Ads & Brands Law Digest: May 2020
02 June 2020
Welcome to the May 2020 issue of our monthly Ads & Brands Law Digest.
Advertising & Marketing
Consumer & Markets Authority investigates misleading online reviews
The CMA has launched a new investigation into “several major websites” to check that their approach to finding and removing fake or misleading reviews is sufficiently robust to protect consumers. It will be examining issues such as i) suspicious reviewing practices (e.g. a single user has reviewed an unlikely range of products), ii) manipulation of reviews by businesses (e.g. using positive reviews from one product in respect of another), and iii) their handling of reviews in respect of which a payment or incentive has been received by the reviewer. Once the investigation is complete, the CMA says it intends to take any necessary enforcement action and will name any non-compliant websites and businesses at that point.
Read more here and here.
ASA rules that product star ratings based upon customer reviews can legitimately exclude abusive and irrelevant reviews
The Advertising Standards Authority has also been looking at online reviewing practices. Swann, a business selling surveillance products, included on its website a Product Reviews page including a claim to a 4.5 star rating (five stars with four and half filled in) based upon 2,205 customer reviews. A complainant argued that the page was misleading as it omitted negative reviews and did not take them into account in calculating its star rating, but the ASA did not uphold the complaint. Swann confirmed that it had used a moderation policy to exclude offensive reviews and those unrelated to a product (e.g. those placed in error, or relating to customer service rather than the product). The ASA considered such a moderation policy to be reasonable, and having looked at the reviews that had been excluded by the policy, concluded that the 4.5 star rating was not misleading.
Read more here.
Reference to Which? “Best… on Test” ranking had to be verifiable, whereas “Best Buy” claim did not
On a related topic, the Advertising Standards Authority has also been looking at ads that include references to positive ratings given by the consumer organisation Which? The advertiser in this case had quoted both a “Best Buy” rating and a “Best [Product] on Test” rating that it had received from Which? in February 2019. A complainant challenged the use of such ratings on the grounds that they amounted to misleading and unverified comparisons with an identifiable competitor or competitors.
The ASA partly agreed and partly disagreed. It felt that a “Best Buy” rating given by Which? did not imply a comparison with competitors – it simply indicated that a product or service had met the approval standards of Which? itself. However, when quoting a “Best [Product] on Test” rating from Which? the ASA felt that an advertiser was indeed implicitly making a comparison with competitors – consumers would understand that Which? had tested the advertised product against others, including identifiable best-selling brands. As such, the ad needed to comply with the CAP Code rules on comparative ads including the provision of information to consumers so that they could verify the comparison. In this case such information was not readily available as it was only accessible to those paying for a subscription to the Which? service.
Read more here.
Stacey Solomon Instagram story failed adequately to flag marketing communication and commercial intent
In many ways this ASA adjudication follows a familiar pattern – a celebrity influencer falling foul of the CAP Code by making promotional social media posts without making sufficiently clear their marketing nature and commercial intent. But it has two features worth flagging up. First, the influencer – Stacey Solomon – had already fulfilled her contractual agreement with the relevant brand by posting two approved (and unproblematic) Instagram stories. The CAP Code breach only occurred because she then went on to post two further stories (including affiliate links) without seeking the brand’s approval – so a lesson to be learned for the brand in terms of having suitable measures in place to control their influencers. Secondly, Stacey had apparently tried to do the right thing – her non-compliant stories did include an “AD” disclosure tag. The problem was that the word “AD” appeared in the top right corner of the posts in white lettering on a slightly off-white background, which the ASA held to be insufficiently prominent to make the commercial intent of the stories clear.
Read more here.
Use of “Virtually Zero” registered trade mark as part of low-calorie claim did not make it compliant
We have in previous issues of the Digest featured ASA rulings in which the business names of the traders concerned have in themselves incorporated claims that have been in breach of the CAP Code. But in this case, although the ruling was against the “Not Guilty Food Co Ltd t/a The Skinny Food Co” for unauthorised nutrition claims about low-calorie products, it was not the company names that were the problem.
