FTC finalizes "unnatural" orders, Olympic trademarks are not fair use, and more in this issue of Advertising Law News & Analysis

4 min

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News:

FTC Finalizes "Unnatural" Orders

This week the Federal Trade Commission (FTC) approved four final consent orders against companies that allegedly misrepresented their personal care products, such as sunscreen and shampoo, as "All-Natural" or "100% Natural," despite the fact that they contain man-made ingredients.

"'All natural' or '100 percent natural' means just that – no artificial ingredients or chemicals," said Jessica Rich, Director of the FTC's Bureau of Consumer Protection, when the Commission announced the orders last April. "Companies should take a lesson from these cases."

Although the Food and Drug Administration has resisted defining "natural," the FTC has not been so shy, at least when it comes to "All natural" claims.

Click here to read the FTC's press release, as well as the complaints and finalized orders in each of the cases.


Analysis:

Olympics Are about Fair Play, Not Fair Use

Back in June we introduced the key Olympic trademarks rights-holders and provided a high-level introduction of why brands should beware of associating with the Olympics this summer. Marketers also should be aware of the more subtle dangers of using Olympic-related words, images, and mottos in the United States, write Venable attorneys Po Yi and Jessica S. Borowick, and summer associate Kristin Adams in a recent post to the firm's advertising law blog.

In the United States, the Ted Stevens Olympic and Amateur Sports Act gives the United States Olympic Committee (USOC) exclusives right to use "Olympic," "Olympiad," the interlocking rings, event mottos, and other Olympic trademarks. The Act also prohibits use of any word, symbol, or combination thereof that "tends to cause confusion or mistake, to deceive, or to falsely suggest a connection with the user and the Olympics." In practice, this is a very broad prohibition.

Despite popular misconceptions, common copyright defenses such as the public domain and fair use are virtually useless in the face of the Act. Plus the Act goes even further than providing regular trademark protections by exempting the USOC from having to prove that a contested use is likely to cause consumer confusion.

If this sounds harsh, it is because Congress intended it to be, the authors write. But it could be worse. An earlier version of the Act, which was in force until 1978, made run-of-the-mill infringement of Olympic marks a crime, punishable by up to one year in prison.

Click here to read more about how to protect your brand this summer.

Read the full text of the Ted Stevens Olympic and Amateur Sports Act here.

Unhealthy Telemarketing Practices = Risky Business

If there was any doubt about the need to take telemarketing compliance seriously, a recent opinion issued by the U.S. District Court for the Southern District of Florida serves as a stark reminder – or 8.7 million stark reminders – to do so, writes Venable partner Leonard L. Gordon in a recent post to the Firm's advertising law blog.

The FTC alleged that Partners in Health Care Association (PIHC), its principal Gary Kieper, and the telemarketers it hired had deceived consumers by telling them that PIHC discount cards were, in fact, health insurance cards. The court granted the FTC's motion for summary judgment, entering an $8.7 million judgement against Kieper.

There are important lessons for all marketers in the court's rejection of Kieper's defenses, Gordon writes. First, it is very difficult to correct a misrepresentation made early in the sales process with a later disclosure. Second, the FTC, and most courts, will hold marketers responsible for the actions of their service providers.

Read the full blog post to learn the other reasons why the Kieper opinion provides an ideal opportunity to review your company's marketing practices and oversight of service providers.

Read the FTC's complaint here.


Correction:

Last week's item about Olympic advertising, "Don't DQ Your Brand by Going for the Gold," incorrectly linked to another Venable blog post. The correct link to the story is here. We apologize for any inconvenience.