What is Misleading Advertising?
From Trade Regulation Talk, we learn about "Puffery" and Lanham Act.
False Advertising ClaimsFor 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?
Comments
Well, I for one favor protection for "puffery" because: (1) the consumer should bear some responsibility for his/her buying decisions; and, (2) if we, in effect, criminalize one another's promotion of our services and products, we over-burden commerce with legalism. This is particularly true until we find a way to compensate consumers in a better fashion than the current class action paradigm does, i.e., hardly at all.
Posted by: Victoria Pynchon
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February 5, 2008 2:26 PM
Victoria;
Puffery as a legal defence to misrepresentation allows franchisors to:
a) say things that they know are false, such as "be your own boss";
b) intend for people to rely upon them;
c) know that people will;
d) and be able defend their lying by calling it puffery.
On, the other hand, in the recent FTC Action against Q-Ray Bracelet, the puffery defence was not allowed.
Q-Ray claimed miraculous things for its copper bracelet - claims so extravagant that no reasonable person could have relied up them.
Of course the whole thing was a fraud - but, the puffery defence was simply brushed aside. (Actually, the defence was a little bit more subtle than that.)
I am going to do a fuller post on this issue, trying to a Law Professor to explain further his article "The Best Paper on Puffery"
It is pretty good.
Posted by: Michael Webster | February 5, 2008 2:48 PM