Welcome to the October 2022 edition of our Digest, covering legal and regulatory developments from the last few weeks relevant to advertising, marketing and brand-owning businesses. As usual, for each item we provide a succinct summary accompanied by a link to the full text of the relevant official source or our own report.
In this edition we report on CAP's guidance on lead generation, the fact that new gambling content rules came into force on 1 October, the CMA's decision on changes proposed by ITV to the sale of its advertising time under merger undertakings, ICO fines for breaches of direct marketing rules and for predatory marketing and ICO guidance on direct marketing using live calls. We also consider two cases on trade marks.
In this edition
Advertising & marketing
CAP issues guidance on lead generation
CAP has issued guidance on lead generation. Lead Generation is a common and legitimate way for companies to communicate with the right kind of customer – one who fits their criteria and who is more likely to be interested in what they're selling.
The guidance points out that whoever sees your ad needs to know they're replying to a company who is filtering out potential customers for you. Sometimes that can be clear from the context. But sometimes it will be necessary to include more explicit messages so consumers can be clear on what is going on and who they're dealing with.
CAP Code rule 2.3 is the relevant one here, and requires that marketing communications "must not falsely claim or imply that the marketer is acting as a consumer or for purposes outside its trade, business, craft or profession". In other words, if you're a lead generator, be up front about that and make sure your ad doesn't give the impression that respondents are making direct contact with a company that provides double glazing, financial services or whatever it is that you're being asked to provide potential customers for.
New gambling content rules in force as of 1 October
The new gambling content rules came into force on 1 October and all new advertising and marketing activity must comply.
The previous restrictions on creative content required that ads must not be of 'particular appeal' to under-18s. The new rules are based on a 'strong' appeal test, which prohibits content (imagery, themes and characters) that has a significant level of appeal to under-18s, regardless of how it is viewed by adults.
In practice, this will significantly restrict the imagery and references that gambling ads will be allowed to use and should decrease the potential for gambling ads to attract the attention of under-18s in an audience. For example, freely accessible ads will not be able to use:
- Topflight footballers and footballers with a considerable following among under-18 on social media.
- All sportspeople well-known to under-18s, including sportspeople with a considerable volume of under-18 followers on social media.
- References to video game content and gameplay popular with under-18s.
- Stars from reality shows popular with under-18s, such as Love Island.
Marketers now need to ensure their campaigns comply. Ideally, they should adapt their compliance processes to assess all the pieces of content included in their creatives (a character, personality, graphic etc.) under the new standard. Ultimately, in the event of a complaint or proactive monitoring work, they must satisfy the ASA that there are no indicators of content being of significant interest or popularity among under-18s.
Catalogue retailer Easylife fined £1.48 million for breaking data protection and electronic marketing laws
The Information Commissioner's Office (ICO) has fined Easylife Ltd £1,350,000 for using personal information of 145,400 customers to predict their medical condition and target them with health-related products without their consent.
The company was also fined £130,000 for making 1,345,732 predatory direct marketing calls.
Easylife is a catalogue retailer that sells household items, as well as services and products under their Health, Motor, Supercard, and Gardening Clubs.
The ICO investigation found that when a customer purchased a product from Easylife's Health Club catalogue, the company would make assumptions about their medical condition and then market health-related products to them without their consent. In a separate investigation the ICO found that, between 1 August 2019 and 19 August 2020, Easylife made 1,345,732 unwanted marketing calls to people registered with the Telephone Preference Service.
ICO fines four firms targeting people with home improvement predatory marketing calls
The ICO has fined four companies a total of £370,000 for making over 820,000 home improvement predatory marketing calls to people registered with the Telephone Preference Service.
The ICO started its proactive investigation into predatory marketing calls generated by the sector in 2020, after vouchers of up to £5,000 were offered to home-owners to improve energy efficiency.
As the ICO had previously seen with "green scheme" and other initiatives, complaints soon came in from people who had been called regarding loft, window and wall insulation. All of the complainants were registered with the Telephone Preference Service (TPS), a statutory register of people who have said they do not want to receive marketing calls. Many of the complainants were vulnerable or elderly, with some having ongoing health conditions.
The ICO investigation found the companies were deliberately or negligently flouting electronic marketing laws to make a profit. Some of the companies also used different trading names.
ICO publishes guidance on direct marketing using live calls
The ICO has published guidance about direct marketing using live calls. The Privacy and Electronic Communications Regulations 2003 (as amended) cover live telephone calls made for direct marketing purposes. A live call is a telephone call where a live person is speaking to the person they are calling.
Direct marketing is "the communication (by whatever means) of advertising or marketing material which is directed to particular individuals".
The guidance points out that there are stricter rules for direct marketing calls about claims management services and pension schemes. The guidance points out that live marketing calls may also be affected by the rules and standards of other regulators. For example, the Financial Conduct Authority has rules banning certain types of cold-calling.
Registrability of advertising slogans and incitements to purchase - "Take Five" mark refused by EUIPO Board of Appeal
We have previously covered cases in this Digest which have raised the question of whether advertising slogans can be registered as trade marks. The most prominent recent example was the success of Oatly in registering their slogan "It's like milk, but made for humans" which was found registrable by the EU General Court having been rejected by the EU Intellectual Property Office. While there is no ban on registering slogans as trade marks, it can in practice be difficult to make a case that a slogan (or incitement to purchase) is sufficiently recognisable as a badge of origin and thus distinctive of a business. But in Oatly's case it was the quirkiness and memorable nature of their slogan that rendered it registrable.
A recent EUIPO Board of Apeal decision provides an example of a case that has (so far) gone the other way. An American beverage company was seeking to register "Take Five" as a mark for carbonated non-alcoholic drinks and mineral waters, but it was rejected by the EUIPO examiner on the basis that the English-speaking public would read it as an incitement to buy – literally to pick up five cans of the product and purchase them – and that this couldn't be distinctive of a particular trade origin. The applicant appealled, and tried to explain to the EUIPO that they were using the expression "Take Five" in its sense of taking a five minute break to recharge one's batteries. Sadly for them, the Board of Appeal considered that this meaning would only be appreciated by a small number of advanced English-speakers, and even then the Board felt it wasn't likely to be understood by such consumers as a badge of origin.
This conclusion seems a little harsh, and the applicant may still try to appeal to the General Court to see if it can get the EUIPO ruling overturned like Oatly did. But the case is a reminder that a choice of branding that is arguably a slogan or call-to-action may lead to having a harder time in trying to persuade the EUIPO of distinctiveness.
Advertisements and offers for sale to EU consumers can constitute "genuine use" of an EU trade mark (to prevent revocation for non-use)
If the proprietor of an EU trade mark does not make genuine use of its mark in the EU within 5 years of registration (or for a subsequent uninterrupted 5 year period) then a competitor can seek its revocation for non-use. A recent decision of the EU General Court has helpfully clarified how to comply with element of the requirement that such genuine use must be made of the mark within the territory of the EU.
The Court confirmed that even a business that is based outside the EU and provides all of its services outside of the EU (in this case the Standard International hotels business, whose services were delivered in the US rather than the EU) can nevertheless demonstrate that it is making genuine use of an EU trade mark if the mark is used in advertisements or offers for sale that target EU consumers. The EUIPO Board of Appeal had previously held that the Standard International business could not have made genuine use of its "The Standard" mark as its hotel services were provided in the US rather than EU. But the General Court overturned that ruling, pointing out that a distinction must made between where services are provided and where a mark is used – provided that consumers within the EU are being targeted, then use of the mark in advertising or offers for sale can be sufficient.
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.