Substantiating Advertising Claims for Newly Developed or Newly Acquired Products

March 16, 2018

When launching a newly acquired or developed product, it is essential to carefully consider advertising claims to protect the brand from possible lawsuits or regulatory action. Lawrence I. Weinstein, partner at Proskauer Rose LLP, Laura Brett, director of the National Advertising Division at the Advertising Self-Regulation Council, and Kathryn Farrara, senior attorney at Unilever United States reviewed related case studies and best practices for reducing those risks.

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When developing or acquiring a new product, there is a lot at stake. Research and development dollars, corporate profits, and the careers of those involved depend on the success of the launch. Substantiating related advertising campaign claims is essential, and in-house counsel can protect against potential issues from both a legal and business perspective.

For substantial acquisitions, in-house and outside counsel should review the product claims thoroughly and look beyond trademark, patent, and IP considerations. If advertising is a primary driver of the product’s success, be sure the claims are valid. If those claims could be challenged after the acquisition takes place, the brand should consider whether the acquisition is still a smart business decision in the long term.

If a client is considering a global acquisition or product launch, it is good practice for counsel to lay out a roadmap of potential risks and consider how advertising standards may differ from country to country.

The National Advertising Division (NAD) of the Advertising Self-Regulation Council  allows advertisers to bring forward challenges to advertising claims in an effort for the industry to self-regulate practices. These challenges can result in a review of advertising claim substantiation and a recommendation from the council for additional substantiation, changes to the advertisements, or removal of the advertisements from the marketplace.

There are some benefits to bringing a claims challenge to the NAD rather than the courts. Brands may attract negative media attention if a market leader takes a small “underdog” brand to court over advertising claims. The NAD process is private, and only the final outcome and recommendation are made publicly available.

When advertising claims are not substantiated with adequate research, clear disclosure, or accurate copy, brands are at risk.

  • Better Life, a newcomer to the all-purpose cleaner market, launched its product with advertising that implied Better Life was less harmful to life than competitors’ products. S.C. Johnson & Son challenged this advertising. Upon NAD review it was found that the brand’s substantiation was not sufficient, and the council recommended that these advertising claims be discontinued.
  • Cosmetic brand Benefit brought a challenge against Too Faced Cosmetics regarding the company’s advertising of a mascara product. Too Faced Cosmetics claimed its mascara created 1,944 percent more lash volume. NAD found that Too Faced’s testing practices measured lash volume with a caliper, a tool typically used to measure hard surfaces. NAD recommended the claims be discontinued, and the case is currently undergoing the appeals process.
  • Pet food brand Blue Buffalo experienced a series of challenges and reviews. In 2008 the brand wanted to highlight its pet food ingredients and the fact that the brand does not use animal byproducts. This claim was challenged on the grounds that there is not anything harmful about feeding pets animal byproducts. The brand was challenged again in 2014. The brand was challenged for a third time in 2018, and NAD determined that the most recent ad claims were substantiated based on sufficient customer and pet research. In this instance, Blue Buffalo demonstrated that if a brand is going to make a comparative claim, it needs to be narrowly tailored to suit the available support.
  • In a more extreme example, Church and Dwight, the leader in the home pregnancy test market, brought a challenge against the second-place SPD Decision Diagnostics. SPD launched a new product that was advertised as able to show a consumer the estimated number of weeks she’s been pregnant for. The product made a splash in the market and helped SPD gain share, but the advertising did not align with the product’s true ability. The product was able to tell the consumer how many weeks since she had last ovulated, not the number of weeks she had been pregnant. The FDA had cleared packaging that was accurate, and the brand used different packaging in market. Church and Dwight sued SPD in federal court for false advertising. The federal court judge determined the ads were egregious and intentionally false. The product has been removed from the market.

CLE Materials

Source

"Substantiating Advertising Claims for Newly Developed or Newly Acquired Products." Lawrence I. Weinstein, Partner at Proskauer Rose LLP; Laura Brett, Director, National Advertising Division at Advertising Self-Regulation Council (ASRC); Kathyrn Farrara, Senior Attorney, Marketing at Unilever United States. 2018 ANA Advertising Law and Public Policy Conference, 3/16/18.

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