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Course: Trademarks Outline Nofar Fall 2004
School: unknown
Year: 2004
Professor: unknown
Course Outline provided by Legalnut.com
  1. TRADEMARKS;

    1. DEFINITION; TM’s are symbols merchants use to identify their goods. Tm law is derived from fed CC pwr.

    2. ADVANTAGES-Reasons for protection;

      1. Avoids consumer confusion.

      2. Reduces search costs

      3. Avoids free riding on someone else’s efforts. Regulates commerce by making actionable the deceptive and misleading marks of such commerce. 15 USC §1127.

      4. Federal jurisdiction

      5. Protects TM owner’s investment from diversion of sales, discrediting the owner’s name, and dilution of the symbol of origin.

      6. Encourage creativity

      7. Provides important information to consumers

      8. Commercial morality; preserves fair competition by ensuring honestly and fair dealing.

    3. DISADVANTAGES:

      1. May lose investment if unknown use by someone else. 2 co’s invest in the same mark.

      2. No requirement for federal registration of TM b/c of costs.

      3. Barriers to entry

      4. Difficult for new firms to drive prices down

      5. Encourages wasteful expenditures on non-informational advertising

      6. Leads to monopolization

    4. REQUIREMENTS; Lanham Act provides for registration of TM that have been used in i/s commerce, foreign commerce or commerce with Indian tribes. It is possible to apply for registration of a TM based on 15 USC §1051:

      1. Affixation;

        1. Physically affix TM to gd.

      2. Use;

        1. TM rights are acquired by use. Use must be affixed; that it be placed on the goods or that the mark be used “in connection with the goods” 15 USC §1127. Use in commerce includes use in intrastate commerce that directly affects interstate commerce.

        2. Blue Bell v Farah; the use must be open & bona fide. Infrequent sales of large seasonal items are ok.

        3. In re Lyndale Farms; Trade name usage does not constitute use of a TM.

        4. Use by a related company inures to the benefit of the TM owner provided that the owner exercises control over the nature and quality of the goods & services provided by the mark. 15 USC §1055, 1127

      3. Distinctiveness;

        1. Secondary meaning is required for descriptive marks b/c descriptive marks are preferred marks. If there is 2ndry meaning then there is no confusion.

          1. Proof of Secondary meaning;

            1. Long and exclusive use; 15 USC §1052(f) five yrs exclusive and continuous use may be accepted by the PTO as prima facie evidence of distinctiveness.

            2. Extensive sales and promotion; Volkswagenwer v Wheeler.

            3. Survey evidence; indication of public association of the mark with the goods and their distributor Schmidt v Honeysweet.

            4. Other convincing evidence; (eg affidavits from consuming public verifying association of the mark with the owner of the goods)

        2. Genericness – incapable of distinctiveness.

          1. AJ Canfield v Honickman; generic at the start. Describes product genius or source.

          2. Registration can be canceled if at any time the registered mark becomes generic. Use the following tests.

          3. Primary significance test; to function as a trademark, a term must be an indicator of a source, sponsorship, approval or affiliation. If in the dictionary, is generic.

            1. 3 types of goods:

              1. Search goods; learn b4 you buy it

              2. Experience goods; can only tell after you buy it (ex tuna)

              3. Credence goods; don’t know about it even after you buy it (ex auto service)

          4. Consumer understanding test; what do buyers understand by the word for whose use the parties are contending? See customer surveys. Learned Hand made this test.

          5. Genus/brand distinction test; AJ Canfield v Honickman; is chocolate fudge soda a descriptive or generic term? Common everyday language is functional. If functional, not protectable.

          6. King Seely Thermos v Aladdin; handout; thermos had become generic in the public domain.

          7. Zatarians v Oak Grove; handout.

    5. REGISTRATION PROCESS; §1051

      1. Registration of TMs requires filing an application for registration of a TM in the patent & Trademark Office. 15 USC §1051(a)(1)

      2. PTO conducts a search of existing TM applications, intent to use appl & statutes.

      3. Mark is then published for opposition. Any party believing that they may be damages by registration has an opportunity to file a notice of opposition within 30 days 15 USC §1063.

