Advertising Laws: 5 Common Mistakes

Ashley R. Dobbs, Bean, Kinney & Korman, focused on the common advertising mistakes that can get you in trouble with the law. She gave insight on how to effectively advertise without sacrificing legality.

The presentation addressed five common advertising mistakes:
• Not telling the truth: Inadvertently creating deceptive or misleading messages, or omitting necessary material
• Not carefully comparing amongst competitors: Being liable for trademark infringement if done incorrectly
• Misusing contests and sweepstakes: Laws in all 50 states regulate these practices
• Misusing children's data or medical data: Collecting and targeting the proper data when advertising to kids
• Spamming: Statutory damages await those who improperly conduct email advertising campaigns

1. Advertising Laws: 5 Common Mistakes Ashley R. Dobbs [phone] [email protected] 2300 Wilson Boulevard, 7th Floor Arlington, VA 22201 www.beankinney.com

2. Ashley R. Dobbs Shareholder at Bean, Kinney, and Korman P.C. 8 years in legal practice Lead BKK’s Intellectual Property practice group: advertising, marketing, brand protection, trademark, c opyright, licensing (data, software, trademark, content), sponsorship & merchandising contracts, internet Clients include businesses and ad and PR agencies 15 years as business and brand marketing consultant, working with advertising and promotion agencies (among others)

3. Overview What is “Advertising”? Five Mistakes that can get you into trouble: Not telling the truth Not carefully comparing amongst competitors Misusing contests and sweepstakes Misusing children’s data Spamming Conclusion

4. What is Advertising? Traditional media Online or Digital Social Media Out-of-Home Guerilla Closed Circuit In-theater Point-of-Sale

5. What’s at Risk? Marketing and advertising expenditure Corrective advertising PR issues and corrections Cost of defending claims Reputation

6. 5 Common Mistakes: Not telling the truth Not carefully comparing amongst competitors Misusing contests and sweepstakes Misusing children’s data Spamming

7. The Truth Will Set You Free Federal Laws: Lanham Act – false advertising Federal Trade Commission Act – false advertising and misleading ads State Laws: Criminal false advertising Trademark laws Consumer Protection Laws

8. False Advertising Elements Generally speaking: False or misleading statement; Actual deception or a tendency to deceive; Likely to influence purchasing decisions; Interstate commerce; and Likelihood of injury to the plaintiff (not actual injury).

9. False Advertising - FTC FTC also requires evidence to back up any claims made in advertisements Particular attention to health and safety claims “Magic Words”

10. Examples Kellogg’s Mini- Wheats makes your kids smarter? – FTC complaint Taco Bell – where’s the beef?

11. Compare and Contrast Federal Laws: Lanham Act – false advertising Federal Trade Commission Act – false advertising and misleading ads Standard: Identify comparison Be truthful and non-deceptive Don’t be ambiguous

12. Claims the FTC Rejected “Domino’s oven baked sandwiches beat Subway’s in a national taste test 2 to 1.” “Unlike Progresso soups, new Campbell’s Select Harvest soups never contain artificial flavors or MSG.” “Glad Fabric and Air Odor Eliminator penetrates deeper than Febreeze on carpet.” 12

13. You May Already Have Won! Federal Trade Commission Act – false advertising State Laws Every state has different laws Online promotions implicate every state Violation of Virginia law is a misdemeanor (Class 3) 13

14. Virginia State Law Va. Code § 18.2-242: “no retail establishment…shall use any game, contest, lottery, or other scheme or device, whereby a person…may receive gifts, prizes or gratuities as determined by chance for the purpose of promoting, furthering or advertising the sale of any product or products having both a federal and state excise tax placed upon it, and the fact that no purchase is required in order to participate…shall not exclude such game, contest, lottery or scheme from the provisions of this section.” 14

15. Other issues Coupons Lotteries Sweepstakes Rebates “Daily Deal” Sites 15

16. Misusing Children’s Data Children’s Online Privacy Protection Act (COPPA ): regulates commercial websites and online services that are directed to or that knowingly collect information from children under 13 years old. 16

17. Compliance? Even if you don’t target children under 13, you may need to comply with COPPA Requires notice, verifiable parental consent, procedures for removal and correction, and means for specific collection identification 17

18. Examples Mrs. Fields Cookies ($100,000 fine) Hershey Foods ($85,000 fine) 18

19. Spamming Federal “CAN-SPAM” Act prohibits certain unsolicited e-mail mesages Applies to: any person, including business entities and nonprofit associations, who initiates a commercial e-mail message- either originates the e-mail or procures the transmission of it 19

20. Requirements: Clear notice of the recipient’s right to opt out of future messages Mechanism for opting out. The opt-out must become effective within 10 business days. Clear identification that the message is an advertisement or solicitation The sender’s postal address 20

21. Best Practices B e accurate. Get permission . Treat competitors fairly. Check your facts. Watch your privacy policies. Check your e-mail marketing policies.

22. Ashley R. Dobbs, Esquire Bean, Kinney & Korman, P.C. 2300 Wilson Boulevard, 7 th Floor Arlington, Virginia 22201 703-526-4701 [email protected] www.beankinney.com