FTC Recommends Changes Re “Made in the USA” Advertising

Re Bedrock Manufacturing Company, LLC d/b/a Shinola/Detroit, LLC, and Filson Holdings, Inc.

Factual Allegations: Watch manufacturer advertised its products as “handmade in Detroit”

FTC Determination: Since the company sourced significant inputs to many of its products overseas, a remedial plan was necessary to avoid FTC enforcement action

Remedial Plan: (1) Applying corrective hangtags; (2) redesigning watch casebacks; (3) updating embossed claims in affected leather goods; (4) updating Internet and hard-copy advertising materials to qualify claims; (5) updating employee training materials; (6) updating advertising materials to third-party retailers; (7) transitioning away from the company’s “Where American is Made” slogan; and (8) developing enhanced policies and procedures, including additional legal review, to avoid future deception or mislabeling

New Advertising Claim: “Assembled in the United States”


FTC Gives Minimum Requirements When Hiring Influencers

FTC Brings Case:

  • Warner Bros., through its ad agency, paid influencers to develop sponsored gameplay videos for YouTube, Twitter, and Facebook
  • Required influencers to promote in a positive way, but did not require disclosure of that fact
  • Disclosure of material connection was only required in video description, “below the fold,” which was unlikely to be read and would not be seen in Facebook and Twitter posts

FTC’s Minimum Requirements When Hiring Influencers:

  • A signed agreement with each influencer that acknowledges responsibility to disclose material connection
  • Monitoring influencers posts on all platforms to ensure compliance
  • Immediately terminating and ceasing payment to any influencer who fails to disclose or misrepresents impartiality

NAD Gives Guidance on “Up To” Claims and What Constitutes an “Appreciable Number”

In re The Procter and Gamble Co. (#5960)

Factual Allegations:

  • For its Charmin products, P&G advertised “use up to 4x less” than its competitor
  • P&G provided evidence that at least 39% used at least 4x less toilet paper than the competitive product

Holding:

  • NAD was satisfied that 39% adequately supported its “up to 4x less” claim
  • NAD noted that consumers understand that their results will vary based on their personal usage patterns and that those that don’t get “up to 4x” will still get a benefit from the product
  • NAD recommended that the advertiser enlarge the words “up to” on product packaging to avoid conveying a misleading “use 4x less” claim

Celeb Sues Over Use of Name in Contest

Julia Child Foundation v. Airbnb, Inc.

Factual Allegations: Airbnb asked the Julia Child Foundation for permission to use her name in a contest to win a free night at the “Former Julia Child Home.” The foundation rejected the request, and Airbnb moved forward with the use of her name anyway.

Possible Issue to be Decided: Does Airbnb have a First Amendment right to use Julia Child’s name to explain that it is giving a prize to stay in a house in which the celeb used to live?

Remedy Sought: Preliminary and permanent injunction and damages, including profits.


Lawsuit Filed Over Alleged Failure to Separately Negotiate With Singer

Darlene Love v. Scripps Networks Interactive Inc.

Factual Allegations:

  • Scripps shot a non-union commercial that contained a song with the voice of the plaintiff without her permission
  • If a union spot, its rules may have required Scripps to negotiate with the singer for payment

Issues:

  • Does the mere appearance of a voice of an identifiable singer in a non-union commercial require permission under right of publicity laws?
  • Or is the claim preempted by copyright law and/or contractual terms the singer originally signed?