      4. Assuming no one successfully opposes registration of the TM, registration is issued for a renewable ten-yr term.

      5. Between the 5th & 6th anniversary, the TM owner must submit an affidavit or declaration of continued use of the mark (shows that mark is in use). Failure to use mark causes registration to be canceled. 15 USC §1058(a). if continued use then incontestable. Incontestability; after 5 yrs of continuous use & affidavit filed means mark cant be challenged for lack of distinctiveness, but can be attacked for generic ness or deceptiveness. Incontestability provides irrebutable presumption for 2ndry meaning of descriptive marks.

        1. Park N Fly v Dollar Park; incontestable TM’s are subject to cancellation especially on such matters as mere descriptiveness.

      6. Benefits of registration;

        1. Registration certificates give a presumption of validity, use, and ownership. P has prima facie case of rt to use in court & shifts the b of P to D.

        2. §1072 reg give constructive notice of claim of ownership dating back to the registration.

        3. Give broad nationwide geographic reach; eliminates cmn law exception of “good faith” user in remote geographic region”

    6. HOW TO PRESERVE TM;

      1. Use the mark as an adjective, never a noun

      2. Distinguish the mark by capitalizing the letters of the mark

      3. Police third-party usage to assure accuracy.

      4. Stage I

        1. Registration certificate give rebuttable presumption of registrants exclusive rt to use in commerce.

        2. After registered TM is in continuous use in commerce for 5 yrs, registrant files an affidavit & TM comes under the bubble of incontestability.

        3. Once in this bubble of incontestability, D can burst the bubble by using 1 of 8 defenses provided in §1115(b) or by showing that the mark has become generic.

    7. SHAPES:

      1. The shape of the product or container must be:

        1. 1st distinctive, which requires proof of a secondary meaning

        2. 2nd, the shape must be non-functional (i.e. not improve the performance of the product or container in any way

      2. Mogan David Wine Corp; ct said consumers were not likely to recognize the identity of the P’s wine by the bottle but rather by the written matter ion the wine.

      3. Levis Strauss; handout.

    8. COLOR; NON WORD MARK

      1. Colors cant be inherently distinctive so must show secondary meaning Color combinations will be protected as trademarks where they are both distinctive and non-functional.

    9. GEOGRAPHIC NAMES;

      1. In Re Nantucket, Inc.; No indication that the purchasing public would expect men’s shirts to have their origin in Nantucket when seen in marketplace with Nantucket on them. If goods do not originate in geographic area denoted by the mark, the mark be characterized as geographically mis-descriptive, but must be geographically descriptively mis-descriptive. There must be a reasonable basis for believing that purchasers are likely to be deceived.

        1. If you are playing on name of location which has reputation for producing such goods, then = deceptively Mis-descriptive. Balancing matters of degree. Must evaluate consumer’s understanding. Greater the knowledge of area, greater the chance that is deceptive.

 

        1. Test:

          1. Do goods come form that place? If yes then geo descriptive mark.

          2. If so, is this distinction material?

          3. If so then primarily geographically deceptive and no registration unless 2nry meaning under 1052(f) (5 yrs continous use gives the presumption of 2ndy meaning to give stronger protection than cmn law. .

      1. DECEPTIVE V. DECEPTIVELY MISDESCRIPTIVE;

        1. Deceptively mis-descriptive is still register able by showing 2dary meaning §1052(f)

        2. Deceptive is never register able.

        3. Deceptiveness test:

          1. Is term mis-descriptive of character, quality, and function?

          2. If so is anyone likely to believe that the misrepresentation actually describes the goods?

          3. If so is the mis-description likely (materially) to affect potential purchaser’s decision?

    1. PERSONAL NAMES: SIR NAMES

      1. Taylor Wine v Bully Hill; if you enter a line of trade for no other reason other than to use a conveniently confusing surname to his advantage.

      2. FAMOUS NAMES are excluded. Can’t use John Travolta toothpaste.

      3. Scope of fair use depends on whether there is likelihood of confusion. Blair Miller making miller beer. If no confusion, then no violation & then don’t worry about fair use.

    2. TRADE DRESS;

      1. TD is the overall appearance of a product and its packaging.

      2. Requirements for TM protection:

        1. 1st TD must be distinctive either inherently (suggestive, arbitrary, fanciful) or by virtue of secondary meaning.

        2. 2nd TD must be non-functional.

        3. 3rd likelihood of confusion.

        4. 4th used in commerce.

