Retail & Consumer Products Law Observer

Retail & Consumer Products Law Observer

Legal Insight for the Retail and Consumer Products Industry

“Do Not Resuscitate”: Lessons for Advertisers

Posted in Advertising & Product Risk Management

The DNR Tattoo

Last week, the Associated Press reported the fascinating story of an unconscious man admitted in acute distress to Miami’s Jackson Memorial Hospital. The words “Do Not Resuscitate” were tattooed across his upper chest, where one would see them before engaging in chest compressions. He carried no identification, so the medical staff could not reach his next of kin. A decision had to be made immediately, however: do we attempt to revive him?

© Getty Images

If doctors took the tattoo at face value, the patient would die. If they rejected the literal words, reading ambiguity into it (perhaps it was merely the result of youthful indiscretion), he might live. The stakes could not have been higher. “We’ve always joked about this, but holy crap, this man actually did it,” said the attending ER physician. “You look at it, laugh a little, and then go: Oh no, I actually have to deal with this.” Fortunately, Jackson Memorial has an ethics team on call for these kinds of situations, and after swift consideration, they recommended that the doctors honor the man’s tattooed request — they allowed the man to die.

Apparently, this is not the first DNR tattoo story. An author in the Journal of Internal Medicine writes of a patient admitted to the hospital for serious surgery, who had the letters “D.N.R.” tattooed on his sternum. When interviewed as part of preoperative procedure, he indicated that he in fact did want to be resuscitated if he went into arrest during surgery, contrary to what was written on his chest. He explained that he acquired the DNR tattoo after losing a drunken poker bet. The author dryly remarks, “It was suggested that he consider tattoo removal to circumvent future confusion about his code status.” The patient declined, however, saying that “he did not think anyone would take his tattoo seriously…”

Can Advertisers Be Taken at Their Word?

The tattoo story has me thinking about its application to advertising. In our line of work, we are frequently confronted with ad copy that expressly says one thing, but arguably implies something else. Indeed, most comparative advertising disputes arise from this kind of situation. The advertiser has carefully crafted a claim, believing it to be truthful and well substantiated. A challenger argues that the literal words may be true, but that the claim also implies something different, and that the different implication is false. Very few sophisticated advertisers are careless or unscrupulous enough to communicate literally false claims. Arguing about implied claims is where the action is.

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Subverting Democracy, Advertising, and the Economy Through Bots

Posted in Advertising & Product Risk Management

The word “bot” is a double-entendre. It refers both to the larval stage of the bot-fly, a rather gruesome internal parasite (warning, link not for the squeamish) and to a software application that runs automated scripts on the internet in highly repetitive fashion—also with parasitic effects. Internet bots can be programmed for good or evil. This post refers to the latter kind.

© Thinkstock

Use of Bots for Ad Fraud

The dominant model of compensation for digital advertising remains the CPM, or cost per thousand impressions. Impressions are simply ad views, that is, the successful delivery of a specific advertisement to a consumer’s web browser. (We adopt the fiction that it has been “viewed” so long as it appears for some period of time on the consumer’s screen.) There is robust debate on what an impression actually means with respect to non-static ads, such as videos, for which compensation may flow even if the consumer sees only a few seconds of the entire video. A publisher, such as a website, will offer advertisers a sliver of their online real-estate at a given CPM rate, and will thereafter be compensated by advertisers at that rate for how many impressions have been generated.

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Quincy Biosciences: What the decision means for advertising of health claims, and what it means to the FTC

Posted in Advertising & Product Risk Management

You may have seen the commercial on late night television. A glowing image of a human brain appears (along with a disclosure stating “dramatization”), with flashing lights pulsing through a crisscrossed mesh, depicting nerves. The voiceover intones, “Your brain is an amazing thing. But as you get older, it begins to change, causing a lack of sharpness or even trouble with recall.” So far, so good. Who, of a certain age, hasn’t experienced these symptoms?

The voiceover continues: “Thankfully, the breakthrough in Prevagen helps your brain and actually improves memory.” The flashing lights grow stronger and zoom more quickly across the neural net. “The secret is an ingredient originally discovered in jellyfish. In clinical trials, Prevagen has been shown to improve short term memory. Prevagen, the name to remember.”

A screen shot of the key frame, showing a graph of what appears to be recall improvement over time appears, along with a disclosure that states that “in a computer assessed, double-blinded, placebo controlled study, Prevagen improved recall tasks in subjects.”

© Prevagen

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It’s Only A Game. Or Is It? Advergaming In The Digital Age

Posted in Advertising & Product Risk Management

Consumers are winning in the digital age. And marketing teams are being forced to think outside of the box.

