Walking the In-House Counsel Tightrope

Masters of Advertising Law Conference attendees: Scroll down for CLE materials

In a landscape where the marketing team is tasked with maximizing profits and the advertising lawyers are tasked with minimizing risk, it can sometimes be hard to feel like you're playing for the same team.

Speakers discussed strategies for building a collaborative relationship between in-house lawyers and marketers. Topics included: core advertising law principles, high risk areas, and current trends in advertising challenges marketers should be aware of to help them understand the legal point of view.

Key Takeaways

Some advertising law concepts for marketers to unpack:

Puffery: Puffery consists of general, favorable statements that are obvious hyperbole or exaggeration, cannot be proven and are not likely to be relied upon by consumers. Context can turn a puff into a comparative claim.

Disclaimers: A disclaimer must be displayed in a manner that is clear, conspicuous, and close in proximity to the claim it is intended to qualify. It cannot contradict the claim it is qualifying.

Testing: There is no way of knowing what product testing others have done to back up their advertising. Your competitor may have different substantiation than you expect, and your testing may not be relevant to their method of substantiation.

These testing principles are best practices for substantiating claims:

Is there an industry standard test?

  • The American Society for Testing & Materials (ASTM) provides tests for specific industries and products. Examples include the ASTM Guide for Sensory Claim Substantiation, the ASTM Guide for Determining Efficacy of Disinfection Processes for Reusable Medical Devices, and the ASTM Standard Test Methods for Determining Radiopacity for Medical Use.
  • Advertisers may use their own proprietary standard, but generally must show that their standard is superior to the industry standard (if one exists).
  • The standard used may not diverge from guidelines to create an unfair advantage or unrealistic conditions.
  • If there is no industry standard, testing must be reliable and support the claim.

Is the testing methodology sound?

  • Will the test be consistent each time it is performed?
  • Is the methodology reliable?
  • Marketers must ensure testing has proper controls.
  • There must be verification that the results are statistically significant.
  • Bias comes in many forms and is a key concern to watch out for.

Is there a correlation between the test results and the challenged claims?

  • Does the test conducted support the claim being made?
  • Without such correlation, even the most robust and reliable test results cannot be used to support or challenge the advertising claim.

Are the test parameters consumer relevant?

  • Products must be used by test subjects in accordance with usage instructions.
  • Tests should be conducted with typical users of the product.
  • Tests must show a consumer meaningful difference.

High-risk advertising claims: In advertising, these can take the form of establishment claims (e.g., "Clinically proven"), comparative claims (touting the superiority of one marketer, the equivalent of one marketer to another, or the disparaging of a competing brand), or line claims (e.g., "America's #1 rated....").

Other factors that add risk to these claims are the platform of the claim (label, print, online, or TV), the geographic reach of the advertising, sales numbers and popularity of the advertised product, and the materiality of the claim.

"Hot claims" in advertising: Some of the latest claims in advertising have included endorsements and testimonials, flavoring, general environmental benefit claims, the number of servings, and the size and composition of items.

Currently, the Federal Trade Commission (FTC) is prioritizing the enforcement of:

  • Health products advertising, including supplements and cannabidiol (CBD)
  • Loans and credit repair, including COVID-related relief
  • Social media influencers, fake online reviews, native advertising
  • "Made In USA" claims

Communications with outside advertising agencies or PR firms are not usually covered by attorney-client privilege.

Exceptions are when:

  1. The third party is necessary to help the attorney understand the client's request for legal advice.
  2. The third party is the "functional equivalent" of a corporate employee.
  3. The third party is hired by the lawyers as part of a legal strategy.

When it comes to dealing with an outside agency, marketers should adopt and implement legal advice as appropriate, and then communicate to the outside agency the resulting business decision (not the underlying legal advice or reasoning or counsel). They should also have separate communications with lawyers and outside agencies (even if inconvenient).

However, marketers should not not copy outside agencies on any written communications with lawyers, forward emails from counsel to outside agencies, include outside agencies on calls with counsel, copy counsel on written communications with outside agencies, or communicate counsel's legal advice or reasoning to outside agencies.

CLE Materials

Source

"Walking the In-House Counsel Tightrope." Jeff Warshafsky, senior counsel at Proskauer Rose LLP; Jennifer Yang, associate at Proskauer Rose LLP; Benjamin Glicksman, corporate counsel at S.C. Johnson & Son, Inc.; Lyris Malajian, vice president and assistant general counsel at Pandora. ANA Masters of Advertising Law Conference, 11/8/22.

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