  It also stressed that all decisions by the Copyright Office are made on a case-by-case basis and other applicants should not expect the Board to conduct such additional screening when applications are rejected. So what can your brand learn from this victory in the sky? Submit the highest quality images you have when applying to register logos with the Copyright Office. When you have a two-dimensional logo that contains shading and features that give the work depth, make sure to point that out on a First Request for Reconsideration. If your logo consists of a combination of geometric shapes and suggestive elements that may not be readily discernable, explain those elements to the Copyright Office in a First Request for Reconsideration. While the Copyright Office claims, that “the symbolic meaning or impression that a work conveys is irrelevant to whether a Work contains a sufficient amount of creativity,” this decision suggests otherwise. The Copyright Office is not interested in a work’s public reception or the author’s intent, so don’t expend resources providing evidence of these points to the Office. In the decision, the Copyright Office also included a reminder that “the Office does not consider the time and effort used in creating a design, its novelty, aesthetic appeal, or commercial value.” It remains to be seen if others will try to leverage similar outcomes by seeking review under the APA, especially in light of what appears to be a recent trend of the Copyright Office refusing company logos on the ground they lack creativity.  In the meantime, American Airlines will be sipping champagne in first class by itself.

Avid readers or this blog know that the FTC spends as much time on Instagram and other social platforms as your favorite millennial, but who knew that the SEC also spends it’s working hours perusing posts on popular social media sites looking at influencer advertising? Now, you do. Late last month, the Securities and Exchange Commission announced a settlement with DJ Khaled and Floyd Mayweather Jr. for failing to disclose payments they received for promoting Initial Coin Offerings, known as ICOs, on their social media accounts. Mayweather was paid some $300,000 by three separate ICO issuers to promote the crypto currencies, while DJ Khaled was paid $50,000 by a single issuer.  The pair made Instagram, Twitter, Facebook and YouTube posts promoting the ICOs to their millions of followers, but failed to make any mention of their status as paid influencers.  As we’ve told our loyal readers over the years, the FTC Endorsement Guides are pretty straightforward on this subject: if there is a ‘material connection’ between an endorser and the marketer of a product – in other words, a connection that might affect the weight or credibility that consumers give the endorsement – that connection should be clearly and conspicuously disclosed, unless the connection is already clear from the context of the communication containing the endorsement. Material connections could consist of a business or family relationship, monetary payment, or the provision of free products to the endorser. Section 17(b) of the Securities Act also requires such disclosures, but the SEC takes it a bit further.  In particular, the Act makes it unlawful to promote the sale of any securities "without fully disclosing the receipt, whether past or prospective, of [any received] consideration and the amount thereof." (emphasis added). SEC Enforcement Division Co-Director Stephanie Avakian noted that “with no disclosure about the payments, Mayweather and Khaled's ICO promotions may have appeared to be unbiased, rather than paid endorsements.” Enforcement Division Co-Director Steven Peikin also noted that “investors should be skeptical of investment advice posted to social media platforms, and should not make decisions based on celebrity endorsements.” Mayweather agreed to pay $300,000 in disgorgement, a $300,000 penalty and $14,775 in prejudgment interest, while DJ Khaled agreed to pay $50,000 in disgorgement, a $100,000 penalty and $2,725 in prejudgment interest. They also agreed not to promote any securities on social media or otherwise for a few years.  And you thought the FTC’s settlement agreements for failing to disclose material connections were tough! So what can you take away from these settlements? Brands and influencers are responsible for making sure that material connections, including payments to influencers, are properly disclosed.  If the product is a security, check the Securities Act – your disclosure obligations go a bit further than #Ad and require full disclosure of the amount of money involved.

