General Advertising Industry News & Updates

What comes to mind when you hear the term “LifeProof”? Does it immediately make you think of something that protects from all of life’s hazards or does it merely suggest that something can withstand various accidents? That is what the Ninth Circuit in California is deciding in Seal Shield LLC v. Otter Products LLC, et. al. after hearing oral arguments on the topic in January. The issues central to the case hammer home the importance of using your trademarks in the right way—as a trademark identifying a brand—or a source—and not as term that merely describes the product.

In this case, Seal Shield and Otter Products both claim rights to the same term—LIFEPROOF. Seal Shield argues that it was the first to use it, so it should have the rights. Otter Products counters and argues that Seal Shield did not use it in the right way—that Seal Shield only used it to describe the product and not as a trademark.

Copyright: 91foto / 123RF Stock Photo
Copyright: 91foto / 123RF Stock Photo

Seal Shield sued Otter Products and TreeFrog Developments (which was acquired by Otter Products) after TreeFrog Developments obtained a federal trademark for LIFEPROOF in 2010. Seal Shield brought a suit in 2013 and argued that it had senior rights to the name LIFEPROOF and requested that the court cancel Otter Products’ trademark as a matter of law. In ruling in favor of Otter Products, the district court held that as a matter of law Seal Shield did not have proprietary rights to the LIFEPROOF name because the way Seal Shield used the name (as a tagline or slogan with its Klear Kase protective cases) was merely descriptive.

Seal Shield appealed the district court decision arguing that its use of LIFEPROOF is not merely descriptive but is suggestive. Specifically, Seal Shield argued that LIFEPROOF falls short of explicitly describing the various features that are included under the mark LIFEPROOF and it takes a mental leap to associate the word LIFEPROOF with a protective case that protects from all of the elements and human error, meaning the mark is suggestive. Seal Shield also argued the mere fact that the USPTO granted TreeFrog Developments federal registration of LIFEPROOF demonstrates that such mark is protectable.

For its part, in addition to a myriad of other arguments, Otter Products contends that Seal Shield’s use of the LIFEPROOF mark is merely descriptive and that it failed to show any consumer evidence of secondary meaning—such as a survey showing that consumers associate their use of LIFEPROOF with the goods of one maker rather than merely describing the product. And to address the seeming inconsistency, Otter Products contends that Seal Shield cannot rely on Otter Products’ federal registration as evidence that the mark LIFEPROOF is distinctive because, as Otter Products argues, it uses the mark as a trademark and not merely to describe the goods.

The court will rule on this appeal later this year. You may think it’s counter-intuitive for Otter Products to argue that Seal Shield’s use of the LIFEPROOF mark is merely descriptive while at the same time maintaining a federal registration for that same mark that is inherently distinctive and suggestive; however, this demonstrates that the way you use mark is a key component on whether a mark will obtain trademark protection.

The FTC recently cracked down on Breathometer, Inc., the maker of an app-supported smartphone breathalyzer, for false and deceptive advertising.

The advertised purpose of the product is to keep people safe—to let someone know when he/she has had too many to drive, and provide an estimate on when sobriety will return.  The device, which connects to an app on a smartphone, allows the user to blow into it and receive a blood-alcohol content reading on their phone.  The accuracy of the reading, however, is in dispute – and it appears the advertisements may have overstated the accuracy of the BAC reading.

In its advertising, Breathometer touted “FDA registered, Law enforcement grade accuracy” and “‘police grade’ precision.”  The advertising went on to claim that the accuracy was proven by “government-lab grade testing.”  According to the FTC’s complaint, these claims were not supported, or outright false.  The FTC alleged that the product was not adequately tested for accuracy and that the company was aware that the device regularly understated users’ BAC – in other words, informing drunk people that they were sober to drive.

Now a settlement with the FTC has imposed strict restrictions on the conduct of the company and its founder going forward.  The company and its founder are prohibited from making claims regarding the accuracy of the product without the support of specifically outlined testing demonstrating it “meets the accuracy specifications set for evidential breath alcohol testers that have been approved by the Department of Transportation.”  In fact, without such testing support, the company cannot advertise that the product detects BAC at all, and is prohibited from “re-enabling the Breathometer app’s breathalyzer functions” which were previously shut down.

In addition, the company must give a full refund to everyone who bought the product – wiping out approximately $5.1 million in revenues.  The company is required to specifically notify its customers by email of their right to a refund, and post refund information on its website.

Registering your brand name as a trademark domestically or internationally can be a long, confusing process involving obscure governmental agencies requiring various fees at seemingly random intervals. Some of these demands are legitimate (International Bureau of the World Intellectual Property Organization notification that payment of a 2nd part fee is due in Swiss francs): but many others are NOT (WPAT s.r.o. invoice for 2738$ “on or before”, 2798$ “after”).

