Ads & Brands Law Digest: March 2023

In this edition we cover the use of under 16s as brand ambassadors, a reminder about gender stereotypes in advertising, an ASA update about racial and ethnic stereotyping in advertising, a CAP enforcement notice, an Ofcom consultation regarding the changes to HFSS advertising coming in 2025, changes to advertising “Buy Now, Pay Later” products, and a call for carbon neutral claims to be banned. In addition, we consider two trade mark cases regarding “slogan marks”.

In this edition:

• Advertising & marketing

• Regulatory

• Trade marks

Advertising & marketing

CAP issues update on use of under-16s as brand ambassadors and in peer-to-peer marketing

In April 2022, the House of Commons DCMS Select Committee published a report on influencer culture. It said that there were several problems regarding children who are involved in influencer marketing and children who follow influencers that create content for a child audience in social media. The issues covered a lack of protection under child labour law, safety, wellbeing and privacy concerns for the child influencers themselves. The report also highlighted the need for influencer marketing to be adequately labelled as such, especially because children’s ability to identify advertising and understand its persuasive intent may be lower due to their less-developed cognitive capabilities. The Committee recommended that CAP conduct a review of the use of under-16s in marketing, ensuring that special focus was given to the use and impact of child influencers, noting the time that had elapsed since CAP addressed “child brand ambassadors” in 2012.

Since the guidance on under-16s as brand ambassadors was published, CAP has developed a range of detailed advice and guidance tailored to influencer marketing that has emerged in the intervening years, setting out the type of material that falls within CAP’s remit and the steps advertisers and publishers should take to make clear when an ad is an ad.

In addition, CAP has specific rules relating to the content of marketing directed at children. For example, ads are required to do nothing likely to result in physical, mental or moral harm of children. Nor should they make children feel inferior or unpopular if they do not have a product. Generally, marketers are urged to prepare their campaigns with a sense of social responsibility.

CAP says that it will monitor developments and research in this area and undertake reviews of existing regulatory positions where merited.

For more information, see here.

ASA issues International Women's Day reminder on harmful gender stereotyping

The ASA issued a statement on 8 March 2023 to coincide with International Women's Day providing advice on ensuring compliance with the CAP Code with regard to harmful or offensive depictions of gender, sexualisation and objectification of people, and irresponsible depictions of body image in advertising. The publication advised that ads that perpetuate harmful or offensive gender stereotypes or sexualise or objectify people of any gender are likely to be deemed irresponsible and in breach of the Code. The ASA also emphasised that using humour, innuendo and animated imagery will not mitigate the use of harmful gender stereotypes or objectification.

For more information, see here.

ASA issues reminder about work done regarding racial and ethnic stereotyping

The ASA recently concluded project work with the aim of identifying the key themes and debates in relation to racial and ethnic stereotypes in ads and to establish whether, and if so to what extent, those stereotypes may contribute to real world harms. The complaints review aimed to identify the key themes and trends among consumers regarding the depiction of people from different racial and ethnic backgrounds in advertising. It also carried out a literature review and issued a call for evidence.

The consensus suggested that the use of stereotypes can influence people’s attitudes towards themselves and others. This means that the use of racial and ethnic stereotypes in advertising has the potential impact of causing serious or widespread offence to consumers, or harm to consumers or society more generally.

The ASA will reflect on the learnings from this project. CAP and BCAP will also be asked to consider the evidence and explore whether additional guidance is necessary on harmful stereotypes in ads. In addition, they will present their findings to the ad industry and will deliver training and advice to assist advertisers when necessary.

For more information, see here.

CAP issues enforcement notice on ads for mini heaters

We have previously reported that the ASA banned four plug-in mini heater ads for misleadingly claiming that their devices would allow customers to heat rooms quickly and efficiently, for less cost than using a radiator. The Committee of Advertising Practice has now issued an enforcement notice to advertisers over ads for mini heaters. CAP advised retailers to ensure that their advertisements accurately reflect the performance of the heaters and to avoid using misleading language such as 'powerful' or 'heats up quickly'. The enforcement notice makes clear to advertisers that CAP will take action if ads break these rules and will be carrying out enhanced monitoring to ensure claims for mini heaters are honest and accurate.

For more information, see here.

Regulatory

Ofcom consults on regulation of advertising of less healthy food and drink

Ofcom is consulting on its approach to implementing new restrictions on advertising for less healthy food and drink products, which have been introduced through the Health and Care Act 2022.

The 2022 Act amends the Communications Act 2003 to introduce new restrictions on advertising and sponsorship for less healthy food and drink products, ie certain food and drink products that are high in fat, salt or sugar (HFSS). These new restrictions apply to advertising on Ofcom-regulated TV and on-demand programme services (ODPS) and also online.

In summary, TV services and ODPS are prohibited from including advertising and sponsorship for less healthy food and drink products between 5.30am and 9pm; and paid-for advertisements for these products, where they are aimed at UK users, are prohibited from being placed online at any time. Both sets of restrictions take effect from 1 October 2025.

Under the 2003 Act, Ofcom is the statutory regulator with responsibility for advertising on TV and ODPS It will also have responsibility for regulating online advertising for less healthy food and drink products, with the power to designate a co-regulator (the ASA).