We are back from the 2018 National Advertising Division Annual Conference: The Truth About Advertising Law – Recent Developments and Best Practices that took place over two days in downtown New York.  We heard from the NAD Director, NAD staff attorneys as well as staff of the Bureau of Consumer Protection at the FTC.  If you didn’t make it this year, don’t worry – here’s a quick wrap-up of the highlights: Monetary Remedies – In his keynote address, Andrew Smith, the FTC’s Director of the Bureau of Consumer Protection, discussed the recent emphasis on monetary remedies in FTC enforcement actions and on findings and admissions as a part of the settlement process. He closed with a word to the wise, that even though the FTC is operating under a Republican administration that might be perceived as low-regulatory in general outlook, the agency still intends to bring national advertising enforcement actions where appropriate. Numerical Claims - There was a lively discussion of appropriate sample size for market research and statistical analysis – the takeaways were that NAD expects that a sample size will be “robust enough to be statistically significant” and that the survey respondents will be representative of the actual consumer market; helpful insights were provided about the proper way to make numerical ratio claims when comparative results have a confidence level range–definitely consult someone with statistical expertise before making these types of ad claims! Customer Reviews - In the session on use of consumer reviews as a basis for advertising claims, Martin Zwirling of the NAD talked about the importance of transparency, authenticity and the representativeness of consumer reviews.  As we’ve blogged about before, verified consumer reviews are extremely important as well as disclosure of whether consumers were incentivized or provided products for free before posting reviews. Health Claims – As always, we saw a focus on health claims.  One panel covered evidentiary standards in the area of health-related claims in courts, the FTC and NAD, and how they differ. There was a lively debate about p values, but the panel members all agreed that when advertisers make health claims, the claims need to fit the evidence. Social Media Posts as Ads – Leslie Fair, the author of the incomparable FTC Business Blog, noted that over the past year so many of the ad claims that the FTC has focused on have been founds on social media, including on Instagram, Facebook and Twitter.  This was the case with one of the latest FTC enforcement actions in the arena of “made in the USA” claims, where the advertiser posted on social media with #AmericanMade. ICC Marketing Code Updates – The International Chamber of Commerce released an update to its advertising self-regulatory code on September 25 live at the conference. The ICC Marketing Code seeks to protect consumers by setting out the dos and don’ts for responsible marketing to ensure legal, honest, decent and truthful communications and practices. While the basic principles of truth and honesty have not changed, these updates cover: (i) native advertising (i.e. distinguishing marketing communications content from true editorial and user generated content); (ii) new digital mediums; (iii) direct marketing and digital marketing communications; (iv) mobile phones, location-based advertising and interest-based advertising and (v) advertising to children and teen. Until next year.

There is a little-known, even lesser-enforced, section of the United States Code that actually prohibits the printing of the American flag on paper napkins and other disposable products like paper plates, cups and boxes.  The United States Flag Code, as it is known, also expressly states that “[t]he flag should never be used for advertising purposes in any manner whatsoever.”  4 U.S.C. § 8(i).  The Code was originally enacted in 1942 and the last amendment was made in 2009.  Based on our online search there have been fewer than a dozen cases since 2001 that cite the United States Flag Code generally (4 U.S.C. § 1 et seq.), and none of those cases cite to subsection (i) of section 8 that addresses paper napkins and advertising.  Yet most of us have been to a July 4th BBQ with American flag napkins—they’re readily available for purchase by anyone with an Internet connection.  And we’ve all seen the flag used in a TV commercial (haven’t we?).  What about those American flag cakes – do you think the United States Flag Code was meant to prohibit us from lining up blueberries and strawberries on vanilla frosting? Just some food for thought for you, dear readers. We hope you all enjoy your Fourth of July celebrations, and if you are barbecuing, maybe take a pause to think before grabbing for that flag napkin.

Even if your brand is sitting on the sidelines like the U.S. Men’s Team in the World Cup over the next month, there is no time like the present to consider the risks involved in ambush marketing because Wimbledon, the X Games, the U.S. Open, the World Series and even the 2019 Women’s World Cup (fingers crossed for the US. Team!) are just around the corner.  As we’ve blogged about before (a few times), large sporting events are great opportunities for brands to produce creative campaigns or promotions, but advertisers need to be aware of the trademark, copyright and right of publicity risks that routinely come up for these types of events year after year.  If you are interested in reading more about these risks, checkout my article on the Little Black Book (LBBonline), a place to celebrate global creativity in advertising, across all parts of the business and from all corners of the world - - Don’t Get Caught Offside With Your World Cup Marketing Promotions.

