5 Written Questions
5 Matching Questions
- Reasonable Man Standard
- Texas Deceptive Trade Practices Act (TDTPA)
- Industry Guides/Guidelines
- Additional concerns (from public as response to FCC speech) for child advertising
- How is the Lanham Act different from the FTC Act
- a Additional concerns (from public as response to FCC speech):
1. Causes disillusionment: When a product doesn't live up to a child's fantasy. (Ex: Sea monkeys on the back of the comic book.)
2. Causes cynicism: Distrust created by advertising.
3. Causes parent-child conflicts (Ex: Some children would throw fits when they didn't get what they wanted. Disciplinary problems would result from these ads.)
The Bottom Line: Advertisers are bigger, and older, and smarter, and have a responsibility to uphold. It is unethical to use superior power to manipulate young minds. Advertisers are in the position to manipulate kids.
- b This is a state regulation ("little FTC Act"). The main provision: "False, misleading, or deceptive acts or practices in the conduct of any trade or commerce are hereby declared unlawful." The minor Provisions: You can't use the state seal and state flag when selling a product, because it doesn't want to look as if the state endorsed the product
-List of examples (not an exhaustive list): Passing off, confusion as to the source, misrepresentation as to the origin, pyramid schemes, turning back odometers when selling cars, etc.
-Consumers can sue and ask for punitive damages (2x), and can get both the court fees and the attorney fees back if you win
-States were encouraged to create their own trade practices by the FTC in the 80s
-This act is like the FTC act b/c it protects against deceptive advertising but this act d/n protect against unfairness and this act allows consumers to sue.
- c The Lanham Act allows competitors to sue, the FTC is only the government. Also this act allows punitive damages. You can sue for 3x damages, meaning that you can earn 3x what you lost on the competitors infringement on your trademark. You can also sue the competitor for the profits they made.
- d ONLY guidance/advisory; they are NOT LAW. If you stray from them, then you are in the danger zone and may be violating the law.
1.Bait Advertising: Ads that draw you in with a great deal and switch you to a higher priced item once you are in the store. The guideline is that you have to truly intent to sell a product advertised.
2. Guideline on the word Free: has to actually be free (ex: offering a washer for sale with a free bike, when you just upped the price of the washer).
3. Guidelines on endorsement
- e FTC decided they would only protect those acting reasonably under the circumstances. Examples of unreason-ability (Clairol case and Invisible floating device case). Used to be the ignorant man standard.
5 Multiple Choice Questions
- 1. Disparagement (tort) - protects a company, product or brand from being badmouthed/lied about
2. Defamation - same thing, but about people - MUST be a lie (libel=written/slander=spoken)
- It put less pressure on the FTC to prove deception and it put more pressure on the advertiser to prove truthfulness. It shifted the burden of proof from the FTC to the advertiser. The advertiser is "guilty until proven innocent"
- Preston - Spoofs = puffery and they are deceptive because some people believe them. He calls puffery a safe harbor b/c the FTC ignores puffery.
Richards/FTC - No. puffery is not deceptive, it is a form of opinion and an exaggeration is expected and does not create a resonable falsity. If no one believes them then it is NOT deceptive. However, opinions that imply facts/can be reduced to a fact can be regulated
- Airlines were running ads offering great deals. However, the deals were misleading because there was only a few tickets at that price and the hotels were gross. States complained b/c the FTC was not doing anything. Guidelines forced airlines to publish a disclosure of limitations but the disclosure tended to take up 3/4 of the ad. The FTC didn't like this but there was nothing the FTC could do to stop the states. The Department of Transportation after some controversy was found to be in charge and threw out the airlines guidelines.
- Pros - Universal reach, Compulsion (definitive means of compulsion)
Cons - Oppressive, Ineffectual, Costly, Rigid, Conflicting laws, weakly enforced
5 True/False Questions
Implied → Possibility
Lanham Trademark Act, Section 43 (a) → Protects against a statutory version of palming off. It is a trademark law designed to make sure that someone who owns a trademark has protection over that trademark. Logos can be part of trademarks but they are not the same thing. Example: Two Pesos, which had a pink color like Taco Cabana, and looked a lot like it (and in reality was the old partner of Taco Cabana). Taco C won the case.
Balkanization → Comes from the Balkan wars where territories were broken up. Advertising regulation would break up into a lot of parts and there would be no unified regulations so any national advertiser would face completely different laws from state to state. As a result the National Association of Attorneys General (NAAG) said the FTC had a point and created guidelines that said if you follow them you will stay out of trouble.
Misdescriptive name → Names can have a primary and secondary meaning. If the consumers know the primary meaning and not the secondary meaning that the ad is implying then it is considered deceptive. EXCEPTION: something has existed so long that it precedes the FTC. It is grandfathered in (ex. 2x4). Cases Aspercreme case and cashmora sweather case
National Advertising Division (NAD)/National Advertising Review Board (NARB) → This group is in charge of advertising self-regulation in the US. It is a division of CBBB. If NAD gets a lot of complaints about an advertiser they look into it. The NAD is selective about protecting competitors. Is solely about protecting public interest. The National Advertising Review Board (NARB) is were advertisers can go to appeal a decision. A panel made up of 3 advertisers, 1 ad agency and 1 public rep. hear the case then the NARB hands down the decision to the advertiser. The NARB can enforce via press release / hand case over to the FTC