Citing a Celeb in an Ad? The First Amendment May Not Protect You.

A recent court ruling finds companies aren't protected from suits by public figures if corporate ads feature them without prior consent.

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In a decision in February, the Seventh Circuit Court of Appeals significantly broadened the definition of commercial speech, calling into question how much a First Amendment defense is available for community-service advertising.

In Jordan v. Jewel Stores, Inc., the court held that an ad congratulating Michael Jordan on his induction into the Basketball Hall of Fame was commercial speech since it mentioned the advertiser.

In light of this ruling, businesses should exercise caution to avoid legal fallout when producing advertising featuring a person or organization.

Related: Writing Social Media Guidelines for Your Company? Tread Carefully.

Michael Jordan was inducted into the Basketball Hall of Fame in 2009. To mark the occasion, Sports Illustrated produced a commemorative edition devoted exclusively to Michael Jordan's career. In exchange for Jewel's agreement to stock the issue in grocery stores, Sports Illustrated included a full-page Jordan tribute crafted by Jewel that included, at the magazine's insistence, a "play on words or design that is specific to Michael Jordan." The ad appeared on the issue's inside back cover.

The text of the ad read as follows: "A Shoe In! After six NBA championships, scores of rewritten record books and numerous buzzer beaters, Michael Jordan's elevation in the Basketball Hall of Fame was never in doubt! Jewel-Osco salutes #23 on his many accomplishments as we honor a fellow Chicagoan who was "just around the corner' for so many years."

Underneath appeared Jewel's logo and the slogan "Good things are just around the corner."

Michael Jordan did not view the ad as a congratulatory gesture but rather as an unlawful use of his name for Jewel's benefit. He retaliated by filing a $5 million lawsuit.

Jewel argued in response that the ad did not count as commercial speech since it wasn't promoting any products or services. And Jewel claimed that the company had merely been exercising its freedom of speech to congratulate Jordan on his accomplishment and that the First Amendment protected the firm from liability. Jewel insisted that its ad congratulating Jordan was no different than any other of its ads supporting various nonprofit and community organizations.

The trial court agreed with Jewel.

Related: Use Photos in Advertisements? Take These Steps to Avoid a Lawsuit

On appeal, however, the Seventh Circuit took a different stance, considering the ad to be commercial speech and therefore less entitled to First Amendment protection. Commercial speech -- or speech that proposes a commercial transaction -- may be regulated or restricted. In its opinion, the court focused on three factors: whether the speech was an advertisement, if it referred to a specific product and whether the speaker had an economic motivation for the speech.

In its analysis, the Seventh Circuit rejected Jewel's claims that its sole purpose for the ad was to congratulate Jordan and not advertising. The court found it irrelevant that the ad did not promote a specific product. It explained that modern "commercial advertising is enormously varied in style" and that "the commercial message is general and implicit rather than specific and explicit." The court supposed Jewel's true purpose was to promote its supermarkets by creating an association in people's minds between the company and Jordan.

The sole issue decided by the court on appeal was whether Jewel's ad qualified as noncommercial speech protected by the First Amendment. Since the Seventh Circuit found that it wasn't, Jordan's claims will proceed without Jewel's being able to claim First Amendment protection.

Thus businesses need to be cautious with their community-service ads or any advertising identifying a person or organization without first obtaining their consent. If the ad can be viewed as an effort to promote the business by creating an association between the business and the cited individual or organization, then the company may be exposed to liability. Even if the ad appears innocuous or focused on the community, it may be viewed as commercial speech and entitled to only limited First Amendment protection.

Related: When Business Names Confuse Consumers: The Basics of Trademark Law

Richard Young and Matthew T. Ingersoll
Richard Young chairs the Chicago intellectual property practice group of Milwaukee-based Quarles & Brady. An associate with that practice group, Matthew T. Ingersoll focuses on trademark law, intellectual property litigation and deal structuring.  

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