    3. ABANDONMENT;

      1. Non use

      2. P’s failure to use mark in D’s area is not abandonment of rights in an area.

      3. Dawn Donut; abandonment required complete discontinuance even if registered. No likelihood of confusion is required.

    4. DILUTION takes away the requirement of proving “likelihood of confusion”.

      1. Blurring means lose association between trademark & product

        1. Fed statute takes requires 5 things for blurring:

          1. Famous mark must be distinctive

          2. Must be dilution – actual or possibility or dilution (likelihood of)

          3. Must be in interstate commerce

          4. Junior user began using mark after mark become famous

          5. Junior user can’t be using it in fair use.

          6. 1st A protection for dilution but not for misleading speech.

      2. Tarnishment puts product in bad light

      3. No anti dilution protection under Lanham Act. That is, some allegation of confusion is necessary to state a claim for infringement under Lanham Act.

    5. TRADEMARK INFRINGEMENT;

      1. Confusion of the goods; belief that b/c of similarity of the mark or trade dress that they are obtaining the same goods they rec’d the last time they bought the product in question.

      2. Likelihood of confusion as to source, sponsorship or approval; customer knows that they are not receiving same goods but they believe that the goods that they are purchasing come form the same mfgr as the other goods. Amoco Oil v Rainbow; Dallas Cowboy Cheerleader v Pussy Cat.

      3. Proof of actual confusion not required. Actual confusion of the purchaser is not essential to TM infringement, but proof if actual confusion can be conclusive in proving actual confusion.

 

      1. D’s intent. P does not have to prove intent to deceive on the part of the D.

      2. Ordinary and reasonably prudent purchaser. This is the std by which most courts measure confusion.

 

 

 

    1. REMEDIES FOR TM INFRINGMENT;

      1. Injunctions; Temp or permanent. 15 USC §1116. Courts have uniformly recognized that irreparable injury attends TM infringement. Loss of business is not necessary to show harm. The fact that P’s symbol of reputation was placed in hands of another jeopardizes exclusive control and = irreparable injury. Also TM dilution = irreparable injury.

      2. Damages; Both actual and punitive (in the case of willful conduct. Willful conduct = knowledge of unlawfulness or reckless indifference to the law) damages may be awarded. 15 USC §1117.

      3. Recovery of Profits; 15 USC §1117

      4. Costs & attorney fees; 15 USC §1117

    2. Essays

      1. Compare fed to state law

      2. Classify

      3. Infringement “likelihood of confusion

      4. Dilution alternative

      5. Defenses

      6. Remedies

 

  1. APPROPRIATION OF OTHER INTANGIBLE;

    1. APPROPRIATION OF BUSINESS SCHEME:

    2. MISAPPROPRIATION DOCTRINE;p270.

      1. Definition: The unauthorized, improper, or unlawful use of property for purpose other than that for which intended. Maybe intentional or negligent. Misappropriation deals with balancing the rights of the creator of an idea or information to exploit them for commercial gain against the publics right to free access to those ideas.

        1. No Tm registration is required for §43(a) protection.

        2. Actual confusion = damages; likelihood of confusion = injunction.

      2. Elements of a protect able business scheme:

        1. Idea m/be concrete; script; Hamilton Nat’l Bank v Belt; p255. In addition to being new, novel or original, an idea to be legally protected must also be concrete. The broadcast idea was too general; a script w/have been sufficiently concrete. Nobody pay for something that is obvious.

        2. Novel; quality of the idea; Murry v. Nat’l Broadcasting; p259. Cosby’s dream for a colorblind TV show was claimed to originate for someone else. Determined to be a non-novel idea and didn’t constitute property. The idea had been floating around for twenty years-adaptation of existing ideas. P’s idea was not entitled to protection.

        3. Useful; it was used

        4. Idea was disclosed & intent to be compensated; created a legal obligation. D made use of the idea. Downey v General Foods; p267 Wriggly Gum; K s/h had a recapture clause to have idea revert back to you if Co fails to exploit it.

      3. Theories for imposing obligation to pay for ideas;

        1. Breach of express or implied K (based on conduct)

        2. Unjust enrichment aka quasi K (imposed by law-moral duty to pay).

        3. Violation of a confidential relationship

        4. Theft of property

      4. Tort elements;

        1. P has created a valuable intangible

        2. The D has appropriated that intangible w/o permission and for profit

        3. The D’s taking has harmed the P economically.

      5. Passing off;

        1. Passing off: The D sells its own product under the good name of the P. Misappropriation occurs when the D sells the P’s product under its own name.

