Marketing: avoiding a sleepless night

‘It’s easier to sleep with a Chartered Accountant.’ Harmless puffery, and
doubtless the ICAEW left nothing to chance and ran this past their lawyers
before the launch of the campaign in 1995. Or did they? There was nothing wrong
with the ICAEW’s campaign, but an accountancy firm embarking on a new marketing
campaign or promotional activity should tread carefully. Some light-hearted
creativity may end up costing dearly in terms of reputational damage, if not
client defections.

Consider the lawyers who rashly published a long list of individuals from
eminent clients and targets in an advert headed ‘If you’d like your name kept
out of the legal pages, take a note of ours’.

The implication that the individuals were personally involved in litigation
angered clients who lodged a successful complaint to the ASA. A high street bank
responded: ‘We were a client. We are no longer.’
I cannot summarise all the pitfalls of advertising/marketing law in a single
article, so here are a few tips and a round up of some newly arising dangers.

The Advertising Standards Authority

The Committee of Advertising Practice administers the British Code of
Advertising, Marketing and Sales Promotion (the CAP Code). The Advertising
Standards Authority adjudicates on breaches.

Firms generally focus on print advertising, so the CAP Code will be your most
immediate point of reference. The ASA does not have power to fine, but can
demand a change to adverts/marketing material.

The ultimate sanction is referring persistent offenders to the OFT ­ as it
has over Ryanair’s bold pricing campaigns and its punchy press ads. Check out
www.cap.org.uk for the CAP Code/guidance notes and www.asa.org.uk for ASA
adjudications.

The ICAEW Code of Ethics

The ICAEW code contains the profession’s marketing guidelines. S250 broadly
reflects key themes in the CAP Code, with emphasis on avoiding bringing the
profession into disrepute. The code highlights unclear or subjective claims of
size or quality as problem areas (eg claims that a firm is the ‘largest’ or the
‘best’).

Direct mail campaigns are a frequent source of complaint. Double-checking
marketing lists (in particular consents obtained) is essential. Ensure you have
appropriate contractual protections against any seller of bought in lists.
Sample test how the list has been compiled and run it past the preference
services.

ING Direct sent out a newsletter to its client database, with details of
several new products. A recipient who had opted out of receiving marketing
material from ING complained. The ASA upheld a complaint the newsletter was
marketing material. All marketing activity needs robust checking; it is not just
the Information Commissioner who adjudicates on data breaches.

Third party intellectual property rights

Marketing is a creative process with real risks of infringing third party IP
rights. Claims for infringement frequently arise. Remember also the defamation
threat.

Eddie Irvine v TalkSport is a classic example of over-energetic marketing
landing leading to a passing-off action. Irvine was shown holding a TalkSport
radio rather than the walkie-talkie of the original photo. The Court of Appeal
agreed with him that ‘he would not get out of bed for less than £25,000’ for
such an endorsement and awarded him that sum, plus (substantial) legal costs.

Recent changes

Unfair Commercial Practice Directive

The Consumer Protection from Unfair Trading Regulations and the Business
Protection from Misleading Marketing Regulations came into force on 26 May 2008,
implementing the EU’s Unfair Commercial Practices Directive. For the first time
there is a general duty on all businesses not to trade unfairly with consumers.

Breaches mainly result in the commission of criminal offences. Pay particular
attention to the banned list of 31 practices deemed unfair in any circumstances,
and the new prohibitions for misleading actions/omissions, aggressive practices
etc.

The CPRs are one of the most significant changes to regulation in recent
decades. The OFT and Trading Standards have substantial new powers to stop
almost any unfair trading activities. A separate briefing note is available on
request from the author.

Gambling Act 2005: prize draws and competitions

Prize draws and competitions have often caught out those who stray
inadvertently into the prohibited zone of an illegal lottery. The impact of the
new Act on marketing is still unclear, but be aware that skill-based promotions
require skill levels which prevent a significant proportion of potential
entrants from entering/claiming a prize. A ‘free’ prize draw will only be free
if there is no additional payment over the normal cost of entry.

The London Olympic Games and Paralympic Games Act 2006

Hailed as ‘the most draconian intellectual property law ever enacted’, the
new London Olympic Association Right, is likely to produce a number of high
profile casualties in the build up to the London 2012 Olympics.
The LOAR grants the London Organising Committee wide powers to prevent any form
of unauthorised association in the course of trade between a business and the
London Olympics. ‘Any’ association means just that ­ so any word, image or sound
is caught. There is even a list of ‘banned expressions’ (eg the
use of combinations of the words ‘Games’, “2012”, ‘London’, ‘summer’ etc could
amount to an offence).

Conclusion

Racy advertising does not come naturally to an accountancy firm, but, case
law and adjudications show that even the most innocuous-looking marketing can
land a firm in hot water. The best advice is to build legal consultation into
the creative process as early as possible.

Top tips

• Carry out trade mark searches on new names/ slogans
• Beware using people’s images/names without consent
• Check for third party intellectual property (eg copyright licences)
• Remember foreign regulation and territorial IP rights if advertising may be
  used abroad
• Check your contract with your advertising agency to clarify responsibilities
  for legal sign-off
• Check your databases – are you honouring your clients’ data consents?

Oliver Bray is head of RPC’s branding team. Contact him
at [email protected]