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Navigating US Legal Issues in Modern Advertising Campaigns

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Navigating US Legal Issues in Modern Advertising Campaigns ® ByBy in-housein-house counsel,counsel, forfor in-housein-house counsel.counsel.® InfoPAKSM Navigating US Legal Issues in Modern Advertising Campaigns Sponsored by: Association of Corporate Counsel Association of Corporate Counsel 10 (4USFFU, NW, Suite 8 1025 Connecticut Avenue, NW, Suite 200 Washington, DC 200 Washington, DC 20036 USA tel +1 202.293.4103, fax +1 202.293.4701 tel +1 202.293.4103, fax +1 202.293.4701 www.acc.com www.acc.com 2 Navigating US Legal Issues in Modern Advertising Campaigns Navigating US Legal Issues in Modern Advertising Campaigns June 2019 Provided by the Association of Corporate Counsel 1001 G Street NW, Suite 300W Washington, DC 20001 USA tel +1 202.293.4103 fax +1 202.293.4107 www.acc.com This InfoPAK provides an overview of US legal issues that commonly arise in modern advertising campaigns and promotions. The goal of the InfoPAK is to explain the US legal framework under which common advertising and promotions issues are analyzed and provide some guidance in navigating the legal and regulatory requirements an advertiser might face. Unless otherwise expressly specified, the laws, regulations, courts and agencies mentioned in this InfoPAK are US laws, regulations, courts and agencies. First, we address false advertising claims, the importance of substantiation and the varying degrees of substantiation necessary for specific types of claims. Starting with false advertising claims provides the lens through which advertisers evaluate advertising campaigns and promotional material. Evaluating false advertising claims will also serve as the backdrop for all the other issues discussed in this InfoPAK. Second, we spend some time discussing the use of people in advertising campaigns, focusing on influencer marketing and right of publicity claims. Third, we address ways to protect the privacy of children under 13 years of age in accordance with the US Children’s Online Privacy Protection Act (“COPPA”). Finally, the last three sections of this InfoPAK address specific types of promotions and advertising claims: conducting legal contests and sweepstakes; structuring cause marketing campaigns; and making truthful, substantiated U.S. origin claims. The treatments of these topics are illustrative more than they are exhaustive. Nevertheless, this InfoPAK aims to assist in-house and outside counsel alike in spotting issues and addressing concerns raised by modern advertising practices. Copyright © 2019 Kilpatrick Townsend & Stockton, LLP & Association of Corporate Counsel 3 The information in this InfoPAK should not be construed as legal advice or legal opinion on specific facts, and should not be considered representative of the views of Kilpatrick Townsend & Stockton, LLP or of ACC or any of its lawyers, unless so stated. This InfoPAK is not intended as a definitive statement on the subject, but rather to serve as a resource providing practical information to the reader. The ACC wishes to thank the members of the Intellectual Property Network for their contributions to the development of this InfoPAK. 4 Navigating US Legal Issues in Modern Advertising Campaigns Contents I. Advertising Claims and Substantiation ........................................................................................... 7 A. US Legal Framework ............................................................................................................................................................... 7 B. Identifying the False or Misleading Statement ................................................................................................................... 8 C. Demonstrating That an Actionable Claim Is Deceptive and Material .......................................................................... 9 1. Literally False Claims: US Courts Presume That Consumers Are Deceived ....................................... 10 2. Literally True but Misleading Claims: Evidence of Actual Deception Required ................................... 11 D. Substantiating Claims ............................................................................................................................................................ 11 E. Determining Whether the False or Misleading Statement Is Actionable ................................................................. 13 F. Disclaimers and Disclosures ............................................................................................................................................... 14 G. Comparative Advertising ..................................................................................................................................................... 16 1. Superiority Claims .............................................................................................................................................. 16 2. Parity Claims ........................................................................................................................................................ 16 H. Claims Requiring Special Attention ................................................................................................................................... 17 1. Health Claims ....................................................................................................................................................... 17 2. All-Natural Claims .............................................................................................................................................. 17 3. Environmental Claims ........................................................................................................................................ 18 I. Practical Tips for Addressing False Advertising from a Competitor ........................................................................ 19 II. Influencer Marketing ....................................................................................................................... 20 A. US Legal Framework ............................................................................................................................................................ 20 B. Instructive Cases and Orders ............................................................................................................................................ 21 C. Practical Considerations and Best Practices ................................................................................................................... 24 III. Right of Publicity ............................................................................................................................. 25 A. US Legal Framework ............................................................................................................................................................ 26 B. Instructive Cases ................................................................................................................................................................... 27 C. Best Practices ......................................................................................................................................................................... 29 IV. The US Children’s Online Privacy Protection Act (COPPA) .................................................... 30 A. US Legal Framework ............................................................................................................................................................ 30 B. The Six-Step Compliance Plan ........................................................................................................................................... 31 C. Enforcing the COPPA .......................................................................................................................................................... 36 1. Collecting Personal Information Without Verified Parental Consent .................................................... 36 Copyright © 2019 Kilpatrick Townsend & Stockton, LLP & Association of Corporate Counsel 5 2. Examining Whether a Website Is Directed to Children under 13 ......................................................... 36 3. Failure to Protect the Security of Children’s Information ........................................................................ 37 D. The COPPA Compliance Checklist .................................................................................................................................. 37 V. Contests and Sweepstakes ............................................................................................................. 38 A. Sweepstakes Versus Games of Skill .................................................................................................................................. 38 B. US Legal Framework ............................................................................................................................................................ 39 1. Florida .................................................................................................................................................................... 39 2. New York ............................................................................................................................................................. 40 3. Rhode Island ......................................................................................................................................................... 40 C. Structuring Promotions ......................................................................................................................................................
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