      6. INS v Assoc Press; p270. Took hot news items from east coast newspapers and telegraphed material to west coast newspapers. Pirating of hot news stories. No copyright infringement b/c can’t copyright the news (facts) Can copyright the expression of the facts. No breach of K b/c there was no K between the parties. J. Brandies Dissents; Not binding precedent b/c it predated Erie v Tompkins,

      7. US Golf Ass v ST Andrews SYS; p281. The USGA created a single STD and is needed for uniformity. Requiring D to create a different formula would destroy its ability to provide it service. The USGA has no legally protectable interest in a formula.

 

    1. THE RIGHT OF PUBLICITY; compare w/ rt to privacy.

      1. Definition; Right of Publicity: Protects against the unauthorized commercial use of a person’s name, likeness or other commercial attributes in a way that causes commercial damages to the P. Corp doesn’t have a rt to publicity-TM provides enough protection. U have a right to publicity b/c

        1. Rt to control reputation

        2. 1st A considerations

        3. Unjust enrichment – someone benefiting from your success.

        4. Look for breach of confidential relationship.

      2. Elements.

        1. Unauthorized use your name.

        2. Significant number of users id u with something

        3. Infringment

        4. Slogan & voice are harder to protect.

      3. Right of Publicity vs. Right of Privacy. Where P is a celebrity, the use of her name has commercial value so that she is entitled to damages not so much for rt of privacy, but for interference with rt to publicity—right to sell (control the commercial value) product enforcements to someone else. Right of Privacy; the rt to be left alone; rt to live without unwarranted interference by the public in matters with which the public is not necessarily concerned. Encompasses various right inherent in the concept of ordered liberty.

        1. Defense: newsworthiness. Where P is a public figure or a newsworthy figure, publication of P’s name or likeness is not actionable, as long as the use is not for trade or advertising.

        2. No 1st A privilege to film or broadcast an entire commercial entertainment or performance.

        3. Damages: reasonable value of the use of name or likeness.

      4. Publicity Placing P in False Light. Privacy action brought against the media because a report has been published that is false. (Falsity must be highly offensive to a reasonable person. Ex. Published nude photos (unauthorized) of P in Hustler magazine) —knowing or reckless falsity. Third party action does not involve commercial appropriation but rather false light in public’s eyes.

        1. Defamation; an intentional false communication, either published or publicly spoken, that injures another’s good name. Intent to that which intends to injure another’s reputation.

      5. Biographical 1st A protection writer is not liable – newspapers do the same thing. Traditional medium of expression.

      6. Descendability; the right to publicity survives death for about 50 yrs.

      7. Hirsh v Johnson & Son; p286. Suit for unauthorized use of a name: “Crazy Legs”; the tort of appropriation protects a property right, not only the right of a person to be let alone or to live his life in seclusion w/o mention in the media. Under an appropriation theory, P had to prove unjust enrichment; under trade-name infringement theory, he must prove that Crazy-Legs designates his vocation or occupation and there is a likelihood of confusion that public believes that he sponsored the product.

        1. Rt of privacy is composed of 4 torts (Prosser):

          1. Intrusion upon the P’s seclusion or solitude, or into his private affairs.

          2. Public disclosure of embarrassing private facts about P.

          3. Publicity, which places the P in a false light in the public’s eyes.

          4. Appropriation for the D’s advantage, of the P’s name or likeness. Argued by Hirsh.

      8. Milder v Ford; p296. Protecting a voice from commercial exploitation; when a distinctive voice of a professional singer is widely known and deliberately imitated in order to sell a product, the sellers have appropriated what is not theirs and have committed a tort. Copyright doesn’t protect voice b/c its not fixed. Copyright doesn’t protect a phrase – use a TM

      9. Lugosi v Universal Pictures; p300. Heirs of Lugosi claimed D appropriated property (Lugosi played Dracula). Issue is the rt of decedents heirs to control the commercial ability of a likeness of a dramatic character. Heirs were not awarded anything.

      10. Rt to publicity and the Lanham Act.

        1. EX. A celebrity’s picture is used in an ad has conspicuous disclaimers stating that the celebrity does not endorse the product.

