Introduction To Basic Advertising Laws
Before creating an advertising program for your business, or branding a new business name, you should consider the multitude of legal issues that surround such a task. You must be careful not to violate any governmental restrictions (state and federal), or the rights of any third party individual or business. In addition to ensuring the information you provide is not false or misleading, you also need to ensure that you are not inadvertently transgressing on a third party's right to a trademark, copyright, trade dress, or their right to privacy.
Truth In Advertising
Businesses may tout the qualities of their products or services, but those representations must be true and substantiated. If there are any misrepresentations in advertisements or promotions (either specific misrepresentations or an overall misleading net impression), the state or federal government may file a lawsuit to redress this wrong.
Laws Affecting Statements About Price
Statements regarding the price of a product must also be truthful. For example, if you claim "sold by our competitors for $59.95, and we charge only $49.99", both prices must be legitimate and substantiated before the advertisement runs.
Although it has become common for businesses to show their products/service superiority by comparing them with those of a competitor, extra care should be taken when engaging in comparison ad campaigns. Comparative advertising is permissible only if: (1) the statements made are in fact true and substantiated by competent evidence; (2) the net impression of the ad on the "reasonable" consumer is not misleading; and (3) in using your competitor's name or logo it is conspicuously clear that your competitor is not sponsoring the advertisement. A person or entity that intentionally or negligently makes untrue or disparaging remarks about a competitor's product or service may be held legally accountable to the injured party (the competitor and/or consumer).
A Product's Packaging and Trade Dress
A special form of advertising known as "trade dress" (a product's packaging) has been given special protection. While it is true that the copyright laws do not protect functional items, such as product packaging, trade dress laws have been developed to protect the design elements of a product's packaging. Why is this important? Because, the trade dress laws may prohibit you from packing your product in a manner that is similar to another company's packaging.
We strongly suggest that you consult with an attorney familiar with intellectual property law and advertising law to ensure your intended advertising campaign will not subject you to unforeseen potential liability.