Truth in Advertising? See You in Court
The performance of litigation as a Biglaw business line during the Great Recession has been widely viewed as disappointing. But at least one type of litigation seems to be picking up. From the New York Times:
A diamond is forever? Prove it.Companies that were once content to fight in grocery-store aisles and on television commercials are now choosing a different route — filing lawsuits and other formal grievances challenging their competitors’ claims…. The goal is usually not money but market share. Companies file complaints to get competitors’ ads withdrawn or amended.
The cases themselves might seem a little absurd — an argument over hyped-up advertising copy that not many consumers even take at face value. Pantene has attacked Dove’s claim that its conditioner “repairs” hair better, and Iams has been challenged on one of its lines, “No other dog food stacks up like Iams.”
Dueling over dog food quality? Desperate times call for desperate measures.
Most consumers probably view the average advertisement with skepticism. But there are standards here:
Since advertisers are required by law to have a reasonable factual basis for their commercials, their competitors are essentially demanding that they show their hand. The increase in these actions may be a reflection of the dismal economy: in recessions, when overall spending lags, advertisers must fight harder for customers.“In this economy, where margins are a bit tighter, a lot of marketing departments have decided to become more aggressive in going after their competitors in the hopes that they can either protect their market position or capture additional market share,” said John E. Villafranco, a law partner at Kelley, Drye & Warren who specializes in advertising.
Have we considered the possibility that ad agencies have just been watching too many episodes of Mad Men? After all, Don Draper is the most influential man in the world.
The evidence suggests an uptick in actions over advertising:
The number of complaints over ads from competitors filed with the National Advertising Division of the Council of Better Business Bureaus, the industry’s main self-regulatory program for national ads, is on track to set a record this year. There have been 82 formal complaints so far in 2009, after last year’s record of 84 challenges, a sharp increase from 62 in 2007 and 52 in 2006.Other companies file false-advertising lawsuits under the Lanham Act, passed in 1946 to strengthen trademark law. While there are no reliable tracking numbers on cases filed under that law, lawyers say they are seeing an increase.
No, laid off Latham associates. You do not have a claim under the Lanham Act.
The advantage of filing a NAD complaint is that it’s inexpensive:
Filing a complaint with the National Advertising Division is cheaper than a lawsuit, costing $2,500 to $20,000. The downside is that the program is voluntary and it has no legal power. By going to court, [Manatt Phelps partner Linda Goldstein] said, companies can file for an injunction and get the ads stopped within days, versus the two to three months that the voluntary process takes, she said.
Over at Am Law Daily, Zach Lowe has an example of an advertising dispute of interest to the legal world:
In another dispute that hits closer to our world, the publishing company behind BAR/BRI filed a complaint with NAD against Kaplan, claiming that Kaplan’s ads inaccurately implied that only 73 percent of BAR/BRI students pass the bar.
C’mon, Bar/Bri — passing the bar exam is hard! Just ask these people.
(Here at Above the Law, we’d gladly take either BAR/BRI or Kaplan as an advertiser. So email us, guys; we have lots of law student readers.)
Read more, and check out other examples of disputes arising out of ads, via the links below.
Best Soup Ever? Suits Over Ads Demand Proof [New York Times]
Another Area of Law that is Booming: Advertising Litigation [Am Law Daily]
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Lat
It would be wrong to drink your cousin's breast milk. The fact you even have to ask disturbs me.
http://twitter.com/davidlat
At least some litigators are busy.
I am willing to bet Mystal's lunch that Lat's cousin is male.
ATL really sucks. Desperate for advertising, piss-poor content and pathetic editors.
@4 = bitter Locke Lord Houston associate tired of his smelly office
1 - The comments on Lat's Facebook status update about the breast milk are priceless:
http://www.facebook.com/davidlat?v=feed&story_fbid=183528259889
4 - Then why are you reading (and commenting)?
The people who say "ATL sucks" probably check this site ten times a day.
