FTC Finalizes Revisions to the Endorsement Guides, Proposes New Rule for Consumer Reviews and Testimonials and Updates FTC Staff Guidance
Covering Your Ads
by Ted Max
8M ago
The Federal Trade Commission’s (“FTC”) Endorsement Guides have evolved over the past forty years from regulating celebrity endorsements and testimonial advertisements to policing social media advertising, including influencer endorsements and native advertising. On February 12, 2020, the FTC announced that it had voted 5‑0 to approve a proposed Federal Register Notice, seeking comment on whether to make changes to its Guides Concerning the Use of Endorsements and Testimonials in Advertising (“the Endorsement Guides”), which were enacted in 1980[1] and amended in 2009,[2] as part of ..read more
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Lizama et al. v. H&M: A Lesson in Artful Crafting of Green Claims
Covering Your Ads
by Dane Brody Chanove, Rachel Tarko Hudson and Craig Cardon
8M ago
Two plaintiffs learned the hard way that not all environmental marketing claims are treated the same. A federal judge in Missouri recently dismissed a proposed class action by the shoppers against H&M over the company’s marketing of its “Conscious Choice” fashion line. The suit, which brought claims under Missouri’s Merchandising Practices Act (“MMPA”) as well as common law claims for unjust enrichment, negligent misrepresentation, and fraud, took issue with H&M’s representations that its Conscious Choice garments—made from a certain percentage of organic cotton and recycled poly ..read more
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Supreme Court Rules “That Dog Don’t Hunt”: Bad Spaniels Toy’s Use of JACK DANIELS Marks is a Poor Parody and Dilution Act Applies
Covering Your Ads
by Ted Max
9M ago
On June 8, 2023, the Supreme Court in a unanimous decision held that a trademark claim concerning “a squeaky, chewable dog toy designed to look like a bottle of Jack Daniels whiskey” which, as a play on words, turns the words “Jack Daniels” into “Bad Spaniels” and the descriptive phrase “Old No. 7 Brand Tennessee Sour Mash Whiskey” into “The Old No. 2 On Your Tennessee Carpet” does not receive special First Amendment treatment where the accused infringer used the trademarks at issue to designate the source of its own goods and that, with respect to a Lanham Act dilution by tarnishment claim ..read more
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Supreme Court Finds Warhol’s Commercial Licensing of “Orange Prince” to Vanity Fair Is Not Fair Use and Infringes Goldsmith’s Famed Rock Photo
Covering Your Ads
by Ted Max and Joseph Ireland
9M ago
On May 18, 2023, the United States Supreme Court ruled in favor of famed rock photographer Lynn Goldsmith against the Andy Warhol Foundation for the Visual Arts, Inc.’s (AWF),[1] in a long-awaited decision impacting fair use under Section 107(1) of the Copyright Act. The opinion written by Justice Sotomayor, in which Justices Thomas, Alito, Gorsuch, Kavanaugh, Barrett and Jackson joined, held that the “purpose and character” of AWF’s commercial use of Warhol’s portraits of Prince shared the same commercial purpose of the original photograph taken by Ms. Goldsmith and, as a result, did no ..read more
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FTC Increases Scrutiny of Negative Option Marketing
Covering Your Ads
by Liisa Thomas, Jason Mueller and Robert Hough
1y ago
Retailers and service providers should take note: the Federal Trade Commission (FTC) is increasing its scrutiny of negative option marketing activity to combat unfair or deceptive practices related to subscriptions, memberships and other recurring-payment programs. The FTC issued today a notice of proposed rulemaking as part of its ongoing review of its 1973 Negative Option Rule—one of the primary guides for the FTC’s enforcement focus. Negative option arrangements include “free trial” programs that automatically convert to paid subscriptions, and “automatic renewals” which allow sellers to u ..read more
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How to Succeed in Environmental Marketing Claims
Covering Your Ads
by Neil Popovic and Snehal Desai
1y ago
Environmental marketing claims often present something of a Catch-22—companies that are doing actual good for the environment deserve to reap the benefits of their efforts, and consumers deserve to know, while at the same time, heightened scrutiny from the Federal Trade Commission (FTC), the National Advertising Division (NAD), state regulators and the plaintiffs’ bar have made such claims increasingly risky. In 2012, the FTC issued the Green Guides for the use of environmental marketing claims to protect consumers and to help advertisers avoid deceptive environmental marketing. Compliance wi ..read more
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Court Orders Injunctive Relief Against Tech Company for Deceptive Advertising, Unfair Fee Practices
Covering Your Ads
by Moorari Shah and A.J. Dhaliwal
1y ago
On August 9, the US District Court of Georgia ruled that the FTC had provided “broad and detailed evidence” for its allegations that a tech company and its CEO engaged in deceptive advertising and unfair fee practices in violation of Section 5 of the FTC Act. The FTC’s 2019 complaint alleged the defendants made deceptive representations to customers and charged hidden, unauthorized fees in connection with the company’s “fuel card” as well as through co-branded cards, to companies in the trucking and commercial fleet industry. The FTC’s factual allegations include the follo ..read more
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CFPB’s New Interpretive Rule Sets Sights on Digital Marketing Vendors
Covering Your Ads
by Moorari Shah, A.J. Dhaliwal and Gabriel Khoury
1y ago
On August 10, the CFPB issued an interpretive rule stating that digital marketing providers that are involved in the identification or selection of prospective customers or the selection or placement of content to affect consumer engagement including purchase or adoption behavior, are subject to the CFPB’s jurisdiction. The rule ostensibly clarifies the scope of companies that are “service providers” under the Consumer Financial Protection Act (“CFPA”) to include digital marketing providers, and thereby subjecting them to the CFPB’s authority to prohibit unfair, deceptive, abus ..read more
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FTC Strengthens Advertising Guidelines Against Fake Reviews
Covering Your Ads
by Moorari Shah, A.J. Dhaliwal and Katie Daw
1y ago
The FTC is seeking public comment on proposed changes to its Endorsement Guides. These changes aim to strengthen the guidelines against advertisers posting falsely positive reviews or by manipulating reviews by suppressing negative ones. The Endorsement Guides were enacted in 1980—and amended in 2009—to ensure that advertisements utilizing endorsements and testimonial reviews are truthful and not misleading. For example, the Guides require that advertisers disclose material connections between those endorsing products and sellers of advertised products. The Commission soug ..read more
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Thinking of Jumping on the NFT Bandwagon – Are you Prepared?
Covering Your Ads
by Brian Anderson, James Gatto and Brittany Walter
2y ago
“NFT” was 2021’s word of the year.  This isn’t too surprising—they’re everywhere!  The market cap for NFT transactions jumped from roughly $400 million at the beginning of 2021 to over $7 billion by year’s end.  What’s next and how can brands and other content creators leverage NFTs to bring value? What is an NFT? “NFTs” are non-fungible tokens, the ownership of which are recorded on a blockchain. NFTs are often associated with digital objects (for example, images or other digital works).  While the purchaser or acquirer gets ownership of the token, they often only get a l ..read more
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