ACT Total Care mouthwash recently dodged a big bullet at NAD. NAD reviewed and recommended that the company discontinue claims that its product kill bad breath germs (the advertiser had already voluntarily discontinued claims that its product fights unsightly plaque). However, without specific evidence of consumer confusion, NAD declined to recommend discontinuing use of "Total Care".
A requirement that an advertiser discontinue or tweak claims in advertising (or even labeling) is regrettable, but doable given sufficient time and money. Changing a product name, however, puts at risk a company’s considerable investment in brand equity. While brand names are sometimes found to convey unsubstantiated claims, the problem is often solved through disclosure. For example, the product Aspercreme was required to disclose that it did not contain aspirin.
However, there are a few instances where the advertiser has been required to change the name of its product. In a case prohibiting an aftermarket brake system from using “ABS” as part of a product name or logo, the FTC explained “brand name excision is a remedy that is available to the Commission when a less restrictive remedy, such as a required affirmative disclosure, is insufficient to eliminate the deception conveyed by the name.” The FTC also prohibited use of the trade name Dollar-a-Day by a rental car company when the cost to rent a car was more than a dollar per day. Courts also have broad equitable power to enjoin use of trade names if found to be inherently false and misleading. While the NAD has no power to enjoin advertising, it does make recommendations, including as to product names. For example, NAD once recommended one company discontinue reference to “All Day” in its One A Day All Day Energy supplement.
Major product repositioning can be a great thing -- when it is voluntary (although not always, see New Coke). Forced reinvention by trade name excision is perhaps the harshest of all remedies and is used, albeit sparingly, by enforcers, courts and in the self-regulatory process. To avoid this risk, particular care should be given to review and assessment of the product’s trade name to make sure it does not convey any unsubstantiated express or implied claims.
- Amy Mudge and Randy Shaheen
