Category - "Consumer Protection"

Connecting with Digital Natives through Brand Protection

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With the constant rise of counterfeiting, protecting one’s brand is now more important than ever. Many brand owners already take protective steps to protect their brands such as registering brands through trademark and copyright registrations and monitoring fraudulent use of said brands. However, with our current social media-driven world, connecting with the digitally native generations is a critical measure brand owners should consider in protecting their reputation and their consumers.

The term “digital native” describes a person who grew up in the information age with computers and an understanding of the Internet. Digital natives make up the largest share of the consumer base and workforce: Millennials (born between 1980-1994), Gen Z (born between 1995-2012), and Gen Alpha (born between 2013-2025) are digital natives because they were exposed to the Internet, social media, and mobile systems from an early age. Digital native generations are important for any brand’s future because they have significant buying power and influence.

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Recap: 2023 ANA Annual Advertising and Marketing Law Conference

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If artificial intelligence is so great, why can’t it reliably predict the weather?

The weekend has just closed on another very rainy Floridian ANA Masters of Advertising Law Conference (Last year we had a hurricane, so this would qualify as an uninspiring upgrade). The Masters Conference is the largest advertising, marketing and promotion law conference in the nation, bringing together major brands, storied advertising agencies, and prominent regulators to discuss cutting-edge topics impacting the industry. Each year – not by design but by happenstance – a different theme is featured. This year, to no one’s surprise, the focus was on AI.

While not every session discussed AI in depth, most speakers devoted some time to the subject throughout the 3-day event.  Panelists confronted questions like: does algorithmic bias, increasingly employed in various industries, constitute an unfair trade practice?  How will regulators view advertising claims based on next gen tech?  What copyright traps exist for the unwary utilizing AI to generate advertising content?  Are US and international privacy laws evolving fast enough to keep up with new challenges posed by AI?  And while it had nearly zero to do with AI, the conference would have felt incomplete without a discussion of what drag queens can teach advertising lawyers about intellectual property protection.  Many learned more about Cardi B’s album covers during that session than they could have imagined in their wildest dreams.

There is no doubt that AI will affect the advertising and marketing landscape for years to come.  Like the metaverse (last year’s theme) and crypto assets (the year before that), these issues are not new.  But despite AI having been around for some time, the leaps forward that generative AI applications have made this year appear poised to significantly transform the landscape of advertising content creation and delivery.  President Biden’s October 30th Executive Order is one of the first major steps being taken to set limits on AI technologies while funneling their potential for good.  Among other things, that Order directs the U.S. Patent and Trademark Office and U.S. Copyright Office to issue a report on “potential executive actions relating to copyright and AI.”

We will of course be following this issue closely as the technology – and its implications for intellectual property and advertising issues – evolves.  But we will hold our concerns regarding AI singularity at bay until such time as we receive an accurate forecast for the next ANA Conference.  (It’s in Arizona, so we’re blithely optimistic.)

Until next year!

The FTC’s Updated Endorsement Guides: Do They Say More Than We Already Know?

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On June 29, the Federal Trade Commission (FTC) published its updated Guides Concerning the Use of Endorsements and Testimonials in Advertising (“Guides”), together with an FAQ document, FTC’s Endorsement Guides:  What People Are Asking (“FAQ”).  One day later, it announced its proposal for a new Trade Regulation Rule on the Use of Consumer Reviews and Testimonials (“Trade Regulation”).  In the spirt of the FTC’s FAQ, we figured we would post a brief one of our own, highlighting some of the big changes (and non-changes).

Can you please explain what’s going on in one paragraph or less?

As background, the Guides explain the FTC’s view on the propriety of endorsements and testimonials made by third parties on behalf of advertisers under Section 5 of the FTC Act, which prohibits unfair and deceptive trade practices.  The Guides were last updated in 2009.  This update therefore brings a refresh and clarifies the FTC’s view on various scenarios that have arisen since 2009 given changes in technology and marketing practices.  The Trade Regulation, by comparison, is focused on the narrow topic of fake consumer reviews, which are singled out because (a) they have been a particular focus of the FTC of late; and (b) the regulation would clearly entitle the FTC to seek civil penalties for violations (whereas its ability to do so under Section 5 of the FTC Act is somewhat murky).

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The Ninth Circuit Just Provided a Roadmap On How to Defend California Consumer Fraud Claims

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Companies that may face consumer fraud claims in West Coast courts will want to take a close look at the Ninth Circuit’s decision this month in McGinity v. Procter & Gamble Co., __ F.4th __, 2023 WL 3911531 (9th Cir. June 9, 2023).  The Ninth Circuit provided some much-needed clarity on how lower courts within its jurisdiction should reconcile two seemingly conflicting precedents on how to apply the “reasonable consumer” test to seemingly fanciful claims brought under California’s consumer fraud laws.

Seven years ago, in the pro-defense Ebner v. Fresh, Inc., 838 F.3d 958 (9th Cir. 2016), the Ninth Circuit upheld the dismissal of claims that the weight indicator on a tube of lip balm was misleading because some of the balm sits in the tube’s screw mechanism and thus is basically unusable.  In the legalese equivalent of “give me a break,” the Ninth Circuit noted California state appellate precedent holding that consumer fraud claims must be dismissed if it is improbable “that a significant portion of the general consuming public or of targeted consumers, acting reasonably in the circumstances, could be misled” by the challenged practice or language, and called the plaintiff’s lip balm claims “not plausible.”  Id. at 965.  The Ebner decision basically counseled district judges to be on the lookout for, and be ready to dismiss, a plaintiff’s allegations that reflect, at best, the reading “an insignificant and unrepresentative segment” of purchasers might give to a challenged advertisement or language on packaging.  Id. at 966.

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