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Social Media Reviews/Criticisms Are Not Advertising for Purposes of Deceptive Business Practices and False Advertising
As we discussed on this blog here, San Diego and California businesses must avoid false and deceptive advertising. There are a number of laws that prohibit deceptive and false advertising including these:
- Federal Trade Commission Act — see FTC information page here
- Lanham Act, 15 U.S.C. § 1125(a)(1)(B
- California Unfair Competition Law, Cal. Bus. & Prof. Code §§ 17200 et
- California Consumers Legal Remedies Act, Cal. Civil Code §§ 1750 et seq.
- California Business and Professions Code § 17500 et seq.
With so much of business now being internet-based, one of the more interesting legal questions is whether online reviews/complaints are considered “advertising.” We know that so-called online “endorsers” are advertising and full disclosure is needed. But, if you post a false or misleading “review” of someone’s business, are you running afoul of laws that punish deceptive advertising? In a couple of recent decisions, federal courts have said “no” under the Lanham Act.
San Diego Business Advertising: Online Reviews are Not “Commercial Advertising”
The Lanham Act — the federal trademark act — creates a civil cause of action against “[a]ny person who … uses in commerce any … false or misleading representation of fact, which … in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods, services, or commercial activities.” It is common for trademark infringement cases to have companion claims for infringement and for false/deceptive advertising. This makes sense in that, if you are allegedly using someone else’s trademark to sell your product, you are allegedly falsely claiming your product is their product. A trademark is something that identifies this product/service as being made by or provided by a certain commercial source.
In general, the test for whether something is “commercial advertising” is whether:
- There is “commercial speech” — as opposed to “political speech”
- There is commercial competition between the parties
- The purpose of “advertising” is to influence consumers to buy the “advertiser’s” goods or services
- The “advertising” is “disseminated sufficiently to the relevant purchasing public to constitute ‘advertising’ or ‘promotion’ within that industry”
See Incarcerated Entertainment v. Warner Bros., 261 F. Supp. 3d 1220 (US Dist., MD Fla 2017).
In one recent case, a court held that online review/criticisms are NOT commercial advertising subject to punishment under the Lanham Act. In Edward Lewis Tobinick, MD v. Novella, 848 F. 3d 935 (US Court of Appeals, 11th Circuit 2017), the defendant, Dr. Novella, posted online statements and articles on blogsites criticizing Dr. Tobinick with respect to claims being made about the effectiveness of the drug Etanercept for treatment of Alzheimer’s. Dr. Novella suggested the Plaintiff’s clinic had some typical characteristics of “quack clinics” or “dubious health clinics” and strongly disputed the plausibility of and the evidence supporting Dr. Tobinick’s claims about Etanercept. Dr. Tobinick sued for, among other things, false and deceptive advertising under the Lanham Act.
However, the court rejected the claim. The court held that Dr. Novella’s blog articles did not fall within the concept of “commercial speech” as they did not relate to or propose a commercial transaction. Instead, Dr. Novella’s articles were held to be noncommercial speech communicating information, opinion, and criticisms. It was deemed relevant that, in the first article, Dr. Novella did not mention his own medical practice and mentioned his own practice in the second article only briefly and to provide context to his criticisms, nor did Dr. Novella discuss products or services for sale. Furthermore, Dr. Novella’s practice is significantly different that Dr. Tobinick’s, defeating the idea of competition between the two. Finally, the court noted that there was no evidence that Dr. Novella had a commercial or profit-seeking motive for writing the articles. Taken as a whole, the court held the blog articles were not commercial advertising.
A similar result occurred in the case of Buckeye International, Inc. v. Schmidt Custom Floors, Inc., Case No. 18-cv-111-jdp (US Dist. W.D. Wis. April 26, 2018). In that case, the defendant, a floor installer, criticized certain products made by the plaintiff, which made various floor finishing products. The criticisms were posted online and the plaintiff sued alleging false and deceptive advertising. However, the court denied the claims on the basis that the parties were not competitors and that the online postings may not have been sufficiently wide-spread to constitute “advertising.”
For a case coming to the opposite conclusion, see Incarcerated Entertainment, above. In that case, the parties were in commercial competition with respect to a certain movie/book rights, the blog and social media posts were clearly intended to prompt consumers to purchase movie tickets, which clearly implicated a profit motive.
Contact San Diego Corporate Law Today
If you want more information on legal issues with respect to advertising and false advertising, contact attorney Michael Leonard of San Diego Corporate Law. Mr. Leonard provides a full panoply of legal services for San Diego and California businesses. Mr. Leonard has been named a “Rising Star” three years running by SuperLawyers.com and “Best of the Bar” by the San Diego Business Journal. Mr. Leonard can be reached at (858) 483-9200 or via email.
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