Adv./PR Law and Ethics Quiz 3

T/F: Registration is not required for protection.

True

T/F: States can have trademark laws.

True

What was the problem with Get Glad's fish ad?

Your fish might die if you use Ziploc, they said you don't have proof that our bag is weak.

What is the difference between puffery and deceptive advertising?

"best" "finest" "brightest" -unverifiable, unquantifiable, subjective and unreliable -Generally about advertiser's own product but derogatory claims have been considered puffery -Other parts of an ad can give meaning to otherwise vague words

Bureau of Competition

(Antitrust) Prevents anticompetitive mergers ex: AT&T v. T-Mobile, Verizon buying Yahoo

Bureau of Consumer Protection

(advertising) Protections against unfair, deceptive or fraudulent practices Consumer protection laws by Congress

Descriptive trademarks

(not automatically protected) dictionary words being used in a way that describes the product's attributes think of description of what it is (when you think Jaguar you don't think of a car), example: TOYS-R-US, OFFICE MAX, PETCO -they do have the ability to receive trademark protection when they achieve secondary meaning for protection -requires secondary meaning for protection

Bureau of Economics

(research and economic analysis) Provides support to antitrust and consumer protection investigations

What Makes Advertising Deceptive?

* An advertisement is deceptive if it contains a statement (or omits information that) that: * is likely to MISLEAD consumers acting reasonably under the circumstances * is MATERIAL, which means its IMPORTANT to the consumers decision to buy or use the product * reasonable consumers: typical consumers that are going to be exposed to the ad

What kind of evidence must a company have to support an advertisement claim?

* Before a company runs an ad, it has to have a "REASONABLE BASIS" for the claims; this means objective evidence that supports the claim * The kind of evidence depends on the claim * At a minimum, an advertiser must have the level of evidence that it says it has * Customer testimonials are usually not enough to support a claim *COMPETENT and RELIABLE claims

What counts as a copy?

* Copy may be "substantially similar" not exact * Underlying premise: copy does not have to be exact

How should claims be interrupted?

* Entire mosaic - must always be interpreted with reference to other elements - the context - of the ad in which they appear * Context of the ad may modify the explicit message as a whole *LOOK AT SLIDES

What are the 4 different types of Deceptive Claims?

* Explicitly False Claims * False establishment claims * False demonstrations and dramatizations * Misleading Implied Claims (through omission)

Explicit/Expressed False Claims

* Express claims are stated literally in the ad * Verbal or visual * example of oranges/Tropicana: deceptive bc of the way they depicted their oranges (their orange juice is pasteurized not squeezing them) —> wasn't said, was shown * can be proven to be false pretty easily * one form is the False establishment claim

Steps FTC Takes to Determine Whether an Ad is Deceptive

* How would a REASONABLE consumer view this ad? * What are the EXPRESS and implied claims made in the ad? * Is/are the claim(s) material? * Is there SUFFICIENT EVIDENCE to support the claim(s)? * "ABC mouthwash kills the germs that cause colds" * Whats implied from this statement? —> mouthwash will cure cold * information that has been committed

What isn't protected under copyright?

* IDEAS, facts

What does the FTC do?

* Protects consumers — stopping unfair, deceptive fraudulent practices in t he marketplace * Promotes competition * Competition: price, selection and service * How does competition benefit consumers? —> lowers prices * FTC ensures markets are open and free * Challenge anticompetitive mergers and business practices that could harm consumers

Examples of what is protected under copyright:

* Song lyrics * Intellectual copies - books, ad copy, software * creative works

Deceptive Implied Claims questions

-What does the advertiser intend to convey? -What do you expect a reasonable consumer to take away from the ad? -For a large campaign, research may be needed to further elucidate what the ad implies -Regardless, advertiser must possess substantiation for claims reasonable implied by the ad.

What are the FTC's Sanctions?

