Ads & Brands Law Digest: November 2020

Advertising & Marketing

DCMS consults on total ban on HFSS online advertising

The Department of Digital, Culture, Media and Sport has issued a consultation about a total ban on advertising foods and soft drinks high in fat, sugar or salt (HFSS). This follows an earlier consultation this year on a 9pm watershed and its wider consultation on the issue last year. The consultation forms part of the UK government’s Obesity Strategy.

The government says that there is evidence (although it admits that it is not conclusive) advertising can shape children's food choices, both short and long term, as well as influencing adult purchases and consumption. Therefore, it thinks that further restrictions on HFSS advertising could help reduce overconsumption and generate significant additional health benefits.

The consultation includes three key issues: what types of advertising will be restricted; who will be liable for compliance and the enforcement of the restrictions.

The consultation ends on 22 December 2020.

Read more here.

CAP issues guidance on qualifications in advertisements

The Committee on Advertising Practice has updated its guidance on the use of 'qualifications' of claims, which includes disclaimers ('small print' or 'footnotes'). Qualifications are essential to provide more information which is material to the consumer understanding of the primary claim and/or the marketing communication as a whole. However, they may not contradict the primary claim.

The guidance uses the “qualifying ladder” with headline sub-heading; body copy; and disclaimer/footnote. Marketers should select an appropriate level of prominence relative to the position of their primary claim. This depends on the importance of the information contained in the qualification to consumers’ understanding of the primary claim; the more important the qualifier, the greater prominence is likely to be necessary (in other words there are fewer steps in the qualification ladder between the two).

Footnotes and other qualifications using small text should be clearly legible to the average consumer to which a marketing communication is directed reading it once, from a reasonable distance and at a reasonable speed.Read more here.

CAP consults on advertising of loot boxes

CAP has published a new consultation on draft guidance on advertising in-game purchases, including loot boxes.

CAP says that it has identified three areas in which formal guidance may help to mitigate the potential harms identified by concerned parties. It does not propose to change the actual rules in the CAP and BCAP Codes. The new guidance covers the pricing information at point of purchase, the language and approaches used to advertise in-game purchases (and the games they appear in), and the use of in-game purchased items in ads for games.

The consultation ends on 28 January 2021.

Read more here.

Competition Law & Regulatory

UK government to set up Digital Media Unit in CMA

The UK government has announced that it plans to set up a Digital Media Unit within the Competition and Markets Authority from April 2021.

The new Unit will be responsible for a new pro-competition regime for the digital marketing, general search and social media markets. It will issue a code of conduct for companies which are designated as having strategic market status as well as providing guidance on that code.

As far as enforcement is concerned, the government says that careful consideration will be given to the nature of the new DMU powers and the cooperation with the wider CMA, ICO and Ofcom. The government will also give further consideration to giving pro-competition powers to the DMU.

Read more here.

EU “right to repair” and impact on advertising

The European Parliament has adopted a resolution on a more sustainable Single Market. It wants to boost sustainability by promoting reuse and repairs and by tackling practices that shorten the lifespan of products.

To encourage sustainable business and consumer choices, MEPs call for responsible marketing and advertising. For example, when environmentally friendly claims are made in advertisements, common criteria should be applied to support such a claim, similar to obtaining ecolabel certifications. The resolution also calls for the role of the EU ecolabel to be boosted so that it is used more by industry and to raise awareness among consumers.

This follows the announcement by the CMA we featured in last months’ Digest that it is investigating greenwashing in advertising and labelling. Therefore, the UK may consider similar action on advertising.

Read more here.

Ofcom consults on changes to the Broadcast Code and Code on Scheduling of Advertising

Ofcom is consulting on changes to the Broadcast Code and the Code on Scheduling of Advertising resulting from legislative changes related to the introduction of the regulations implementing the amended Audio-Visual Media Services Directive and the departure of the UK from the EU.

In addition, the European Convention on Transfrontier Television (ECTT) framework will continue to apply and the legislation requires Ofcom to implement it. This means that UK television services that broadcast to ECTT countries must comply with content standards set out in the ECTT, which include those on the amount of advertising broadcasters can transmit and where this is scheduled.

The key changes are amendments: to the definition of hate speech; to reflect revised product placement restrictions affecting specific programme genres and products; and on scheduling reflecting the ECTT’s advertising provisions.

Read more here.

Trade Marks & Other Intellectual Property

Changes to Address for Service requirements when dealing with the UK Intellectual Property Office

Following a speedy consultation exercise, the UK government has implemented new rules meaning that from the end of the Brexit transition period, ie effective from 1st January 2021, those making new applications to or initiating new proceedings before the UK Intellectual Property Office will need to have an address for service in the UK, Gibraltar or the Channel Islands. (Previously, an address in the EEA was acceptable, but that will no longer be the case.) This change is partly in response to the EU rules which mean that from the end of the transition period most UK-based IP practitioners can no longer be able to represent their clients before the EU IPO – this will not affect Lewis Silkin clients as we have a Dublin office staffed by Irish practitioners.

There are four main exceptions to the new UK Address for Service rule: i) UK IPO applications already started before 1st January 2021; ii) UK IPO opposition, invalidation or revocation proceedings already started before 1st January 2021; iii) UK trade marks, designs and patents already granted before 1st January 2021 (unless/until they are challenged and need to be defended); and iv) proceedings in respect of comparable trade marks and re-registered designs granted to existing EUTM and RCD holders – but only for the next three years. In respect of these four exceptions, an EEA Address for Service can still be used.

Read more here.

Consultation on Exhaustion of IP Rights regime announced

In other news related to the end of the Brexit transition period, the UK government has announced that it intends to consult early in 2021 on the future development of the UK’s IP exhaustion regime. In the short term, the UK has provided for EEA-wide exhaustion to continue to apply also in the UK from 1st January 2021. However, by contrast, the EEA countries will not be treating as exhausted the IP rights in goods that have first been put on the market in the UK by or with the consent of the IP owners. For the time being, therefore, parallel imports will still be possible from the EEA into the UK, but not from the UK into the EEA; it is likely that the Government will propose a change to this situation in its consultation.

Read more here.

Ruling in look-alike jeans dispute finds passing off based upon post-sale confusion

The IP & Enterprise Court has recently handed down a judgment that could open up an important new line of argument for brand owners battling against look-alike competitors, particularly where the products in question have a reasonably long life post-sale during which the get-up or branding continues to be on display as the product is used (or worn). The case related to “WR.UP” branded jeans, and to look-alike jeans produced under the brand “HUGZ”, in both cases designed to be “body-enhancing” in the buttock region. The claimant was successful in its claims against the defendant based upon a patent, unregistered designs, passing off and breach of a previous settlement agreement.

But in one important respect the judge’s findings for the claimant went further than in previous English case-law relating to passing off. To show passing off a claimant must traditionally demonstrate that the purchaser was subject to a misrepresentation at the time they made their decision to purchase the look-alike product. But in this case the judge was willing to extend passing off protection to circumstances where “a consumer knows she is purchasing a knock-off… but she does so because she wants other consumers to believe that her jeans are associated with the Claimant and its products… the owner of goodwill in a product is entitled to have this goodwill protected throughout the life of the product, not just at the point of sale… [The] evidence was that the HUGZ Get-Up will continue to make misrepresentations whenever the HUGZ jeans are worn. On the facts of this case, that misrepresentation damages the Claimant.”

Similar arguments based upon post-sale confusion have previously been accepted in at least one UK trade mark case, but not in passing off (except in Australia). If adopted more generally by the UK courts this approach could considerably strengthen the hands of product designers against competitors copying their get-up or branding.

Read more here.