The consultation ends on 21 April 2023.

For more information, see here.

HM Treasury consults on changes to BNPL advertising rules

The UK government is consulting on the proposed draft legislation that will bring Buy Now Pay Later into the regulatory ambit of the Financial Conduct Authority and give consumers the option of complaining to the Financial Ombudsman Service.

The consultation ends on 11 April 2023 after which the government will bring forward legislation. The FCA is expected to publish a separate consultation on its proposed rules for newly regulated BNPL agreements after the government’s response to the consultation.

Businesses that offer BNPL as a payment option at the checkout stage are advised to think about how they will ensure that promotions of those arrangements comply with the new regulations alongside the existing CAP Code rules.

For more information, see here and here.

European consumer group calls for carbon neutral claims in marketing to be banned

European consumer group BEUC has published a report about the food and drink sector. In the report, it says that carbon neutral claims are scientifically inaccurate and misleading for consumers. BEUC sees current consumer protection laws as ineffective, only allowing action once consumers have been misled, and calls for an outright ban on carbon neutral claims to stop consumers being exposed to deceptive marketing in the first place.

In the UK, updated advertising guidance was issued last month emphasising the need for organisations to adequately explain the basis of their carbon neutral claims. The ASA is monitoring compliance with this guidance before deciding if further action is needed. In January 2023, the CMA said that it would be reviewing the accuracy of green claims made about household essentials, such as toiletries and food and drink.

For more information, see here.

Trade marks

EU General Court rejects application for green slogan trade mark for lack of distinctiveness

Regular readers of this Digest will recall that we have previously covered case-law relating to so-called “slogan marks”, the general rules of thumb being: (a) there is no rule of law that says slogans cannot be registered as trade marks, nor that they they must meet stricter requirements than normal; but (b) in practice it can be harder to persuade the EU Intellectual Property Office (EUIPO) and the courts that a slogan is sufficiently distinctive, i.e. capable of being used by consumers to distinguish the products or services of one particular business from those of other businesses. This is because consumers are said not to pay much attention to promotional messages, while the wording of a slogan is often rather predictable or purely laudatory, and consumers are thus less likely to read them as an indicator of origin. Many slogans thus fail to gain registration.

By contrast, the most recent high-profile example of a promotional slogan mark to buck the trend and be found registrable by the EU General Court was the Oatly slogan “It’s like milk but made for humans”. The EUIPO had found this phrase insufficiently distinctive to be registered, but on appeal the Court concluded that there were elements of the phrase that would cause a consumer to stop and think about its meaning. Where a slogan is capable of “setting off a cognitive process in the minds of the relevant public” in this way, it can render it more memorable, and thus distinctive. A recent EUIPO report identified five non-exhaustive factors that can help render a slogan mark registrable: i) it has a number of meanings; ii) it constitutes a play on words; iii) it is in some way imaginative, surprising or unexpected; iv) it triggers a cognitive process or requires interpretative effort (as in the Oatly example); or v) it uses unusual linguistic devices such as alliteration, metaphor or rhyme.

In the current case, the applicant was seeking registration of the slogan “Sustainability through Quality” for goods ranging from engines to electronic control devices, and related services, but the EUIPO refused this on the basis that the mark applied for was devoid of distinctive character. On appeal to the EU General Court the applicant’s mark was found to lack all of the five factors listed above. It was simply a short, descriptive, and laudatory promotional formula, linking two words very commonly used in a green advertising context – “sustainability” and “quality”. It was for the applicant to demonstrate disinctiveness, but it had failed to show any element of surprise, linguistic play or triggering of a cognitive process. The General Court thus confirmed the EUIPO ruling that the slogan was not distinctive, and thus not registrable as a trade mark.

For more information, see here and here.

EU General Court rejects application for promotional slogan trade mark for lack of distinctiveness

Not long after the case summarised above, the EU General Court was faced with another appeal by an applicant from an EUIPO ruling that their slogan lacked distinctiveness. In this case the slogan was “Other Companies do Software We do Support” for computer software consulting services. The EUIPO had ruled that consumers would perceive this as a straightforward laudatory promotional message, lacking in any element of surprise, wordplay or call for cognitive engagement that might have rendered it distinctive.

The appellant disputed this conclusion, arguing that the slogan did require consumers to engage cognitively in order to work out its meaning, because of its abbreviated wording and because the phrase could have a number of meanings. They also argued that the grammatical structure and repetition of the word “do” was memorable and thus distinctive. The General Court was not persuaded by these arguments. Given that consumers tend not to be very attentive to promotional signs, they would be unlikely to engage cognitively just because the wording was vague or left meanings open. Moreover, the Court found that there wasn’t as much ambiguity in the meaning of the phrase as the appellant argued.

Finally, the appellant tried to argue that the slogan was distinctive because in practice it was laid out on two lines, but this was rejected out of hand by the Court as the registration was for a word mark, and thus aspects of configuration were not a relevant consideration. Overall, the Court agreed with the EUIPO that the slogan lacked the distinctiveness needed for consumers to regard it as indicating the commercial origin of the software services in question, and thus the mark was not registrable.

For more information, see here.