Ads & Brands Law Digest: November-December 2019

Advertising & Marketing

Clock counting down ‘price guarantee’ periods found by ASA to misleadingly imply that discounts were time-limited

The CAP Code contains rules on price promotions designed to ensure that consumers are not misled regarding the period for which discounts are available, and not disadvantaged by a change in closing date, nor by techniques designed to instil a false sense of urgency or fear of missing out on an offer. The traditional approach to using a clock has been to count down to the end of a period during which a discount is applicable, but the advertiser in this instance instead used the clock to count down the continued application of a “price guarantee” – during which consumers could be sure that a particular price would still be available. This was presumably in the hope that a “sense of urgency” could be instilled in its consumers to buy, while avoiding the obligation under the CAP Code immediately to revert to a higher “was” price that would have applied to a time-limited discount.

However, the ASA held that the “price guarantee” countdown was also contrary to the CAP Code, as it misleadingly implied that there was a time-limited discount offer. The advertiser offered to remove struck-through “was” pricing from the relevant items, and to provide clarifying wording in pop-ups and FAQs, but the ASA felt that these would be insufficient to prevent the use of a countdown clock from misleadingly still implying that items would revert to a higher price at the end of the countdown.

Read more here.

Previous ASA ruling on promotional Instagram posting reversed after Independent Review, emphasising the need for ad transparency ‘prior to engagement’

In a ruling from September 2018 the ASA had previously decided not to uphold a complaint about an Instagram posting by Zoe de Pass, promoting some shoes that she had designed for a business called Air & Grace. The posting was held to be a marketing communication as it linked through to a merchandising page, but - although it did not use a #ad tag - the ASA decided that the Instagram post contained enough other indications of its marketing nature to ensure that it was obviously identifiable as such. These included references to a waiting list for the shoes, and use of Twitter handles and hashtags that referred to the collaboration with Air & Grace.

However, a revised version of the ruling was published in November 2019 which overturns the original ruling described above, following input from the ASA’s Independent Reviewer. The ASA has now held that the Instagram posting was in breach of the CAP Code because most of the references that helped identify it as a marketing communication were only revealed once customers clicked on a “more” button on the posting. On first seeing the post, Instagram users would simply see a photo of the shoes with text reading “Thanks to everyone who has contributed to the ‘big feet/small feet’ chat a few weeks back.” Thus, prior to engagement with the ad (by clicking the “more” button), consumers would have had no indication that it was a marketing communication. This was sufficient to render it in breach of the CAP Code.

Read more here.

ASA rules that paid-for contributions to annual ‘Parliamentary Review’ publication amounted to advertorials

It is not an uncommon publishing model for magazines and annuals in various specialist sectors to partially fund themselves by taking payment from relevant organisations for the right to contribute an article to the publication. This ASA ruling serves as a reminder that – where the content of the article is controlled by the organisation submitting it, and it is published in exchange for payment (or other benefit) – there is a danger that it will amount to an advertorial piece and thus be subject to the CAP Code, including the requirement that the piece is clearly flagged up as “advertorial” in the publication.

In this case the publisher argued that the articles were not advertorial as they retained editorial control over the pieces published. But the ASA was not convinced – the “editorial control” in question seemed only to relate to matters of style, while the publisher’s FAQs stated that “organisations are free to use the [Parliamentary] Review, and their article within it, to promote themselves to a wider audience.” The publisher was also found to have breached the CAP Code (a) by sending out letters inviting contributions to the “Parliamentary Review” which misleadingly implied that it was an official government publication, and (b) failing to flag up that the letter of invitation itself was a marketing communication.

Read more here.

Ofcom rules Good Morning Britain interview with Judith Chalmers was in breach of Broadcasting Code rules on promotional material

An interview with Judith Chalmers was broadcast on ITV’s Good Morning Britain show to look back at her career in holiday and travel broadcasting. Her invitation onto the programme had been prompted by her being voted the UK’s “all time leading TV travel icon” in research commissioned by the company Travel Republic, but there was no commercial arrangement in place. Despite the efforts of the presenters to steer her away from such references, Judith Chalmers was able to include some comments on the services and merits of Travel Republic, including that “it’s a marvellous company”, as well as referring viewers towards a promotional video created by Travel Republic.

ITV confirmed that it had retained full editorial control over the interview, and had done what it could to limit references to Travel Republic (including not including material from its video); it argued that the references to Travel Republic that had been included were “appropriately brief and limited”. Ofcom disagreed, finding both that Judith Chalmers’ comments were promotional, contrary to Rule 9.4 of the Code, but also that the references to Travel Republic’s products and services lacked editorial justification and thus received undue prominence contrary to Rule 9.5 of the Code.

