Ads & Brands Law Digest: April 2020

Advertising & Marketing

Regulatory responses to the Covid-19 crisis

Since the last issue of this Digest was circulated the full impact of the Covid-19 virus, and of the Government’s response to it, have become clear.  We have been analysing the response of the ASA and other regulators to the crisis on the Lewis Silkin AdLaw blog, and providing a wide range of advice for brand-owners and businesses in the advertising & marketing sector via our Lewis Silkin Coronavirus Hub; rather than repeating that coverage here, Digest readers are referred to the blog and Hub respectively for further details.

Amongst other initiatives, the ASA has promised to prioritise the tackling of advertising that inappropriately plays upon public health-related anxiety caused by the Covid-19 crisis, introducing a special form to report such ads.  A recent example of such ASA action was the issuing of three upheld complaints on 22^nd April against businesses offering intravenous drip treatments that were variously stated to offer protection from, or to improve immunity towards, the virus and that were being promoted without the appropriate MHRA licence approval for the medical products concerned.

Read more here.

Government to proceed with legalisation of advertising via skywriting and skytyping

After a 2 week consultation period ending on 29th March (which may well have been overlooked by some interested parties, given other events), the Government has announced that it intends to amend existing legislation “at the earliest opportunity” so as to allow advertising via skywriting (smoke trail from a single plane) and skytyping (creation of a message in the sky by a number of planes using puffs of smoke in a “dot matrix” approach).  There was opposition from groups such as the Campaign to Protect Rural England given the potential environmental and visual impact, but the Government has decided to proceed based upon the economic benefits (and the fact that such practices have been legal for many years in other countries).  A principal use is likely to be planned aerial advertising to crowds at outdoor events, but no doubt there will also be the potential for ambush marketing.

Read more here (Government announcement) and here (AdLaw comment).

Promotional offer for magazine omitted key information about the subscription term and cost

The ASA has found that a paid-for Facebook post promoting Warners Group’s British Railway Modelling magazine that focussed entirely upon the benefits (“£60 Goody Bag, ticket to Warley + 5 issues of BRM – all for just £5!) was misleading, as it failed to mention that readers would then be tied into a full year’s subscription costing £12.49 per quarter after the first 5 issues.  Warners argued that these conditions were clearly stated on the landing page for the offer, to which consumers would have to click through so as to respond to the ad.  But the ASA ruled that material information such as the full subscription term and financial commitment involved should have been included in the Facebook ad itself, to avoid being misleading.

Read more here.

StubHub claim of ‘guaranteed genuine tickets’ was misleading

A poster ad for StubHub on a train featured text reading “That Knee Slide along the Platform Moment” with smaller text below reading “Guaranteed genuine tickets to the match can do that.”  StubHub argued that this claim was justified as the vast majority of tickets traded on their site were genuine (in the sense of not being fake or fraudulent) and they were backed by the StubHub “FanProtect Guarantee” for the 0.1% that turned out not to be genuine.  However, the ASA upheld the complaint against the ad on the basis that consumers would instead understand the claim to be a guarantee that ticket buyers would always be able to gain entry to their chosen event.  This is not the first time that an ASA ruling has flagged up that the existence of a “money-back guarantee” does not automatically justify the use of the word “guaranteed” in an ad.

Read more here.

ASA decides that Burger King’s ads for its new plant-based burger could mislead vegans & vegetarians

In a variety of social media ads, Burger King had promoted its new plant-based burger called the Rebel Whopper, accompanied by tag lines such as “no beef” and the “Vegetarian Butcher” logo.  Complaints about the ads did not relate to the burger patty itself, which was accepted to be meat-free, but to the fact that (a) it was cooked alongside meat products and (b) an egg-based mayonnaise was used in the Rebel Whopper as served.  Burger King were able to point to small print in the ads which warned that the product “may not be suitable for vegans or vegetarians”, but the ASA concluded that this was not sufficiently prominent to override the overall impression that the burger was suitable for them.  It felt that the use of the “Vegetarian Butcher” logo, a green colour palette, and the choice to launch the product in “Veganuary” all contributed to an impression that the Rebel Whopper was suitable for vegans and vegetarians, and the ads were thus found to be misleading.

 

Read more here (ruling) and here (AdLaw comment).

