How Businesses Comply with The Lanham Act Scheme – The Lanham Act (Part 4), by Khalid Farwana

[Khalid Farwana]

As mentioned earlier, The Lanham Act aims at making a company liable to another which is likely to be affected by the false description or representation of products and services in a comparative advertising. A comparative advertisement makes a comparison between two products or services and targets to attract the customer by mentioning the weaknesses of the competitor and value of the seller’s product as the main selling point. Complying with the Lanham regulatory scheme simply means following its provisions and regulations regarding false advertising and misrepresentation that may cause injuries or damages to both the consumer and the competing business (Singdahlsen 340). When it comes to comparative advertising, compliance involves practising “truth-in-advertising” concept where a business focuses on following the laws laid in place with the aim of protecting both consumers and competing businesses. Such laws promote truthful advertising by requiring advertisements to be honest and any claims to be substantiated and based on facts. Failure to do so means that a business faces a likelihood of a lawsuit where the affected parties either sue for an injunction stopping the advertisements or for relief regarding monetary rewards in case of any injuries or damages suffered in the process.

For a long time, the Federal Trade Commission was the body mandated with regulating advertising and marketing, as well as being the authority that filed lawsuits and imposed penalties against businesses that did not comply with federal advertising rules (Beard 270). However, the passing of the Lanham Act changed the situation and made it possible for businesses and affected customers to file lawsuits directly, especially with regards trademarks and false advertising claims. Both the FTC and the Lanham Act ensure that businesses comply with the regulatory scheme by ensuring that advertisements are truthful and not deceptive, substantiating any claims made in the advertisements. Moreover, businesses also comply with the advertising laws by differentiating between boastful advertising and false advertising. Failure to differentiate the two concepts means a business runs the risk of getting sued by either competitor or by consumers for false advertising (Beard 280). For example, in the U-Haul International, Inc. v. Jartran, Inc. case, the defendant used deceptive advertising techniques to lure customers from the plaintiff, clearly showing a violation of Lanham Act provisions which prohibit false advertising which can harm either the competitor or the consumers. The defendant, Jartran Inc, used three deceptive advertisements claiming that false price comparison. They claimed their trucks were better than alternatives in the market and that “nobody can rent a truck as Jartran can.” The price comparison was found to be deceptive in that it represented different prices than the actual price (Anten 388). Jartran also published pictures of its trucks next to a U-Haul truck with the sizes manipulated so that U-Haul trucks appeared smaller and thus less attractive. In this case, Jartran should have practised truthful advertising by avoiding deceptive and false advertising as it was illegal under the Lanham Act and the comparative advertising concept.

A look at the L’Aiglon Apparel, Inc. v. Lana Lobell, Inc. case shows that complying with the Lanham Act also involves not using “palming off” as it is considered to be false advertising that can affect both the businesses and individual consumers. In the case, Lobell, the defendant, used the Palming off concept to pass off L’Aiglons’ national print advertising campaign as its own by using the plaintiffs dress pictures, hence confusing the potential consumers and damaging the plaintiff’s business (Beard 146). In this case, it shows that compliance with the Lanham Act regulatory scheme should involve avoiding passing off other business’ goods and services to benefit financially or by gaining customers. Compliance also involves following the policy of truth, avoiding false advertisements and deceptive marketing, and avoiding mentioning the competition in the advertisement unless the information is factually accurate. The “don’t knock your competition” rule is based on the comparative advertising concept which was encouraged by the FTC and motivated businesses to compare aspects of their products and services with those of the competition in a bid to influence customer purchasing decisions. However, the use of comparative advertising can make it hard for a business to comply with the Lanham Act provisions as there is a thin line between false and boastful advertising.

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