Ads & Brands Law Digest: November 2021

Advertising & marketing

CAP issues guidance on recycling claims

Climate change and the environment are currently high on the ASA and CAP’s (and wider) agenda, so it is more paramount than ever that advertisers familiarise themselves with the CAP guidance in this area. CAP has issued a note summarising some key features of CAP’s guidance, and the ASA approach to, recycling claims. The two key points are that:

• Claims about recycling and recyclability must be supported by evidence. Marketers should ensure that they only describe products as being “recyclable” if they are actually capable of being recycled. Marketers should ensure they hold suitable evidence in substantiation of the recycling claims they make. And importantly, they should hold that evidence before publishing any ad making such a claim.

• Claims should not exaggerate the recyclability of a product. Marketers must not exaggerate the recyclability of a product or its packaging. Consumers are increasingly conscious of trying to make an effort to recycle the packaging and goods they consume. To this end, marketers should be cautious about making claims exaggerating the environmental credentials of a product that is not widely recyclable. The ASA has previously upheld complaints about claims that packaging “100% recyclable” when it contained a plastic element that was not widely recyclable.

For more information, see here.

CAP issues call for evidence on body image in advertising

The Committee of Advertising Practice (CAP) and the Broadcast Committee of Advertising Practice (BCAP) have issued a call for evidence about potential harms in advertising relating to body image concerns.

Body image is how we think and feel about ourselves physically, and how we believe others see us. The UK Advertising Codes already offer a number of protections that are intended to mitigate such potential harms.

CAP and BCAP would like information about the current evidence base surrounding the potential body image related harms from advertising and the potential detrimental impact of those harms on consumers. In particular, CAP and BCAP welcome evidence that updates and improve their understanding of the following areas:

• Types and themes of ad content that give rise to body image concerns;

• Impact of advertising on self-perception of body image experienced by different audience groups;

• Impact of social media advertising, including influencer marketing, on body image concerns, in light of increased online media use;

• Potential impact of advertising content for specific product sectors (for example, cosmetic interventions, weight control and reduction, beauty and cosmetics, etc.); and

• Positive impact of advertising on consumers’ body image perceptions

The call for evidence ends on 13 January 2022.

For more information, see here.

ASA and CAP issue checklist for influencers

Following previous guidance and rulings on influencers and promotions, CAP and the ASA have now created a resource page aimed at helping influencers and brands gain the knowledge they need to ensure they stick to the rules when running a prize promotion. Whether they are running a giveaway, prize draw, competition, or any other type of prize promotion on social media, it’s vital that influencers understand and stick to the advertising rules to avoid participants being misled or left disappointed.

If a promotion is not run in line with the rules, such as if the draw is unfair, missing important conditions or if the prize is not awarded at all, the ASA will take action against whoever is promoting it. As well as being subject to negative media coverage and subsequent reputational damage, after having a promotion banned, further sanctions can also be applied, such as referrals to Trading Standards.

For brands and agencies, promotions can be a great opportunity to reach and engage with new audiences. However, they don’t want to be known for letting down customers, and won’t want to work with influencers with a reputation for misleading those who follow them, so it’s important for both parties to familiarise themselves with the rules and take advantage of the resources available to them.

The new resource page includes a new checklist for influencers and brands which summarises key issues that should be considered before running a promotion.

For more information, see here.

Regulatory

Ofcom issues new guidance for Video Sharing Platforms on harmful content

Ofcom has issued new guidance for video sharing platforms to better protect users from harmful content.

Video-sharing platforms are a type of online video service where users can upload and share videos with other platform users. They allow people to engage with a wide range of content and social features.

VSPs established in the UK are required by law to take measures to protect under-18s from potentially harmful video content; and all users from videos likely to incite violence or hatred, as well as certain types of criminal content.

Ofcom says its best practice guidance is designed to help companies understand their new obligations and judge how best to protect their users from this kind of harmful material..

For more information, see here.

CMA launches court action against Teletext Holidays

The Competition and Markets Authority has announced that it is launching court action against Truly Holdings Ltd, the company that operates Teletext Holidays, and its sister company, the travel operator Alpharooms.com. They  had signed undertakings committing to refund package holiday customers for holidays cancelled during the pandemic.

