Puffery in Advertising

Puffery in advertising refers to the practice of exaggerating the quality of a product or service. The accuracy of the exaggeration is not readily determinable as the claims are generally vague and subjective. Puffery is not illegal and is a commonly employed advertising tactic. This article discusses puffery versus objective advertising claims that require substantiation, providing information about the relevant federal statutes and the regulatory authorities that govern their enforcement. Case law is referenced throughout the note for illustrative purposes.  

Puffery vs. False Advertising

Puffery is a legal method of marketing and promoting a product or service through hyperbole that cannot be verified by any objective measure. Puffery in advertising is legal because it is assumed that a reasonable person would not rely upon the statement to make a purchasing decision. For example, most people would understand that the pizza being advertised is not literally “the best pizza in the country,” and that Starbucks does not actually make “The Best Coffee for the Best You.”  Puffery consists of subjective claims about a product or service that cannot be proven untrue. The claims, therefore, do not require substantiation and are not actionable under the Lanham Act or any other applicable statute. 

False or deceptive advertising, on the other hand, is an illegal form of marketing characterized by the issuance of an objectively (i.e., verifiable) false statement or representation with the intent to deceive potential customers, acting reasonably, about the quality or nature of the product or service being sold. For example, stating that a cell phone only weights 4 oz. when it actually weighs 8 oz. would be false advertising, as the statement is factually inaccurate, deceptive, and a consumer would reasonably rely upon it in deciding whether or not to purchase the product. Objective advertising claims require substantiation. Once an ad contains a measurable and testable claim upon which a reasonable consumer could rely, it ceases to be puffery and becomes actionable under the Lanham Act and other applicable statutes. 

The line between puffery and actionable false or deceptive advertising is not always clear. A single advertising campaign may contain both elements. Generally speaking, courts have found subjective, exaggerated claims to be puffery. Once such claims are linked to specific, factual performance metrics, however, they require substantiation, and if proven untrue or materially deceptive, constitute false advertising.  

Some common examples of activities which fall under the heading of false advertising include: the manipulation of measurement units, the charging of hidden fees, the use of packaging that is far larger than its contents, the promulgation of misleading comparisons and illustrations, the adding of false certifications such as “organic” or “chemical free,” and the use of bait-and-switch schemes. The false or misleading representation may either be literally false or implicitly conveying a false impression.  Additionally, the statement must be quantifiable and capable of being proven true or false using existing scientific methods. 

False Advertising – Key Federal Statutes
Section 43(a) of the Lanham Act  
Pursuant to Section 43(a) of the Lanham Act (15 U.S.C. § 1125(a)), a federal claim can be made against a defendant for misleading or false advertising. In order to prevail, the following elements must be proven: (i) a misleading or false statement must be made by the defendant about either his or her own, or someone else’s, products or services; (ii) there must be an actual, material deception perpetrated on the members of the intended audience; (iii) the goods being advertised are transported through interstate commerce; and (iv) there is a reasonable likelihood of injury to the intended audience (including the plaintiff). With respect to (ii) above, the term ‘material’ shall refer to a deception that is significant enough that it would likely affect the purchasing decision of a reasonable consumer.  

For example, Papa John’s advertising slogan “Better Ingredients - Better Pizza,” challenged by Pizza Hut in 2000 (Pizza Hut, Inc. v. Papa John’s Int’l., Inc., 227 F. 3d 489 (5th Cir., 2000)) on the grounds that it violated Section 43(a) of the Lanham Act, was found by the Fifth Circuit to have epitomized the very type of exaggeration that companies are almost expected to promulgate while advertising their products. The court held that the slogan was merely a “general statement of opinion” and not an objective statement of fact upon which a reasonable consumer would rely. The terms “Better Ingredients” and “Better Pizza” were considered by the court to be too generic and did not specifically point to any particular reason or reasons that the company’s pizza was “better;” i.e., no objective comparisons were made. In other words, it failed to prove that the slogan, standing alone, had a material effect on purchasing decisions and as such, was un-actionable puffery.  Additional instances where the applicable court found puffery in lieu of a Section 43(a) violation include Time Warner’s reference to its Internet service’s “blazing fast speed,” and Warner Bros.’ claims that one of its upcoming feature films would be a “most ‘want-to-see’ movie of the year” and a “blockbuster.”  By way of contrast, in 1997, the Ninth Circuit held that Stove Seed Co.’s claim that its sod product resulted in “50% less mowing” was actionable non-puffery in violation of Section 43(a) because it was an objective, measurable, unsubstantiated claim that could reasonably affect a consumer’s purchasing decision (Southland Sod. Farms v. Stover Seed Co., 108 F.3d 1134 (1997)).

