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Retail & Fashion eBulletin: influencer crack down, Cadbury and MysteryBrand alleged ‘scam’

13 February 2019

Ahead of London Fashion Week, which takes place from 15-19 February, our latest eBulletin focusses on influencer marketing, Cadbury and the colour purple, and the MysteryBrand alleged ‘scam.’

CMA crack down: Influencers under increased scrutiny from authorities

The Competition and Markets Authority (CMA) earlier this month publicly announced the action it is taking following an investigation into concerns that social media stars are not properly declaring their relationship with the advertiser when promoting products and services. The CMA announced that they have already secured a ‘formal commitment’ from 16 celebrities to clearly indicate in their social media posts when they have been paid, or otherwise incentivised or rewarded, to post about a brand or its products.

This represents the latest development in a long running effort by the authorities to control and moderate the behaviour of advertisers and social influencers to ensure that consumers who see their posts are not misled about the reason for the brand or product endorsement. The question of how to appropriately identify a post has often caused confusion and there are great inconsistencies between the various approaches taken by brands and influencers, which gave the impression to many that further regulation or guidance is necessary.

The key message from the CMA’s latest announcement is that it’s no longer just the advertisers that need to ensure compliance with the relevant laws and regulations. Influencers themselves now need to take responsibility for what they post or they will be investigated and sanctioned accordingly.This includes the following more detailed instructions amongst others:

  • Influencers should not assume that the inclusion of discount codes, competitions or giveaways, or references to their own range of products is sufficient to make it clear that there is a commercial relationship between the brand and the influencer; and
  • Individuals and brands must not neglect to mention past relationships, or any relationship in the past twelve months which is likely to be relevant to social media followers.

The CMA, in obtaining formal commitments from celebrities, has stressed that no finding has been made as to whether the influencers’ practices breached consumer law and the undertakings should not be viewed as an admission that the influencers in question were acting contrary to the law.

Despite this we expect to see a relatively swift change in influencer behaviour as the threat of sanctions hangs over them and the public are becoming increasingly conscious of what influencers should and shouldn’t be posting, and are showing a growing appetite to notify the ASA if they think they have spotted non-compliance. However, influencers themselves have been using social media, perhaps unsurprisingly, to react to these latest developments. Many were keen to point out that they already viewed themselves as relatively transparent when it came to sponsored posts or gifting.

The CMA has announced that they will next turn their attention to the digital platforms themselves, with Instagram and other similar channels likely to face the closest scrutiny. However, regardless of whether advertisers, platforms or the influencers themselves are being targeted, it is clear that we are now seeing a concerted effort by the authorities to clamp down on online activity which could mislead consumers and over the next few months we should begin to get a clear picture as to whether the investigation and action taken has had the desired results.

You can read further articles on this topic in our earlier eBulletins below:

Cadbury and the colour purple

In another landmark ruling, the Court of Appeal has ruled against Cadbury trying to alter its trade mark registration for the colour purple. Cadbury attempted to update its existing trade mark as a defensive strategy and an attempt to secure the mark’s validity.

In 1995, Cadbury registered the shade Pantone 2685C as a trade mark for its world famous chocolate bars, with the description of the mark indicating that the colour purple was “applied to the whole visible surface, or being the predominant colour applied to the whole visible surface, of the packaging.”

In a 2013 Court of Appeal decision, Cadbury’s application, which had the same description, was refused registration on the basis that the description could indicate that the mark included an unknown number of signs. Noting that the same reasoning could be applied to its existing registration, Cadbury asked the UK Intellectual Property Office to amend the description, to drop the latter part of the wording.

The Court of Appeal rejected Cadbury’s bid to alter its registered trade mark. Lord Justice Floyd said: “it must be for the applicant to state clearly the type of monopoly for which he contends.”

Sharon Daboul, our Chartered Trade Mark Attorney, said: “When applying to register unusual marks, such as the colour purple in Cadbury’s case, the description provided at the time of filing the application is very important and forms as much a part of the mark as the mark itself. It is vital that the wording in the description is clear and precise so that anyone viewing the register can see what the mark is and what it protects. Altering a trade mark registration is subject to very limited exceptions, namely exceptions that do not substantially affect the identity of the trade mark.

“Following the Court of Appeal’s decision, there is a risk that Cadbury’s purple trade mark registration will be considered invalid, as the description could indicate that more than one sign is covered by the mark, rendering the registration imprecise. This could make it harder for Cadbury to stop others from using the colour purple for chocolate and claiming a monopoly on that particular shade, but provided they have acquired the necessary goodwill in the UK, there could be an argument under the law of ‘passing off.’ Overall, it will be a blow for Cadbury with its oldest UK colour registration now being vulnerable to attack from competitors such as Nestlé.”

Luxury brands targeted by online gambling website ‘scam’

Top designers such as Gucci, Ralph Lauren and Louis Vuitton are just a few luxury brands which have unwittingly been embroiled in controversy surrounding online gambling website MysteryBrand.

The platform, promoted by paid social media influencers and internet stars, sells virtual randomised gift boxes containing prizes allegedly ranging from small novelty gifts to cars and even houses. The controversy has arisen primarily from the manner in which the gift boxes are promoted, which potentially breaches advertising codes and trade mark laws. There have also been allegations that some of the branded items included in the boxes turned out to be counterfeit.

Kostyantyn Lobov, one of our senior associates specialising in Intellectual Property and Advertising said: “Things like use of third-party trade marks in the logo of the website, and on the sides of the ‘boxes’ themselves – which could give the impression that the box is sponsored – are things that could be of concern to brand owners.

“Owners of trade marks which have an established reputation could also argue that associating those marks with gambling – a sensitive area which has received a lot of regulatory and press attention recently – could tarnish their reputation, particularly if it is inappropriately targeted and does not comply with other applicable laws. Furthermore, brand logos, artwork, patterns and photographs of products may be protected by copyright or design rights.”

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