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Comparative Advertising-How Far can you Go?

Over the past decade and a half I have gone from advising clients as to what they legally “can” do on the internet to what they practically “should” do. More important than whether you can legally do something online, is whether you are going to get sued. For the most part, any internet advertising that you do not get sued over is far preferable to legal advertising that ties you up in court for years. You may “win” the case, but waste hundreds of thousand of dollars on internet attorneys and years of time you could have devoted to running your business. So, what are the most important considerations when embarking on an online comparative advertising campaign? Here are the factors to consider when making a “practical” analysis:

1) How big is the company that might sue you?
2) How likely is it that the internet activity would come to the other company’s attention?
3) How likely is the other company to sue you (regardless of whether they are likely to win or not)?

If you are dealing with an eight-hundred pound gorilla that sees your online ads every day and has an itchy suing finger, you should obviously avoid the comparison, even if you have a legitimate right to do so. Even if the initial press outweighs the cost initially, over time the litigation costs will likely far outweigh the publicity benefits. Although the extra media attention is a factor to consider, bear in mind that you are not the one in charge of making the lawsuit go away.

Now for the “legal” analysis. If you answered the foregoing three questions to your satisfaction (or if you want this to be your “Waterloo”, but still want to position yourself to win a pyrrhic victory) internet product comparison statements must still be accurate and non-deceptive.

In addition to product comparison issues, you must also consider the following to avoid having to pay damages for trademark infringement and unfair competition:

1) Make sure the comparison information is truthful; do not mislead the consumer either by act or omission;
2) Use the competitor’s trademark in an accurate manner. Do not alter or deface it in any manner;
3) If your competitor’s trademark is federally registered, use it in association with the circle ®;
4) Note clearly, somewhere in the advertising, who the owner of the other trademark is, and that they are not affiliated with you;
5) Do not connote in any way that the owner of the trademark endorses or sponsors you or your product in any way;
6) Do not use the competitor’s trademark in a manner more prominent than your own, and do not alter meta tags to drive traffic based upon the use of the competitor’s trademark;
7) Properly note the comparison in a manner which does not demean the competition; 8) Document and preserve the substantiation of all comparison claims;
9) Obtain all testing or factual criteria from a recognized, legitimate, objective, third party source;
10) Remove claims immediately once the comparison is no longer valid or supportable;
11) Make the comparison an honest, “apples to apples” comparison; and
12) Avoid sham comparisons designed solely to increase visibility by comparing a complete unknown to the industry leader.

Bear in mind, however, there are few hard and fast rules in this game. While the foregoing rules obviously cannot guarantee immunity from suit, they will go a long way toward mitigating what could otherwise be years of crippling damage to your business.

Posted in Trademark Law. Tagged with , , .