-Cease and desist order -"Fencing in" order -> prevents similar claims regarding other of the advertisers products -Monetary penalty -- charing them if deceptive -Corrective Advertising ---> YAAAS birth control making false claims about birth control helping with something that wasn't true

Deceptive Implied Claims

-Exaggerated significance -Oftentimes deceptive advertising have confusing presentation, imagery, language -Craft was implying that you were getting the same mineral nourishment as two strips of bacon, etc. FTC will conduct own research with consumer panels to determine how consumers are determining claims

What is the FTC's "False Advertising" Definition?

-advertisement, other than labeling, which is MISLEADING in a MATERIAL respect (part of the ad that leads to the consumer making a judgement or decision making that can be explicit (stated, vocalized in writing) or implicit (implied) -representations MADE OR SUGGESTED by word, design, device, sound, or any combination thereof, but also fails to reveal facts material with respect to the CONSEQUENCES which may result from the use of commodity

What are the FTC's 2 Pillars of Truth?

1. Advertising must be truthful and not misleading -misleading is much harder to prove 2. Advertisers must have adequate substantiation for all product claims before disseminating (spreading something widely) their advertising -have to have adequate substantiation to show what you're saying, research must be done before making claim

Plaintiff must prove

1. OWNERSHIP of copyright of a particular work 2. Defendant is copying a SUBSTANTIAL, legally protectable portion of the work

How do you test for trademark infringement? What is trademark infringement criteria:

1. Plaintiff has a valid and protectable trademark (if a plaintiff comes forward with.... do they have a case? NO_ 2. Plaintiff has priority over the defendant. 3. Defendant used the trademark in commerce. 4. The defendants usage creates likelihood of consumer confusion about the product's source, sponsorship, or affiliation.

What are the four characteristics of puffery?

1. Subjective statement - the brands viewpoint, people are going to interpret it differently than someone else would 2. General and vague; not specific 3. Unmeasurable or unverifiable - can't be proven, no evidence to prove it 4. Claim upon which consumers are unlikely to rely - claim is not something consumers will take seriously

What are the two points of Lanham Act?

1. displayed in any manner on the goods 2. Displayed in the sale or advertising of services

What is the Lanham Act? What are its 6 determinants?

6 Factor inquiry to determine a violation 1. False or misleading statement of fact 2. Interstate commerce 3. Connection with commercial advertising 4. Actually deceives or has the tendency to deceive 5. That is material (impacts decision making) 6. That is likely to cause injury to the plaintiff

What does trademark law protect?

BRANDS! How consumers recognizes things

What is Puffery? What two forms does it come in?

Boastful, exaggerated claims 1. Exaggerated, blustering, and boasting statement upon which no reasonable buyer would be justified in relying 2. A general claim of superiority over comparable products that is so vague that it can be understand as nothing more than a mere expression of opinion "life changing" "free"

What are the FTC's 3 Bureaus?

Bureau of Competition (Antitrust), Bureau of Consumer Protection (advertising), Bureau of Economics (research and economic analysis)

False establishment claims

Claim conveys an explicit or implicit message "Tests prove the X cleans better" "Studies show that Y lasts longer" Assertion that the advertising claim has been "Established" or proven by competent and reliable testing -establishment claims can be express or implied -Reebok's Shape-Ups -POM's health claims (lowers PSA for prostate, arteries and blood flow)

Demonstrations and Dramatizations

Even if an advertiser has substantiation that a product is capable of achieving a certain result, it is false to advertise it using a rigged demonstration. -Way commercial is filmed is not accurate, its still considered deceptive. -Volvo 1991 Commercial was problematic because it wasn't an accurate representation of the ability of the car - it was staged. -Nissan 2014 Commercial going up sandhill

T/F: The FTC does not accept consumer complaints.

FALSE - FTC accepts consumer complaints.

T/F: Trademark Law does not protect consumers from imposter brands.

FALSE; it does!

What are the advertiser's options?

Created in-house (advertiser owns) "Works for hire" --> hire people out so you get something in writing that they give the copyright to the agency --- Commissioning party (advertiser) is owner Copyright licensing - advertiser granted limited right to use -whoever creates it owns it and often there is a misperception, just because advertiser pays for it they own it, but this is not true!

