February 24, 2020

February 24, 2020

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Serious Games Require Serious Attention to Marketing Statements

Lumos Labs recently paid $2 million to the Federal Trade Commission to settle claims that it deceived consumers about its brain training application’s ability to increase cognitive function. According to the FTC,  the company alleged that its app, called Lumosity, provided many beneficial effects including the ability to improve users’ school and work performance, delay the onset of age-related cognitive disorders and help restore brain function lost as a result of brain trauma and other health conditions.

According to the FTC, the company did not have sufficient scientific data to back up the claims made in its ads. The FTC also claimed that the company did not disclose that it solicited consumer testimonials about the effectiveness of the product via a contest that offered users the chance to win iPads and other prizes.

In a prepared statement, the company stood by the scientific basis for its brain-training methods and asserted that the settlement was a result of its marketing language that has since been discontinued.

The use of games for “good” causes, such as education, health and training is known as “serious games.” The potential for these types of games to help people in a variety of ways is immense. The number of these games is growing rapidly.

Makers of these games must be mindful not to overreach in the claims of what these games can do. The FTC has been active in policing unsupported claims by app makers.

Additionally, the FTC has been enforcing its endorsement guidelines which require disclosure when a company provides some compensation or financial incentive for endorsements or testimonials. Here, the fact that users had a chance to win valuable prizes in exchange for providing testimonials apparently was not disclosed.

Serious games and other apps have tremendous opportunity to provide beneficial results. However, it is important for makers of these games and apps to understand and comply with the various legal issues that are relevant to these offerings. It is advisable to seek legal review of all serious games and apps and their marketing plan before they are released to identify potential legal issues.

Copyright © 2020, Sheppard Mullin Richter & Hampton LLP.


About this Author

James Mattinson Blockchain Technology and Digital Currency Lawyer Sheppard Mullin Washington DC

Jim Gatto is a partner in the Intellectual Property Practice Group in the firm's Washington, D.C. office. He is also Co-Team Leader of the firm's Digital Media Industry and Social Media and Games Industry Teams, Blockchain Technology and Digital Currency team, and Team Leader of the firm's Open Source Team. 

Areas of Practice

Mr. Gatto leverages his unique combination of nearly 30 years of IP experience, business insights and attention to technology trends to help companies develop IP and other legal...