This article investigates the regulatory environment for comparative advertising in terms of industry regulation, government regulatory agencies, and private court actions under state law and the federal Lanham Act. Major legal issues are trade disparagement and defamation, trademark infringement and dilution, and deception. The Lanham Act offers protection and redress for parties injured by false, misleading or unfair comparative advertising. Legal theory for application of Lanham to comparative advertising is detailed and implications of the U-Haul vs. Jartran case, where Lanham was applied with U-Haul's being awarded more than forty million dollars in damages and legal fees, are discussed. Several public policy issues are raised including whether the FTC's private action policy serves the public interest given legal risks and costs of defending law suits.
Get full access to this article
View all access options for this article.
References
1.
AbramsBill (1982), “Comparative Ads Are Getting More Popular. Harder Hitting,” The Wall Strut Journal (March 11).
2.
Advertising Age (1974), “Competitors Hail NARB for Schick Shaver Ruling.” (January 7), 1, 6.
3.
Advertising Age (1977), “Comparative Ads Graded ‘F’ by CBBB President.” (October 17), 2.
4.
Advertising Age (1987), ‘Top 500 Advertisers for 1987,” (March 26), 22–135.
5.
Alfred Dunhill Ltd. v. Interstate Cigar Co., Inc. (1974), 449 F.2d 232 (2d Cir).
6.
American Brands, Inc. v. R.J. Reynolds Co. (1976), 413 F. Supp 1352, 1356–7 (and targets of comparative advertising. S.D.N.Y.).
7.
American Home Products Corp. v. Johnson & Johnson (1977), 436 F. Supp. 785 (1977), aff'd (1978), 577 F.2d 160, 165 (2d Cir.).
8.
Amesen v. Raymond Lee Organization, Inc. (1971), 333 F. Supp. 116 (C.D. Calif.).
9.
Avis Rent A Car System, Inc. v. The Hertz Corp. (1986), 782 F. 2d 381 (2d Cir).
10.
BarryThomas and TremblayRoger L. (1975), “Comparative Advertising: Perspectives and Issues.” Journal of Advertising (October), 15–20.
11.
Bernard Food Industries, Inc. v. Dietene Co. (1969), 415 F.2d 1279, 1283 (7th Cir.), cert.denied 397 U.S. 912 (1970).
12.
BerryDick (1983), “How Marketers Use Microcomputers—Now and in the Future,”Business Marketing68 (December), 47–51.
13.
Big O Tire Dealers v. Goodyear Tire & Rubber Co. (1977), 561 F.2d 1365, 1375 n. 2 (10th Cir.), cert. denied 434 U.S. 1052 (1978).
14.
Black's Law Dictionary (1979), 5th ed., 1371–72.
15.
Bohsei Enterprises Co. v. Porteous Fastener Co. (1977), 441 F. Supp. 162, 165 (C.D. Cal.).
16.
BrownStephen W. and JacksonD. W.Jr. (1977), “Comparative Television Advertising: Examining Its Nature and Frequency,”Journal of Advertising6 (October), 15–18.
17.
BuchananBruce (1985), “Can You Pass the Comparative Ad Challenge?” Harvard Business Review (July-August), 106–13.
18.
Burndy Corp. v. Teledyne Industries, Inc. (1984), 748 F.2d 767 (2d Cir.).
19.
Business Week (1975), “Schick, Inc. Teeters on the Razor's Edge,” (May 5), 38.
20.
ChristopherMaurine (1974a), “NBC Spells Out New Formal Guides for Comparative Spots,” Advertising Age (January 28), 1 +.
21.
ChristopherMaurine (1974b), “ABC Comparative Rules Stress Test Procedures,” Advertising Age (March 18), 1+.
22.
Cliffdale Associates Inc. (1984), 103 FTC 110 appendix.
23.
Coca-Cola Co. v. Gemini Rising, Inc. (1972), 346 F. Supp. 1183 (E.D.N.Y.).
24.