What if the copyright is not registered?

Creator still has rights; still protected

What makes a trademark strong and protectable?

Distinctiveness

What is the difference between facts and opinions?

Facts can be proven, whereas opinions are not protected Fact: "specific and measurable claim, capable of being proved false or of being reasonable interpreted as a statement of objective fact" Opinion: not protected if the statement can be verified "make every effort" "too close for comfort" "50% less mowing required" "longer engine life" (puffery) -- "make every effort and too close for comfort" but 50% is not puffery because it can be protected

T/F: All brand names are protected under Trademark.

False; not all!

T/F: Consumer and producer interest are not divergent.

False; they are divergent!

What are the 5 hierarchy of trademark distinctiveness?

Fanciful, Arbitrary, Suggestive, Descriptive, Generic

Where do trademark rights come from?

From the Lanham Act; means that right to trademark comes from "Use in commerce" which means the bona fide use of a mark in the ordinary course of trade

When can colors be trademarked?

If they serve- and only serve- to identify the source of a product. Louboutin v. Yves St. Laurent (court ruled in favor of Louboutin- red soles on heels identified with Louboutin). Hershey v. Mars (Hersey dropped lawsuit because their packaging doesn't look that familiar).

Who can the FTC go after in terms of deception?

Individual companies, industry wide, operation waistline, operation big fat lie, operation failed resolution, internet sweeps

What does the FTC act on?

Own initiative, consumer complaints, competitors making claims

What was the Court's decision on Papa John's?

Pizza Hut sued Papa John's and the Court support PH; found that ads were misleading --> have to view WHOLE ad, not just visuals but also the sound/etc., when deciding if ad is deceptive -Statement must be considered int he overall context in which it appears -Papa John gave definition to the word "Better" so the statements take on the characteristics of fact -Pizza Hut provided evidence that there are no "demonstrable" or "quantifiable" differences between the parties' sauces or dough.

Which distinctiveness trademarks are protected? Which aren't?

Protected: Fanciful, Arbitrary, Suggestive Not automatically protected: Descriptive (sometimes), Generic (never)

What is the focus of copyright law?

Protecting the creator's rights to the creative product

Who owns a copy?

The creator is the owner! ALWYS get copyright deals in writing. Trend of court is to protect the original creator.

What can be protected by Trademark law?

Trademarks, brand names, logos, colors, sounds (NBC chimes), Slogans, Trade dress, unique product packaging, product features and attributes

T/F: Trademark Law rewards producers for investment in quality.

True

When does trademark protection begin?

When the product is sold

Why is Trademark Law confusing?

can be difficult bc you're trying to figure out if a product confuses consumer from another product

Trademark law attempts to govern...

cognitive associations in consumers head to figure out if a brand places a logo or color schemes/packaging can be covered by trademark

Fanciful trademarks

completely newly terms or brand names —> Google, Instagram, SnapChat, Oreo, Clorox, Kodak, Amazon (words you don't find in the dictionary)

Secondary meaning refers to...

consumers will only think of one source or producer for that brand (Toys-R-US because theres no confusion)

Suggestive trademarks

dictionary words that GIVE MEANING to suggest to something about the product —> Greyhound bus (its fast), Jaguar (protected) -think in terms of meaning of how product performs

Arbitrary trademarks

dictionary words that give novel meaning to the brand (hear it, know brand immediately) —> Apple, Shell, Camel, Amazon (protected automatically)

Unlike Copyright law, Trademark rights...

do NOT come from the Constitution; was introduced in the "commerce clause"

Trademark law is created to project a company's entity and to...

keep consumers from being confused about company's identity (e.g. logos, slogans)

Papa John's "Better Pizza, Better Ingredients"

making loud claims, then began to back up claims but without scientific evidence, also didn't have proof Pizza Hut was making their pizzas from "remanufactured tomato paste" etc.

Advertiser says "I PAID FOR IT!" Court says....,

so what?

Generic terms

words used for their dictionary meaning; never protected.