The FTC announced an enforcement action last week that focused on two hot button issues – unsubstantiated health claims and failure to disclose material connections between endorsers and product marketers. In re Mikey & Momo, Inc. et al. The Complaint and Proposed Consent Order involve a business named Aromaflage, which markets sprays and candles advertised as DEET-free mosquito repellants containing essential oils and fragrance. Aromaflage advertised its products, which were sold at $30 for an 8 milliliter spray bottle and $40 for a 7.5 ounce candle, “as effective as 25% DEET over 2.5 hours.” More specifically, Aromaflage claimed that the products were “scientifically tested,”  “rigorously tested at one of the world’s leading Universities and found to be as effective at repelling mosquitos as the leading brand” and would repel mosquitos “that may carry Zika, Dengue, Chikungunya and Yellow Fever.” By expressly mentioning product testing, Aromaflage was required to meet a stringent standard for making what are called “establishment claims” – ad claims that specifically refer to tests having been conducted to support the advertising claims. Turns out that the testing had two significant problems – the test methodology was not scientifically rigorous and reliable and the results did not support the company’s positive claims. Here’s what bugged the FTC about the methodology: the testing did not include candles, even though the advertising claims were made for both sprays and candles; no human subjects were used, even though the products were intended to overcome mosquitoes’ attraction to human odors; and Aromaflage did not use more than one species of mosquito, even though other species can carry many of the diseases specifically mentioned in Aromaflage’s advertising material and could react differently to the same repellant. And the actual test results? Among other things, the data showed that at the 30 minute mark, more mosquitoes were in the Aromaflage-treated half of the testing chamber than in the untreated half and performed worse than water.  Unsurprisingly, the 25% DEET product performed better than the Aromaflage sprays for at least the first ninety minutes. Aromaflage compounded its regulatory problems as a result of glowing testimonials on Amazon that were posted as independent reviews when in fact they were written by one of the company’s officers, her mother and two of her aunts – without disclosing these material connections to Aromaflage. The FTC proposed consent order details an onerous 20-year compliance monitoring program that we are sure that defendants didn’t contemplate when they talked about their own “rigorous testing.” In fact, the order mandates that the defendants have “competent and reliable scientific evidence” to support their claims going forward – meaning: tests, analyses, research, or studies that (1) have been conducted and evaluated in an objective manner by experts in the field of insect repellency; (2) are generally accepted by such experts to yield accurate and reliable results; and (3) are human clinical testing of the covered product, when such experts would generally require such human clinical testing to substantiate that the representation is true. If that wasn’t enough, the order goes on to require that: when such tests or studies are human clinical testing, all underlying or supporting data and documents generally accepted by such experts as relevant to an assessment of such testing as set forth in the Provision entitled Preservation of Records Relating to Competent and Reliable Human Clinical Tests or Studies must be available for inspection and production to the Commission. While the order did not include a monetary judgment, it looks like defendants will be spending a pretty penny if they want to continue advertising their candles and sprays as beneficial. Takeaways: Making health-related advertising claims? – The FTC is watching and focused on protecting consumers from false or misleading claims relating to products advertised to prevent, treat or cure diseases from Alzheimer’s to Zika. If your ad says that your product was scientifically tested, that testing better be reliable and the methods should be well accepted in the relevant scientific community. On the subject of testing, make sure that your ad claims fit your testing – the claim should be designed based on what the testing shows and nothing more. The FTC isn’t saying your mom can’t go on Amazon and review your company’s products, but you’ll need to tell her that she’s going to have to tell everyone that she’s your mom when she writes her glowing review.