CohenDorothy (1986a), “Trademark Strategy,” Journal of Marketing50 (January), 61–74.
25.
CohenDorothy (1986b), “U-Haul International, Inc. v. Jartran., Inc., et. al.” In “Legal Developments in Marketing.” WernerRay O., ed., Journal of Marketing, 50 (January), 104.
26.
CohenDorothy (1987), “Southwest Sunsites, Inc. v. Green Valley Acres, Inc., Green Valley Acres, Inc., II, Sidney Gross, and Edwin Kritzler v. Federal Trade Commission, CCH <67,021 (CA-9, April 1986); BNA ATRR No. 1260 (April 10, 1986), 633.” in “Legal Developments in Marketing,” WernerRay O., ed., Journal of Marketing51 (January), 114–15.
27.
CohenStanley E. (1981), “Transition Unit Tells Plans for FTC,” Advertising Age52 (February 2), 3.
28.
ColfordSteven W. (1986), “Jartran Ruling May Raise Stakes of Ad Claims,” Advertising Age, 57 (July 21), 4 & 77.
29.
ConlonSuzanne (1977), “Comparative Advertising: What Ever Happened to Brand X?”Trademark Reporter67, 407–14.
30.
Council of Better Business Bureaus, Inc. (1983a), NAD Guide for Advertisers and Advertising Agencies.
31.
Council of Better Business Bureaus, Inc. (1983b), NAD Case Report (July 15).
32.
CrawfordC. T., MurisT. J. and PetermanJ. L. (1984), “Federal Trade Commission Law Enforcement in the 1980s: A Progress Report on the First Three Years of the Reagan Administration Leadership, October 1981 to October 1984.”
33.
Cuisinarts, Inc. v. Robot-Coupe Int'l. Corp. (1984), 580 F. Supp. 634, 637 (S.D.N.Y.).
34.
DenicolaRobert C. (1982), “Trademarks as Speech: Constitutional Implications of the Emerging Rationales for the Protection of Trade Symbols,” Wisconsin Law Review, 158–207.
35.
DerenbergWalter J. (1957), “Federal Unfair Competition Law at the End of the First Decade of the Lanham Act: Prologue or Epilogue?” 32 N.Y.U. Law Review, 1029.
36.
Dun's Review (1977), “Battle Over Comparative Ads,” 110 (November), 60–62.
37.
Durbin Brass Works, Inc. v. Schuler.1982, 532 F. Supp. 41 (E.D. Missouri).
38.
Federal Register (1979), “Comparative Advertising: Issuance of a Policy Statement,” 44, 47, 328 (to be codified at 16 C.F.R. Part 14).
39.
Federal Trade Commission (1978), “Ads Giving Useful Price Data and Product Information Would Aid Business, Help Inflation Fight, Says FTC Chairman,” FTC News Summary (November 10).
40.
FordGary T. and CalfeeJohn E. (1986), “Recent Developments in FTC Policy on Deception,”Journal of Marketing50 (July), 82–103.
41.
FTC v. Sterling Drug, Inc. (1963), 317 F.2d 669, 674 (2d Cir).
42.
GermainKenneth B. (1974), “Unfair Trade Practices Under Section 43(a) of the Lanham Act: You've Come a Long Way, Baby—Too Far, Maybe?” Trademark Reporter64, 93.
43.
GermainKenneth B. (1982), “The Thirty-Fifth Year of Administration of the Lanham Trademark Act of 1946,” Trademark Reporter72, 559, 733, n. 907.
44.
Girl Scouts of the United States v. Personality Posters Manufacturing Co. (1969), 304 F. Supp. 1228 (S.D.N.Y.).
45.
GoldenLinda L. (1976), “Consumer Reactions to Comparative Advertising,” in Advances in Consumer Research, Ed. AndersonBeverlee B., 3, 63–67.
46.
GrantDon (1973), “Be Hard on Comparison Ads: Reports to Four A's,” Advertising Age (November 19), 1.
47.