These solicitations arrive because the process of registering a trademark creates a public record. This means that anyone who infringes a registered trademark is not allowed to complain they did not know about the trademark but it also lets potential scam artists know that you have a trademark you care enough about to spend money registering.

But be careful not to be misled by the flurry of official looking invoices! Like this one:

Don't pay this invoice!
Don’t pay this invoice!

The United States Patent and Trademark Office warns against such scams, listing a number of examples (the above image was taken from their website).

If you have hired a trademark attorney to register your brand name for you, you need never pay any of the invoices yourself. Trademark attorneys will pay the legitimate ones on your behalf. In the United States and in most other countries, legitimate communications will be directed only to the trademark attorney and not to the trademark owner. When in doubt, just forward the communication to your trademark attorney.

If you are trying to negotiate the process yourself or just want to be able to spot wrongdoers, here is our list of red flags:

  1. Who dd it come from? Scammers like to use slight deviations from the correct names of the legitimate agencies. For example instead of “The United States Patent and Trademark Office”, the notice will come from entities such as the “Trademark and Patent Office” or the “United States Trademark Registration Office”.
  2. Where dd it come from? The real United States Patent and Trademark Office is located in Alexandria, Virginia. Beware of solicitations directing funds be sent to an address in New York or Philadelphia Pennsylvania. And, especially not Slovakia!
  3. Read the fine print. Some of the communications helpfully state that they are not legitimate (in a tiny difficult-to-read font, embedded in the middle of a long paragraph with otherwise unalarming factual information): “THIS PUBLICATION IS AN ELECTIVE SERVICE WHICH NEITHER SUBSTITUTE THE REGISTRATION NOR PROLONGS THE VALIDITY OF THIS TRADEMARK OR PATENT WITH U.S.P.T.O.”
  4. Watch the grammar! Typos, grammar and spelling errors are common in these types of scams. See the example in our red flag number 3…
  5. Check the website address. The real United States Patent and Trademark Office operates from the address USPTO.gov. Addresses such as patenttrademarkoffice.org, on the other hand, take you to a website that explains, in the “About Us” tab: “Headquartered in New York City, the Patent Trademark Office is the nation’s premier Trademark and Patent renewal service.” (ha!). Likewise, World Intellectual Property Organization (WIPO) operates from the address WIPO.int. Be suspicious of any address ending in a .com, .org or .us.
 Don’t fall prey to these confusing communications!

 

 

Ever been skeptical of symptom relief claims made by medicine made of things like crushed bees or poison ivy?  It seems you are not alone–the FTC is skeptical too, and a recent FTC announcement may leave marketers scrambling to change the claims made on homeopathic drugs.

Homeopathy, dating to the 1700s, is based on the theory that disease symptoms can be treated by minute doses of substances that produce similar symptoms when provided in larger doses to healthy people.  While many people believe in these remedies, the efficacy claims for these products are generally not supported by modern scientific methods and are generally not accepted by modern medical experts.

Last week, the FTC released an Enforcement Policy Statement on Marketing Claims for OTC Homeopathic Drugs.  In the statement, the FTC provided specific guidelines for marketing the efficacy of homeopathic remedies.  The FTC acknowledged it has historically not pursued many enforcement actions against homeopathic marketers, but stressed that the same rules apply to marketing homeopathic drugs as other health-related products, and indicated its lax enforcement may be a thing of the past.

Copyright: <a href='//www.123rf.com/profile_kerdkanno'>kerdkanno / 123RF Stock Photo</a>Generally, an advertiser is required to have adequate substantiation for any claim, but the substantiation that qualifies as “adequate” is more demanding for health-related claims.  For health-related claims, an advertiser must have “competent and reliable scientific evidence” to support the claim.  And for claims that a product can treat or prevent a disease or its symptoms, the FTC has required support in the form of well-designed human clinical testing.  This is a real problem for homeopathic drugs—most have absolutely no scientific support for their treatment claims (let alone the human clinical testing required).

So what is a marketer to do – how can you identify what the homeopathic drug supposedly treats without saying (expressly or implicitly) that it is effective at doing so?  After all, for the vast majority of homeopathic drugs, the case for efficacy is based solely on traditional homeopathic theories and there are no valid studies using current scientific methods showing the product’s efficacy.  So just making a treatment claim could violate the regulations.  The answer according to the FTC: disclaimer, disclaimer, disclaimer.

The FTC is recommending that homeopathic drug marketing include disclaimers that consist of at least two components: (1) a statement that there is no scientific evidence that the product works and (2) a statement that the treatment claims are based only on theories of homeopathy from the 1700s that are not accepted by most modern medical experts.  And it is not enough to put these disclaimers in the fine print.  As stated by the FTC any disclaimer “should stand out and be in close proximity to the efficacy message; to be effective, it may actually need to be incorporated into the efficacy message.”  The FTC also warns against marketers attempting to spin this into a positive; says the FTC: “Marketers should not undercut such qualifications with additional positive statements or consumer endorsements reinforcing a product’s efficacy.”

