How To Make Sure Your Trademarks Are Not False Advertising

A brand’s trademark can be false advertising. Brands that forego that analysis may find themselves in a sticky legal situation.

Brands are accustomed to clearing trademarks to determine whether they violate a third party’s intellectual property. To that end, they may request their trademark attorney evaluate trademark searches and advise regarding the mark’s availability for use and/or registration. In so doing, their counsel will consider the proposed trademark’s distinctiveness as well as any likelihood of confusion it creates in the marketplace. A third factor for evaluation may also be relevant. Could the trademark convey a false advertising claim?

A recent case before the National Advertising Division of the Better Business Bureau (“NAD”) illustrates the complexity of evaluating a trademark as an advertising claim. SharkNinja Operating LLC sells and markets a line of non-stick cookware products under the brand name “ Foodi NeverStick.” In addition to branding its cookware products with this name, SharkNinja claimed in national advertising that NeverStick cookware “never sticks, chips or flakes.” It also encouraged consumers to “grab the cookware that never sticks.” Finally, it asserted that the products had a “lifetime guarantee.” Sunbeam Products, a competitor to SharkNinja, challenged the product name and the advertising claims before the NAD.

The NAD is a forum where a brand can challenge a competitor’s national advertising in an industry-adopted self-regulatory process. The NAD applies the standards of Section 5 of the Federal Trade Commission Act. It evaluates advertising campaigns to determine if they include misleading, deceptive, or unfair commercial speech. If the challenged advertiser opts out of the process or fails to adhere to NAD’s recommendations, the NAD may refer the matter for further investigation to the Federal Trade Commission.

Precedent for Challenging Trademarks as Advertising

Even before the SharkNinja case, courts established long-time precedents holding trademarks to the same standards of truthfulness as advertising claims. For example:
• “Creamo Oleomargarine” was a deceptive trademark because cream was not a primary ingredient. Brougham v. Blanton Mfg. Co., 249 U.S. 495 (1919).
• Mylanta Night Time Strength” implied falsely that the product provided all-night relief or had some special attribute for nighttime. Novartis Consumer Health, Inc. v. Johnson & Johnson-Merck Consumer Pharmaceuticals Co., 290 F.3d 578 (3rd Cir. 2002).
• “Fresh. Local. Quality.” deceived consumers where its breads were made out of state, and the court upheld an $8 million jury verdict. Bimbo Bakeries USA, Inc. v. Sycamore, No. 13-cv-00749, 2018 WL 1578115 (D. Utah March 29, 2018).

Similarly, the NAD also has a lengthy set of precedents regarding finding trademarks to convey false advertising messages. Unlike a traditional court litigation, NAD may start with a presumption that consumers see brand names as a type of puffery. Accordingly, the NAD will look to see if the challenger has any extrinsic survey evidence to demonstrate consumers are confused or deceived. Absent such survey evidence or a finding that the product name is expressly false, NAD will usually decline to make a discontinuation recommendation.

For example, after considering consumer survey evidence, NAD recommended that:
• Sprint discontinue a slogan “America’s Newest Network” because consumers consumers could misunderstand the slogan to mean the network is superior to competitors. Sprint Corporation (Sprint Wireless Services), NAD Case Report No. 5812 (February 2015).
• an advertiser stop using the trademark “Fungi-Nail Toe & Foot” after more than 40 years. NAD found the trademark neither “whimsical” nor “hyperbolic.” Instead, it conveyed the expressly false message that the product treats toenail fungus as opposed to skin fungus. Kramer Laboratories, Inc. (The Original Fungi-Nail Toe & Foot Brand), NAD Case Report No. 6141 (Dec. 19, 2017).

Sunbeam’s Challenge of SharkNinja Advertising and Product Name

After considering the company’s product testing and the challenger’s rebuttal testimony, NAD encouraged discontinuance of SharkNinja’s advertising’s claims associated with the company’s product. NAD did find that SharkNinja’s testing may substantiate a monadic non-comparative claim about its cookware. In this instance, however, NAD interpreted the advertising claims as unsupported implied blanket superiority advertising claims against the entire category of non-stick cookware. That product category is known to lose its non-stick properties over time. Without any disclaimers or guardrails around its “never stick” advertising copy, NAD asserted that a reasonable consumer would interpret the advertising to mean that SharkNinja’s NeverStick cookware would have a greater resistance to sticking, chipping, or flaking than other non-stick cookware in the marketplace.

NAD also recommended that SharkNinja discontinue its “lifetime guarantee claim.” In fact, the product comes with only a five year guarantee, as stated in a confusing disclaimer “When used as directed. Lifetime based on 5 years of use.” NAD found the disclaimer to contradict the “lifetime” message. Taken as a whole, NAD thought reasonable consumers would purchase the pan based on the implied false messaging of a much longer guarantee.

On the other hand, the NAD determined that the “Never Stick” brand name would not be a misleading or false advertising claim in and of itself. The NAD conditioned its finding, however, on (i) the trademark being simply a brand name, and (ii) the context of advertising accompanying the name must not reinforce misleading overall superiority messages.

Why This Case Matters

While SharkNinja did not face a discontinuation recommendation for its trademark in this case, the NAD’s finding highlights the importance of evaluating a trademark based on the advertising context of its use and consumers’ understanding of the product category. The message for other advertisers is clear. A trademark may convey a false  advertising claim, especially when surrounded by unsubstantiated advertising claims that mislead consumers.

Here are the most important take-aways from this case:
• When choosing and clearing a trademark, a brand should consult with its trademark counsel regarding not only its availability for use and registration but what constraints the name may create on its advertising copy.
• Brands are responsible for the express and implied claims associated with their advertising, whether those claims are intended or not.
• In describing its products’ attributes, a brand should be careful not to use dangling unqualified superiority claims against all competitors. The standards for substantiating such claims are high.
• If a brand’s trademark includes a possible advertising claim, it is crucial that the brand have substantiation for all advertising claims beyond the product name. If not, the product name may be seen as an advertising claim, in need of substantiation and not simply as a brand trademark.
• When challenging a competitor’s trademark as an unsubstantiated advertising claim, consumer survey evidence may be persuasive to a fact-finder.

For more information about selecting and evaluating your trademarks and advertising claims, contact us here.