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A Glimpse Into False Advertising Litigation

March 5, 2021

On occasion, we as business owners see advertisements from competitors that seem false. Remember back in the 1980’s when now famous commercials came across your TV for garbage bags that would leakbatteries that would die early, or someone would claim to have the lowest prices in the universe? False advertising has been an issue since the “Golden Age of Advertising,” and the complexities and nuance surrounding advertising disputes has evolved since that time. We recently sat down with Andrew Lustigman, a partner at Olshan Frome Wolosky in New York to discuss this topic.  

Andy provides some background history“There was a significant problem with national advertising that was going on [in the 1970’s]. There were lots of different mechanisms that were being used to manipulate product advertising, particularly in the comparative sense.” A false advertising problem existed on a national level, and back in the 1970s the resolution was often found in the Lanham Act. Andy continues, “The typical remedy for a competing business was to file a lawsuit under what’s known as the Lanham Act, which is typically thought of as infringing a trademark, but there is a provision that allows a competitor to sue for false representations.”  

Due to the federal government’s attempt to solve the issue via regulation, the industry came together around a more logical solution. Andy explains, “What happened was the industry banded together and said if we do not act in terms of self-policing, we are going to find ourselves facing onerous federal regulation. They founded what is known as the National Advertising Division (NAD) as a self-regulatory body, to oversee national advertising, and for competitors to have matters resolved outside of government interference.” 

Despite the creation of NAD, and many positive changes within the industry, many business owners still do not know what to do about false advertising as they do not feel like a strong blueprint exists. There are several options for executives to pursue should a competitor advertise falsely. Andy indicates, “It is important to have a candid conversation with your client to determine what his or her goal is concerning advertising. The simplest thing that you can do is to have a well-constructed cease and desist letter. That puts the advertiser on notice as to the offending conduct and request voluntary compliance or else. The “or else” is a biggie. Do you have a mechanism to back it up so a cease-and-desist letter could be backed up with a lawsuit, typically in federal court?”  

Throughout the 80s and 90s most people went the route of the Lanham Act to stop advertising, and this is still an option for businesses. Andy elaborates, “The key thing is a lot of that context is the ability to get damages potentially for offending conduct. If that is of critical importance to your client concerning somebody’s advertising, you must look at what the claim is. Is the person denigrating your product? Is the person making a false statement about your product? Then maybe that is the route to go. It must be a false representation. You must be able to please that what the advertiser is doing is a false representation. That is the key component.” 

The evolution of advertising-based litigation is quite interesting, and the role of expert witnesses in this space is a critical one. We recommend that experts and attorneys interested in this topic take a listen to our conversation with Andrew Lustigman on our podcast Engaging Experts. We were honored to speak with Andrew on our podcast, and hope that you find our conversation most informative.  

For those that are unfamiliar with Round Table Group, for more than 25 years, we have helped litigators to locate, evaluate, and employ the best and most qualified expert witnesses. Round Table Group is a great complement to any litigator’s quest for an expert witness and our search is always free of charge. Visit roundtablegroup.com or contact us at engagingexperts@roundtablegroup.com for more information. 

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