LLAW6132 Chap.9 Misleading and Comparative Advertising
Misleading and Comparative Advertising
The case that carries the chapter
Consumers sued the owner of Kona Brewing Company in the Northern District of California, alleging that packaging with a map marking a Hawaiian brewery, an invitation to visit it, Hawaiian imagery and a Hawaii address misled them into believing the beer was brewed in Hawaii, when the packaged beer came from four mainland states.
The company moved to dismiss, arguing puffery, a disclaimer, no warranty and no standing for an injunction.
Puffery against specific fact
A statement is actionable only if specific and measurable. Liquid Aloha and surfing imagery were puffery, but the address, the map and the invitation were specific representations that, taken together, could mislead a reasonable consumer.
Literal truth was no defence, and a list of brewing locations on the bottle labels did not cure packaging a consumer is not required to open.
The consumer statute, fraud and quasi-contract claims survived; the warranty claims and the injunction did not.
The European rules
The Unfair Commercial Practices Directive treats a practice as unfair if it breaches professional diligence and materially distorts the average consumer's behaviour, and names misleading acts and omissions, such as copycat packaging, and aggressive practices.
Directive 2006/114 lists the factors for misleading advertising, including geographical or commercial origin, and sets cumulative conditions for lawful comparative advertising: not misleading, like with like, objective and verifiable, no denigration, no unfair advantage, no imitations and no confusion.
Two references to the Court of Justice
In O2 v.
H3G the Court held that a mark owner can stop a comparative advertisement only where it creates a likelihood of confusion. In L'Oreal v. Bellure it held that unfair advantage had been taken, and the English Court of Appeal accepted the ruling while arguing that trade mark law should not be over-protective.
What this chapter covers
- 01
The Kona beer packaging and the claims pleaded
- 02
The reasonable consumer test at the pleading stage
- 03
Puffery against specific and measurable statements
- 04
Why a truthful address and a hidden disclaimer did not help
- 05
The unfair commercial practices general clause
- 06
Misleading factors and comparative advertising conditions
- 07
O2 v. H3G and L'Oreal v. Bellure
Worked example · free
Would a disclaimer on the carton have saved the brewer?
- 3Identify the two reasons the actual disclaimer failed.
- 3Apply each reason to the hypothetical disclaimer.
Key terms
- Reasonable Consumer Test
- The objective US standard asking whether a representation is likely to mislead the public.
- Comparative Advertising
- Advertising that identifies a competitor or its goods, lawful in the EU only if it meets every condition in Article 4 of Directive 2006/114.
- Professional Diligence
- The standard of care a trader owes consumers under the Unfair Commercial Practices Directive, breach of which is one limb of unfairness.
- Copycat Packaging
- Dressing a product to resemble the overall appearance of a famous rival brand, a misleading practice under EU law.
Misleading and Comparative Advertising FAQ
Can a statement that is literally true be misleading advertising?
Yes. In the Kona order the brewery really existed at the address shown, but the court held that the question is the overall impression the statements create. True statements combined with imagery and an invitation can create a false impression about where a product is made.
What makes a claim puffery rather than a statement of fact?
Vagueness. A statement is actionable only if it is specific and measurable, capable of being proven true or false. Liquid Aloha and pictures of surfers could not be tested, but a map marking a brewery and an address could, which is why the claim survived.
When is comparative advertising lawful in the EU?
When it meets all the Article 4 conditions of Directive 2006/114: it is not misleading, compares goods meeting the same needs, objectively compares verifiable features, does not denigrate or take unfair advantage, does not present imitations and creates no confusion among traders.
Exam move
Read the list of Kona packaging features and sort each into puffery or specific fact before checking the court's answer. Then run the same features through the EU factors, so you can compare the two tests on identical facts.
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