          1. Lanham act claim; would be denied -- no passing off, no endorsement.

          2. Publicity claim; would be upheld – for the commercial use of celebrity’s photo without her consent.

 

 

 

 

    1. PREEMPTION OF STATE LAWS BY FEDERAL LAWS;

      1. Lanham Act;

        1. Lanham Act codified state unfair competition laws in a federal statute.

        2. Applies only to interstate commerce.

        3. State unfair competition laws still apply to intrastate commerce.

      2. Defenses;

        1. Innocent infringement

        2. 1st A

        3. Fair use

        4. Parody

        5. Acquiescence of use

        6. estoppel

      3. Remedies;

        1. Injunctive relief; requires proof of likelihood of injury & false claim §43(a)

        2. Accounting;

        3. Damages; requires actual injury & proof of actual reliance.

        4. Attorney fees.

      4. Types:

        1. Express; supremacy clause.

        2. Implied; entire field is occupied.

      5. C gave rt to fed but not an exclusive rt.

      6. Lanham act (voluntary system) does explicitly preempt state law.

      7. Sears Robeuck v Stiffels; p454. State c/not patent a lamp that is un-paten table under federal rules. State may not prohibit copying of the article or award damages if its not patented. Patent system promotes invention & preserves free competition.

      8. Compo v Day-Bright; p458. Fed patent does not stand in the way of a state court requiring those who make & sell copies to identify their product as their own.

      9. Kewanee Oil v Birch; p462.

      10. Aronson v Quick Point; p472. D claimed that K to pay % to developer of idea was invalid b/c developer was unable to obtain a patent.

      11. Bonito Boats v Thunder Craft Boats; p477. Involved a Florida statute that prevented the use of a process for copying the design of boats.

      12. Goldstein p489. §301 copyright act

      13. Zacchini; p510.

 

 

    1. TRADE SECRETS;

      1. Definition; Uniform Act Definition: any information (any formula, pattern, devise, or compilation, which is used by a business) that is kept confidential (take steps to preserve secrecy) and derives economic value (minimal novelty & utility required) from not being generally known by others and used continuously in the operation of business and there was an improper appropriation.

      2. Kewanee Oil v Birch; p 306. Protection is accorded to the TS holder against disclosure or unauthorized use of the trade secret by those who have been confided with the TS under express or implied restrictions of nondisclosure or nonuse. WHY?

        1. Incentive to innovate

        2. Encourages disclosure

        3. Free use of invention in public domain

      3. Smith v Dravo; p308. P used marginal efforts to protect secrets b4 court protected them b/c improper conduct – breach of confidence. D learned about P’s design through access to P’s plans. P didn’t reverse engineer. P c/have obtained a written K of secrecy, limit access to info, clearance procedures.

 

        1. Elements of TS infringement:

          1. The existence of TS.

          2. Communication of TS to D.

            1. Was D in a position of trust and confidence at the time of the disclosure?

          3. Improper use by the D of the secret info. BREACH OF CONFIDENTIAL RELATIONSHIP.

        2. RESTATEMENTS of AGENCY §395. An agent is under a duty not to communicate information confidentially given him by the principle or acquired during the course of the agency or in violation of his duties as an agent, or in competition with or injury of the principle on his own acct or on behalf of others.

        3. RESTATEMENTS of K’s §188; unreasonable restraints on trade if restraint is greater than needed to protect the principle legitimate interest. 2nd injury to public. P 344.

        4. Reverse engineering; patent law protects b/c no business ethics problem & requires effort and may stumble upon something else that is valuable in the process.

      1. Rockwell Graphics v Dev Sys.; P316. Concentrated on ethics. No cost-benefit analysis.

      2. E.I Dupont v Christopher; p323. Open air to the public; plane flow overhead. Cost benefit analysis: to tent over entire complex. This would create an enormous expense and unreasonable precaution. Espionage was an improper means of discovery of Dupont’s trade secrets. Ct said that thou should not appropriate a trade secret through deviousness under the circumstances in which countervailing defenses are not reasonably available.

      3. Leo Silfen v Cream; p344. List of customers was readily obtainable. D failed to prove a physical appropriation or copy of confidential info or wrongful disclosure or use of TS.