The FTC’s new guidance helps define clear rules and puts marketers on notice of the pitfalls of marketing homeopathic products.  If in doubt about whether a advertising message is misleading, consider consulting an attorney and obtaining consumer surveys to ensure the advertisement is clear and not misleading.

This week eight of the nine states voting on the issue said yes to cannabis decriminalization but the USPTO continues to say no.

Trademarkland takes a hard line against drugs, refusing to register any trademarks linked to cannabis. If anything, it has gotten even stricter on this issue over time. The law animating the USPTO, the federal Lanham Act, bars the registration of trademarks that are connected to “unlawful” uses.

While the USPTO seemed to invite companies to apply to register these types of trademarks in 2010 when it created a new trademark category: “processed plant matter for medicinal purposes, namely medical marijuana”, it quickly reversed course. Trademarks for marijuana, which is still illegal on the federal level (under the Controlled Substances Act), can’t be federally registered.

This summer the board overseeing the USPTO decided it could conclude from photographs submitted by a Washington dispensary that its “Herbal Access” trademark was being used for illegal services despite the fact that the owner never mentioned pot in his application. Then, a few weeks ago, the board issued another ruling refusing to register “JuJu Joints” as a trademark for marijuana vaporizers.

Trademarkland has jurisdiction over the entire United States but obeys its own set of rules.

The Food and Drug Administration recently invited public comment on an updated definition of what constitutes a “healthy” food.  An updated definition is not merely fodder for food policy gurus.  This will have a very real impact on advertisers and consumers alike because the new standard will set the stage for what brands will label and advertise as “healthy.”

What is “healthy” under the current definition—which reflects decades old views on nutrition—may no longer be “healthy” after the FDA’s final determination. Perhaps that is a good thing.  Take, for example, that some sugary breakfast cereals and pastries could be considered “healthy” under the current guidelines—which focus on overall fat content rather than sugar content—but things like fresh avocados and nuts are not considered “healthy” because of their fat content.

Copyright: dole / 123RF Stock Photo
Copyright: dole / 123RF Stock Photo

The FDA’s new guidance will likely force many brands to rethink and retool how they advertise their previously “healthy” (but suddenly not “healthy” anymore) products. On the flip side, the new definition could well breathe new life into a languishing product or push emerging products to even greater market prowess that will be suddenly considered “healthy” by the FDA.  According to the FDA, many consumers make their purchasing decisions in 3-5 seconds.  So, by that data, most folks are not loitering in the florescent lights of a big box supermarket comparing nutrition tables.  While the details may not be a focus to consumers, a big catchy label clearly stating that something is “healthy,” could make the difference between buying Brand X or Brand Y.

Perhaps most importantly, brand owners and the public will have a say on the final definition of “healthy.” The FDA is currently seeking input on a variety of questions about what “healthy” should mean – both from a nutrition standpoint and from a consumer’s understanding standpoint.  The public comment period opened on September 28, 2016, and comments can be submitted through the FDA’s website.

One likely result is that companies will get sued by its competitors. Such a lawsuit will cost money to defend, cause a distraction to the company, and has the potential to embarrass the company with consumers.

Another potential result is more troubling – an enforcement action by the FTC. Such actions, like competitor lawsuits, are expensive to defend, cause distraction, and have the added problem of communicating to consumers that the government thinks the company is making false statements.

A recent FTC enforcement action decision reinforces the necessity for companies to validate the advertising claims made about their products, particularly if such claims relate to health benefits.

In May 2015, the FTC filed a lawsuit against COORGA Nutraceuticals Corporation and its owner claiming that the Defendants violated the law in claiming that their “Grey Defense” dietary supplements reversed or prevented gray hair. The United States District Court for the District of Wyoming recently granted summary judgment in favor of the FTC, issued an injunction against the company and its owner, and asked the Defendants to pay nearly $400,000.

COORGA marketed Grey Defense to consumers as not only a product that could stop, reverse and prevent the natural graying of hair, but also that it was scientifically proven to do so. The Court found that the COORGA did not have the required scientific evidence to support such claims.  In addition to finding that the company was liable, the Court also found the owner liable because he controlled COORGA’s advertising.  The Court took COORGA’s owner to task for “arrogantly” relying on internet research to validate the company’s claims.  The Court found that this conduct constituted “reckless indifference” and issued an injunction against the company relating to advertising claims across a broad range of products in addition to finding Defendants liable for $391,335.

As this and other FTC enforcement cases make clear, a company must ensure that if it makes scientific claims about its products that it has the testing to back up those claims.