FTC Publishes Final Guidelines Governing Testimonial Advertisements, Bloggers, Celebrity Endorsements

The Federal Trade Commission (“FTC”) recently announced the following:

The Federal Trade Commission recently announced that it has approved final revisions to the guidance it gives to advertisers on how to keep their endorsement and testimonial ads in line with the FTC Act.

The notice incorporates several changes to the FTC’s Guides Concerning the Use of Endorsements and Testimonials in Advertising, which address endorsements by consumers, experts, organizations, and celebrities, as well as the disclosure of important connections between advertisers and endorsers. The Guides were last updated in 1980.

Under the revised Guides, advertisements that feature a consumer and convey his or her experience with a product or service as typical when that is not the case will be required to clearly disclose the results that consumers can generally expect. In contrast to the 1980 version of the Guides – which allowed advertisers to describe unusual results in a testimonial as long as they included a disclaimer such as “results not typical” – the revised Guides no longer contain this safe harbor.

The revised Guides also add new examples to illustrate the long standing principle that “material connections” (sometimes payments or free products) between advertisers and endorsers – connections that consumers would not expect – must be disclosed. These examples address what constitutes an endorsement when the message is conveyed by bloggers or other “word-of-mouth” marketers. The revised Guides specify that while decisions will be reached on a case-by-case basis, the post of a blogger who receives cash or in-kind payment to review a product is considered an endorsement. Thus, bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service. Likewise, if a company refers in an advertisement to the findings of a research organization that conducted research sponsored by the company, the advertisement must disclose the connection between the advertiser and the research organization. And a paid endorsement – like any other advertisement – is deceptive if it makes false or misleading claims.

Celebrity endorsers also are addressed in the revised Guides. While the 1980 Guides did not explicitly state that endorsers as well as advertisers could be liable under the FTC Act for statements they make in an endorsement, the revised Guides reflect Commission case law and clearly state that both advertisers and endorsers may be liable for false or unsubstantiated claims made in an endorsement – or for failure to disclose material connections between the advertiser and endorsers. The revised Guides also make it clear that celebrities have a duty to disclose their relationships with advertisers when making endorsements outside the context of traditional ads, such as on talk shows or in social media.

The Guides are administrative interpretations of the law intended to help advertisers comply with the Federal Trade Commission Act; they are not binding law themselves. In any law enforcement action challenging the allegedly deceptive use of testimonials or endorsements, the Commission would have the burden of proving that the challenged conduct violates the FTC Act.

United States Trademark Registration Process Overview

A trademark includes a word, name, symbol, device, color, sound and shape which is used for goods to indicate their source and to distinguish them from the goods of others. A service mark is the same as a trademark except that it identifies services rather than goods. The terms “trademark” and “mark” are commonly used to refer to both trademarks and service marks.

Trademark rights are acquired through using the mark in commerce. A trademark owner does not need federal “approval” to use a mark. Once trademark rights have been acquired, the trademark owner may prevent others from using a confusingly similar mark, but possibly not prevent others from using the same or similar mark for unrelated goods or services. Marks that are used in interstate commerce may be registered with the United States Patent and Trademark Office (“USPTO”).

Before filing a trademark application with the USPTO, it is advisable to conduct, at a minimum, a preliminary availability search, which includes a search of the USPTO trademark database, Internet and domain name registrar. If the searches do not find any potentially conflicting marks, the next step may be to order a full trademark search, which is more comprehensive than the preliminary search.

If the availability search is clear, it is generally advisable to file a federal trademark application. Once a federal trademark application is filed, an examiner at the USPTO will review the application to determine whether there are any procedural (i.e., objections to the identification of goods and/or services) and substantive issues (i.e., whether the mark conflicts with another mark or whether the mark is merely descriptive). If an examining attorney determines that the mark should not be registered, for whatever reason, the examining attorney will issue an Office action, which details the reason(s) for the refusal. If the examining attorney issues an Office action, a response to the Office action must be filed within six months from the mailing date of the Office action, or the application will go abandoned.

If the examining attorney does not raise any objections, or if the applicant overcomes all objections, the examining attorney should approve the mark for publication and the mark will then be published in the USPTO’s weekly notice publication known as the Official Gazette. Once the mark has been published for opposition, any party who believes it may be damaged by registration of the mark has thirty days from the date of publication to object to the mark’s registration. If no objection is filed, and the application is based upon actual use of the mark in commerce, the mark should then proceed to registration. However, if the application is based upon an intent-to-use the mark (meaning the mark was not in use as of the application filing date and possibly publication date), the Office will issue what is known as a “Notice of Allowance.” The applicant will then have six months in which to prove use of its mark. If the owner has not yet put the mark to use at the end of the six-month period, the owner may request a six-month extension of time in which to file the use affidavit. The applicant will have a total of five six-month extensions – or three years from the date of the issuance of the Notice of Allowance – in which to show use of its mark. If use is not established by the end of the three-year period, the application will go abandoned.

Once the applicant has filed an acceptable affidavit of use, the registration certificate should then issue. Once a registration issues, the trademark owner will receive full protection provided under federal trademark law. In order to maintain those rights, the trademark owner must take all necessary steps to maintain the registration. Federal trademark rights are indefinite as long as the trademark owner continues to use the mark for the goods and/or services listed in the registration and timely makes all necessary maintenance filings. The trademark owner must file an affidavit of continued use or excusable non-use between the fifth and sixth year of registration. The trademark owner must also file a renewal application every ten years from the date of registration.