Advertising Law

‘World’s Best’ Is Puffery, Not Objectively Provable Claim

By Jeffrey S. Edelstein, Partner, Advertising, Marketing and Media

The claim “World’s Best Glass Cleaner” is puffery, the National Advertising Division decided in a challenge brought by S. C. Johnson & Son Inc. against advertiser PLZ Aeroscience Corporation.

PLZ’s “Sprayway” product featured the claim on its label under the picture of an American flag and the statement “Made in the USA since 1947.” The challenger told the NAD that because “world’s best” was tied to a product function (the cleaning of glass) it was a broad superiority claim that required PLZ to provide evidence demonstrating the product’s superior cleaning performance as compared to its competitors.

The advertiser countered that the term “World’s Best” was part of the product name and a registered trademark since 1995 that included a stylized logo featuring the image of a smiling woman in high heels wearing a 1950’s style shirtdress with a frilly apron, holding a spray can in her right hand and a cleaning cloth in the other.

Both parties presented the self-regulatory body with consumer perception surveys, but the NAD expressed concern about basing its decision on either survey, noting that federal courts “are divided on whether consumer perception evidence can be admitted to assess whether an advertising claim is puffery.” Given that both parties used “a novel design” for their studies that yielded “widely divergent” results, the NAD elected to step into the shoes of the consumer.

Noting that “puffery is more an art than a science” that needs to be evaluated in context to determine if any misleading messages are conveyed, the NAD reviewed the claim and found it constituted puffery. It emphasized that the words “World’s Best” appeared in “significantly smaller” font than the words “Glass Cleaner.”

“The small sizing of the ‘World’s Best’ claim juxtaposed against the nostalgic image of the woman in an apron and the dramatically larger descriptor ‘Glass Cleaner’ claim rendered ‘World’s Best’ an exaggerated display of the advertiser’s pride in its product (puffery) rather than an objectively provable fact requiring testing against its competitors worldwide as substantiation,” the self-regulatory body concluded.

Other statements on the label (such as “Ammonia Free” and “It’s Streakless!”) were physically separated from the headline claim and were not in sufficient proximity to “World’s Best Glass Cleaner” to render it an objectively provable claim, the NAD added. Therefore, “in the context in which it appears on the challenged product label, ‘World’s Best Glass Cleaner’ constitutes puffery and as such does not require substantiation.”

To read the NAD’s press release about the case, click here.

Why it matters: The NAD emphasized the size differential between the phrases “World’s Best” and “Glass Cleaner,” finding the label to be an “exaggerated statement” of the advertiser’s pride in its product rather than an objectively provable claim. The self-regulatory body also noted that the federal courts are divided as to whether consumer perception evidence can be admitted to assess whether an advertising claim is puffery, with some courts refusing to consider such evidence and others requiring it to establish what messages are reasonably conveyed.

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No Harm, No Lawsuit: Court Dismisses VTech Litigation

By Richard P. Lawson, Partner, Consumer Protection

Finding that the plaintiffs failed to prove any harm from a data breach suffered by toymaker VTech, a federal court judge granted the company’s motion to dismiss consolidated litigation brought by eight parents and 14 children.

The Hong Kong-based toy company offers a “Kid Connect” service that allows parents to use smartphones to talk to kids who use VTech toy tablets and other devices. But in 2015, a hacker gained access to the company’s servers and captured the names, email addresses, home addresses and passwords of more than 4.8 million parents and the names, genders and birthdays of approximately 6.4 million children. The hacker also gained access to chat logs between kids and their parents, kid selfies, and voice recordings.

In addition to legislative inquiries, the data breach triggered consolidated litigation in Illinois federal court alleging that the company failed to employ reasonable data security to protect its customers, resulting in an increased risk of identity theft to adults as well as harm to children if predators accessed their information.

VTech moved to dismiss the action for failure to state a claim. U.S. District Court Judge Manish S. Shah granted the motion, finding that the plaintiffs were unable to establish that they suffered actual harm as a result of the breach and that their alleged injuries were too “speculative” for the lawsuit to move forward.

“Plaintiffs fail to make the connection between the data breach they allege and the identity theft they fear,” the court said. “Specifically, plaintiffs do not explain how the stolen data would be used to perpetrate identity theft.”

In some situations, a data breach can result in an increased risk of identity theft sufficient to confer standing, Judge Shah wrote, referencing cases against P.F. Chang’s and Neiman Marcus in which the plaintiffs alleged that they incurred fraudulent charges on their financial statements and spent time and money protecting themselves against future charges.

But unlike those data breaches, “the data stolen here did not include credit-card or debit-card information, or any other information that could easily be used in fraudulent transactions,” the court said. “It is unclear how the disclosure of plaintiffs’ names, addresses, birthdates, and VTech account information would increase the risk of fraudulent transactions on plaintiffs’ credit cards or fraudulent accounts being opened in their names.”

The plaintiffs also did not allege that any fraudulent transactions have occurred, that they actually engaged in mitigation efforts (such as purchasing credit monitoring services) or that the personal information was stolen by individuals who intended to misuse it. In fact, the complaint included a news article that quoted the hacker as saying he did not intend to sell or publish the data, the court noted.

“With respect to this data breach, plaintiffs have not plausibly alleged a substantial risk of harm sufficient to confer standing,” the court said. As for future harm to their children from predators, the plaintiffs failed to allege that the hacker was a predator or that the hacker disseminated the information broadly to predators or anyone else who would harm children.

“Harm need not be literally certain to confer standing, but allegations of future harm based on poor data security, without allegations to support an inference that someone with potentially malicious intent will access the data, is too speculative to confer standing,” Judge Shah wrote.