Read more here (see pages 11-15)

Commercial Court rules in dispute over ‘matching rights’ in Liverpool FC sponsorship and football shirts contract

It is not uncommon for sponsorship/merchandising agreements between football clubs and replica kit manufacturers to include clauses relating to so-called “matching rights”, which are designed to allow the incumbent kit provider under the agreement to match any offer that the club might receive from a third party, and thus to retain the contract. Regular readers of this Digest may recall that we discussed a similar dispute relating to Rangers FC and its licensee in our November-December 2018 edition.

The current dispute was between Liverpool FC and its sponsor and football shirt licensee New Balance Athletics, and resulted from Liverpool having received an attractive offer from Nike to take over the shirt manufacturing and distribution. New Balance tried to make use of the “matching rights” clause in its agreement with Liverpool FC, putting forward an offer by which it claimed to match the Nike terms and thus hoped to keep the business. Liverpool rejected the offer as “contrived and unconsidered”, and argued that it had not been put forward in good faith. The dispute ended up in court, where the judge ultimately sided with the football club. Although it did not think that New Balance had been dishonest or reckless in its purported matching offer, on detailed analysis he felt that they had not (and probably could not) match certain aspects of the Nike offer such as being able to call upon high-profile celebrities to help with marketing.

Read more here

Trade Marks & IP Protection

Advocate General of the EU Court of Justice suggests circumstances in which Amazon could be liable for TM infringing products on its marketplace

In a reference to the EU Court of Justice from the German Courts, this case relates to infringing perfume products of Coty Germany that were found to be available on Amazon from sellers enrolled in the Amazon Logistics programme. Amazon has – so far – successfully resisted liability on the grounds that it merely stocked the products on behalf of third party sellers, and was not aware that the products were infringing Coty’s trade marks. In his Opinion, the Advocate General does not rule out that this may be the correct decision on the facts of the case. Interestingly, however, he outlines scenarios in which he would suggest that a marketplace host like Amazon could be infringing – for example if they are directly involved in the promotion, commercialisation and distribution of the products via the marketplace. In such circumstances, a lack of awareness that the products were infringing would not exonerate them from liability, as it would be reasonable to expect them to have checked.

Read more here.

High Court rejects defence of honest concurrent use where the defendant had adopted a policy of ‘grandmother’s footsteps’ to gradually expand its use of the contested mark

These court proceedings related to a dispute between two businesses both of whom use the mark BENTLEY. The claimants had registered that mark for use on clothing and headgear, while the defendants – Bentley Motors – were famous for its use in respect of luxury cars, but had also begun to use the mark (in association with a wings device) for related merchandise including clothing and headgear. The Court found in favour of the claimants, who were seeking to enforce their marks to prevent Bentley Motors from using BENTLEY on clothing and headgear. It did not matter that Motors used the mark in association with the wings device, as consumers would see them as distinct signs. While Bentley Motors may originally have been entitled to a defence of “honest concurrent use” in respect of a small scale of merchandising, they had lost this having taken a conscious decision gradually to develop their use of the mark on and expanding range of clothing and headgear, hoping that the trade mark owners would not notice. The judge held that such a policy of “grandmother’s footsteps” could not be regarded as honest concurrent use.

Read more here.

Employee dismissed for refusing to sign confidentiality & copyright agreement loses discrimination claim

The luxury handbag design company Mulberry had a policy of requiring all employees to sign both an employment contract with IP clauses in it and also a separate agreement on confidentiality and copyright, requiring an assignment of copyright to Mulberry in any works conceived, written or made during the course of their employment. One particular employee was dismissed because she had refused to sign the latter agreement in case it impinged upon her (non-Mulberry) work as a writer and film-maker, and subsequently brought an employment tribunal claim for discrimination on grounds of religion or belief. Her argument was that her concerns about ownership of copyright in one’s own creative output amounted to such a belief, but this was rejected by the tribunal, and also by an appeal tribunal. The Court of Appeal also dismissed a further appeal by the employee, but on different grounds – it held that it did not need to consider whether her copyright convictions amounted to a “belief” that could be subject to discrimination, because it found no causal link between it and her decision not to sign the agreement or Mulberry’s decision to dismiss her. The Court confirmed that Mulberry was pursuing a legitimate aim and acting proportionately in asking its employees to sign such an agreement.

Read more here.