© Getty Images

According to a recent study, people would rather give up their spouse, or go to prison if it means they won’t lose their smartphone. On top of that, consumers are “cutting” or “shaving” the cord to traditional television and demanding more flexibility in how they view content. Nielsen data shows that between 2011 and 2017, traditional TV viewing by 18-24 year olds dropped by almost 12 hours a week, or by roughly 1 hour 40 minutes per day. In addition, online advertisers are employing targeted advertising whereby consumers are exposed to ads that reflect their interests. As a consequence, consumers are becoming increasingly difficult for marketers to reach and businesses are struggling to find ways to bridge this gap.

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Soda Stays Safe in San Francisco

Posted in Advertising & Product Risk Management, Product Liability & Torts

© Getty Images

Ninth Circuit Blocks Sweet Drink Warning Labels Pending Free Speech Lawsuit

The Ninth Circuit dealt a blow to the war on sugar last month, calling the warning labels a San Francisco ordinance would require on sweet drinks “deceptive” and blocking the mandate on free speech grounds. As we have discussed before, cities and counties across the nation have been launching an offensive against sugar for years. Favorite methods of attack include bans on large sugary drinks, taxes on sugar in drinks by volume, and now, warning labels.

While the USDA, FDA, and American Heart Association all have backed policies aimed at limiting sugar consumption, these policies have received mixed reviews from consumers and courts. A state judge knocked down the New York City ban on large sodas in 2013, calling it “arbitrary and capricious.” More recently, sugar taxes have been protested by unions in Philadelphia, sparked class-action litigation in Illinois, and were outright repealed in Cook County after only three months of implementation because residents began crossing state and county lines to avoid them.

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Report on the Autonomous Vehicle Safety Regulation World Congress 2017

Posted in Privacy & Data Protection, Product Liability & Torts

The big takeaways from The Autonomous Vehicle Safety Regulation World Congress centered on the importance of a federal scheme for AV regulation and the reality of the states’ interest in traditional issues such as traffic enforcement, product liability, and insurance coverage. In keeping with those messages, the World Congress kicked off with NHTSA Deputy Administrator and Acting Director, Heidi King, speaking about NHTSA’s goals and interest followed almost immediately with wide participation from the states including California, Michigan, and Pennsylvania, among others.

Deputy Administrator King emphasized NHTSA’s desire to foster an environment of collaboration among all stakeholders, including the states.  Ms. King emphasized that safety remains the top priority at NHTSA.  NHTSA has provided some guidance, and looks forward to hearing from stakeholders about the best way to support and encourage growth in autonomous vehicles.  NHTSA wants to provide a flexible frame work to keep the door open for private sector innovation.  It is necessary to build public trust and confidence in the safety of autonomous vehicles, and that can only accomplished by all stakeholders working together.

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Court Dismisses FTC’s Unfairness Claims Against D-Link

Posted in Advertising & Product Risk Management

© iStock

Earlier this month, the Northern District of California dismissed FTC’s unfairness claims against D-Link, a manufacturer of routers and IP cameras, while allowing most of FTC’s claims rooted in deception to survive, suggesting that traditional false advertising actions may be FTC’s most effective means of addressing suspect data security practices. Further, the Northern District of California’s decision to dismiss the unfairness claims shows this court’s unwillingness to entertain data security actions rooted in the FTC’s unfairness prong, without concrete harm.

Deception

FTC filed suit against D-Link in January of this year, alleging that the company engaged in both deceptive and unfair practices based on D-Link’s claimed flimsy data security practices. Specifically, the FTC alleged that D-Link engaged in deceptive practices by marketing sophisticated and state-of-the-art security provided with its products, while simultaneously failing to protect users from “widely known and reasonably foreseeable risks of unauthorized access.” For example, D-Link touted that its products featured “the latest wireless security features to help prevent unauthorized access” and offered the “best possible encryption.” But in practice, according to FTC’s pleadings, D-Link failed to take “easily preventable measures” against “hard-coded user credentials and other backdoors.” And, the Northern District held, these accusations were sufficient to plead a deception claim under the FTC Act. However, where the company did not specifically market its data security practices, its advertising was not deceptive – such as in a brochure where D-Link described the camera as a “surveillance camera” for the “home or small office.” Indeed, where D-Link did not refer to its digital security, the court would not imply messages about the state of that security.

Unfairness

Notably though, the Northern District dismissed FTC’s claims that, because D-Link failed to provide adequate data security, it engaged in unfair practices. Specifically, the court found that, because the FTC could not plead actual harm, it had not sufficiently pled a violation of the FTC Act. FTC was unable, the court noted, to show any “monetary loss or an actual incident where sensitive personal data was accessed or exposed.” It was not enough to plead that D-Link put customers at risk.

The Northern District did not, however, completely close the door on potential unfairness claims against D-Link. Choosing to dismiss the claims without prejudice, the Northern District noted that “[i]f the FTC had tied the unfairness claim to representations underlying the deception claims, it might have had a more colorable injury element.” Accordingly, where a company does not make affirmative representations about its data security practices, a court will likely be reluctant to find a violation of the FTC Act without concrete injury.

