Ads & Brands Law Digest: October 2020

Advertising & Marketing

Instagram provides new commitments to CMA

The Competition and Markets Authority has been investigating hidden advertising on Instagram over concerns that too many social media influencers are posting content about businesses without making clear where they have been paid or given incentives to do so, and that the platform was not doing enough to tackle the problem. Instagram will now make it easier for all users – and the businesses they promote – to comply with consumer protection law when posting content.

It will: prompt users to confirm if they have been incentivised in any way to promote a product or service and, if so, require them to disclose this fact clearly; extend its ‘paid partnership’ tool to all users. This enables people easily to display a clear label at the top of a post; use technology and algorithms designed to spot when users might not have disclosed clearly that their post is an advert and report those users to the businesses being promoted. Under the commitments, Instagram is also required to involve businesses in the changes by creating a tool to help them monitor how their products are being promoted. As a result, businesses should do their part to comply with consumer protection law and take action where appropriate, including asking the platform to remove posts if necessary.

Read more here.

CAP consults on gambling advertising regulation

The Committee on Advertising Practice has issued a consultation on strengthened rules and guidance for gambling ads to protect children and young people. In particular, new rules would strengthen the rules to prohibit creative content of gambling and lotteries ads from appealing ‘strongly’ to under-18s. The new restrictions would have significant implications for gambling advertisers looking to promote their brands using prominent sports people and celebrities, and also individuals like social media influencers.

CAP also proposes to update existing guidance to prohibit: presenting complex bets in a way that emphasises the skill or intelligence involved to suggest, inappropriately, a level of control over the bet that is unlikely to apply in practice; presenting gambling as a way to be part of a community based on skill; implying that money back offers create security (for example, because they give gamblers the chance to play again if they fail or that a bet is ‘risk free’ or low risk); humour or light-heartedness being used specifically to play down the risks of gambling; and unrealistic portrayals of winners (for example, winning first time or easily). The consultation ends on 22 January 2021.

Read more here.

Competition Law & Regulatory

CMA tackles misleading environmental claims

The Competition and Markets Authority is undertaking work to understand better how consumer protection legislation can be used to tackle false or misleading environmental claims that affect consumers, and through doing so contribute to its Annual Plan commitment to support the move towards a low carbon economy. In particular, it is focusing on how claims about the environmental impact of products and services are made; whether such claims are supported by evidence; whether such claims influence peoples’ behaviour when purchasing such goods and services; and whether consumers are misled by an absence of information about the environmental impact of products and services. It plans to produce guidance for businesses on how they can best be transparent in the way that they market goods and services in relation to any claims made about environmental impact.

Read more here.

Ofcom issues new guidance on video-sharing

Ofcom has recently issued new guidance for video sharing platforms (VSPs) on the new regulations that apply from 1 November. VSPs must assess if their services fall within the scope of the new regulations. From 6 April 2021, VSP providers will be required to notify Ofcom that they fall within scope of the regulation. VSP providers must take appropriate measures to protect children (under 18s) from content which might impair their physical, mental or moral development. VSP providers must also take appropriate measures to protect the general public from content inciting violence or hatred, and content constituting criminal offences relating to terrorism; child sexual exploitation and abuse; and racism and xenophobia. Ofcom will be seeking to engage with VSP providers as it starts operating the new regime. It will assist VSP providers in understanding the steps they should take to ensure compliance, where appropriate. Guidance on the risk of harms and appropriate measures will be consulted on in early 2021 and published in summer 2021. Before the publication of its guidance on harms and measures, it will prioritise only the most serious potential breaches for formal enforcement action. Any enforcement action taken will be in line with Ofcom’s existing guidelines for regulatory investigations.

Read more here.

European parliament calls for more regulation of online platforms

The European Parliament has called for new rules on digital services, including online platforms and marketplaces, and for a binding mechanism to deal with illegal content online. This is part of its contributions to the European Commission’s new Digital Services Package, which is due to be launched next month.

The current rules for digital services remain largely unchanged since the E-Commerce Directive was adopted two decades ago.

In particular, MEPs want targeted ads to be strictly regulated in favour of less intrusive, contextualised forms of advertising that require less data and do not depend previous user interaction with content. They go as far as saying that that there should be a phase-out leading to a ban. They also encourage the Commission to assess options for setting up a European entity to monitor and impose fines.

Read more here.