Advertising counsel should always review all advertisements and related marketing materials created by a company prior to their release to ensure that all statements intended as puffery do, in fact, fall under that category, and all other claims are accurate and properly substantiated. All assertions must be objectively true, properly fact-checked (with supporting documentation as proof), and verified to the extent necessary in all respects prior to distribution. Counsel should inform his or her client that an omission of material information can be just as damaging as the inclusion of incorrect or misleading information. For example, a warning that a certain hair product could cause a serious rash if the consumer does not stay out of the sun for 24 hours following its application would be considered a material omission if such a statement were true yet not included in the product’s applicable marketing materials in a clear and conspicuous manner. Finally, if a business believes that a competitor is disseminating false or misleading comparative advertising, its counsel should promptly challenge the applicable piece of marketing by engaging in one or more of the following actions: sending a cease and desist letter, issuing a takedown request, or filing a legal complaint. 

Section 5(a) of the Federal Trade Commission Act (FTCA)  

Section 5(a) of the FTCA (15 U.S.C. § 45) prohibits “unfair or deceptive acts or practices in or affecting commerce.” This prohibition applies to all persons and entities engaged in commerce. An advertisement is considered unfair or deceptive by the Federal Trade Commission (FTC) if it contains a statement that is: (i) likely to mislead a consumer that is acting and thinking reasonably under the circumstances; and (ii) “material” (i.e., sufficiently important enough to reasonably impact the consumer’s decision-making with respect to the product or service). Basically, all advertising claims must be truthful and evidence-based. This principle is known as “truth-in-advertising,” and it covers not only unfair or deceptive affirmative statements, but also material omissions. 

New Balance’s 2012 “toning sneaker” advertisement provides a clear example of an ‘unfair and deceptive’ ad in violation of Section 5(a) of the FTCA. The company claimed to have exploited a certain secret technology to aid in calorie burning as well as in an increased activation of the glutes, hamstrings, quads, and calves in manufacturing its shoes. It was later proven that not only were these claims completely unsubstantiated (and no secret technology existed to begin with), but also that the shoes led to an increased risk of injury (Pashamova v. New Balance Athletic Shoe, Inc. et al., case number: 1:11-cv-10001 (2012)).  Another example of deception in advertising can be seen in Pfizer’s unsubstantiated claim that its product, Listerine, was as ‘effective as flossing’ in fighting tooth and gum decay.  Pfizer was sanctioned for this piece of marketing since the claim made was not clinically supported in any way. In 2005, a federal judge ordered Pfizer to pull the commercial and cease making the claim (McNeil-PPC, Inc. v. Pfizer, Inc., 351 F.Supp.2d 226 (2005)). Prior to running an advertisement, a business is required to have a reasonable basis for all factual claims set forth therein. The term “reasonable basis” means objective evidence to support the statements. For example, health or safety claims must be supported by reliable scientific evidence. Statements such as “two out of three dentists recommend ABC toothpaste” must be backed-up by a reliable survey of dental experts.  Additionally, the level of substantiation that courts generally require is equal to the express or implied support that the statement reasonably claims to have.  In this example, consulting three dentists prior to making the statement would not be sufficient.  Rather, a sample size of 100 or so dentists would make more sense, with approximately 66% of those experts providing the requisite product recommendation.  

Advertising counsel should require his or her client to obtain and retain all objective evidence supporting any express or implied claims made respecting the products or services being marketing. What constitutes sufficient proof for a claim varies depending upon applicable federal and state laws and as such, counsel should understand well which rules apply in all instances. All supporting proof should be stored indefinitely, as a claim could arise many years after the applicable ad was disseminated and as such, the client needs to be prepared to defend itself in the event of a suit. Additionally, supporting evidence cannot come from “laypersons;” i.e., it must come from reliable experts in the applicable field who have the knowledge and training required to be able to make the claims in the first instance. Unsupported, anecdotal opinions and commentary such as customer feedback do not suffice. Certified professionals should conduct all required testing and analysis pursuant to the procedures and techniques generally accepted in the field as accurate. Large, randomized samples are considered the most reliable. Finally, all supporting evidence must be up-to-date, and as such, re-testing should be performed as necessary. 

Other Federal Statutes that Address Deceptive Advertising Practices

There are a host of other federal statutes that address false and deceptive advertising practices, including some of the following: (i) the Federal Food, Drug and Cosmetic Act (21 USC § 301 et. seq.); (ii) the Free Products Guide (16 CFR 251.1); (iii) the Postal Reorganization Act (39 USC § 3009); (iv) the Use of Pre-Notification Negative Option Plans (16 CFR 425); (v) the Deceptive Mail Prevention and Enforcement Act (39 USC § 3001); (vi) the FCC Contest Rule (47 USC § 509); and (vii) the FTC Endorsement Guides (16 CFR Part 255). 

