A federal jury in Illinois recently awarded Dyson, Inc. over $16 million in damages after finding that SharkNinja falsely advertised that its Rotator Powered Lift-Away vacuum was better than Dyson’s best-performing vacuum, the DC65.  SharkNinja ran ads that claimed that independent testing showed that the Rotator Powered Lift Away vacuum was proven to have “more

Laura Brett became the director of the National Advertising Division in August 2017. Law360 published a Q&A session with special counsel Jennifer Fried and Laura Brett that provides insight into the NAD, what we can expect in the upcoming years, Laura’s approach as the NAD director, recent noteworthy cases, the NAD’s deliberative process, and much

Florida attorney general Pam Bondi filed a complaint last week against Icebox Cafe, L.C. alleging that the restaurant violated Florida’s Deceptive and Unfair Trade Practices Act by making misleading claims that its food products were “locally-sourced” and “sustainable.”  The defendant operates a self-proclaimed “farm-to-table” restaurant in Miami Beach, along with select locations at airports.

According

Earlier this week, the FTC settled its case with BLU Products, Inc., a cell phone company the FTC claimed misled consumers about its privacy and data security practices. According to the agency, the company represented that it did not collect unnecessary personal information and that it imposed specific data security procedures to protect consumers’ personal information. But the FTC claimed not so fast, alleging that BLU allowed one of its partners, an advertising software company, to collect sensitive consumer information such as text message contents and call logs with full telephone numbers. The FTC also alleged that BLU failed to implement the security features it represented to consumers, allowing the company’s devices to be subject to security vulnerabilities that could allow third parties to gain full access to the devices.

In settling the case, BLU agreed not to misrepresent its data collection or data security practices. The order also requires BLU to clearly and conspicuously disclose: (1) all of the “covered information” that the company collects, uses, or shares; (2) any third parties that will receive this “covered information”; and (3) all purposes for collecting, using, or sharing such information. This disclosure must be separate from the company’s privacy policy or terms of use and the company must obtain the consumer’s affirmative express consent to the collection, use, and sharing of such information. “Covered Information” is defined as geolocation information, text message content, audio conversations, photographs, or video communications from or about a consumer or their device.
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As consumers get ready to watch the 2018 Winter Olympic Games, some companies are getting ready to capitalize on the public enthusiasm. Many marketers want to incorporate Olympics-related themes – ranging from overt mentions of the Olympics to more subtle sports references – in their ads in order to associate their brands with the attention

Those of us who spend our days at the intersection of law and advertising of health products generally accept that the prescription drug world is a universe unto itself, overseen by the FDA pursuant to the Prescription Drug Marketing Act. As prescription drug companies have increased their direct-to-consumer outreach through social media, native advertising, and health information platforms, questions have arisen as to the role that the NAD might play in regulating these advertisements.  For those who are unfamiliar, the NAD is the National Advertising Division of the Better Business Bureau.  It is an industry self-regulatory body that is charged with hearing and rendering decisions in advertising disputes, typically among competitors.  It is commonly used amongst advertisers of consumer-directed products and services.  It is not commonly used amongst prescription drug advertisers and, until recently, many likely assumed that NAD did not have jurisdiction to hear prescription drug advertising challenges.

A relatively recent NAD decision makes clear that that body believes that it has jurisdiction over prescription product advertising, however. Late last year, the NAD evaluated advertising by Synergy Pharmaceuticals for its Trulance product, which is prescribed for chronic idiopathic constipation.  Allergan, maker of a competing product, challenged the advertising on the basis that it included false implied superiority claims, expressly false superiority claims, and undisclosed native advertising in the form of a waiting room pamphlet that allegedly was positioned as independent and impartial patient education material. 
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Last week, eHarmony agreed to pay up to $2.2 million to resolve allegations brought by four California counties and the city of Santa Monica over the company’s billing practices. That includes a payment of $1.2 million in penalties and up to $1 million in restitution to customers whose subscriptions were automatically renewed, but were denied

Most Popular Ad Law Access Posts of 2017

As reported in our Ad Law News and Views newsletter, Kelley Drye’s Advertising Law practice posted 106 updates on consumer protection trends, issues, and developments to this blog in 2017. Here are some of the most popular:

The decision in Kwan v. Sanmedica International, 854 F.3d 1088 (9th Cir. 2017) in April, has occasioned a lot of discussion about the apparent demise of the establishment claim “standard” in California.  What the Kwan decision should have done, but did not, is provoke some hard thinking about what this “standard” is and how we use it.  From the Kwan decision, it is apparent that the Ninth Circuit does not understand where the establishment claim principle came from and what it means.  But its error is understandable, because attorneys and judges have been careless with the principle and arguably have made much more of it than it should be.                                                                                                                                             

Kwan has been accepted as standing for two propositions.  The first, which should be non-controversial and unsurprising, is that in private suits brought under California’s Unfair Competition Law (UCL) and Consumer Legal Remedies Act (CLRA), a plaintiff must allege and ultimately prove that the offending advertising claim is false, not merely unsubstantiated.  There has been no serious dispute about this since the California Court of Appeal (Second District) decision in National Council Against Health Fraud, Inc. v. King Bio Pharmaceuticals, Inc., 107 Cal. App. 4th 1336, 133 Cal. Rptr. 2d 207 (2003).  What made Kwan news was that the court also rejected plaintiff’s allegations that defendant’s dietary supplements were “clinically tested to boost [human growth hormone] by a mean of 682%,” is provably false, and in so doing refused to “incorporate Lanham Act provisions into California’s unfair competition and consumer protection law by distinguishing between ‘establishment’ and ‘non-establishment’ claims.”  854 F.3d at 1097.   
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