HisrichRobert D. (1983), “Executive Advertisers’ Views of Comparative Advertising,”Sloan Management Review (Fall); 39–51.
48.
International Harvester Co. (1984), 104 FTC 949 appendix.
49.
JordanE. R. and RubinP. H. (1979), “An Economic Analysis of the Law of False Advertising,” The Journal of Legal Studies, 527–36.
50.
KoelemayJames M.Jr. (1982), “Monetary Relief for Trademark Infringement Under the Lanham Act,” Trademark Reporter72, 385.
51.
KotenJohn (1984), “More Firms File Challenges to Rivals’ Comparative Ads,” Wall Street Journal (January 12), 27.
52.
KrakwieckiMarie (1977), “What Else is Going Up? Ad Liability Insurance Cost,” Advertising Age (August 15), 32–25.
53.
L'Aiglon Apparel v. Lana Lobell, Inc. (1954), 214 F.2d 649 (3d Cir).
54.
LeeJerome G. (1981), “Comparative Advertising, Commercial Disparagement, and False Advertising,”Trademark Reporter71, 620–40.
55.
LevyRobert (1987), “Big Resurgence in Comparative Ads,”Dun's Business Month129 (February), 56–58.
56.
LevySidney J. and RookDennis W. (1981), “Brands, Trademarks, and the Law” in Review of Marketing 1981, EnisBen M. and RoeringKenneth J., eds., Chicago: American Marketing Association, 185–94.
57.
Lorillard v. FTC (1950), 186 F. 2d 52, 58 (4th Cir).
58.
MacklinM. Carole and MacklinCrofford J.Jr. (1987), “Refuting a Competitor's Advertising Claim,”Journal of Business Strategy8 (Summer), 71–75.
McConvilleDaniel J. (1985), “Can the Lawyers and the Creatives Co-Exist,” Madison Avenue (November), 24–26, 58, 127.
61.
McLeodRaymond and RogersJohn C. (1982), “Marketing Information Systems: Uses in the Fortune 500,”California Management Review25 (Fall), 106–18.
62.
McLeodRaymond and RogersJohn C. (1987), “Marketing Information Systems: Their Current Status in Fortune 1000 Companies,”Journal of Management Information Systems1 (Spring), 57–75.
63.
MentzerJohn T., SchusterCamille P. and RobertsDavid J. (1987), “Microcomputer Versus Mainframe Usage by Marketing Professionals,”Journal of the Academy of Marketing Sciences15 (Summer), 1–9.
64.
MeyerowitzSteven A. (1985a), “How Advertising Claims Can Create Legally-Troublesome Warrantees,” Business Marketing (June), 98–106.
65.
MeyerowitzSteven A. (1985b), “Brand X Strikes Back! The Developing Law of Comparative Advertising,” Business Marketing (August), 81–86.
66.
MuehlingDarrel D. and KangunNorman (1985), “The Multi-Dimensionality of Comparative Advertising: Implications for the Federal Trade Commission,”Journal of Public Policy & Marketing4, 112–28.
67.
NARB (1975), The National Advertising Review Board: 1971–1975, NARB.
68.
National Broadcasting Company, Department of Broadcast Standards (1975) Comparative Advertising Guidelines, Revised (September 2).
69.
Nebraska Law Review (1978), “The Present Scope of Recovery for Unfair Competition Violations Under Section 43(a) of the Lanham Act,”38, 159–80.
70.
O'ConnorP. J. (1986), “The Information Value of Comparative Advertising Mediating Purchase Influence,” Proceedings: American Marketing Association, Educators’ Conference, 23–37.
71.
PoschRobert (1986), “Comparative Advertising.” Direct Marketing (September), 122–25.
72.
PattishallBeverly W. and HilliardDavid C. (1974), Trademarks, Trade Identity and Unfair Trade Practices, New York: Matthew Bender.
73.
PrestonLee E. and BloomPaul N. (1983), “The Concerns of the Rich/Poor Consumer,”California Management Review26 (1), 100–19.
74.