Lat,
Thankfully, been seeing a lot more posts from you and Kash. Very hopefully, this is a harbinger of an Elie-less ATL.
Your longtime pageviewers are counting on you to dump that guy. He's ruining your site.
Imagine there's no Elie
It's easy if you try...
How big are Kash's breasts?
Lat's cousin
I got into Harvard today! So excited!
Filing lawsuits over claims of false advertising? With AT&T, there's an app for that.
Elie is to ATL what Kenan Thompson is to SNL.
Diamonds aren't forever; graphite is forever.
mere puffery
13 FTW
Huh? Any evidence of an upswing in these types of lawsuits? I worked on the same exact types of lawsuits 5 years ago when I was still at big law. False Advertising suits are hardly a reaction to the economy.
Huh? Any evidence of an upswing in these types of lawsuits? I worked on the same exact types of lawsuits 5 years ago when I was still at big law. False Advertising suits are hardly a reaction to the economy.
Linking to articles on the New York Times website is an engaging and nuanced method to expound upon today's legal concerns, but if you would advise, at your convenience, as to my chances of getting a summer offer from the PERMITTING YOUR OWN BUSINESS TO WASTE AWAY practice group at WILDMAN HARROLD?
I used to work for a company that made Carbholic Smoke Balls. We were in the mids of getting sued for breach of contract, when a senior principal asked if I he even cared about the law suit. Now look, let me clue you in on something right now. I've given this country 22 damn, fucking years of my life. Twenty two years! I've seen young boys blown out of the air, over the Pacific. I've seen their guts sprawled all over the rice paddies in Vietnam, so whenever somebody dies for this country, believe me boy, I give a shit! Goddamnit, nobody talks to me like this and I'm not about to start now! You want to do something for your father, hmm? You be strong for your family, you stay *right here*!
How about the At&T v. Verizon suits over the "There's a Map For That" and "Island of Misfit Toys" ads?
20, Carbholic Smoke Ball case...? Really...?
1. Nobody cares about your remedial knowledge of 1L contracts law.
2. The CSB case dealt with whether an advertisement/claim was an offer, not whether the advertisement was false and misleading.
You should probably go study harder for your upcoming finals. Toodles.
20, Carbholic Smoke Ball case...? Really...?
1. Nobody cares about your remedial knowledge of 1L contracts law.
2. The CSB case dealt with whether an advertisement/claim was an offer, not whether the advertisement was false and misleading.
You should probably go study harder for your upcoming finals. Toodles.
@17-18 -
I did these cases at my former firm (I jumped ship to my current firm 6 mos ago).
If nothing else, the advertising practice was busy, and didn't experience the slowdown other practices did. Companies are under pressure to increase revenue, so they are becoming more aggressive in their advertising, by, among other things, naming their competitors. So instead of "works twice as fast as the leading brand" or "works better", they are claiming "works faster than Tide" (or Cheer or whatever). When you name a competitor in your ads, you are going to get an NAD challenge, if not a full blown PI motion.
22/23 trolled by 20.
Well done 20
Wittgenstein ftw.
@22/23 I don't need to study anymore. I'm ready. I told my contracts professor that I was ready and he showed me an old yearbook. He had me look at all of his old contracts clases. I asked him how those kids were any different from me?
He said: Because they're dead, all of them! I had laid awake at night thinking about how fast and how brutal they died. Parts of them burning on the land, parts of them landing in the sea, some part of them burning just into nothing in the middle of the air and all of them thought that they were ready for it. When it was all over, I promised myself I'd never be part of killing kids again. That's why it took me so long to come around to helping you. Now it looks like I have us both trapped into something...
That's right, I have Chappy Sinclair for Contracts.
Marshall Dennehey, Port Richmond to $42k !
Lat, please stop shilling for advertisers, it's pathetic.
A diamond, like child support, is preatty much forever.
Think twice before pop the Q.
Instead of putting up a paywall, the big newspapers can just request that blogs not write about a story until it's stale. Kudos to ATL for leading media into the future.