Counsel should be well versed in all of the regulatory laws applicable to the industry and form of marketing that his or her client is exploiting. For example, contests distributed by mail must comply not only with Section 43(a) of the Lanham Act and Section 5 of the FTC Act, but also with the Deceptive Mail Prevention and Enforcement Act and the FCC Contest Rule. Similarly, blog posts promoting a company’s goods and services must be made solely in compliance with the FTC Endorsement Guides. 

Regulatory Agencies

The Federal Trade Commission (FTC) and the National Advertising Division of the Council of Better Business Bureaus (NAD) are the two main regulatory agencies handling false advertising claims. The FTC only handles federal false advertising claims. Local matters are generally referred to state, county, or city agencies, as applicable. The FTC defines puffery as a “term frequently used to denote the exaggerations reasonably to be expected of a seller as to the degree of quality of his product, the truth or falsity of which cannot be precisely determined."  Marketers and their counsel would be well advised to keep on top of current FTC policies and rulings with respect to advertising claims. A great resource for doing so is the FTC website itself, located at: http://www.ftc.gov. Anyone can easily use the search function to find the most up to date, industry-specific advice. Additionally, the FTC is available to answer questions and can be reached at the phone numbers provided on its website. 

The advertising industry established the NAD as an arm of the Better Business Bureau in order to uphold truth-in-advertising principles. It is a non-profit, non-governmental body which reviews national advertising campaigns for compliance with the policies of the Advertising Self-Regulatory Counsel (ASRC), an advertising industry association whose website can be viewed at the following link: http://www.asrcreviews.org/.  The NAD was established as an alternative to bringing a false or deceptive ad claim in state or federal court. The NAD performs the following activities: (i) ongoing monitoring and reviewing of national advertising campaigns; (ii) investigation of consumer complaints about deceptive advertising claims; and (iii) provision of a dispute resolution forum (with written decisions provided within sixty days). The NAD initiates investigations on its own accord and investigates and institutes actions after receiving a complaint. 

In determining whether or not a statement is puffery or false advertising, the NAD looks at the following three factors: (i) whether the statement concerns general matters that cannot be proven or disproven; (ii) whether the statement is independent and distinct from representations of objective, measurable research; and (iii) whether the wording clearly expresses an opinion that a reasonable buyer would naturally discount when making his or her purchasing decision. The following are a few examples of where the NAD found the advertisement in question to be puffery: (i) Seven Up’s “It Tastes So Good, You Can Feel it in Your Bones,” (ii) Wrigley’s “For Whiter Teeth, No Matter What,” and (iii) ConAgra Food’s “Better Tomatoes Make Better Ketchup.”  Problems often arise, however, when the statement at issue fails to meet factor (ii) above; i.e., that it be independent and distinct from representations of objective, measurable research. For example, in 2005, Pom Wonderful made several claims in connection with its new line of juices, including “Cheat Death,” and “Outlive Your Spouse,” among others. NAD held that while these statements, independently, constituted non-actionable puffery, when combined with a statement describing the horrors of cancer (as Pom Wonderful did), they became reasonably misleading as to the relation between the advertised juices and the treatment and/or prevention of cancer (NAD Case # 4468, Pom Wonderful, LLC (Apr. 5, 2006)).

If the NAD determines that a violation has occurred, it generally issues recommendations including changing the ad, discontinuing the ad, and/or requesting that the marketer distribute corrective, clarifying information with respect to the ad. While compliance with NAD recommendations is voluntary, counsel should take note that the NAD often refers non-compliant companies to the FTC, which can then institute its own proceeding under applicable federal law.  For more information about the NAD, refer to the following link: https://www.bbb.org/council/the-national-partner-program/national-advertising-review-services/national-advertising-division/.

Marketers and their counsel should, once again, keep abreast of current policies and rulings on a regular basis. Participation in industry and trade self-regulating bodies offers great value to the practitioner, as such entities are deeply involved in creating and maintaining codes of conduct and industry best practice guidelines, as well as in lobbying various government bodies to adopt these codes and guidelines. Some examples include: (i) the Direct Marketing Association’s (DMA) Guidelines for Ethical Business Practice (which can be found at the following link: https://thedma.org/accountability/ethics-and-compliance/dma-ethical-guidelines/); (ii) the Entertainment Software Ratings Board’s (ESRB) ratings system and Principles and Guidelines for Responsible Advertising Practices (which can be found at the following link: http://www.esrb.org/ratings/principles_guidelines.aspx); and (iii) the Mobile Marketing Association’s (MMA) Code of Conduct (which can be found at the following link: http://www.mmaglobal.com/policies/code-of-conduct). Particularly in areas where the law is unsettled or is still developing, self-regulating codes and guidelines can provide an excellent foundation for designing a compliance program. Many national codes also incorporate state-law requirements, which can help simplify compliance research in a specific area.