MX: Not All Endorsements Are Alike

Companies failing to follow the FTC’s revised endorsement guidelines risk prosecution and public disclosure of their product research and testing.

The famous line “you like me, you really like me!” is attributed to Sally Field in her 1985 Oscar acceptance speech for the lead actress role in Places in the Heart. The phrase entered popular culture as Field’s over-the-top expression of appreciation for her peers’ endorsement.

However, Field was misquoted. She actually said, "I haven't had an orthodox career, and I've wanted more than anything to have your respect. The first time I didn't feel it, but this time I feel it, and I can't deny the fact that you like me, right now; you like me!” According to Wikipedia and other sources, the phrase "you like me" was originally from Field’s wry, understated reply during a key scene in Norma Rae, a material connection missed by most people.

In the case of Sally Field the most serious fallout of the misunderstood response that her peers “really” liked her has been ridicule and satire. However, misstated endorsements have can have much more serious repercussions for device companies and other businesses. These overall concerns were raised by the FTC’s 2009 revisions to the Guides Concerning the Use of Endorsements and Testimonials in Advertising), the first revisions since 1980. (16 CFR § 255 et seq.)  For medical device companies, the revised Guides are particularly important, especially as they relate to doctors’ endorsements. As highlighted in its 2011 Chairmen Report , the FTC places a high priority on preventing deceptive or unfair health and safety claims relating to product endorsements, particularly given the growing use of social media.

Definition of Endorsement
The revised Guides define an endorsement as “any advertising message (including verbal statements, demonstrations, or depictions of the name, signature, likeness or other identifying personal characteristics of an individual or the name or seal of an organization) that consumers are likely to believe reflects the opinions, beliefs, findings, or experiences of a party other than the sponsoring advertiser, even if the views expressed by that party are identical to those of the sponsoring advertiser.”

The revised Guides make it clear that endorsements must meet the following criteria: They must be honest and the actual opinions of the endorser. The endorsement must be “in context.” If the advertiser states that the endorser used the product, it must reflect use before the endorsement. The advertiser must “disclose material connections between themselves and their endorsers.” Both endorsers and advertisers can be subject to liability if they do not comply with the revised Guides.

The revised Guides give the following example:

A skin care products advertiser participates in a blog advertising service. The service matches up advertisers with bloggers who will promote the advertiser’s products on their personal blogs. The advertiser requests that a blogger try a new body lotion and write a review of the product on her blog. Although the advertiser does not make any specific claims about the lotion’s ability to cure skin conditions and the blogger does not ask the advertiser whether there is substantiation for the claim, in her review the blogger writes that the lotion cures eczema and recommends the product to her blog readers who suffer from this condition. The advertiser is subject to liability for misleading or unsubstantiated representations made through the blogger’s endorsement. The blogger also is subject to liability for misleading or unsubstantiated representations made in the course of her endorsement. The blogger is also liable if she fails to disclose clearly and conspicuously that she is being paid for her services. In order to limit its potential liability, the advertiser should ensure that the advertising service provides guidance and training to its bloggers concerning the need to ensure that statements they make are truthful and substantiated. The advertiser should also monitor bloggers who are being paid to promote its products and take steps necessary to halt the continued publication of deceptive representations when they are discovered. (Emphasis added.)

The above example makes clear that endorsements must also have appropriate scientific substantiation and are not themselves adequate substantiation of the statements made regarding performance or attributes of the product advertised.

Substantiation, ‘Typicality,’ and POM
In addition to scientific substantiation generally, the endorser’s experience also must represent what consumers will generally experience. That is, the scientific substantiation also must support the “typicality” of the experience. In this regard, medical device companies must use caution when using doctors to endorse their product. The revised Guides warn that if a medical doctor states in an advertisement that a consumer’s use of a product will help the consumer achieve certain results, then the doctor must have adequate support—as judged by peers with the same degree of expertise--for her statement. Otherwise, the endorsement is deceptive.

An ongoing case exemplifies the FTC’s position. The commission continues to prosecute POM Wonderful LLC for alleged false and unsubstantiated claims that its products will prevent or treat heart disease, prostate cancer, and erectile dysfunction. In the POM case, the FTC alleges that the medical research simply does not support the “typical” experience and that POM’s disclaimers do not overcome the purported deception caused by the medical endorsements. Here the commission is asserting that sometimes disclaimers such as “results not typical” or the stronger “these testimonials are based on the experiences of a few people and you are not likely to have similar results” will not suffice to overcome the lasting impression of advertising that involves an “atypical” consumer endorser’s experience.

