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

 Advertisers have been given the green light to continue to use the name of products they give away as prizes in promotions, without needing the permission of the brand/product owner, following a recent controversial adjudication by the ASA

The ASA disagreed and found in favour of Bodyform in all respects. Clauses 7.1 (Truthfulness),14.7 (Testimonials and Endorsements) and 20.1-20.2 (Denigration) of the CAP Code were considered, but the ASA ruled there had been no breach. It was decided that the adverts were not likely to discredit the underwear brand or company and that "readers would understand…that [Stella McCartney] underwear was a product of value and a desirable prize." The ASA also commented that the CAP Code does not require an advertiser to get permission from a brand before referring to a brand. Is it time this requirement was added? Or should luxury brands be grateful with the free advertising in any context? What’s next? Toilet cleaning products offering luxury branded jewellery as prizes? Could coupling a particular product with a luxury brand in an ad ever be deemed denigratory to the luxury brand? Watch this space!  

Some believe this decision is contrary to the ECJ ruling in Copad SA v Dior (Case C-59/08, 23 April 2009), where a "trademark's prestige" and "the aura of luxury" were found to be "essential" to brand protection. Stella McCartney Limited challenged the adverts for a competition being run by the makers of female sanitary products, Bodyform (SCA Hygiene Products UK). The ads (running in magazines, on packaging and on line) gave the reader the chance to win £100 worth of Stella McCartney underwear. Stella McCartney Ltd argued that the ads were denigratory, misleading by suggesting an endorsement of the product by the underwear brand, took unfair advantage of the brand, and did not make it clear that the brand had no association with Bodyform.

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 On September 14, the European Court of Justice rejected an appeal by Danish toy company Lego against a ruling by the Court of First Instance in 2008. Lego had previously sought to register its iconic 3-D studded brick as a trade mark. The 3-D studded brick featured prominently in Santander’s UK rebranding television campaign which began earlier this year. Registration had been granted to Lego by the European trade mark office in 1999 but it was subsequently overturned in 2004 following an appeal by Canadian rival Mega Brands. The ECJ ruled that the iconic 3-D studded brick cannot be registered as a trade mark as the "shape merely incorporates a technical solution developed by the manufacturer of the product". This would in effect grant an exclusive right to a technical solution which cannot be "freely used by all economic operators". The ECJ has restricted the prohibition to "signs which consist exclusively of the shape of goods which is necessary to obtain a technical result". The ECJ has stated that Lego may be able to protect the iconic 2x4 studded brick by using unfair competition laws to object to copies. Advertisers should also be warned that as with most iconic toy manufacturers, Lego fiercely protects its copyright in the design of its product and therefore clearance for use in advertising is advised.

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In the same week that the Pope visited the UK, the ASA banned an ad it deemed could be offensive to some Roman Catholics.  The ad, for Antonio Federici ice-cream, which ran in Grazia and The Lady magazines  earlier this year, featured an obviously pregnant nun eating Antonio Federici ice-cream alongside the words "Immaculately conceived". The strap line for the campaign was "Ice-cream is our religion". The ASA received ten complaints from readers of the magazines claiming that the ad was offensive to Christians and in particular to Catholics. In its adjudication, the ASA said that the ad breached old CAP Code s.5.1 (Decency), which states that ads "should contain nothing that is likely to cause serious or widespread offence. Particular care should be taken to avoid causing offence on the grounds of race, religion, sex, sexual orientation or disability. Compliance with the Code will be judged on the context, medium, audience, product and prevailing standards of decency".

Thus the ASA concluded that the use of such an image as the pregnant  nun to advertise ice-cream, was likely to cause serious offence to readers, particularly practising Catholics. It did not matter that the ad was only placed in a small number of publications, and only a relatively small number of complaints were received, the ASA ruled that the potential for causing serious offence in breach of the Code was significant and that the ads should not run again in their current form.

In 2009, the ASA banned a similar series of ads from Antonio Federici  which featured a cavorting priest and nun with the lines "Submit to temptation" and "Kiss temptation".  The ice-cream company appears determined to create controversial ads, regardless of the previous adverse ASA decisions, so one wonders what their next campaign will be like. However most advertisers do not revel in the publicity of adverse adjudications and there is a danger for repeat offenders that they will be required to pre-clear all their ads for a prescribed period in the future.

When using any religious references, images or innueundo, it is always wise to seek advice and to tread carefully. An ad need not actually cause serious and widespread offence to be problematic, the potential to do so may suffice for a negative adjudication. The latest adjudication was investigated under the old CAP Code. As of 1 September 2010, the new CAP Code is in force. Please see our Ad Guide for further information about the changes to the regime.

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A double page comparative ad which Asda ran in January 2010 was found to be ambiguous and misleading by the ASA in a recent adjudication since it breached clauses 7.1 and 7.2 (Truthfulness), 18.1 and 18.3 (Comparisons with identified competitors and or their products) and 19.1 (Other Comparisons) of the CAP Code. The ad featured the statement that Asda had “Lower prices than any other supermarket”, followed an asterisk and caveat that price comparisons had been made against only three of its largest rivals and not against the sector as a whole. There was also the statement “Lower prices on everything you buy, week in week out” above a number of products in different product categories, accompanied with arrows on the opposite page stating the number of products that were cheaper at Asda than at Sainsbury’s, Tesco or Morrisons. The ASA was of the opinion that the ad could have been interpreted to mean that the price reductions highlighted had all occurred in the preceding week, which was not the case. The advert has now been banned from appearing again in its current form and Asda have been warned about its comparative advertising. The adjudication highlights the dangers for advertisers when making comparative ads, a practice which most of the major supermarkets seem to now participate in, with Waitrose launching its first comparative ad recently, comparing its prices to those of Tesco. Comparative advertising is permitted provided that the comparisons made are clear and not misleading, and that it is a like-for-like comparison. It seems that Asda have lost a battle on this occasion, but in comparative advertising the "Supermarket Wars" rage on.

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The Advertising Standards Authority, ASA, announced on the 1st September 2010 an extension of its regulatory remit, from March 2011, which will give the Regulator jurisdiction over all marketing communications on the Internet including those on corporate websites and social media networks such as Twitter and Facebook, as well as over advergames and user generated content.

This controversial move has been introduced without any public consultation, and includes new serious sanctions for advertisers. Exemptions to the new regulation include "heritage advertising", 'investor relations', and marketing communications promoting "causes and ideas". Nearly all other marketing promotions on-line will need to comply with the CAP Code. Some areas of concern include how the ASA will deal with the fine line between editorial and promotional material; how the extended remit will be adequately funded; how sanctions can be effectively enforced against companies with sites based overseas or indeed against those thousands of smaller on line advertisers who are blissfully unaware and ignorant of the CAP Code and whose advertising can change in seconds in this fast paced media environment.

All this comes into effect on the 1^st March 2011, which does not give businesses long to review their on line promotions and marketing plans. The changes to the CAP Code ironically comes literally days after printed versions of the revised CAP and BCAP Codes were sent out to purchasers, and only a few months after a public consultation, which excluded these latest provisions.

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