If you were a devoted listener of season one of Serial, you probably already know that last month the Maryland Court of Special Appeals decided that Adnan Syed deserves a new trial. What you may not know is that three days before, the Trademark Trial and Appeal Board quietly issued a precedential opinion holding that Sarah Koenig, Dana Chivvis, Ira Glass and team at Serial Podcast, LLC have no trademark rights in the term “serial” because it is a generic term free for all to use for ongoing audio programs. According to TTAB precedent, generic terms are common descriptive names of a class of goods or services and are not registrable because they are incapable of indicating source. In other words, generic terms are the “antithesis of trademarks, and can never attain trademark status.” So how does the Trademark Office determine that a term is generic? They ask if members of the relevant public, the general public in this case, understand the term to refer to the genus of goods or services in question, ongoing audio programs in this case rather than a particular, single source of the goods or services. If the evidence shows the former, the term is generic.  On the other hand, if everyone in your office thinks Serial is Serial the podcast and not a “serial,” the term might not be generic, depending on whether this understanding truly reflects single source significance, not just the popularity of one particular program. But the evidentiary record in this case didn’t include any consumer survey or even an unscientific office poll for that matter. The Examining Attorney, who had already found the term generic prior to the ex parte appeal, relied on current dictionary definitions and a long list of online articles using the term “serial” as both a noun and an adjective to generically denote episodic broadcasts or podcasts.  It should be noted that a number of the articles were references to older radio program dating as far back at the 1930s.  On the other hand, the podcast team relied on over 12,000 recent media stories referring to its podcast as Serial; a daily download audience as high as 1.4 million in the first season and 1.7 million in the second; and high profile parodies on Saturday Night Live and Sesame Street. In their defense, the podcasters also attacked the Examining Attorney’s evidence as “antiquated” and “archaic,” which should not be relied upon to determine the public’s current understanding of a term. From the title of this post, you should already know that the TTAB sided with the Examining Attorney.  The Board found that because current dictionaries contain a definition for “serial,” the understanding of the term is not confined to a bygone era.  Moreover, it found that the podcast’s evidence only amounted to de facto secondary meaning of a generic term, which essentially means nothing more than that the public recognizes Serial as the most well-known ongoing series currently being offered.  In leveling a last blow to the podcast team, the TTAB referenced a Federal Circuit opinion from 2006: While it is always distressing to contemplate a situation in which money has been invested in a promotion in the mistaken belief that trademark rights of value are being created, merchants act at their peril in attempting, by advertising, to convert common descriptive names, which belong to the public, to their own exclusive use. Even though they succeed in the creation of de facto secondary meaning, due to lack of competition or other  happenstance, the law respecting registration will not give it any effect. So what do you think? Does the term “serial” belong to the public or the public radio team of This American Life at WBEZ in Chicago? If the podcasters had submitted a consumer survey, would the case have turned out differently?  Maybe this Serial will follow in the footsteps of Adnan and go up on appeal once more.

We blogged last week about a recent National Advertising Division case involving a Kimberly-Clark ad campaign that illustrated the well-known NAD maxim: “an advertiser is responsible for all reasonable interpretations of its claims, not simply the messages it intended to convey.”  The decision also serves as a useful reminder of another frequent NAD principle of truthful advertising: “at all times there must exist a good fit between the claim made and the evidence offered in support of that claim.”  KC ran afoul of this principle when it advertised its Huggies diapers as “the fastest growing brand in hospitals” with a “super” disclaimer notice that stated “based on volume share growth.” There were number of problems with these ad claims.  As an initial matter, KC relied on data covering only its own products, and the NAD found this to be insufficient because a “fastest growing brand” claim is comparative in nature.  NAD reasoned that to make such a strong comparative claim, data on competitors is necessary.  KC argued that its substantiation was reasonable in this case because the market consists of two main players, Huggies and Pampers, so if the Huggies sales number are increasing, then it could assume that the Pampers numbers were decreasing. While admitting that perfect substantiation is not required, NAD found this type of “conjecture” and “assumptions” (KC’s word, not NAD’s) insufficient. As explained by challenger Procter & Gamble, sales and market share data for hospital products can be obtained through an independent third-party database operated by Global Healthcare Exchange. Over time, both KC and P&G had used the GHX database for the purpose of tracking hospital diaper sales and market share. Here, KC did not rely on GHX data, instead basing its advertising claim on its own internal product shipment data. NAD also faulted KC for not considering the entire market since 100% market data was available and the ad claim was not limited to “among leading brands.”  Notably, NAD allows advertisers to base claims on 85% of the market for comparative product performance claim because obtaining data from the entire market is impractical and expensive. But in this case, GHX data covered the full market and in fact showed that a smaller player had the fastest growth rate.  KC tried to argue that such reasoning was unfair because smaller players could attain a faster (or the fastest) growth rate from a modest increase in sales numbers, but the NAD rejected this reasoning. Based on past NAD precedent, P&G also argued against KC’s data on the basis that untracked, non-publicly available data is unsuitable as claim support because it is not reliable and verifiable based on sales and share data that can be vetted by a competitor. NAD agreed. Another major problem with KC’s ad campaign was the mismatch between the claim of “fastest growing brand” with data that showed only growth in sales volume, not the rate of growth. KC’s internal data demonstrated 18% growth in sales volume on a 52 week rolling basis, but “NAD questioned whether an increase in absolute shipments is an appropriate metric for support of a claim of faster volume share growth (as referenced in the super) than other competitors in the market. A ‘fastest growing brand’ claim requires concrete data demonstrating that Huggies grew sales or share at a faster rate than any other brand in hospitals” – data that KC lacked. NAD emphasized, however, that “given the evidence in the record concerning Huggies impressive growth in sales in the hospital channel, nothing in NAD’s decision precludes K-C from crafting a more narrowly tailored self-referential monadic claim concerning the increasing presence of Huggies in the hospital channel (i.e., growing more than ever before).” Several important takeaways can be gleaned from this NAD decision: Third-party data is the gold standard. If you choose to use internal data, it better be reliable and complete. Comparative sales claims should be supported by reliable data on the market as a whole, not just a substantial portion. If your company has a good story to tell about sales growth, sales ranking or rate of growth, you need to tell the story in the right way – the ad claim must match the supporting data