The POM case also should make medical device companies mindful that when the endorser and the advertiser have a connection that might materially affect the weight or credibility of the endorsement, the advertiser must fully disclose this connection. Financial compensation from advertiser to endorser is one such connection. In the POM case, a single doctor was paid for his research by the company, according to the FTC. He had conducted more than 80% of the medical research substantiating the medical endorsements related to the POM product.

The revised Guides set forth the following example: If an advertisement refers to endorser of a hearing aid simply as “doctor,” the ad likely implies the endorser is a medical doctor with substantial experience in the area of hearing. Accordingly, the advertisement must make clear the nature and the limits of the endorser’s expertise in order to prevent deceptive endorsement of the product. Further, if the endorsing doctor receives a percentage of sales for the product, owns part of the product company, or otherwise receives benefits from the sales of the product, the advertisement must clearly and conspicuously disclose the endorser’s connection, even if consumers expect a physician to receive compensation for endorsing a product.

In addition to the above example, the revisions offer several other instances of what might appear to be innocuous situations but which are, in fact, material connections requiring disclosure. In one example, a college student and reputed video game expert blogging about gaming experiences from using free copies must disclose that he receives the games for free. In another example, a music enthusiast posting comments promoting a leading playback device in an online message board designated for discussions of new music must disclose that he is the manufacturer’s employee. Still another example notes that a young man taking part in a “word-of -mouth” campaign talking to his or her friends about particular products in exchange for prizes must disclose these incentives. In all of these instances, the “compensation” would materially affect the weight or credibility of the endorsements, and the advertiser must disclose the connection.

Increased Risk of Prosecution
It is clear that companies failing to follow the revised Guides face risk of prosecution by the FTC and disclosure of a company’s product research and testing to the public. Since the FTC released the updated Guides in 2009, it has aggressively pursued offending companies across industries for deceptive endorsements. With regard to health-related claims, the FTC brought and settled actions against The Dannon Company  and Iovate Health Services USA . In each case the FTC charged the respective companies with making false and unsubstantiated claims that certain health benefits resulted from use of each product.

In 2010 and 2011, the FTC has obtained consent judgments in at least three actions involving the revised Guides. In one case, the FTC charged that Reverb Communications Inc. (FTC File No. 0923199) engaged in deceptive endorsement by using employees posing as consumers to post online reviews without revealing that the posters were employees. In another example, Legacy Learning Systems (FTC File No. 1023055) engaged in deceptive endorsement by misrepresenting statements made by affiliates as independent, ordinary consumers and by failing to disclose that the endorsers received compensation based upon sales of the product. In yet another case, the FTC charged that Nonprofit Management LLC (FTC File No. 1023064) engaged in deceptive endorsement by failing to disclose that the company owned and operated the two endorsing organizations.

Medical device companies using endorsements to advertise the health benefits of their products should look closely at the revised Guides in order to ensure that their endorsements are compliant. Rigid honesty, appropriate context, and disclosure of material connections will allow companies to state in a straightforward way that consumers and customers “really” do like you.

References   
1. See http://www.ftc.gov/os/2011/04/2011ChairmansReport.pdf.
2.See http://www.ftc.gov/os/adjpro/d9344/index.shtm. (FTC File No. 0823122.)
3.The FTC charged Dannon with making false and unsubstantiated claims that its DanActive probiotic dairy drink and its Activia probiotic yogurt reduced the likelihood of getting a cold or the flu. See http://www.ftc.gov/os/caselist/0823158/index.shtm.(FTC File No. 0823158.)
4.The FTC charged Iovate with making false or deceptive claims related to seven dietary supplement products. Seehttp://www.ftc.gov/os/caselist/0723187/index.shtm.

Maureen Beacom Gorman, JD, is a trademark attorney with Marshall, Gerstein & Borun (Chicago), a firm that specializes in intellectual property law. She can be reached at [email protected].

 

 

 

 

 

 

 

Gregory J. Chinlund, JD, is a partner with Marshall, Gerstein & Borun.

 

 

 

 

 

 

 

 

Tiffany D. Gehrke, JD, is an associate with Marshall, Gerstein & Borun.
 

500 characters remaining