Surveys in False Advertising Cases

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

During a session held at the ANA's 2022 Masters of Law Conference, a panel of experts discussed the use of surveys in a variety of legal contexts, from the duties of in-house counsel to assessing liability and damages.

Key Takeaways

Duties of In-House Counsel

An in-house counsel may use surveys:

  • As part of claims support, e.g., to support consumer preference claims through taste tests
  • To defend a brand claim if challenged (e.g., to establish consumer perception of an ad claim)
  • To defend intellectual property in areas of trademark and trade dress
  • To challenge competitors' implied claims before the NAD

In considering the use of a survey, counsel should evaluate if a survey is the right tool, or if the claim in question could be better explored through a lab test, sales data, etc.

Some questions to ask in preparing a survey include:

  • Is the study population representative of the target market?
  • Is the sample size sufficient, i.e., statistically significant?
  • Do the questions match the desired claims? (Consider, for instance, that the question, "which product tastes best?" isn't necessarily equivalent to which product a consumer prefers.)
  • Are the questions biased?
  • Is the survey sufficiently blinded?
  • Are products being used or compared under appropriate conditions? (E.g., has it been ensured that they haven't expired.)
  • Are the results repeatable?

Once the survey is completed, make sure that the claims match the findings of the survey and that those claims are made consistently across all formats.

Assessing Liability

The panel identified two types of surveys used to assess liability: "likelihood of confusion" surveys and materiality surveys.

"Likelihood of confusion" surveys are used to establish whether the advertised information that is claimed to be false or misleading actually deceived consumers.

In this type of survey, the test group is shown the ad at issue. The control group is shown a similar ad that does not contain the statements at issue. All respondents are asked questions about the information they take away from the ad. This approach tests whether the ad is likely to lead respondents to believe the advertised product has different attributes than the hypothetical product for which the contested claim is not made. The difference between test and control groups provides evidence on whether the statements at issue are confusing

Materiality surveys are used to evaluate whether the statements at issue affected consumer purchasing decisions.

The test group is shown the ad at issue, while the control group is shown a similar ad without the statements at issue. All respondents are asked about their likelihood to purchase the product; the difference between the groups provides evidence on the impact of the statements at issue.

Assessing Damages

To assess damages, a court must ascertain the difference between the price consumers are willing to pay for a product with the falsely claimed attribute and the price they are willing to pay for the product without that attribute.

Ideally, this difference can be ascertained by observing real-world products actually on the market. However, in the absence of such evidence, a so-called "conjoint survey" may be executed.

In such a survey, respondents are asked how much they would be willing to pay for different composites of product features, some containing the falsely claimed attribute and some omitting it. The results of such a survey allow researchers to create two demand curves, reflecting consumer's willingness to pay for a product a) with the falsely claimed feature and b) without it. Using these two demand curves, an economic model can calculate damages.

CLE Materials

Source

"Surveys in False Advertising Cases." Lisa Cameron, principal at The Brattle Group; Steve Herscovici, principal at The Brattle Group; Paroma Sanyal, senior consultant at The Brattle Group; Alaina Ingram, senior marketing counsel at Unilever. 2022 ANA Masters of Law Conference, 11/9/22.

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