ReactS : Advertising Lawyers & Attorneys : Reed Smith Law Firm : Marketing Regulations, Product Placement

Google’s new trademark policy comes into play from the 14th September 2010 in UK, Ireland and Canada, and effectively most of Europe. The change has been received with differing views. One view is that it will ultimately result in a better surfing experience for users; the other is that it is nothing other than a ruse for Google to hike up prices and cut costs. Whatever your view brands need to be aware of what, if any, rights they have left to protect their brands on line in sponsored search results on Google.

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At the end of July, Intercontinental Brands ("ICB") lost their appeal against the High Court ruling that their "VODKAT" brand was being passed off as genuine vodka. In an important case, which will have an effect on advertisers' choices for product names, the court held that makers of vodka, such as Diageo, were entitled to protect the 'vodka' name under the doctrine of "extended passing off".

Five elements have to be established in order to succeed in a claim for extended passing off:

1. That his business consists of, or includes selling in England a class of goods to which the particular trade name applies;
2. The class of goods is clearly defined, and that in the minds of the public, or section of the public, the trade name distinguishes that class from other similar goods;
3. Due to the established reputation of the goods there is goodwill attached to name;
4. The claimant is the owner of the goodwill which is of substantial value;
5. The claimant has suffered, or is likely to suffer substantial damage to his goodwill.

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Last week the Chancery Division dealt a blow to Specsavers when judgment was given in its trade mark infringement claim against Asda. Keen-eyed observers will also see that Specsavers were represented by the aptly named Adrian Speck.

Asda ran an in-store advertising campaign for its optician's services which featured a logo containing two ovals along with the straplines "Be a real spec saver at Asda" and "Spec savings at Asda". Specsavers, whose own logo consists of two interlocking ovals framing the word 'Specsavers', brought claims for trade mark infringement on the basis that the use of the logo and the straplines caused confusion, and took unfair advantage of their registered marks. They also claimed passing off. (The logos can be seen in the appendices to the judgment which can be found here.)

The court ruled against Specsavers on all but one of its claims. It was a clean sweep for Asda on likelihood of confusion (or the lack of it), which can be a difficult claim to run in comparative advertising cases: in order to draw an effective comparison, it must be possible for consumers to distinguish between the two traders in question, and so comparative campaigns are generally designed to avoid confusion. Specsavers did have some success on the 'unfair advantage' claims, as the court held that Asda's use of the "Be a real spec saver at Asda" strapline took unfair advantage of the SPECSAVERS trade mark. The use of the words 'spec saver' was a clear link to the SPECSAVERS mark, and by using it Asda were taking unfair advantage of Specsavers' established reputation. There was, however, no unfair advantage in Asda's use of the ovals logo (which was held to have only a weak resonance with the Specsavers logo) or the "Spec savings at Asda" strapline.

There was an obvious intention on Asda's part to incorporate a reference to Specsavers into their campaign and the court seemed to accept that it was 'living dangerously'. Intention is generally irrelevant in trade mark infringement claims (except perhaps where it comes into the 'honest practices' test applying to some of the defences), but here the court conceded that if there is evidence showing a defendant is 'living dangerously', that would be admissible but not conclusive in relation to the question of actual confusion. In this case the 'living dangerously' evidence did not affect the result on confusion, but it did appear to make the court more amenable to a finding that there was a link between the logo used by Asda and the Specsavers logo. The court's approach appears to suggest that advertisers who deliberately sail close to the line could find themselves in more trouble, but anyone who mounts a comparative advertising campaign will surely be 'living dangerously' in the same way that Asda was. Comparative campaigns will always involve a deliberate attempt to incorporate a reference to another trader. The trick is to live dangerously by sailing close to the line without crossing it, so it is important to obtain good compliance advice.

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The first television commercial for post conception advice by Maris Stopes led to the Advertising Standards Authority receiving almost 5,000 complaints, fueled by attacks from anti-abortion groups. Apparently the ASA also received a petition against the advertisement from the Society for the Protection of Unborn Children.

