GPSOLO September 2010
INTELLECTUAL PROPERTY LAW
Green Marketing: It’s Not All Bunnies and Flowers
By E. Thomas Watson
Green marketing, meaning the marketing of products in a manner intended to communicate that they are environmentally safe or benign, is both increasingly common and increasingly denounced as “greenwashing.” This article surveys the available remedies with respect to green marketing claims and concludes that the claims of critics that the consumer is without effective remedy are overstated.
The seven sins of greenwashing. According to the latest version of the Greenwashing Report, the “seven sins” of greenwashing consist of the following: (1) The “Sin of the Hidden Trade-off” is a claim that correctly states that a product is “green” but does not inform the consumer that it has certain adverse environmental impacts; (2) the “Sin of No Proof” is committed when an environmental claim is made that cannot be corroborated by easily accessible proof; (3) the “Sin of Vagueness” applies to a claim that is so vague as to have no real meaning or one that is easily misunderstood; (4) the “Sin of Worshipping False Labels” applies to product claims that give the impression that the product has been endorsed by an independent third party, where no such endorsement has been made; (5) the “Sin of Irrelevance” means a truthful but irrelevant environmental claim; (6) the “Sin of Lesser of Two Evils” ignores the environmental harm caused by the very existence of the product; and (7) the “Sin of Fibbing” involves environmental claims that are simply false.
But are businesses all that free to sin at will? Historically, outsized advertising claims have been controlled by a variety of legal means: (1) giving consumers a private cause of action, (2) giving competitors a private cause of action, (3) giving states regulatory authority over advertising, (4) promoting self-regulation by the industry, and (5) giving the federal government enforcement power over false or misleading advertising claims. Although a private suit against an advertiser for common law fraud can be quite difficult to maintain and consumers rarely resort to such remedies, the other methods for controlling misleading or false advertising are generally effective, whether the subject matter of the claim is superior pizza ingredients or green energy production.
There is no tort of deceptive advertising as such at common law so as to give a competitor a private cause of action. State legislators as well as courts have also been reluctant to grant private parties statutory causes of action for deceptive advertising.
Federal restrictions against false and misleading advertising. One method of attack offered by the federal Lanham Act comes from § 43(a), which bars false advertising. A plaintiff must prove that the defendant’s claim was factually false or misleading; the false claim was likely to influence the consumer’s purchasing decision; the claim actually deceived or is likely to deceive a reasonable consumer; the claim was made in interstate commerce; and the plaintiff has been injured. Consumers admittedly are at a disadvantage in bringing a § 43(a) claim. The federal circuits generally do not allow consumers to sue for § 43(a) violations and are divided as to whether commercial noncompetitors may sue.
The Federal Trade Commission (FTC), however, may rush in where consumers may not tread. Section 5 of the Federal Trade Commission Act authorizes the FTC to take action against “unfair or deceptive acts or practices” in commerce. Existing FTC rules require that all such claims be reasonably substantiated by competent and reliable scientific evidence. Under this general standard, the FTC has issued its “Guides for the Use of Environmental Marketing Claims,” collectively known as the “Green Guides.” The Green Guides, which are administrative interpretations and not binding legislative rules, set out general principles as well as specific guidance to the FTC’s position on terms such as “biodegradable,” “recyclable,” “natural,” “organic,” “ozone friendly,” “eco-safe,” “environmentally safe,” and “nontoxic.” Missing, however, are any firm interpretations on the meaning of “green,” “sustainable,” “carbon neutral,” or other terms that have come into popularity since the Green Guides were first promulgated in 1992.
Industry self-regulation. Self-regulation by large advertisers poses another meaningful barrier to large-scale greenwashing. The National Advertising Division (NAD) of the Council of Better Business Bureaus has achieved a reputation for actively and disinterestedly pursuing doubtful advertising claims. Both consumers and competitors may bring charges before the NAD. On occasion, the NAD will initiate an investigation itself. Although the NAD lacks enforcement authority and cannot grant either injunctive relief or damages, it is no industry cat’s paw. In one case, the NAD found the repeated failures of the company under investigation so egregious that it referred the results of its investigation to the FTC.
Certification marks. Legitimate certification marks issued by trusted experts are becoming an important source of consumer information and decision making. The more the legitimate marks are recognized, the less room there will be in the marketplace for self-serving marks, which, when used in a deceptive or misleading fashion, may establish a claim for false or deceptive advertising. Section 4 of the Lanham Act provides for the registration of certification marks, which are trademarks used with permission by many different persons to indicate compliance with rules promulgated by the trademark owner.
Commercial trademarks: It’s not easy being different. Certification marks are a species of trademark. A trademark is not an ordinary name; it is defined by the marketplace and by law as a distinctive symbol (usually a word or logo) that identifies the source or quality of goods or services marketed under that mark and distinguishes them from competing products and services. Many companies understand the value of trademarks but fail to understand the fundamental requirement that, as used, the chosen mark must uniquely identify and distinguish. The U.S. Patent and Trademark Office (USPTO) often will require an applicant to disclaim any exclusive right to use the word “green” by itself, but most applications for a green trademark are simply denied on the basis of being “merely descriptive” under § 2(e)(1) of the Lanham Act. The USPTO has taken the position that the term green “has come to describe goods or services that are intended to be beneficial to the environment,” such as electric cars and hybrid vehicles.
Advice for successful and legal green marketing. The advice for the green marketer is straightforward: Tell the truth; don’t overstate your case; be prepared to substantiate your claims; and use a trusted certification mark where you are eligible. When trade-offs are made, be transparent in your choices: Let consumers know what values have been traded, and why. When choosing a green trademark, do not pick the words “green,” “eco,” “Earth,” or any other word or phrase that has become a cliché for an environmentally benign product. Once you’ve chosen a good mark, have the mark searched and cleared by an experienced trademark attorney, and then register the mark before the world beats a path to your competitor’s door, the one where a similar product is sold under a similar or identical mark.