Almost every NAD case begins with the maxim: It is well-established that an advertiser is responsible for all reasonable interpretations of its claims, not simply the messages it intended to convey. It follows that advertisers must choose their words very, very carefully to avoid unsubstantiated claims.  As we’ve blogged about before, comparative advertising can be highly effective in touting the advantages of a company’s products against those of its competitor, but these types of claims often require more careful substantiation than non-comparative ones.  So what happens when an advertiser’s claim is not intended to be comparative on its face, but one of the reasonable interpretations of its claim is comparative in nature? The NAD will likely recommend that the advertiser choose a different word.  In a recent case, the NAD analyzed Kimberly-Clark’s advertising claim “More hospitals than ever are choosing Huggies.”  In connection with data presented to substantiate a related claim ("Huggies® diapers is the fastest growing brand in hospitals ('based on volume share growth')"), which we will blog about soon, the NAD found that Kimberly-Clark had provided reasonable substantiation to support the statement that “more hospitals than ever” were purchasing/using Huggies, but NAD was troubled by the use of the word “choosing.” The NAD found that the word choice: connotes a “selection” of one product over another, and that consumers could reasonably interpret this claim to mean that more hospitals than ever are choosing Huggies over [the main competitor] (or buying more Huggies diapers than [those of the main competitor])—a message that the evidence in the record does not support. So, was there a better word choice?  According to the NAD, Kimberly-Clark could have made the claim self-referential by saying "more hospitals than ever before are using Huggies," or that Huggies is finding its way into more hospitals than ever before."

You’ve heard it before and you’ll hear it again - Stay away from any advertising or promotional ideas that suggest authorization, sponsorship or an official connection to the Olympics. This means not using the Olympic Rings in advertising or even #Olympics on your brand’s social media account, especially in the next two weeks.  And don’t even think about holding any type of “Olympiad” promotions either. Have you ever wondered why the warnings not to use the trademarks owned by the United States Olympic Committee are so strong? The Ted Stevens Olympic and Amateur Sports Act of 1998, 36 U.S.C. §22050 is the answer.  Under its predecessor, the Amateur Sports Act of 1978, Congress granted the USOC the exclusive right to use and license certain Olympic-related trademarks and symbols. The current statute also provides for the USOC’s right to file trademark infringement suits under the Lanham Act.  You might now be asking - so what the big deal here? Any trademark owner can file an infringement suit under the Lanham Act.  Well, as confirmed by federal courts on a few different occasions, the USOC doesn’t need to prove a likelihood of confusion to win an infringement suit.  They simply need to demonstrate unauthorized commercial use by a third party and the USOC is on the medal stand waiting for their court-awarded injunction. The intent behind this super-trademark monopoly is pretty simple – The US Olympic team does not get federal funding, so the USOC has to raise the money and it does so through licensing its trademarks for commercial purposes.  It is important to note that federal law does not prohibit individuals from using Olympic trademarks on social media for non-commercial purposes. The IOC’s social guidelines, in fact encourage athletes and coaches to post on personal social media accounts for non-commercial purposes. As a brand, however, you should also be aware the USOC has more than 200 US trademark registrations and pending applications on file with the United States Trademark Office. As we get excited to cheer on the home team, advertisers should think twice about using the following trademarks on social media or in more traditional advertising: TEAM USA, ROAD TO PYEONGCHANG, DESTINATION PYEONGCHANG, LET THE GAMES BEGIN, PYEONGCHANG 2018 and GO FOR THE GOLD.