Trade Marks & Domain Names

EU Court of Justice rules on genuine use of Ferrari's "testarossa" marks

Trade marks are potentially vulnerable to revocation if the proprietor cannot demonstrate that they have been put to genuine use in the course of trade for a continuous period of five years. In this case, figurative marks featuring the word “testarossa” had been registered by Ferrari in Germany and as an international mark at WIPO in Class 12 for “vehicles…in particular motor cars and parts thereof”, but the first instance court in Germany had concluded that they should be revoked for non-use. Ferrari appealed that ruling, arguing that it had used the “testarossa” marks during the relevant five years in respect of spare parts and accessories for luxury sports cars, and also the inspection, resale and provision of services in respect of a small number of very expensive second-hand luxury sports cars. The EU Court of Justice was asked to rule upon whether such limited and specialised use of the marks could nevertheless amount to “genuine use”, so as to save them from revocation.

While confirming that the onus was upon the proprietor to demonstrate that it had made genuine use of the marks, the CJEU confirmed that the types of use that Ferrari had made of its “testarossa” marks were capable of amounting to genuine use. Although the registrations were for the broader category of “motor cars and parts” in general, genuine use could be demonstrated in respect of a relatively small number of transactions within a very high-priced specialist sub-set of that category, unless consumers would regard the mark as only relating to that independent sub-category

Read more here.

Clarification of position on EU trade marks/designs and UK comparable rights created at the end of the transition period

From the end of the transition period the territorial coverage of EU Trade Marks (EUTMs) and Registered Community Designs (RCDs) will no longer include the UK. The UK government is putting in place a system automatically to provide alternative UK protection (called ‘comparable UK trade marks’ and ‘re-registered designs’) for those who have current EUTM or RCD protection in the UK and will lose it as a result of Brexit.

There are a number of important respects in which the automatically-granted UK comparable trade marks and re-registered designs will remain associated with their underlying EUTM or RCD – for example the ‘cloned’ UK rights will inherit the registration and priority dates of the corresponding EU rights.

New IP (EU Exit) Regulations adopted at the end of September have now confirmed a further very important link between the underlying EUTMs/RCDs and the new UK ‘cloned’ rights. In cases where there are ongoing proceedings (i.e. still under way on 1st January 2021) against the EUTM or RCD for invalidity or revocation, the UK rights will potentially be automatically invalidated/revoked along with the corresponding EU rights. The only way that the UK right holder can avoid this fate is by demonstrating to the UKIPO that the grounds of invalidity or revocation of the EUTM or RCD do not apply in the UK.

For further details on the implications of the end of the Brexit transition period for Brands, see our FAQs for owners of EUTMs and RCDs and our Brexit and IP Overview.

Details of new UK scheme for the post-Brexit protection of Geographcal Indications announced

The UK has confirmed that it will ensure the continued protection of geographical indications (GIs) in the UK from the end of the Brexit transition period by establishing its own scheme – administered by DEFRA - to protect the geographical names of food, drink and agricultural products in parallel with the EU system. The new UK scheme will include Protected Designation of Origin (PDO), Protected Geographical Indication (PGI) and Traditional Speciality Guaranteed (PSG) protection. Under the Northern Ireland (NI) Protocol of the Withdrawal Agreement, NI remains part of the EU scheme for protecting GIs, so the new UK scheme (as currently announced) will only cover Great Britain (GB).

From 1st January 2021, UK products already registered under the EU GI schemes will continue to be protected by those registrations in the EU27 and Northern Ireland, but no longer in GB. Corresponding protection for GB will automatically be provided under the new UK scheme without any charge or re-examination, and will last for as long as the corresponding EU GI protection continues. Likewise, the UK has committed to providing corresponding protection under the new UK scheme to non-UK products that have existing GI protection in the EU. This too will be automatic, free of charge and apply to GB; the existing EU registrations will provide continued protection in the EU27 and Northern Ireland.

For new GIs, post-transition applications for protection in GB will need to be made under the UK scheme, whereas GI protection for the EU27 and NI must be sought through the EU scheme (producers based in GB will need to obtain protection under the UK scheme first.)

Applications for EU GI protection that are still pending at the end of the transition period will – once registered – no longer cover GB, but will cover Northern Ireland. Pending applications for NI products will continue as EU applications, but those still pending for GB products will have to comply with the EU conditions applicable to GIs from third countries.

There are certain products with existing registered GIs that can be produced anywhere on the island of Ireland (Republic of Ireland and Northern Ireland). These include Irish Whiskey, Irish Cream and Irish Poteen, which will continue to be protected under both the UK and EU schemes. The EU Guidance also confirms that cross-border IE/NI applications for GI registrations will be possible under the EU scheme going forward.

See here for the DEFRA Transition guidance on GIs (which includes details of the new logos to be applied to GI products under the UK scheme) and here for the EU Commission Guidance.