The CMA does not consider that Truly Holdings has done enough to provide refunds to package holiday customers with outstanding claims, including recent cancellations, or to make sure that it pays all future refunds that are due within the 14 days required by law.

The CMA has therefore filed proceedings requesting a court order that outstanding refunds be immediately repaid and that, going forward, customers who are entitled to a refund are repaid within 14 days. The CMA will also be asking the court to order that Truly Holdings puts in place appropriate processes to ensure it complies with the law in the future.

For more information, see here.

ASA issues statement on the regulation of environmental claims and issues in advertising

The ASA has issued a statement on the regulation of environmental claims and issues in advertising. It has carried out a review of its regulation in this area and says the outcomes of that review are:

First, later this year CAP will issue advertising guidance to industry that sets out the key principles advertisers need to follow to ensure their ads don’t mislead about the environment and are socially responsible when considering environmental issues.

Secondly, it is commencing a series of enquiries into specific issues starting with priority areas requiring carbon reduction. These include aviation, cars, waste, animal-based foods and heating. The work will focus on energy, heating and transport issues to begin with.

Thirdly, the ASA will commission research this autumn into consumer understanding of carbon neutral and net zero claims and research to understand consumer perceptions of hybrid claims in the electric vehicle market.

For more information, see here.

Trade Marks, Passing Off and Trade Secrets

How prior unregistered rights in a brand can trump later trade mark registrations

The registration of a trade mark might seem to give a brand-owner a powerful advantage when it comes to a dispute with a rival business using the same brand, but this may prove illusory if the rival business had been using the brand earlier – even if they hadn’t bothered to register it as a trade mark. The registration process gives the opportunity for the rival to oppose your trade mark application, but even if they don’t do so – they may not be aware of it - and the mark proceeds to successful registration, they can always choose to challenge your registered trade mark later for invalidity (on the basis that it shouldn’t have been granted as they were using the mark earlier than date of your trade mark application: see Trade Marks Act sections 5(4) and 5(4A)).

This was very much the situation in a recent case before the Intellectual Property & Enterprise Court. The owner of the trade mark “Archangel Alchemy” – registered in respect of training courses including those relating to holistic health – sued another holistic therapist who was using exactly the same “Archangel Alchemy” branding to market her own online training courses. The latter therapist successfully defended herself in the litigation by showing not only that her unregistered use of the branding pre-dated the registration of the claimant, but that she had made sufficient earlier use of it to generate goodwill in the brand giving her protection in passing off (sometimes described as having an “unregistered trade mark”). The judge found that the activities of the claimant (the owner of the “Archangel Alchemy” registered mark) caused confusion amongst customers, and amounted to passing off of the defendant’s earlier, unregistered brand. The claimant’s trade mark registration was thus also declared invalid.

For more information, see here.

Breach of confidentiality obligations during change from one designer to another

It can be tempting to “switch horses” from one external supplier to another when such a change will apparently bring substantial cost savings. But if the first supplier has already created important intellectual property in the course of fulfilling the contract, things may not be so straightforward – the replacement supplier will not necessarily have any right to build upon the IP already created, and may instead have to go back to the drawing board. If the client and new supplier try to take the benefit of that IP without properly compensating the first supplier, infringement and litigation may result.

Such a scenario applied in a recent case heard in the Commercial Court. A ship design company (Salt) had won the tender to design a cable-laying vessel and was 9 months into fulfilling its design obligations when it had its contract terminated, in favour of a different shipbuilder (Vard). While the contract with Salt was still in place, the client had secretly been feeding key aspects of the confidential Salt designs through to Vard so that they could be incorporated into the latter’s designs. Salt sued its client for breach of confidentiality obligations (both equitable and under the contract) and for unlawfully conspiring with Vard to utilise the confidential designs in the ship as it was being designed and built by Vard. The judge found in favour of the claimant, Salt, and in the circumstances of the case – in which the client was hoping to make a substantial cost saving while still taking advantage of Salt’s designs – said that it might be appropriate to award exemplary damages over and above the standard compensation due.

For more information, see here