Instead, it was the use of the phrase “Virtually Zero Calories” on their products which the ASA objected to, ruling that this equated to an “energy-free” nutrition claim which would need to comply with the EU Regulation on Nutrition and Health Claims. The advertiser argued that because they had a registered trade mark for the phrase “Virtually Zero”, they could use the wording “Virtually Zero Calories” in respect of their product without misleading. But, as the ASA pointed out in its ruling, when a trade mark applied to a food product incorporates a nutrition or health claim then that claim itself must be authorised, or its use in an ad must be accompanied by an authorised nutrition or health claim that supports the trade mark wording. That was not the case here as the products that the trade mark was applied to did not qualify for an “energy-free” claim.
Read more here.
Consumer Protection & Regulation
Consumer & Markets Authority gains new power to apply for “online interface orders”
A new set of Regulations, due to come into force on 2nd June 2020, will give the CMA a potentially important new avenue of enforcement against online traders that are posing a risk of serious harm to consumers. In such circumstances the Regulations allow the CMA to go to court to seek a broad range of “online interface orders” against the infringing trader or a third party: to remove or modify internet content, to disable or restrict access to a website, to display a warning to consumers accessing the site, or to delete or amend ownership of a domain name. Such orders can only be sought where no other means available to the CMA would be effective, but one can imagine that it might make use of them against repeat offenders or in circumstances in which an urgent response is needed to protect life and limb. The Regulations are introduced in compliance with an EU Regulation on Consumer Protection Co-operation that the UK is likely to revoke once the Brexit transition period is complete, but it seems that these new CMA powers to seek such orders are intended to be permanent.
Read more here.
EU Court of Justice rules that importation, storage and onward supply by a private individual can still amount to TM “use in the course of trade”
The EU Court of Justice has recently issued a judgment that helpfully delimits the extent to which private individuals can avoid liability for trade mark infringement by arguing that their actions (e.g. importation of TM goods) are purely a private activity rather than “use in the course of trade”. The Court has ruled that an objective test must be applied, looking at the transactions concerned to see if they go beyond the scope of a private activity by reason of i) their volume, ii) their frequency, and/or iii) other objective characteristics of the goods concerned
In this case an individual in Finland had taken receipt of 150 industrial ball-bearings weighing 750kg, paid the relevant customs duty, taken them home, and ultimately delivered them to a third party for export to Russia. He had infringed the “INA” trade mark that was applied to the ball-bearings by his actions, as both the nature (industrial) and the quantity of ball-bearings indicated that his actions were not “private” and so the importation and handling of the TM goods could be characterised as “use in the course of trade”. The individual concerned had only received a carton of cigarettes and a bottle of brandy by way of remuneration, the EUCJ held that this was not a relevant consideration.
Read more here.
Long-running Sky v SkyKick case reaches (probably) its conclusion in the High Court
Regular readers of the Digest will recall from our January 2020 issue that the EU Court of Justice has ruled in these proceedings that i) a lack of clarity and precision in designating which goods and services a trade mark is registered for is not in itself a ground for invalidity, but that ii) a mark might be invalidated in whole or in part on grounds of bad faith if the applicant had no intention of ever using the mark for some or all of the goods or services specified. The issue returned to the High Court in May for the EUCJ ruling to be applied to the particular facts of the case between Sky and SkyKick. The judge confirmed that Sky hadn’t genuinely intended to use all of the classes of goods and services for which the mark SKY was registered. Nevertheless, Sky’s marks remained valid to the extent they could show use or intention to use. SkyKick were found to have infringed in respect of some of the remaining classifications, notably the provision of email services.
For existing trade mark owners this provides reassurance that, while over-broad specifications may be vulnerable to some pruning if challenged on grounds of bad faith in areas for which the proprietor never intended to use them, the overall validity of the mark should not be at risk as applied to other classes of goods or services where use or intention to use can be demonstrated.
Read more here.