Webinar: Cyber Reputation Defense

Posted in Events

Join Us for a Webinar – Tuesday, October 10, 2017 12:00 – 1:00 PM ET

It’s been said that “A lie gets halfway around the world before the truth can even pull its boots on.” In today’s world of online commentary and social media, this is truer than ever.

In the cyber-world, you or your company may be accused of selling defective goods, providing poor service, misleading customers, defrauding the government, or committing unethical or criminal conduct. These accusations can appear in e-mails to your clients or government enforcement agencies, as posts on blogs or company websites, or in streamed videos on social media. What’s more, they can be made or circulated by competitors or persons cloaked behind the anonymity of the internet, making it difficult (but not impossible) to hold responsible persons accountable.
As a result, internet defamation cases are on the rise. A surprise reputational attack in the cyber-world requires quick thinking and a game plan.

Please click here to register for this webinar, or click here to view the event on Crowell.com.

This 60 minute webinar will cover the:

  • types of growing internet defamation (and sometimes intellectual property infringement) cases
  • “hot” litigation issues, including First Amendment anonymity, Communications Decency Act Section 230, and personal jurisdiction issues
  • related anti-SLAPP statute issues
  • steps to defend your online reputation

Presenters:

 

 

A Science-Driven Agency Makes a Science-Based Decision: FDA Acknowledges Qualified Health Claim Aimed at Preventing Peanut Allergies

Posted in Product Liability & Torts

© USDA

Earlier this month, the U.S. Food and Drug Administration announced that it would allow infant food manufacturers to use a qualified health claim on their labeling to characterize the relationship between consumption of ground peanuts by infants beginning between 4 and 10 months of age and a reduced risk of developing peanut allergy by age five. The precise language FDA will allow reads:

For most infants with severe eczema and/or egg allergy who are already eating solid foods, introducing foods containing ground peanuts between 4 and 10 months of age and continuing consumption may reduce the risk of developing peanut allergy by 5 years of age. FDA has determined, however, that the evidence supporting this claim is limited to one study.

If your infant has severe eczema and/or egg allergy, check with your infant’s healthcare provider before feeding foods containing ground peanuts.

Qualified health claims must be supported by credible scientific evidence, a less rigorous standard than the “significant scientific agreement” requirement for authorized health claims. Here, FDA found support for the qualified claim in the same studies that moved the National Institute of Health to issue updated guidelines for the early introduction of peanut-containing foods in infants.

FDA’s decision is notable for several reasons. First, it was the first time the agency approved a health claim aimed at preventing a food allergy. FDA acknowledges that food allergies are an increasing and serious public health issue that requires the agency’s attention. This is one of many tools it has available to address the problem.

Second, it showed the FDA’s willingness to loosen restrictions on allowable disease prevention claims within its existing regulatory framework when presented with sound, scientific evidence demonstrates. In this case, the agency was responding to a manufacturer’s petition.

Third, it showed FDA Commissioner Scott Gottlieb’s willingness to step into the role of the nation’s doctor. FDA’s announcement was accompanied by a statement from Dr. Gottlieb, in which he addressed concerns about food allergies and possible prevention as both a parent and physician. He has spoken similarly on other public health issues, most recently on the opioid addiction crisis, and thus has demonstrated a willingness to encroach on questions traditionally in the realm of the practice of medicine, an area the agency typically avoids.

Achieving regulatory changes in the current political environment is challenging, but this decision demonstrates that FDA will respond to requests based on sound scientific evidence to relax rules that otherwise limit what manufacturers can say about their products. Manufacturers whose products show demonstrable health benefits may thus want to consider similar requests to secure greater marketing flexibility.

President Nominates Attorney Dana Baiocco to Consumer Product Safety Commission

Posted in Product Liability & Torts

© Thinkstock

President Trump has nominated Dana Baiocco to be Commissioner of the Consumer Product Safety Commission. The appointment is for a term of seven years beginning on October 27, 2017. Ms. Baiocco is currently a litigator at Jones Day. According to her firm’s bio, she has litigated cases involving “mass torts, consumer and industrial products and medical devices” and has counseled clients on “minimizing risks, regulatory and reporting obligations, warranties, and CPSC product recalls.”

This nomination is significant. With the expiration of Democratic Commissioner Marietta Robinson’s term in late October, Baiocco’s eventual Senate confirmation will shift the Commission’s balance of power. Specifically, it will mark an end to the unusual dynamic of the Commission being led by a “Minority Chair” (Republican Commissioner Ann Marie Buerkle), who does not command a 3-2 voting majority based on political party. Upon Baiocco’s confirmation, Republicans will regain the Commission’s majority.

Our prior blog posts have reflected on Acting Chair Buerkle’s philosophy and priorities for the Commission, which may now start to come into fruition. Assuming Acting Chair Buerkle is confirmed as Chairman later this month, with the new Republican majority, we can now expect the Commission under the Trump Administration to come into focus and likely reflect some of the Administration’s regulatory priorities.

We congratulate Dana Baiocco on her nomination, and expect her confirmation in the coming months.