International Law

What is Misleading Advertising?

From Trade Regulation Talk, we learn about "Puffery" and Lanham Act.

False Advertising Claims

For purposes of the complaining lessors' Lanham Act claims, the district court's conclusions with respect to four of the five challenged statements rested on factual findings rather than legal conclusions. Thus, the Lanham Act claims were remanded, as well.

The defending copier equipment lessor's allegedly false statements that it would "deliver 95 percent up-time service" on its contracts and that it intended its contracts to be for a fixed term of 60 months could constitute false advertising actionable under Sec. 43(a) of the Lanham Act, the court ruled.

However, alleged statements that the defending lessor would provide its customers "low costs" and "flexibility" were puffery and thus could not constitute false advertising under the Lanham Act.

Puffery is an interesting legal concept.

According to the United States Court of Appeals for the Ninth Circuit;

"A statement is considered puffery if the claim is extremely unlikely to induce consumer reliance. Ultimately, the difference between a statement of fact and mere puffery rests in the specificity or generality of the claim.

'The common theme that seems to run through cases considering puffery in a variety of contexts is that consumer reliance will be induced by specific rather than general assertions.'

Thus, a statement that is quantifiable, that makes a claim as to the ?specific or absolute characteristics of a product,? may be an actionable statement of fact while a general, subjective claim about a product is non-actionable puffery."

Here is the paradox:

1. Most advertising is done in general and emotional language.
2. But most advertising is done with the intent to induce (unreasonable?) reliance.

So mere puffery protects false commercial speech, or is a defence to misleading advertising, even though the false commercial speech was intended to make consumers do something.

Does that sound right to you?

Full post as published by Misleading Advertising Law on February 05, 2008 (boomark / email).