 

Competition and Data Privacy Regulation

CMA makes further findings of online resale price maintenance

 

The practice of “resale price maintenance (RPM)” (i.e. requiring retailers not to sell one’s products below a certain price) is contrary to competition law, as it prevents consumers from benefiting from potential price competition between sellers via discounting.  But the Competition & Markets Authority believes that an increasing number of businesses are being tempted to impose such unlawful policies on their online retailers, particularly as there is now sophisticated software available to track the prices that are being charged.  The CMA has previously fined Casio (keyboards) and Fender (guitars) for online RPM, and has now announced that Roland (drums) and Korg (synthesisers) are also provisionally found to have been in breach.  It is not just the musical instruments sector that is under scrutiny – the CMA has previously issued fines for RPM in the lighting and bathroom fittings sectors, while the EU Commission has imposed fines for online retail price maintenance on hi-fi equipment manufacturers.

Read more here.

Supreme Court rules that Morrisons was not vicariously liable for the deliberate data privacy breach of its employee 

The Supreme Court has overturned a previous Court of Appeal ruling that Morrisons, the supermarket chain, should be held vicariously liable for a deliberate privacy breach by a disaffected employee (who had posted online payroll data for a large number of Morrisons staff).  The employee in question had subsequently been prosecuted and imprisoned for criminal offences under the Data Protection Act, but this case related to civil proceedings brought by a group of affected members of staff seeking compensation from Morrisons, arguing that the company was itself primarily liable for the data breach and vicariously liable for the acts of its former employee.  The trial judge had dismissed the argument that Morrisons bore primary responsibility for the breaches, as the company had demonstrated that it had taken the steps reasonably necessary to protect its data.  But both the judge and the Court of Appeal had found that Morrisons were vicariously liable, as the employee had been acting “in the course of his employment” when committing the data breaches. 

But the Supreme Court has reversed those latter rulings.  The online disclosure of data was not part of the employee’s normal field of activities, nor did it have a sufficiently close connection with his real duties at Morrisons for vicarious liability to arise – on the contrary, the employee was pursuing a purely personal vendetta against the company.

Read more here.

Trade Marks and Passing Off

ECJ rules that mere unknowing storage of infringing goods by Amazon for third party seller did not amount to trade mark use

Two Amazon companies had been sued by Coty Germany for their involvement in the warehousing and despatch of Davidoff perfume products that were being put on the EU market by a third-party seller via Amazon Marketplace without Coty’s consent (Coty has the exclusive EU rights to use of the Davidoff mark).  But the EU Court of Justice has ruled that merely performing warehouse functions, without themselves offering the goods for sale or putting them on the market, did not make the Amazon companies liable for using the Davidoff mark – only the third-party seller was seeking to market the perfume.  However, the Court did note that intermediaries such as Amazon can in principle be liable if they can be shown to have enabled a third party to have used a trade mark unlawfully. 

While the particular Amazon companies analysed in this case had not played such an enabling role, it is arguable that other entities in the Amazon group might have been shown to have been doing so.

Read more here.

High Court rules in trade mark and passing off dispute over Photo App icons

This case highlights the important role that icons (and any associated text beneath) can play in distinguishing between apps on our mobile phones or computers, whether in the App Store or in subsequent use.  PlanetArt had been using a turquoise icon for its “FreePrints” photo app since 2014, while in early 2019 Photobox (which already had another established app and pay-per-photo business model) decided to launch a competing app called “Photobox Free Prints”, using a similarly coloured icon to PlanetArt.  Despite the similar-looking icons, the judge found that there was no trade mark infringement or passing off by Photobox in the App Stores, as their name “Photobox” was clearly stated as part of the App name and would avoid any confusion.  The result was different with respect to the ongoing use of their Icon once the app had been purchased, however – in use, the Photobox app’s turquoise icon simply had “Free Prints” beneath it, while PlanetArt’s trade mark protected turquoise icon had “FreePrints” beneath it.  The similarity of the Photobox icon/wording, in use for identical services to PlanetArt, rendered the Photobox icon/wording infringing. 

The judge had words of criticism for both parties.  PlanetArt should have come up with a more distinctive name for its app - it couldn’t expect to prevent competitors from launching competing products, nor from using a description such as “Free Prints”.  Meanwhile, even for its non-infringing use in the App Stores the judge criticised Photobox for the “anti-social non-distancing” of its identity (i.e. there had been no need to use such a similar icon in terms of colour or design); in so doing, Photobox were largely to blame for bring the litigation upon themselves.

Read more here.