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ANA Files Brief with U.S. Supreme Court in Key Commercial Speech Case

ANA has filed a “friend of the court” brief with the U.S. Supreme Court in a key commercial speech case involving data mining.

Sorrell v. IMS Health, Inc., No. 10-779, is a challenge to a Vermont law that restricts the use of prescriber-identifiable data for purposes of marketing or promoting prescription drugs.  The Court of Appeals for the Second Circuit struck down the law, holding that it violated the First Amendment by unnecessarily restricting commercial speech.  This case conflicts with two recent decisions of the First Circuit which upheld similar laws in Maine and New Hampshire.  ANA was joined in the brief by the American Advertising Federation (AAF) and the American Association of Advertising Agencies (AAAA).

This is one of the most important advertising cases to come before the Supreme Court in a decade.  It raises fundamental issues about what constitutes commercial speech and whether the government can undermine constitutional protection by simply labeling information used for marketing purposes as nothing more than a commodity.  These are critical issues for the entire marketing community.  We are very hopeful that the Supreme Court will clarify that data mining for marketing purposes is fully protected by the First Amendment.  This case could create very important precedents not only for the pharmaceutical industry but the ad community in general.
   
Vermont’s Prescription Confidentiality Law (PCL) bans the sale or use of prescriber-identifiable (PI) data to market or promote prescription drugs and bars pharmaceutical companies from using PI data for such promotion unless the prescriber consents.  The PI data contains no information about patients and is routinely used by pharmaceutical detailers to focus their marketing efforts to individual physicians.  In IMS Health Inc. v. Ayotte, 550 F.3d 42 (1st Cir. 2008), the First Circuit upheld a similar New Hampshire law, holding that data mining for marketing purposes is not protected by the First Amendment because it constitutes mere conduct and not speech.          

The industry brief noted that the Second Circuit rejected that conclusion: “The Second Circuit correctly held a ban on the use of PI data in advertising, promotion, or any activity used to influence sales or market share regulates speech and violates the First Amendment.  . . .  The First Amendment safeguards the entire communication process, including the gathering of data used to create a commercial or non-commercial message.  Vermont may thus not ban the use of data without satisfying constitutional requirements.”

While this case involves data mining for pharmaceutical companies, it has serious implications for the ability of all marketers to collect and use information to target their messages to the right audience.  The Court of Appeals in the New Hampshire case argued that data mining was no different than coal mining or any other purely economic, rather than speech-directed activity.  The data mining process and the information collected are not merely conduct or a commodity – it is commercial speech that can only be regulated under the standards adopted by the Supreme Court in the Central Hudson case.  If First Amendment protection can be made to evaporate simply by the use of government imposed labels, then the ad community’s ability to effectively target advertising will be severely undermined.
 
The industry brief was written by Robert Corn-Revere, noted First Amendment attorney with the law firm Davis Wright Tremaine LLP.  ANA had also filed a “friend of the court” brief with the Supreme Court in the appeal of the New Hampshire case, but the Supreme Court decided in 2009 to not hear that case. 

If you have any questions about this matter, please contact Dan Jaffe (djaffe@ana.net) or Keith Scarborough (kscarborough@ana.net) in ANA’s Washington, DC office at (202) 296-1883.

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