TCAM Today

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Posts by TCAM Today


Healthy Choices: The Power and Perils of Health and Wellness Claims in Advertising

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Even before COVID-19 had turned each of us into an amateur epidemiologist, companies in nearly every industry had begun to recognize the magnetic appeal of health and wellness claims in consumer advertising.  Marketers of everything from cleaning products to apparel to furniture to homes were suddenly making claims touting the health and wellness benefits of their products. It wasn’t just better, it was better for you and your family.  It will surprise no one to learn that the pandemic year of 2020 only intensified this trend, as consumers focused as never before on the ways that their purchases might not only help them live better lives, but perhaps even keep them alive.

Predictably, competitors, regulators and the plaintiff’s bar have all taken notice of this trend, and moved aggressively in response.  In 2020, for example, the BBB National Programs’ National Advertising Division (NAD), the nation’s premier forum for competitor initiated advertising challenges, recorded an extraordinary 50% uptick in challenges to health-related advertising.  Similarly, the Federal Trade Commission (FTC), Food and Drug Administration (FDA), Environmental Protection Agency (EPA), and state regulators across the country have focused intense scrutiny on companies claiming to offer health benefits to consumers often desperate for help.  It is natural to predict that class actions and Lanham Act activity will soon reflect these trends as well.

So with the undeniable power of these claims balanced alongside the risks of a misstep, how should brand messaging communicate the health and wellness benefits of a product in the “right” way?  And what are the red flags to look for in the advertising of your competitors?  Here are a few hints:

  1. Identify the Claims. Advertisement and marketing claims are intended to communicate characteristics of a good or service designed to entice a purchase.  Claims are present in all forms of branded communication, from TV commercials, to print ads, radio announcements, pop-up ads, and social media influencer posts.  Keep in mind it isn’t just about what you are saying, but what can be implied from the images, graphics and pictures.So whether looking to substantiate your own claims, or to challenge the claims of a competitor, the first step is to systematically identify the statements that actually qualify as a “claim.” For many marketers this can seem daunting, but in fact this initial analysis involves asking just a simple question:  what exactly are you promising?  Claims are promises and comparisons presented as facts:  you should buy this product because it will improve your memory.  You should buy this chair because it will reduce your back pain.  You should use this cleaning product because (unlike the products sold by our competitors) it does not contain toxic chemicals.  Performance claims, superiority claims, comparative claims – all of them are, in the end, statements which are either true or false, accurate or misleading.  And it isn’t enough to say “everybody knows X is true” – all claims must be substantiated before you make them.  And remember, it isn’t just what you say directly:  you can be held accountable for what your spokesperson or influencer says, too.
  2. Substantiation. What kind of evidence would substantiate the claim?  How much data is necessary?  Do I need a clinical trial?  Is my evidence enough?The simple answer is…it depends.  The level of scientific evidence necessary to support a claim always depends on the claim that is being made.  Moreover, specific regulatory requirements may apply depending on the claim.  If the product claims to ‘sanitize,’ for example, then it is possible that EPA approval may be necessary or it must meet certain FDA requirements.  Of course, if the product is not regulated, the standard may differ.  This is where talking things through with your counsel is most critical:  the same type of claim on a different kind of product may not be subject to the same requirements.  In any event, the science must closely match the requirements of the claim language.  Don’t let your claim outpace the science – anecdotes from happy customers, or enthusiasm for your product, can never substitute for systematic evidence.
  3. Magic Language. We all love puffery – and we all think we know it when we see it.  But, that isn’t always the case.  Statements that are specific, quantifiable or purport to describe objective facts may not constitute puffery, regardless of how over the top the language may seem.  Claims about the ‘safest’, ‘best’, ‘highest quality,’ can all require substantiation under certain circumstances.  Perhaps it is just enough to merely offer the “finest” of all puffery….
  4. Is this a Regulated Claim?  Is it possible that the product “sanitizes”, has “antimicrobial” properties, or somehow prevents or reduces the likelihood of contracting COVID-19?These statements are important ones as they may transform the product from an ordinary consumer product to a regulated product.  Sanitizing and antimicrobial properties may trigger EPA review and treatment or prevention of a disease may render a product a ‘drug’ regulated by the FDA.  Of course, the FTC may also assert its authority particularly if these statements are disseminated on a product website or in other forms of advertisement.  It is possible that the mere existence of these words invite enforcement activity.
  5. Is this a Comparative Claim? The most, the best, the mostest, the bestest, the… mostest bestest?  We all want to be on top, but sometimes that means a “head-to-head” comparison is necessary to substantiate the claim.  Even then, it is necessary to understand that an unqualified comparison may trigger a greater level of substantiation because consumers may understand it to mean “as compared to all leading products nationwide.”  Our advice: “Think before you compare” and determine the basis for your comparison – don’t just assume that everyone will understand it in the same way.

While health and wellness claims are subject to an increasingly intense level of scrutiny by competitors and regulators alike, there is little question that consumers want to know whether the products they buy are in alignment with the health and wellness goals they have set for themselves and their family.  A well-crafted campaign supported by properly substantiated claims is not only a way to stay out of trouble, but a way of building deeper and more lasting engagement with educated consumers.

Oops! Now What? Corrective Assignments and Fixing Inadvertent Chain of Title Errors

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We’ve all been there.  Maybe we find it in reviewing the chain of title for trademarks during due diligence.  Maybe it’s something that another company filed that has nothing to do with us.  Or maybe someone on your team made a typo (yup, no one is perfect!).  But, however it happened, it’s there, in the USPTO records:  an assignment inadvertently recorded against a registration that was not actually part of the assignment; a security interest recorded against the wrong application number; or a name change was erroneously recorded as a merger.  Regardless of why or what, the bottom line is the same:  there is an error in the chain of title for the application or registration.  Oops!  Now what?  How do we get that error fixed and removed from the USPTO trademark records?

