Ads & Brands Law Digest: January-February 2023

There is a bias towards environmental issues in this issue. We cover updated environment guidance from CAP and BCAP about carbon neutral and net zero claims in advertising, the ASA’s ban on ads for plug-in heaters, CMA consideration of unit prices in supermarket advertising, the CMA’s investigation into green claims for household essentials and Ofcom’s review of inflation-linked telecoms price rises. We also consider a case about registered designs.

In this edition

• Advertising & marketing

• Regulatory

• Registered Designs

Advertising & marketing

CAP and BCAP update guidance about carbon neutral and net zero claims in advertising

CAP and BCAP have published updated guidance about the use of carbon neutral and net zero claims in advertising. The updated guidance reflects key principles of the CMA’s existing guidance on environmental claims on goods and services.

CAP and BCAP have found that there is low consumer understanding and lack of consensus around the meaning of carbon neutral and net zero claims, and so CAP and BCAP advise advertisers to take into account the following points:

• Avoid using unqualified carbon neutral, net zero or similar claims. Information explaining the basis for these claims helps consumers’ understanding, and such information should not be omitted.

• Marketers should ensure that they include accurate information about whether (and the degree to which) they are actively reducing carbon emissions or are basing claims on offsetting, to ensure that consumers do not wrongly assume that products or their manufacture generate no or few emissions.

• Claims based on future goals relating to reaching net zero or achieving carbon neutrality should be based on a verifiable strategy to deliver them.

• Where claims are based on offsetting, they should comply with the usual standards of evidence for objective claims set out in this guidance, and marketers should provide information about the offsetting scheme they are using.

• Qualifying information about a claim should be sufficiently close to the main aspects of the claim for consumers to be able to see it easily and take it into account before they make any decision. The less prominent any qualifying information is, and the further away it is from any main claim being made, the more likely the claim will mislead consumers.

CAP and BCAP say that if advertisers follow these points, their marketing is less likely to mislead.

For more information, see here.

ASA bans ads for plug-in mini-heaters

The ASA has banned four ads for plug in mini-heaters. All the ads claimed, directly or indirectly, that mini-heaters are a viable replacement to conventional heating via gas. They implied that the products would save consumers money while quickly and efficiently heating a room.

The Energy Saving Trust told the ASA that gas is currently cheaper than electricity, and that it is more efficient to heat a room with one radiator than with a plug in mini-heater.

Despite being from different advertisers, all the ads used images of the same product. When the ASA raised its concerns about these ads to the advertisers, none of them responded.

The ASA has said that ads for products such as plug in mini-heaters should ensure that they are not making inaccurate claims or exaggerating how effective they are. They should take care not to mislead around how much they cost to run, or imply that they are more cost efficient than central heating without sufficient evidence to back up the claim.

Therefore, the ASA has banned the ads and says that it will be keeping a close eye on claims around how consumers can save money on their bills, especially heating. It will be taking compliance action in the coming weeks to ensure consumers are protected and that ads which don’t comply with these rulings are removed.

This action relates to mini-heaters, but applies to any ads related to saving consumers money – claims have to be accurate and based on reality.

For more information, see here.

Regulatory

CMA to investigate supermarket pricing

The CMA is starting a programme of work looking into unit pricing practices online and instore in the groceries sector. Unit pricing shows how much a particular product costs by weight or volume, which helps people identify best value for money.

The work follows previous work in 2015 when the CMA considered pricing and promotional practices in the groceries market and concluded that complexities and inconsistencies with unit pricing may affect understanding of which deal offers the best value. These included:

• different interpretations of legibility of unit prices amongst retailers;

• inconsistencies with how retailers present unit prices for similar products; and

• inconsistencies with how retailers present unit prices for products on promotion.

The new project will consider the following:

• if the unit pricing issues identified in 2015 remain;

• compliance with the law by retailers; and

• consumer awareness and use of unit pricing information.

The project is at an early stage and the CMA has not yet formed a view on these issues. It will provide an update later in 2023.

For more information, see here and here.

CMA to scrutinise accuracy of green claims made about household essentials

The CMA has announced that it will examine the accuracy of green claims made about household essentials – such as food, drink, and toiletries – with the aim of making sure shoppers are not being misled.

This is an expansion of the CMA’s ongoing work into “greenwashing”, which seeks to investigate if products and services that claim to be green or eco-friendly are being marketed to shoppers accurately.

The CMA will analyse environmental claims made about such products – both online and in store – to consider whether companies are complying with UK consumer protection law. Concerning practices could include the use of vague and broad eco-statements, for example packaging or marketing a product as “sustainable” or “better for the environment”’ with no evidence; misleading claims about the use of recycled or natural materials in a product and how recyclable it is; and entire ranges being incorrectly branded as “sustainable”.

If the CMA finds evidence suggesting green claims could be unfounded, it will consider taking enforcement action using its formal powers – for example, opening an investigation into specific companies.

For more information, see here and here.

Ofcom to review inflation-linked telecoms price rises

Ofcom has launched a review about whether inflation-linked mid-contract price rises give phone and broadband customers sufficient certainty and clarity about what they can expect to pay.

It is concerned about the degree of uncertainty consumers face about future price rises specified in contracts based on inflation. The unpredictability of inflation rates means that it can be difficult for consumers to know, when they enter into a new contract, what an inflation-linked price rise will equate to.

Ofcom says that its preliminary research has found that around a third of mobile and broadband customers do not know whether their provider can increase their price. Among those who do know their provider can increase their price, around 50% do not know how this would be calculated. It also says that nearly 50% of all customers do not know what CPI and RPI measure.

Its review will examine these issues in detail to see whether tougher protections are needed, and Ofcom expects to publish its initial findings later in the year.

For more information, see here and here.

Registered Designs

Court finds infringement of registered designs in dispute between big brands over light-up snow-globe gin bottles

The Intellectual Property & Enterprise Court (IPEC) recently ruled that Aldi had infringed four designs for light-up snow-globe-style bottles of gin liqueur that had been registered by Marks & Spencer (to see what these M&S designs and Aldi products looked like, follow the link below). The judgment is a useful reminder that registered designs should not be overlooked in strategies to protect against “look-alike” competitors, particularly where considerable effort and investment has been put into developing a new and striking product and/or packaging. (In this case, neither the registration nor the judge seem to have seen any need to separate out the bottle with integral light in its base – the container or packaging - from the gin-liqueur with gold flakes in it, that it contained.)

As the owner of a registered design, to succeed against an alleged infringer one needs to show that their product “does not produce on the informed user a different overall impression” to the registered design. The judge in this case discussed in some detail the ways that courts have interpreted this test in the past, but there was one relatively novel element in the judge’s reasoning. Past case-law has established that if a registered design is “markedly different from anything that has gone before”, then it is on balance likely to receive greater protection as that marked difference will tend to make informed users less likely to gain a different overall impression from the competing designs.

But what if the design owner has put various previous versions of the design on the market – as M&S had in this case – should that “count against” how its registered designs are regarded? The judge said no, not if those previous versions were put on the market during the one year “grace period” prior to the date of registration or priority. The grace period is intended to ensure that a designer can test-market versions of the product before having to go through the formalities and cost of registration. But the judge in this case concluded that the grace period is also relevant to infringement, as products put on the market during that year (including the designer’s own earlier versions) can be excluded from the “design corpus” or backdrop against which the notional informed user decides whether the competitor product created a “different overall impression”.

For more information, see here.