According to Petty (161), the law of comparative advertising in the United States has altered from being ineffective to having the ability to challenge competitors engaging in advertising abuses. A comparison between provisions of the FTC and the Lanham Act shows that both federal laws have constantly clashed over time. For instance, comparative advertising faces more frequent challenges under the Lanham Act than non-comparative advertising as there is a thin line between what is legal and what is not. The evolution of comparative advertising law, most notably the Lanham Act section 43(a), was necessitated by the ineffectiveness of the existing federal laws including the Sherman Antitrust Act and the Racketeer Influenced Corrupt Organization Act under common law (Petty 161). Comparative advertisement abuses and injuries were not considered by courts as they were reluctant to allow businesses to sue for damages, reimbursement, or relief against rivals’ advertising misrepresentations; even when it was clear that such misrepresentations led to injuries (Anten 390). The only available course of action under common law was suing the offending businesses under criticism. This allowed lawsuits in cases where the comparison in advertisements went beyond statements of opinion to declaration of facts and in this case likely to influence consumers purchasing behavior (Anten, 388). In the Saxlehner v. Wagner [1910] case, the judge argued that in the case where the comparative advertisement claims create a situation where consumers could be confused about the origin of goods and services, such claims could be instructed as passing off (Petty 163).
The FTC was created in 1914 as a replacement of common law and as an independent regulatory agency. The body was mandated with developing and enforcing the emerging antitrust policies as well as acting against unfair methods of competition. The FTC endorsed comparative advertising as beneficial to consumers in the 1970s. The passing and implementation of the Lanham Act section 43(a), which was amended in 1988, allowed injured parties to sue firms that used false or misleading advertisements or misrepresentation of facts regarding products and services. At first, it was hard to implement the Lanham Act to comparative advertising as courts interpreted its language to mean that plaintiffs had to prove that the defendant was passing off his or her goods (Petty 167). The main effective remedy in the Lanham Act was its use of an injunction, meaning a preliminary or temporary restraining order. An analysis of numerous cases brought under the Lanham Act shows that its understanding has constantly evolved and moved towards cases relating to comparative advertising.
The application of the Lanham Act as a regulatory scheme aimed to change trademark protection laws as well as restricting false advertising under the concept of comparative advertising. In this case, it means that both consumers and businesses have legal rights to sue a competitor who makes false claims regarding a product or service or gives misleading information regarding another business or product. The continued implementation of the Lanham Act is important as in the past, the United States legal framework lacked a formal system aimed at protecting businesses and consumers against false advertising and passing off. It means that businesses could copy their rivals legally and, in the process, create a lot of confusion for consumers (Singdahlsen 339). Whenever a business violates the Lanham Act provisions, the most common legal option is the injunction relief which requires the company to discontinue its actions immediately. However, other legal recourses include recovering damages for lost profits and other overhead costs associated with the case.
Sources:
Anten, Todd. “Self-disparaging trademarks and social change: Factoring the reappropriation of slurs into Section 2 (a) of the Lanham Act.” Colum. L. Rev. 106 (2006): 388.
Petty, Ross D. “The Evolution of Comparative Advertising Law: Has the Lanham Act Gone Too Far?.” Journal of Public Policy & Marketing (1991): 161-181.
Singdahlsen, J. P. “The Risk of Chill: A Cost of the Standards Governing the Regulation of False Advertising under Section 43(a) of the Lanham Act.” Virginia Law Review, vol. 77, no. 2, 1991, p. 339
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