COMPARATIVE ADVERTISING
Jeffrey H. Brown
Katrina G. Hull
July 17, 2013
What is Comparative Advertising?
 Advertising - communications to the public that promote the
purchase of goods or services.
 For example, commercials, point of sale, websites, banner ads, email
blasts, Facebook pages, tweets, texts, direct mail.
 Can be an effective way to inform prospective purchasers
about your products or services and how they compare to
your competition.
 Must comply with general principles applicable to
advertising.
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General Advertising Principles Apply to
Comparative Advertising:
 Advertisers must have a reasonable basis to
substantiate objective claims in their advertisements
before the ads are disseminated.
 Requirement applies to all reasonable takeaways – not
just those intended.
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What laws apply? Who can challenge a
comparative advertisement?
 FTC
 State Attorney Generals
 Competitors
 State and federal claims
 NAD (National Advertising Division of the Better Business
Bureau)
 Trade Organizations
 Consumers
 Individual / class action
 State / federal claims (including consumer fraud)
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Elements of a federal false advertising claim under
Lanham Act § 43(a)
 A false or misleading statement of fact about a product
or service offered in interstate commerce;
 Such statement either deceived, or had the capacity to
deceive a substantial segment of purchasing
customers;
 The deception is material to a consumer’s purchasing
decision;
 The plaintiff has been or is likely to be injured as a
result of the statement at issue.
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“Literally false” versus “literally true” under the
Lanham Act
 Claims that are literally false do not require evidence of
the impact of the claims on consumers.
 Claims that are literally true require the challenger to
submit evidence that the false or misleading
implications were material, i.e. the claims had a
tendency to influence purchasing decisions.
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Has an advertising “claim” been made?
 An advertising “claim” makes a specific promise or
quantifiable statement about a product or service. A “claim”
can be tested and proven either true or false.
 Puffery is not a claim because puffery is a statement of pure
opinion.
 Express claims are claims literally made in an advertisement.
Example: Drinking orange juice prevents colds.
 Implied claims are claims made indirectly or by inference.
Example: Orange juice contains vitamin C and vitamin C
strengthens your immune system’s ability to fight off colds.
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What is puffery?
 “Puffing” is a “seller’s privilege to lie his head off, so
long as he says nothing specific, on the theory that no
reasonable man would believe him, or that no reasonable
man would be influenced by such talk.” Prosser &
Keeton on the Law of Torts § 109 (5th ed. 1984).
 “Puffing” is “exaggerated advertising, blustering and
boasting upon which no reasonable buyer would rely and
is not actionable under 43(a).” Southland Farms v.
Stover Seed Co., 108 F.3d 1134, 1135 (9th Cir. 2997).
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What is puffery? (continued)
 “Best in the World.”
 “America’s Favorite Pasta.”
 “3DO, The Most Advanced Home Gaming System in
the Universe.”
 “POWERADE” is “The Complete Sports Drink.”
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What is puffery? (continued)
 The weight of a Dyson vacuum is “backbreaking” as
compared to Oreck’s nine-pound vacuum.
 Huggies diapers “fit more naturally” than competing
diapers.
 “Better Ingredients. Better Pizza.”
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Express Claims vs. Implied Claims
 An express claim makes a straightforward statement,
such that an advertiser typically does not make an
express claim unless clear substation exists for the
claim. Example: Three out of four dentists recommend
FRESH brand toothpaste.
 “Tests prove” claims are often express claims.
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Express Claims vs. Implied Claims (continued)
 Many express claims also involve at least some
implication:
 PENNZOIL oil “outperforms any leading motor oil against
viscosity breakdown.”
 PENNZOIL oil provides “longer engine life and better engine
protection.”
 DUNLOP golf balls are the “longest” ball on the pro tour.
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Express Claims vs. Implied Claims (continued)
 The tagline “Better Ingredients. Better Pizza.”
combined with the following statements:
 Advertiser’s pizza sauce uses “fresh pack” vine-ripened
tomatoes as compared to competitor’s use of tomato paste to
make its sauce.
 Advertiser’s pizza dough is made from filtered water as
compared to competitor’s use of tap water to make its dough.
 A cartoon baby bear with toilet paper bits stuck to his
bottom before mother bear gives him a disapproving
look and then hands him the advertiser’s toilet paper,
after which no more toilet paper is stuck to the baby
bear’s bottom.
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Express Claims vs. Implied Claims (continued)
 The voice over stating, “To kill roaches in 24 hours it’s
hot shot MAXATTRAX. MAXATTRAX is the no-wait
roach bait,” combined with the following split screen:
 A pristine kitchen with MAXATTRAX poison bait combined with
a scene depicting “roach hell” in the second kitchen and
roaches kicking over the competitor’s poison bait.
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What Substantiation is Required?
 In some contexts, no substantiation can equal per se liability
 Type of substantiation required depends upon claim
 Objectively verifiable – tests must meet industry standards, must be
statistically significant, unbiased
 Subjective claims (e.g. taste tests) – consumer surveys (conducted by
professionals)
 What doesn’t suffice?
 Anecdotes
 Personal experiences
 Testimonials
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Considerations for Consumer Surveys / Consumer
Preference Studies
 Who? What? Where? When? How?
 Impacts claims that can be made
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Considerations for Consumer Surveys / Consumer
Preference Studies (continued)
 Who participates in the test?
 Do you have adequate demographic / geographic test results?
 Are the tests being conducted at appropriate locations?
 Multiple sites? Varied locations, times, days?
 Have you tested the relevant competitive universe?
 How many people do you need to test?
 Testing Protocol
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Consumer Tests Can Also Be Used To Test
“Takeaway” Of Advertisement
 Consumer tests can establish consumer understanding
of competitor’s advertisement when more than one
meaning
 Preference is for open ended, rather than closed ended
questions (to avoid bias)
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Rules of the Road – Key Takeaways
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Importance of apples to apples
Importance of relationship between claim and test
Comparative advantage must be meaningful
Comparison cannot be overstated
Advertiser cannot ignore non-supportive test data
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Options When Competitors Cross the Line
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Substantiation demand
Responsive advertising
Media challenge
Possible government involvement
Complaint for false advertising
NAD challenge
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What is NAD?
 NAD is the National Advertising Division of the Better
Business Bureau. NAD provides a “voluntary”
administrative process under which attorneys with
expertise in advertising claim substantiation review
challenged claims.
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NAD vs. Federal Litigation
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Burden of proof
Costs
Availability of counterclaims
Discovery
Speed of Resolution
Damages and other remedies
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Before you take action . . .
 Are the claims impacting business?
 Are there damages or other considerations?
 How will this play out in the media and the social
media?
 Is your business vulnerable to possible counterclaims
for its own advertising?
 Will this type of competitor suit prompt a consumer
class action suit?
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