ProsserWilliam (1971), Handbook on Torts, 4th ed., St. Paul: MN., West Publishing Co.
75.
RogersJohn C. and WilliamsTerrell G. (1988), “Comparative Advertising Effectiveness: Practitioners’ Perceptions Versus Academic Research Findings,” Working paper, Logan: Utah State University.
76.
RothschildMichael (1987), Marketing Communications, Lexington, Mass.: D. C. Heath and Company.
77.
Samson Crane Co. v. Union National Sales, Inc. (1949), 87 F. Supp. 218, 222 (D. Mass).
78.
ShimpTerence A. (1975), “Comparison Advertising in National Television Commercials: A Content Analysis with Specific Emphasis Devoted to the Issue of Incomplete Comparative Assertions,” in Marketing in Turbulent Times: AMA Combined Proceedings, MazzeEdward M., ed., Chicago: American Marketing Association, 504–08.
79.
Skil Corp. v. Rockwell International Corp. (1974), 375 E Supp. 777, 783 (N.D. Ill).
80.
SterkS. E. (1977), “The Law of Comparative Advertising: How Much Worse is ‘Better’ Than ‘Great’,”Trademark Reporter67, 368–406.
81.
StevensonThomasII. and SwayneLinda E. (1984), “Comparative Industrial Advertising: The Content and Frequency,”Industrial Marketing Management13, 133–38.
82.
SwayneLinda E. and StevensonThomas H. (1987), “Comparative Advertising in Horizontal Business Publications,”Industrial Marketing Management16 (Fall), 71–76.
83.
Thompson Medical Co. (1984), 104 FTC 648 appendix.
84.
TownleyRod (1982), “No Hitting Below the [Money] Belt,” TV Guide (August 7), 18–20.
85.
Transgo, Inc. v. Ajac Transmission Parts Corp. (1985), 768 F.2d 1001, 1014–16 (9th Cir.) cert. denied 106 S Ct 802 (1986).
86.
U-Haul International, Inc. v. Jartran, Inc. (1982a), 522 F. Supp. 1238 (Ariz.) aff'd 681 F.2d 1159 (9th Cir.).
87.
U-Haul International, Inc. v. Jartran, Inc. (1982b), 681 F. 2d 1159 (9th Cir.).
88.
U-Haul International, Inc. v. Jartran, Inc. (1984), 601 F. Supp. 1140–1150 (D. Ariz.).
89.
U-Haul International, Inc. v. Jartran, Inc. (1986), 793 F. 2d (9th Cir.), 1034–1042. Ulanoff, Stanley M. (1975), “Comparison Advertising: An Historical Retrospective,” working paper, Cambridge, Mass.: Marketing Science Institute.
90.
15 USC section 45 (a) (1) (1976).
91.
15 USC section 1125 (a) (1982).
92.
15 USC section 45 (Supp. 1984).
93.
Universal City Studios, Inc. v. Sony Corp. of America (1977), 429 F. Supp. 407, 410 (C.D. Cal.).
94.
Upjohn Co., v. American Home Products Corp. (1984), 598 F. Supp. 550, 556.
95.
Vidal Sasoon, Inc. v. Bristol Myers Co. (1981), 661 F. 2d 278 (2d Cir.).
96.
Wendy's International, Inc. v. Big Bite, Inc. (1983), 576 F. Supp. 816, 819 (S.D. Ohio).
97.
WernerR. O. (1985), “U-Haul vs. Jartran Decision Gives Comparative Advertisement Warning,” Marketing News 19 (April 26), 16.
98.
WilkieWilliam L. and FarrisPaul W. (1975), “Comparison Advertising: Problems and Potential,”Journal of Marketing39 (October), 7–15.
99.
WrightPeter L. and BarbourFrederick (1975), “The Relevance of Decision Process Models in Structuring Persuasive Messages,” Communication Research2 (October).
100.
ZanotEric John (1977), “The NARB: Precedents, Premises and Performance,” Dissertation, Urbana/Champaign: Graduate College, University of Illinois.