Despite the fierce objections however the ASA did not uphold the complaints, indeed it may well be argued that no other outcome was feasible since the advertisement did not breach any of the Code rules, as we stated in our blog of 24 May 2010 . The ASA concluded that the advertisement would not cause widespread offence and was not harmful in that it would not encourage promiscuity or overly appeal to young people.

It is interesting nevertheless to consider the grounds that were used by complainants to object to the advertisement.  Arguments against the commercials were wide ranging and included: that the commercial was a political message; the ad promoted abortion; offended the religious beliefs of some viewers; trivialised the decision to choose abortion; did not take into account the views of the father; was sexist in that it portrayed pregnancy as a woman's responsibility; and that it would encourage promiscuity among young people and that it equated decisions about the life of an unborn child with decisions about consumer goods.

None of these views were accepted and the ASA adjudication states:

We considered that it was clear that the ad was promoting the Advice Line as a source of information for ..women, and noted that it did not advocate one option over another.

Unsurprisingly anti-abortion groups are upset at the decision, with the ProLife Alliance claiming the ASA has ignored clear breaches of the Code.  The commercials were though carefully and sensitively produced and there is little doubt the advertisements are compliant with the BCAP Code.  As I commented in May this year in Campaign Magazine, given this is a highly sensitive area, there will always be those who object to the right to advertise such services.   

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Ofcom has today designated that, from 1 September 2010, the Advertising Standards Authority (ASA) will be the appropriate regulator for advertising on video on demand (VOD) services notified to the Association for Television on Demand (ATVOD), thus maintaining the ASA as the one stop shop for advertising regulation and enforcement in the UK.

Simultaneously, CAP has issued a new Appendix to the CAP Code (the Code), incorporating new rules into the Code, which will take effect from the same date. This change does not introduce new rules for VOD advertising: it is merely necessary to ensure that the Code reflects specific legislative rules that apply to VOD services, which are not already covered in the Code, thereby enabling the ASA to regulate this area.

In addition to the new Appendix, advertising on VOD services must continue to comply with all the rules and provisions of the Code. In effect, therefore, for advertisers little has changed, except that the regulatory enforcer is now the ASA, with Ofcom merely acting as a backstop power. VOD providers should remember, however, that, under the Communications Act 2003 (the Act), they are primarily responsible for complying with the rules contained in the Act, which are now set out in the Appendix.

In addition to the usual remit of sanctions for non-compliance, the ASA also has the power now to refer any matter to Ofcom with a view to Ofcom considering whether the media service provider has contravened the requirements of the Act.

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Ofcom recently investigated 57 programmes broadcast on STV in 2008 and 2009, all of which were sponsored either by the Scottish Government or its agencies. This followed allegations in the press that the Scottish Government had influenced the content of STV's programming.

39 of the programmes in question (including the 12 Homecoming programmes, about which the press had originally complained) were found not to be in breach of sponsorship rules in the Broadcasting Code. However, 18 other programmes, most of them short, one-minute productions on public information subjects, were deemed to be in breach.

Ofcom reiterated in the adjudication that a sponsor is only allowed to gain promotional benefit from funding through being associated with the programme, not by being referred to during it. There must be no promotional reference to the sponsor in the programme and the relationship between the sponsor and the sponsored programme must be transparent.

Ofcom felt that in this case STV had sought programme funding to create programmes which were effectively vehicles for the promotion of their interests. Although the majority of the series found to be in breach of the Code covered "social action subjects", such as education, health and well being, which are intrinsically unownable, non-proprietorial matters, Ofcom nevertheless felt that the series in fact promoted the service or product provided by the sponsors. For example, the programme, Time for Change, sponsored by Learning Direct Scotland, focused purely on the benefits of attending courses and the funding that was available. Ofcom inevitably surmised that this series served almost solely as a vehicle to encourage viewers to use the service of Learn Direct Scotland, a body which (surprise, surprise) advises consumers on suitable courses and available funding!

Ofcom felt that in these 18 culpable cases, the programmes were in effect advertisements for the sponsor or its activities. STV's sponsors were not simply associated with their respective programmes; they were promoted by them. This time the Scots certainly did not get off scot-free...

