IP ENSight | 7 November 2018

Advertising regulation: a phoenix rising from the ashes

by Delene Bertasso

“’I am very pleased indeed to hear that the advertising industry intends giving birth to a new era of self-regulation. I applaud this because in this day and age it is necessary to keep the advertising chancers and opportunists in check’ says Chris Moerdyk, renowned media commentator.”

It was recently announced that the South African Advertising Standards Authority (“ASA”) is in liquidation. For many people, consumers and companies alike, this is bad news, as the ASA performed the very valuable role of keeping advertising within acceptable parameters. There is good news, however, as advertising self-regulation will seemingly return to South Africa in the form of a new body known as the Advertising Regulatory Board (“ARB”). Gail Schimmel, an advertising law specialist (and former executive of ENSafrica), who did so much to make the ASA the effective body that it was, is the driving force behind the new ARB. Ms Schimmel is quoted in the media as saying that the public can expect to see a ”phoenix rise from these ashes”.

The demise of the ASA came as no real surprise. For many years, companies and organisations that did not belong to the ASA challenged its authority. The Medical Nutritional Institute (Pty) Ltd went to the High Court over an ASA ruling that one of its adverts contained unsubstantiated claims about the product’s efficacy – this ruling incorporated what was probably the ASA’s most potent weapon, the so-called “Ad Alert”, an instruction to all the ASA’s media company members to not accept the advert in question. The court issued an order that stopped the ASA from imposing any sanctions (including an Ad Alert) in respect of the advert, and required the ASA to remove its ruling from its website.  

Then came the now-famous Herbex case. Once again, a non-member company that was aggrieved by an ASA ruling went to court. The High Court held that the ASA had no jurisdiction over non-members, and that it was required to make this clear to people to whom it addressed letters of complaint. The ASA took this decision to the Supreme Court of Appeal. The matter was eventually resolved by way of an agreement that was made an order of court. This agreement made it clear that the ASA had no jurisdiction over non-members. It went on to say that, unless a non-member submitted to the ASA’s jurisdiction (in other words, voluntarily agreed to accept it), the ASA could not require the non-member to participate in its processes, or issue any instructions, order or ruling against it. 

The bulk of the ASA’s rulings dealt with consumer complaints, in other words, issues about adverts that were allegedly misleading, harmful or offensive. An example of a consumer protection complaint concerned a Virgin Active television advert. The complaint was that the advert was offensive because it used the expression “get off your ass”. In its ruling, the ASA ruled that it should adopt neither an “oversensitive nor a hypercritical perspective”, and that it had to consider “relevant factors such as the context and likely audience for the commercial.” It went on to hold that the advert was light-hearted and said this: “The word ‘ass’, while not necessarily preferable to parents, would not likely cause mental, emotional or moral harm to children.” Indeed!

Increasingly, the ASA came to deal with competitor complaints, in other words, complaints dealing with consumer confusion, copying and the exploitation of advertising goodwill. This brought intellectual property (“IP”) very much into the realm of the ASA. Over time, the ASA became a popular forum for passing off-type matters, which is, of course, an area where speedy action is required and the ASA was generally far cheaper and quicker than the High Court. The ASA also seemed to become increasingly sympathetic to IP-related issues.

A good example of how the ASA became involved in IP-related issues is evident in the case involving alleged copying and passing off of Simba crisps. In this case, the respondent specifically raised the point that the complaint was trying “to obtain leverage in relation to primarily trademark issues”, despite the fact that “trademarks in themselves do not receive protection” under the ASA Code. The ASA dealt with this as follows: “While the respondent is correct in noting that the ASA is not an appropriate forum to dispute trademarks, a complaint in relation to advertising goodwill associated with trademarks and/or other distinctive advertising properties falls squarely within the ambit and jurisdiction of the ASA…similarly, disputes about alleged imitation of such distinctive advertising properties, veracity of claims and potential deception also fall within the purview of the ASA.”

The ASA also increasingly employed IP-related language. In the Simba case, the ASA said that the following issues had to be borne in mind when considering alleged imitation: the extent of exposure; the period of usage and advertising spend; and the issue of whether the concept is central to the theme, distinctive or crafted as opposed to in common use. The ASA also looked at intention, holding that here the respondent had intentionally set out to imitate Simba’s get-up.

Brand owners will no doubt hope that any new regime will make provision for IP-related cases, such as passing off. A few years back, when doubts were already surfacing about the viability of the ASA, a document known as The Advertising and Marketing Industry Code of Practice (under the Consumer Protection Act, 2008) was published. In this document, the focus was entirely on consumer protection issues, with no mention of complaints based on consumer confusion and slavish copying. It would be a great pity, indeed, if the new ARB follows that route without taking cognisance of IP-related issues.

Reviewed by Gaelyn Scott, head of ENSafrica’s IP department.

 

Delene Bertasso

trade mark attorney | senior associate | IP
dbertasso@ENSafrica.com
cell: +27 83 399 6172

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