Beware of False Advertising in Marketing Puffery
GlassBuild America is upon us. As always, the show presents an exciting opportunity to learn about new products and their capabilities. Marketing departments live for these moments. However, there is a fine line when a salesperson’s comment about performance turns from an opinion into a warranty or a false advertisement.
Prior to the show, this distinction is worth review, as such “puffing” can lead to fines. Consider a paint company that made a statement in 2018 that its products were VOC-free. This claim was legally challenged as being false. The manufacturer defended its conduct as mere puffing but lost the legal challenge and was fined.
In legal context, puffing is a defense against claims that advertising was false or created an express warranty. The manufacturer takes a position that its advertising or its salesperson’s actions were simply matters of opinion—or so general that no reasonable person could reasonably rely on the challenged conduct.
At its most basic, puffery is an expression of subjective opinion. Statements like “fine quality” or “amazing” or “best” when used to describe a product have been held as mere puff. But when those comments are used in a way that ventures toward measurable criteria or used in comparison with a competitor’s product, the distinction is less clear.
Consider the phrase “best per-hour rate.” When a word like “best” is attached to the phrase “per-hour rate,” the potential for advertising liability increases. This is because under most legal systems a statement relating to the performance, quality or nature of goods sold can become a warranty if that statement becomes a basis of the bargain. A comment that, when read in full, establishes a technically measurable standard can create a warranty that must be accurate and met when a product is delivered. If the statement is not accurate there is a potential for a false advertising claim. Likewise, if the performance is not met, there is additional breach-of-warranty exposure.
Alternatively, a general statement that may seem like mere puffery can still prove problematic when used. For example, “Better Ingredients. Better Pizza” was a slogan used by a pizza franchise in the early 2000s. This franchise was sued by another pizza company for false advertising, and the Third Circuit Court of Appeals found that the slogan itself was general and close to puffing. However, because the slogan was used in an advertising program that directly questioned the ingredients and quality of competitors’ pizza, there was a violation of the Lanham Act—a set of federal regulations governing false and deceptive advertising.
Glass and glazing companies regularly run into general statements of subjective quality that are simple puffery. But as technology advances and it becomes easier to quantify the qualitative, liability risks abound. For this industry, one need look no further than the various environmental impact claims surrounding modern glazing. Consider words such as renewable versus sustainable; efficient versus neutral; recyclable versus recycled content. These terms, which can seem general, have very specific technical measures that must be met in order to be advertised with the descriptors. In fact, environmental claims are so technical that the Federal Trade Commission has published regulatory guidelines for proper use of environmental marketing—the “Green Guides.”
Absent governmental guidance, what can a company do when considering whether its advertising is simple puff or presents potentially misleading or false claims? Content checks are a good first step. Keep representations neutral, toward both performance criteria and competitors’ products. Content must also be used in a neutral context to avoid inappropriate implications, as in the example of the pizza company above.
If there is a performance point or production target worth advertising, be sure to have the testing and validation to support those claims. Include in the advertising any necessary disclaimers regarding the conditions or circumstances of the testing so viewers can appreciate that their circumstances may differ. And if a comparison is made with another manufacturer’s products, be sure that the most current model and equal evaluations are used. Advertising based on outdated data, or a failure to regularly update testing to current production models, has been held to be false advertising.
Finally, understand that advertising liability, in large part, does not depend on intent. It is not necessary that a competitor or consumer prove that someone intentionally presented a false advertisement for liability to exist. The risk for penalties and fines focus most often on those who received the advertising, not the company issuing the offending ad. Even so, it is worth noting that if it can be shown there was an intent to mislead, or the advertising was issued with a reckless disregard for accuracy, punitive damages and personal fines are possible.