Written by Helena Heaton, summer vacation student.

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Companies directly marketing to customers must not use the Internet to gather data about children. That's according to a new code of practice published by the Direct Marketing Association (DMA), which says companies must seek parental consent for children under 12 years old, The Register reports. The code must be adhered to by members of the DMA.

"Even if your site is not primarily aimed at young people, if there is a possibility that it would be attractive to them...you have a responsibility," a DMA spokeswoman said.

The revision brings the code into compliance with the new CAP Code, which sets the rules governing advertising in the UK, the report states, and includes a whole new annex containing the rules on marketing to children. The new code has also been updated to take account of changes in legislation including the new Consumer Protection Regulations 2008 and the Gambling Act 2005, and also features a new section on key environmental responsibilities.

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The new coalition government has stated that one of its priorities is the protection of children from excessive commercialisation. This policy aim reflects a general perception in the UK among the governing and chattering classes that advertising is at the root of both this problem and the problem of obesity among children. Eyes are therefore turned to the advertising industry to see what they have done and what they are doing to protect children.

It is helpful therefore that Ofcom have recently released a review showing that since the rules concerning the advertising of foods that are high in fat, sugar and salt (HFSS) came into force in 2007, advertising for HFSS products seen by children had dropped by 37%, and the fall was greater for younger children (a 55% decline).

There are already a number of rules and safeguards in place to protect children, and these are probably set to increase if the proposed extension of the CAP Code into all promotional messages on the internet goes ahead. Our new Ad Guide on advertising to children goes into greater detail on all these areas.

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Earlier this month I reported on the fiasco of the Article 29 Working Party's Opinion which favoured prior opt in before cookies are attached to your PC or laptop to track future on line activity. Now a new system to police privacy abuses by companies that track consumer' on line behaviour for targeted advertising purposes is about to be launched in the US.

The Federal Trade Commission in the US has made in abundantly clear to the advertising industry that, as Peder Magee, senior attorney at the FTC said according to the Wall Street Journal, advertising businesses are sophisticated and complicated and if they can collect, use and monetize data they can find a way to make their practices more transparent to consumers. The same attitude has been adopted by EU and regulators across the world.

In response the Internet Advertising Bureau, IAB, in the US and UK, have been pushing members to adopt best practice guidelines. Now though a new business called the Better Advertising Project is launching technology which tracks the trackers. The software it has developed allows consumers to see which companies are tracking them as they surf the web. 300,000 people have volunteered in the US to use the software so the Better Advertising Project can send information to the Council for Better Business Bureaus and the Direct Marketing Association in the US. Initial reports are that more than 250 companies were tracked collecting and using consumer data.

The idea is that if a company is then found to be violating industry principles and refuse to respond to warnings from self regulatory bodies, their actions will be reported to government bodies with greater powers. While no such proposals have yet surfaced in the UK it is likely the technical innovation will spread across the Atlantic fairly swiftly. Advertisers and their agencies in the EU need to act to be more transparent. The proposal to place a universally agreed icon on websites and advertisements to alert consumers if their activities on a web page are being tracked giving them the option to opt out of such tracking appears the only way forward.

IAB UK is submitting a set of proposals to the EU to demonstrate that self regulation is effective in protecting consumers and that the Art 29 Working Party Opinion is an overly restrictive interpretation of the Privacy and Electronic Communications Directive. According to New Media Age Nick Stringer, IAB head of regulatory affairs said "we are proposing aims to enhance transparency and give users greater control".  AOL, AudienceScience, Crimtan, Google, Microsoft, Specific Media and Yahoo were the first seven digital companies to be independently audited in April pursuant to the IABs behavioral targeting best practice principles. Amongst other things these companies promote the IABs consumer facing website Your On Line Choices which gives further information to consumers about privacy on line and behavioural advertising.

All this matters because companies could well fall foul of legislation and self regulatory codes if active steps to warn consumers about tracking and to protect data are not adhered to. In future monitoring activity of on line advertising companies is clearly going to be easier and best practice needs to be adopted, not only to protect consumers but to protect brand reputation.

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