To read the memorandum opinion and order in In re VTech Data Breach Litigation, click here.

Why it matters: The court took a firm stance on Article III’s injury-in-fact requirement, finding that the plaintiffs’ allegations failed to connect the data breach with their fears of identity theft or harm to the children involved and were too speculative to move the suit forward.

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California Looks to Regulate Marijuana Advertising

By Jesse M. Brody, Partner, Advertising, Marketing and Media

With recreational marijuana soon to be legal in California, state lawmakers are looking to impose advertising restrictions on the industry.

Senate Bill 663 would prohibit retailers from packaging products in transparent material or colorful designs that would be attractive to minors. The measure includes a list of characteristics that would automatically be deemed “attractive to children,” including the use of a name or a design feature that resembles “a candy, snack food, baked good, or beverage commercially sold without cannabis” as well as the use of a name or slogan that would reasonably appeal primarily to a minor.

Also on the list: the display of a cartoon, logo or design feature that would reasonably make the package or label appeal to a person under the age of 21, and the display of a “statement, artwork, or design that could reasonably mislead a natural person under 21 years of age to believe that the package contains anything other than cannabis or cannabis products.”

The bill, which states that the list is not exhaustive, vests oversight responsibility with the Department of Consumer Affairs.

In April, the Senate approved the bill and sent it to the Assembly, where it underwent some tweaks in committee. On July 17, the Assembly passed the measure in a unanimous vote and sent it back to the Senate for approval.

To read Senate Bill 663, click here.

Why it matters: Recreational marijuana will become legal in California in January 2018, and lawmakers will spend the next several months trying to establish a framework for the industry, including regulation of advertising. State Sen. Jim Nielsen (R-4th District), who sponsored Senate Bill 663, said in a statement that his intent was to protect children, who are “susceptible to commercials and advertisements” and are “most at risk to its exposure with edibles like brownies, cookies and candies.”

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Photographer’s Copyright Suit Gets Mixed Results

By Jesse M. Brody, Partner, Advertising, Marketing and Media

A New York federal court judge handed a photographer a mixed result when it dismissed her copyright infringement claim but allowed her Digital Millennium Copyright Act (DMCA) allegations to move forward in a dispute that began on Instagram.

Photojournalist Matilde Gattoni, based in Italy, photographed a colorful building in Essaouira, Morocco, that included the figure of a woman in a long dress walking down an empty street. In August 2016, she placed the photograph—which has a pending copyright registration in the United States—on her Instagram page, accompanied by a copyright notice.

According to Gattoni, roughly one month later, clothing retailer Tibi copied and cropped the photograph (removing the woman) and placed it on the company’s social media page without licensing the image or obtaining her consent to use it. Tibi also removed the copyright notice, but did include a hyperlinked reference to Gattoni’s Instagram page.

Gattoni sued under two theories: copyright infringement and violation of the DMCA, which prohibits the intentional and knowing removal of copyright management information. Tibi moved to dismiss the suit, which requested statutory damages of up to $150,000 for copyright infringement and at least $2,500 and up to $25,000 under the DMCA.

U.S. District Court Judge Robert W. Sweet issued a mixed opinion, tossing the copyright claim but allowing the DMCA charge to move forward.

Although Gattoni met three of the four requirements to state a claim for copyright infringement (that the subject was an original work, that she owns the copyright in that work and that the defendant acted to infringe the copyright), she was lacking one prong of the test: that the copyright has been registered in accordance with the statute.

Courts are split on the issue of whether a work qualifies as registered under the statute when an application for copyright is pending, Judge Sweet explained. “Some courts have taken an ‘application approach,’ under which a pending copyright registration application is sufficient to satisfy Section 411(a), while others have taken a ‘registration approach,’ under which a certificate of registration issued by the Copyright Office is a prerequisite to suit.”

The U.S. Court of Appeals Second Circuit, has not addressed this question, but federal courts in the circuit have followed the registration approach, the judge said, requiring either a valid copyright registration or evidence that an application was made and registration was refused.

In granting the nature to dismiss without prejudice, the court said, “Because Gattoni has alleged only that the registration for the allegedly infringed film is pending, and because no application has been made by Gattoni to amend the Complaint if and when the Photograph became registered, Gattoni has not properly pled the pre-requisite element of a copyright infringement claim.”

Turning to the plaintiff’s DMCA claim, the court noted that whether an application for copyright remains pending is not a bar to such an action. Gattoni therefore satisfied the elements to establish a violation of the statute, as she demonstrated the existence of the copyright management information on her photograph, the removal and/or alteration of that information, and that the removal and/or alteration was done intentionally.

The presence of the hyperlinked credit tag used by Tibi in its post caused the court some hesitation but was not enough to dismiss the claim. “Certainly, the presence of a credit ‘tag’ that hyperlinks to Gattoni’s Instagram page … ‘undermines the strength of Plaintiff’s allegations regarding Defendant’s intent,’” Judge Sweet wrote. “However, the Defendant cites no authorities that ‘tagging’ the author of a Photograph conclusively means the Defendant lacks the required scienter under the DMCA.”

Drawing all reasonable inferences in Gattoni’s favor at the early stage of litigation, the court denied the motion to dismiss the plaintiff’s DMCA claim and granted her leave to amend the complaint with either a valid copyright registration or rejection of her copyright registration application.

To read the opinion in Gattoni v. Tibi, LLC, click here.

Why it matters: Gattoni’s lawsuit highlights the challenges facing copyright owners on social media and the dangers of linking to content without permission. Even Tibi’s attempt to give credit to Gattoni—with the use of the hyperlinked tag—was insufficient to keep it out of copyright trouble.

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