      4. Covenants not to compete;

        1. Ee’s need mobility

        2. Must be reasonable

        3. Remedies;

          1. Possible criminal violations.

          2. Damages; measured by accounting for profits reasonable royalty fees.

          3. Injunction; what should the scope of the injunction be? Permanent

        4. Milwaukee Linen Supply v Ring; p349 Q: what is a reasonable restraint? That which is reasonably necessary for the fair protection of the er’s business rights, and not unreasonably restricting the rights.

 

  1. FALSE ADVERTISING;

    1. Lanham Act §43(a) prohibits any false description or representation of goods. A P seeing injunctive relief under this § must show a likelihood of economic injury due to the D’s conduct in order to be entitled to relief. If the P seeks damages, it must demonstrate an actual loss of sales and prove the D’s advertising caused that loss of sales. If the P seeks to recover D’s profits it must prove that the D acted willfully or in bad faith.

      1. False Description; any falsehood with a tendency to mislead or deceive is actionable under §43(a) provided that it is material. The P need not prove that the D acted intentionally.

    2. COMPETITOR REMEDIES FOR FALSE ADVERTISING UNDER STATE LAWS;

      1. American Washboard v Saginaw; p522. cmn law competitor suit. Unless there is confusion as to the origin then no claim for false advertisement-may be a claim for TM infringement. False advertisement leads to diversion of sales. Damages for false advertisement are awarded b/c not easy to determine.

      2. Ely-Norris Safe v Mosler Safe; p524. Selling safes by claiming that it had distinctive features but didn’t. Single Source Rule. If only one other competitor & u make false stmts – sales have to be coming from the other competitor – not just expanding the market.

      3. Free rider problems; when other competitors wait for you to assert a claim against D & wait for you to do the work b4 they bring suit.

    3. COMPETITOR REMEDIES UNDER FEDERAL LAW;

      1. Johnson & Johnson v Carter; p526. P claimed implicit message that the baby oil in D’s product w/not require consumers to purchase additional baby oil. Used consumer survey. §43(a) standard is whether it is likely that D’s advertising has caused or will cause a loss of P’s sales. Proof of actual diversion of sales is not required under §43(a) (its impossible to measure exact damages) but proof of false advertising is essential.

      2. Coca-Cola v Tropicana; p532. D made false representations in its advertising and P is likely to suffer irreparable harm as a result. Granted a preliminary injunction.

    4. THE TORT OF DISPARAGEMENT; P559.

      1. Disparagement is a falsehood that tends to denigrate the goods or services being sold by another party. Damage reputation of a product v. defamation of a person’s reputation. Puffing of opinion is not actionable “BK tastes better”. True stmts are not actionable.

        1. If disparager is a competitor; Commercial speech

        2. If disparager is a consumer or a rating agency; P must prove that the D acted with actual malice in order to establish a right to relief.

        3. Elements: P must prove.

          1. D made offending stmts about P’s products

          2. The stmts are false (either oral or written-trade libel)

          3. The stmts caused “special damages” (i.e a loss of sales directly traceable to the disparaging stmts). Reasonably likely to discourage others from dealing with P.

        4. Express disparagement:

          1. 1st A protection for false stmts by individuals not engaged in a given line of business that attack particular goods.

        5. Implied disparagement:

          1. D alters or mutilates works of art then displays them with the implied representation that they are the work of the original artist.

          2. D uses a Tm or TS of P in obscene parodies, where there is an implication that the TM owner endorses or sponsors the parody.

        6. Damages:

          1. Trade libel—loss of profits on specific sales. Consequential damages are not available.

        7. Defense:

          1. Truth

          2. Consent

          3. Privilege, recording a lis pendens (recording a lawsuit)

      2. No cases

 

 

    1. UNFAIR;

      1. Unfair Acts: Behavior that is withholds material information from consumers, or subjects them to harsh remedies for the collection of consumer debt

      2. International Harvester; p587.

    2. DECEPTION;

      1. Cliffdale; p613. Defines deception as: consisting of behavior that is likely to mislead consumers acting reasonably under the circumstances; neither actual consumer injury nor intent are required.

      2. Puffing: is not actionable b/c can’t define std for what is the “best” (subjective test.

      3. Deception std has also been used to challenge omissions of material facts, inaccurate claims that a product was unique, mischaracterizations of the type of business the seller is in, falsehoods by endorsers, and use of misleading TV [props and mock-ups.

