South Africa: GUD Heavens, Watch How You Advertise!

Last Updated: 7 December 2012
Article by Gaelyn Scott

Most Read Contributor in South Africa, September 2016

On 30 October 2012 the Advertising Standards Authority (ASA) handed down a ruling that has important ramifications for the automotive parts industry.   The case involved G.U.D. Holdings (G.U.D.) and Federal-Mogul.  G.U.D. is  South Africa's leading manufacturer and distributor of automotive filters, and it has been in the business since 1950. The company sells products under the well-known trade mark GUD, as well as the trade mark FRAM, for which it is a licensee.  The company's products are sold in major automotive parts stores including Autozone, Midas, Diesel Electric and Allparts. The company also manufactures filters for the following automobile manufacturers - Volkswagen, Nissan, BMW, Mercedes Benz, General Motors, Ford and Toyota.  G.U.D. has developed an elaborate parts numbering system for its GUD products over the past 60 years, and it has copyright in this system. It also has the rights to the numbering system used for the FRAM products. The GUD and FRAM parts numbering systems are distinctive, well-known and associated with G.U.D.  Federal-Mogul is a competitor of G.U.D.'s, having entered the automotive filters market in late 2011 with its CHAMPION brand of products.

G.U.D. lodged a complaint with the ASA about a brochure that Federal-Mogul used for its CHAMPION brand, and which was headed 'Quick Reference Code Guide For CHAMPION Filters'. The complaint was that the brochure made claims that could not be substantiated, and that were therefore misleading.  The complaint went on to say that the brochure contravened the provisions  of the ASA Code relating to comparative advertisement and disparagement. This  related to the fact that  the brochure compared CHAMPION filters to those of a competitor, and declared the  CHAMPION products to be superior.   Although the brochure made no reference to the GUD or FRAM trade marks, it did  list (cross reference) all the CHAMPION part codes against the corresponding  GUD and FRAM part codes. In the process, Federal-Mogul made it quite clear that the competitor concerned was G.U.D.  In addition, complained G.U.D, Federal-Mogul blatantly used the distinctive and well-known GUD and FRAM parts numbering systems as a marketing tool for the CHAMPION products. G.U.D. gave notice that it would consider filing a separate copyright infringement case.

On the issue of misleading claims, G.U.D. argued that the comparisons contained in the brochure were unfair, and that the results used were selective.  G.U.D. argued that Federal-Mogul was wrongly comparing the filters simply in terms of efficiency, without taking life/capacity into account. It argued that you can't evaluate a filter simply with reference to its ability to stop dirt, contaminants and particles passing through it, because once the filter's clogged a valve opens up to bypass it - the valve then allows these impurities to pass through, and this is obviously undesirable. G.U.D. claimed that its products are in fact designed to get optimal life/capacity according to OEM's (Original Equipment Manufacturer's) specifications.

During the course of the ASA proceedings certain issues were resolved but, although Federal-Mogul made it clear that it would no longer be using the brochure, it did not give any undertakings to stop using various claims. The ASA therefore had to decide whether the following claims that were made by Federal-Mogul about its CHAMPION filters, and about how these filters compared to the GUD and FRAM filters, complied with the ASA Code:

'Not only protect engines from harmful particles, but enhance performance as well.'

'Champion came out tops.'

'Independent laboratory ... undergoing an efficiency and capacity test, results showed the impressive performance of Champion oil filters.'

'Enough holding capacity to last between service intervals.'

'Clear that Champion Oil Filters outperform the tested competitor.'

The ASA ruled that the Code makes it very clear that an advertiser must  have documentary evidence to support any claims that are capable of objective substantiation, and that this evidence must come from an independent credible expert.  The ASA did not accept Federal-Mogul's argument that its brochure simply claimed that its filters outperformed GUD and FRAM filters in terms of filtration efficiency, because it also made some reference to life/capacity.  The evidence which Federal-Mogul had, and which came from a US-based testing facility called IBR, did not support the various claims. In fact, it consisted of no more than raw data, and it offered no conclusions at all.  This meant that the claims could not be substantiated, and that they had to be withdrawn.

A comprehensive victory for G.U.D. then. And a reminder that you have to be very careful about making unsubstantiated claims in your advertising!

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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