- November 2, 2012
- Posted by: Seth Heyman
- Category: Business Law
Is yours the only product of its type in the market? If not, is it the best, biggest, or most powerful? If so, go ahead and tell the world, but be certain not to sit on your laurels, at least according to the National Advertising Division, an investigative unit of the advertising industry’s system of self-regulation. The NAD has consistently held that broad, unqualified superiority claims such as “largest,” “best” and “highest” must be supported by reliable data against all or a significant portion of the market.
Assuming your claim is properly substantiated, a recent NAD case illuminates the importance of monitoring and reexamining your claim as the marketplace evolves. The case revolved around T-Mobile’s “America’s Largest 4G Network” claim, which the company was able to make for years, until the size of competing networks grew*.
When making an unqualified superiority claim, an advertiser is telling the world that its product is the best, biggest, or fastest compared to essentially all products in the class. Of course, depending on the size of the market, there may be a competitor whose product is better, bigger, or faster, so before making the claim, be certain to test your product against the overwhelming majority (i.e., 90%) of the competition.
Even when you get past this high hurdle, the claim needs to be substantiated on an ongoing basis. In an ever-evolving, competitive marketplace, someone is always looking to trump the competition. This means that you’ll need to constantly keep your eye out for new or improved products in the same class as your own. Whenever they appear (and they no doubt will), their performance will need to be tested against your own, and if your product falls short, your claim is no longer valid. To avoid this and the potential repercussions, it’s best to constantly work on improving the size, power, or performance of your own product to maintain your edge. If you’re unable to do so, be prepared to change your advertising (and possibly your packaging) with very little advance notice.
This leaves a manufacturer with two choices: either refrain from using a “best” or “only” claim, or ensure that you the resources necessary to continually monitor the accuracy of the claim. In other words, it’s good to be the king, but like James II, you may be deposed at any time in a not-so glorious revolution.
*After the case was brought, T-Mobile discontinued the claim, but not soon enough to avoid the challenge brought by AT&T. The NAD found that T-Mobile had properly and timely discontinued the claim.