Hunton Retail Law Resource

The Children’s Advertising Review Unit of BBB National Programs (CARU) has issued two recommendations this summer addressing negative social stereotypes in children’s advertising. The first decision involves fashion retailer Primark and the second decision, involved Moose Toys.

The FTC, through the Department of Justice, has entered a settlement with two companies and the joint corporate President for falsely claiming that the LED lighting products and personal protective equipment (PPE) they sold were “Assembled in the USA,” “Buy American Act Compliant,” “Manufactured in the USA” and “100% Made in the USA,” despite having been imported from China. According to the FTC’s complaint, the defendants, Axis LED Group, LLC, ALG-Health LLC and Adam J. Harmon, went so far as to peel “Made in China” stickers off the products and replace them with Made in USA labels. The FTC had previously investigated and warned the companies, and received assurances that they would remove unqualified Made in USA claims from their marketing materials. The defendants subsequently were investigated by the National Institute for Occupational Safety & Health (NIOSH) over safety superiority claims for their KN95 masks.

Non-fungible tokens (NFTs) are creating new economic opportunities in old, familiar spaces. To capitalize on the current popularity of NFTs, some retailers are turning to the timeless art of nostalgia: reworking old media or products into an NFT collection to advertise a brand in an online space or bring new attention (and customers) to a vintage product.

As part of a broader regulatory roll-back intended to stimulate business and economic activity post-pandemic, the New York City Council repealed regulations affecting the auction industry.[1] Generally, the repeal’s effect is to remove rules that regulate the conduct of auctioneers and auction houses, including licensing and disclosure requirements.

The FTC has announced that it is taking a fresh look at its guidance for online disclosures, in part because, according to its Consumer Protection Director, “some companies are wrongly citing the guides to justify practices that mislead consumers online.”

The FTC voted today to issue revised proposed Guides Concerning the Use of Endorsements and Testimonials in Advertising, aka, the “Endorsement Guides.” In a 5-0 vote, including a yes vote from the FTC’s newest Commissioner, Alvaro Bedoya, the FTC agreed to publish their proposal in the Federal Register and will take comment on the updates from the public. In addition, the FTC announced that it will hold a virtual event on October 19, 2022, in which it will consider the special challenges presented by advertising to children, especially children under 12 years of age.

The FTC continues its pursuit of deceptive Made in USA claims, this time with allegations that company Lions Not Sheep and its owner, Sean Whalen, marketed apparel as being “Made in USA,” “Made in America,” “100% AMERICAN MADE,” and “BEST DAMN AMERICAN MADE GEAR ON THE PLANET” when in fact the products were made in China. According to the FTC, Whalen appeared in social media posts claiming he could conceal the fact that his politically-themed hats, t-shirts, sweatshirts, and other apparel were of Chinese origin by removing the labels and replacing them with express markings that they were “Made in USA.”

The Recall Roundup is a monthly survey of regulatory activity affecting the manufacture, distribution, and sale of consumer products.  Subject matter may include the latest product recalls, major federal agency developments, and proposed or new federal rules.  The blog’s goal is to provide an overview, rather than a comprehensive report on every development that could potentially affect businesses or consumers.  Nothing herein constitutes legal advice.  If you have questions or comments about the blog, please reach out to the authors.

Trade dress is a sub-category of trademarks traditionally reserved for product packaging. However, it can also include product design itself if the design elements claimed are distinctive and allow the consumer to recognize a single source as the producer or seller of the goods. Well known product design cases include high heels with contrasting red soles[1], iconic electric guitar shapes[2], and the green color of night-time cold medicines.[3]

On March 31, 2022, the staff of the Division of Corporation Finance and the Office of the Chief Accountant of the SEC issued Staff Accounting Bulletin (SAB) No. 121 (SAB 121), which “adds interpretive guidance for entities to consider when they have obligations to safeguard crypto-assets held for their platform users.” SAB 121 highlights the enhanced technological, legal and regulatory risks associated with safeguarding digital assets, as compared with more traditional asset classes. Specifically, SAB 121 asserts that a company is subject to “significant increased risks… including an increased risk of financial loss” when that company controls the cryptographic keys associated with a user’s digital assets. As a result, the staff believes that reporting companies should quantify and disclose that obligation, and record a liability and corresponding asset on their balance sheets at fair value.