False Advertising

News & Analysis as of

SEC Charges Investment Adviser for Misleading Performance Advertising

In a settled action, the SEC charged an investment adviser for false advertising and its chief compliance officer on related matters. The defendants did not admit or deny the charges....more

Guidelines to Avoid False Advertising

When making an advertisement, what is okay? • Identifying a competitor’s product in the advertisement to make a true comparison • Making a true statement about your product or a competitor’s product that is...more

Two-Party Market: Presumption of Confusion and Injury

Merck Eprova AG v. Gnosis S.p.A., et al. - Clarifying applicable presumptions in Lanham Act false advertising cases, the U.S. Court of Appeals for the Second Circuit affirmed a district court’s use of presumptions of...more

A New Data Point on False Advertising, Causation, and Section 75-1.1

Earlier this year, in another false-advertising case, SMD Software, Inc. v. EMove, Inc., a plaintiff won a 1.7-million-dollar verdict based on section 75-1.1 alone. The jury instructions in that case did not specify what...more

Supreme Court Allows POM Wonderful to Sue Coke for False Advertising, Despite Its Apparent Compliance with FDA Regulations

In a unanimous decision, the Supreme Court in POM Wonderful LLC v. The Coca Cola Co. (June 12, 2014) held that the Food, Drug, and Cosmetic Act (FDCA) does not preclude a private party from bringing a Lanham Act claim...more

Legal Alert: CFPB Warns Credit Card Companies About Potential UDAAP Violations When Marketing Promotional Interest Rates

The Consumer Financial Protection Bureau (CFPB) issued a bulletin on September 3, 2014 warning credit card companies that marketing materials for promotional annual percentage rate (APR) offers may be in violation of the...more

CFPB Warns Credit Card Companies Against Deceptively Marketing Promotional Offers

On September 3, the CFPB warned credit card companies against deceptively marketing interest-rate promotions, over concerns about companies luring in consumers with offers of reduced or zero interest for a specific purchase...more

California Supreme Court Clarifies an Insurer’s Duty to Defend in Disparagement Cases

Advertising injury liability coverage offered under commercial general liability (“CGL”) policies is aimed at protecting companies against claims, often brought by competitors, alleging harm by purportedly derogatory...more

Week in Review

Some popular online services made legal headlines this week. After years of litigation, a federal appeals court held that Yelp did not extort businesses by manipulating user reviews to coerce advertising purchases. While Yelp...more

The Supreme Court Resolves a Circuit Split Regarding Standing to Sue for False Advertising Under the Lanham Act

In Lexmark Int’l, Inc. v. Static Control Components, Inc. (March 25, 2014), the Supreme Court unanimously held that "to invoke the Lanham Act’s cause of action for false advertising, a plaintiff must plead (and ultimately...more

Third Circuit Nixes Presumption of Irreparable Harm in Comparative False Advertising Cases

Continuing a trend that began in 2006 with the Supreme Court’s decision in eBay Inc. v. MercExchange, L.L.C., the U.S. Court of Appeals for the Third Circuit has ended the practice of presuming irreparable harm in Lanham Act...more

11 Ways to Avoid Advertising Missteps

Although advertisements are everywhere, many companies are not aware of the numerous state and federal laws and regulations that govern advertising. Below are several basic advertising concepts to help spot and avoid...more

Lanham Act Claims Are Not Precluded by Compliance with the FDCA

In POM Wonderful LLC v. Coca-Cola Co., decided last month, the U.S. Supreme Court confirmed that companies can bring unfair competition actions under the Lanham Act even when their competitors have complied with the Federal...more

Second Circuit Clarifies the Use of Legal Presumptions of Consumer Confusion and Injury in Certain Lanham Act Cases

On Tuesday, July 29, the United States Court of Appeals for the Second Circuit “clarified certain aspects of [its] false advertising jurisprudence” and held that, where literal falsity and deliberate deception have been...more

CFPB Fines Online Mortgage Company And Its Owner For Alleged Deceptive Rate Advertising

On August 12, the CFPB announced a consent order with a nonbank mortgage lender, its affiliated appraisal management company (AMC), and the individual owner of both companies to resolve allegations that the lender deceptively...more

$3.5 Million Cactus Juice Settlement Should be a Warning to Advertisers

In this health-conscious age, consumers are always on the lookout for new products which will improve wellness and quality of life. Marketers attuned to this trend may be tempted to increase sales by extolling the virtues of...more

Oregon, Washington, Vermont Join 33 States Suing over 5-Hour Energy Drink

Oregon, Washington State and Vermont say the slogans for 5-Hour Energy drink are hype that is misleading. Last week the Attorneys General of all three states filed lawsuits against the drink’s maker, Living Essentials LLC and...more

Ninth Circuit Holds State AG Credit Card Add-On Suits Belong In State Court

On August 1, the U.S. Court of Appeals for the Ninth Circuit held that neither the federal question statute nor the Class Action Fairness Act provide a federal district court with subject matter jurisdiction over the Hawaii...more

How Not To Market Your Business Online (Even If It Works): Claims Against Fake Review Sites And Stolen Obituary Photos Survive...

Despite celebrity endorsements from the likes of Dennis Miller and Alan Thicke, all that glitters isn’t gold when it comes to the marketing of precious metal investments. In March 2014, American Bullion, Inc., which is in the...more

What a Tangled Web We Weave, When First We Practice to Deceive: Second Circuit Holds that “Deliberate Deception” Creates Legal...

On July 29, the Second Circuit clarified its view that, in a two-player market, willfully deceptive advertising – even non-comparative advertising – creates a legal presumption of consumer confusion and injury, applicable to...more

Two Consumer Class Actions Settle for (Mostly) Nominal Amounts Per Plaintiff

Two recent false advertising class action settlements illustrate some of the myriad ways to structure settlements, and also reflect the real risks of these lawsuits when early-stage efforts to dismiss them are...more

Second Circuit Issues Decisions on Lanham Act False Advertising Case

On July 29, 2014, the Second Circuit decided a Lanham Act false advertising case that clarified the circuit’s jurisprudence on demonstrating consumer confusion and competitive injury. In Merck Eprova AG v. Gnosis S.P.A. and...more

Advertising Law - July 2014 #4

COPPA Gets Parental Consent Updates - With changes that should make it easier to develop child-directed apps, the Federal Trade Commission recently updated its guidance for verifying parental consent under the...more

Advertising Law - July 2014 #3

Suit Seeks To Include E-Mail Address Under Song-Beverly Protections - First zip codes, now e-mail addresses? According to a new complaint filed in California federal court against Express Fashion Apparel, LLC,...more

Creating Fake Customer Reviews Site Could Be False Advertising and Trade Libel

As evidenced by the success and robust market capitalization of the consumer review site Yelp, Internet users are increasingly turning to "regular people" as a lodestar for whether to purchase goods or services. This is...more

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