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How to Find and Protect Your Own Hidden Trademarks

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“Please list your trademarks.”

For many companies this simple request is surprisingly difficult to answer.  Sure, maybe they have a few registration certificates in a drawer, or a docket sheet from their outside counsel, but what exactly does it mean to “have” a trademark?  And how many of them do you have?  And why do so many companies only notice they have a trademark after a competitor starts to infringe it?

Last month, in her fantastic post on trademark audits, our colleague Emily Bayton discussed the critical first step any company must take in order to answer those questions: understanding the scope of the official parts of your portfolio.  What registrations are in your name?  What jurisdictions do they cover?  What rights do you license?  How is your portfolio managed, and should your approach be changed?  Without a real inventory – married to a regular analysis of needs and future plans – trademark portfolios can remain stuck in the past, designed to fight old competitive battles and failing to capitalize on new opportunities.

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New Trademark Fees Implemented by the United States Patent and Trademark Office

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On November 17, 2020, the USPTO enacted a rule that will adjust trademark fees and Trademark Trial and Appeal Board fees. This is the first time that trademark fees have been adjusted since 2017. In the final rule, the USPTO says that the increase in fees is intended to further USPTO strategic objectives by better aligning fees with costs, protecting the integrity of the trademark register, improving the efficiency of agency processes, and ensuring financial sustainability to facilitate effective trademark operations. The new fees will take effect on January 2, 2021.

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USPTO Warns of New Email Scam

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The United States Patent and Trademark Office (USPTO) recently released a warning regarding email scams targeting owners of trademark applications and registrations.  Unfortunately, misleading notices and solicitations are nothing new for those experienced with filing applications with the USPTO.  Because filings with the USPTO are public, private companies are able to gather the contact information of trademark applicants and registrants.  They use this information to send misleading letters and emails asking brand owners for substantial fees in order to renew or maintain trademark applications and registrations.  These companies often go by names that sound like official government agencies, which increases the confusion and the likelihood that brand owners will be duped into responding to the solicitations.

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COVID-19 Impacts on the Copyright Office: What Does It Mean for Mergers and Acquisitions?

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Like much of the federal government, the U.S. Copyright Office (the “Office”) is adjusting its practices and procedures in response to the COVID-19 pandemic.  Unlike registration and recordation with the U.S. Patent and Trademark Office, copyright registration and recordation regulations still require the submission of hard copy materials in many instances.  The Office’s technical infrastructure will not permit electronic filing of certain types of applications and cannot accommodate electronic submission of documents for recordation.  The Office has been closed since March 13, 2020, with registration specialists working remotely.  Hand deliveries are not accepted at this time; mail sent through the postal system or by commercial carrier is received at an off-site facility but will not be processed until the Office reopens.

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Faegre Drinker Goes Virtual to Combat COVID-19 Pandemic

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The Faegre Drinker Intellectual Property Team is committed to our clients and contacts during this difficult time. It was impossible to listen to the news of the last week and be unaffected as many ordinary things we take for granted changed so quickly. Because of the coronavirus pandemic, Faegre Drinker has asked our colleagues to work remotely until at least March 31, 2020. Like so many of you, our priority is protecting the health and safety of our colleagues, clients, visitors and their loved ones. We also want to do our part to contain the pandemic.

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Will New FTC Endorsement Guidelines Make A #Hashtag of Influencer Advertising?

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In a world where social media influencers can wield more power over consumers than network media buys, the Federal Trade Commission’s (FTC) Endorsement Guides felt increasingly like a relic from an earlier era. While not wholly ineffective, the FTC’s formal guidance to businesses on the use of endorsements and testimonials in advertising was still a policy with roots in the limited media environment of the 1970s, the decade when the Guides originated. There were no Instagram influencers, no sponsored posts, and no hashtags in 1980, when the Guides were finally enacted, and even cable television was in its infancy. And despite important and well-intentioned 2009 amendments crafted during the early days of social media, so much has happened in the intervening years that the Guides never seemed fully engaged with the radical implications of a marketing environment where blurring the lines between advertising and reality is more often a feature rather than a bug.

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Tips for Using Data Privacy Compliance to Enhance Your Brand

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Companies in 2020 must comply with more data privacy laws than ever before. Effective on January 1, the California Consumer Privacy Act (CCPA) contains the most complex data privacy compliance requirements in U.S. history. Some other states have their own requirements, and more states are following suit; many are considering data protection laws while their legislatures are in session.

Compliance with the CCPA and other relevant privacy laws and industry standards involves much more than a brief privacy law update and presents multiple opportunities for customer engagement. Consider using those opportunities to enhance your relationship with your customers. How companies handle consumer data has already become one way in which consumers evaluate whether to do or continue doing business with a particular company. Poorly handled data privacy issues quickly create negative customer experiences, online reviews, and bad press. Differentiate your company by handling customer data — and customer relationships — with intentionality and care.

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It’s Perfect! Or, Perfecting Security Interests in Intellectual Property

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In our recent post, we discussed the Seven Secrets of Security Interests relevant for owners or buyers of intellectual property.  But after an IP owner grants a security interest in intellectual property, how do you make it official?

Welcome to the mysterious world known as perfection.  That’s a fancy word for filing the right documents with the correct organizations so everyone knows that the lender has that security interest in intellectual property – and to make sure that the lender has priority over other parties who might have a future interest in the IP.

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