      4. Deceptive Pricing & sales Practices;

        1. Claims that products are “on sale” or “free”; or “warranty terms”; or bait & switch.

    3. ADVERTISING SUBSTANTIATION;

      1. Pfizer; Held that it was “unfair” (harder to prove than deception; must be substantially unfair) within the meaning of the statute for a firm to make claims about its mdse unless it had documentation to substantiate those claims. Later cases held that the making of an unsubstantiated claim was also deceptive.

      2. The kind & amount of documentation satisfying the “reasonable basis” (ic) standard is determined on a case-by-case basis (type of claim; facts & figures; product involved; fear of discouraging truthful info; cost of substantiation). Only material in the advertiser’s possession b4 the advertisement was disseminated is considered in determining if substantiation (prior substantiation) was adequate.

      3. Problems with substantiation.

        1. Can be costly – even if passed on to consumers

        2. May encourage meaningless rather than informational ads. Silencing truthful speech.

    4. FORMS OF RELIEF FOR COMPETITORS;

      1. Remedies for violation of §5;

        1. Cease & desist order;

          1. A firm found guilty of an unfair or deceptive act will be order to refrain from the challenged conduct. Penalties are imposed if firm violates the provisions of the order. By the time u get a cease & desist order u co isn’t advertising anymore.

        2. Affirmative stmts;

          1. JB William; p662. Deception may only be eliminated by requiring an affirmative disclosure of additional information whenever certain claims are made.

        3. Corrective Advertising;

          1. Warner Lambert; p666. When a deceptive advertising claim has continued for such a long period that it will “linger” (ic) in the minds of consumers even after the advertisements are discontinued, the Commission may require the advertiser to run a corrective stmt in future ads to eliminate erroneous impression that was generated in the earlier ads. 1st A requires that the Commission use the least restrictive order possible to remedy the deception.

        4. Restitution;

          1. Heater; p677. Congress didn’t grant FTC pwr to grant a refund to consumers. Must go to ct. The Commission may not include a provision in a case & desist order requiring a firm to refund money to consumers. It may file suit in US d/c seeking a judicial order requiring restitution, either b4 or after administrative proceedings have been concluded.

      2. FTC rulemaking

        1. FTC can issue rules & guidelines. Violators are subject to civil penalties.

        2. FTC rules are subject to judicial review.

    5. CONSUMER REMEDIES;

      1. Common Law:

        1. Consumers victimized by false advertising or sales representations may bring cmn law actions for deceit (fraud—hard to prove), contractual recession (parol evidence is a problem), or restitution. If physical injury occurs, they may also assert a strict liability products liability claim.

      2. FED

        1. UCC:

          1. Consumers may invoke the warranty and unconscionably (must be unfair & need reason why you didn’t know better) provisions of the UCC if they have been deceived by advertisements or other falsehoods prior to purchasing tangible goods.

        2. Lanham Act:

          1. Consumers lack standing under §43(a) of the Lanham Act, & thus cant use that provision as a false advertising remedy.

          2. No FTC §5 remedy for consumers

        3. Magnuson Moss Warranty Act; 15 USCA §2301 requiring that written warranties as to consumer products must be fully & conspicuously disclose in simple and readily understood language including whether the warranty is full or limited.

      3. STATE.

        1. BABY FTC p727. mcl 445.903

          1. Advantage of FTC acts

            1. Law is liberalized

              1. No intent, or reliance, or knowledge required

            2. Cant disclaim liability

            3. Procedural advantage

              1. Provides for attorney fees

              2. Multiple damages are available

              3. Some states allow merchants to use the statute

 

    1. STATE ENFORCEMENT;

      1. Proof of scienter and reliance not required;

        1. Most states do not require the P to prove that the D knew the challenged representations were false or that he or she actually relied on the representations at issue.

 

  1. CONTENTS

    1. TRADEMARKS

    2. MISSAPPROPRIATION

    3. RT TO PUBLICITY

      1. FALSE LIGHT

      2. RT TO PRIVACY

      3. DEFAMATION

    4. PREEMPTION OF STATE LAWS BY FED LAWS

    5. TRADE SECRETS

    6. FALSE ADVERTISING

      1. DISPARAGMENT

      2. ADVERTISING SUBSTANTIATION

      3. FORMS OF RELIEF

        1. COMPETITORS

        2. CONSUMERS

          1. BABY FTC

 

 

 

 

 

 

 

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