Chapter 48: Intro Problem

Doans is a brand name used for more than 90 years for back pain medication sold on an over-the-counter basis. Shortly after its purchase of the Doans trademark and the right to produce the underlying product, Ciba-Geigy Corporation (Ciba) conducted a marketing study concerning consumer perceptions of the Doans medication for back pain. The study revealed that this medication had a weak image in comparison to the leading brands of analgesics, and indicated that Ciba would benefit from positioning Doans as a more effective product that was strong enough for the types of pain typically experienced by persons susceptible to backaches.

In an effort to strengthen the image of Doans, Ciba mounted a television and newspaper advertising campaign that lasted for eight years. The advertisements characterized Doans as an effective remedy specifically for back pain and stated that the product contained a special ingredient (magnesium salicylate) not found in other over-the-counter analgesics. Some of the advertisements displayed images of competing over-the-counter pain remedies. The Federal Trade Commission (FTC) instituted an administrative proceeding against Cibas successor-in-interest, Novartis Corporation, on the ground that the advertisements for Doans were deceptive, in supposed violation of 5 of the Federal Trade Commission Act. The FTCs theory was that even though the Doans advertisements were truthful in stating that the product was effective for back pain and that it contained a special ingredient not present in other over-the-counter analgesics, the combination of the two literally true statements created an implied representation for which there was no substantiation: that because of its special ingredient, Doans was superior to other analgesics in relieving back pain. It was this implied representation that the FTC alleged to be deceptive. Consider the following questions as you study this chapter:

• In FTC administrative proceedings, what legal test controls the determination of whether an advertisement was deceptive?
• May the FTC validly base a deceptive advertising proceeding on the theory that an advertisement consisting of literally true statements may nevertheless be deceptive in what it implies?
• If the theory just noted is valid, were the Doans advertisements deceptive?
• If the Doans advertisements were deceptive, what potential legal consequences could follow for Novartis? In particular, may that firm be ordered to engage in corrective advertising, or would a corrective advertising order violate the firms right to freedom of speech?