Disruptive Advertising Names Names

July 22, 2014

There is nothing actually wrong with naming the competition in advertising. Roughly speaking, the legal standard under the Federal Trade Commission Act is that true statements that can be substantiated, and are neither expressly nor implicitly deceptive, even through omission, are okay.

However, it’s a very combative strategy, with risks and rewards from both a marketing and legal standpoint. Marketers should not rush in without weighing all the factors and anticipating some blowback.

From a Marketing Viewpoint

It can work very well. Taco Bell’s recent campaign featuring 38 real-life Ronald McDonalds created quite a buzz. It can also backfire, creating free publicity for the competitor, turning off consumers as mean-spirited or exposing unattractive aspects of the industry. The recent spat between Pizza Hut and Papa John’s left everyone thinking about terrible pizza sauce and worse crust. Some suggest that comparative advertising works better in price-based print ads than it does on television, where the audience may be more easily distracted.

From a Legal Viewpoint

In 1979 guidance, the Federal Trade Commission actually encouraged name brand comparisons, reasoning that truthful and non-deceptive contrast could be a source of important information to consumers, helping them make rational purchase decisions.

Advertising that names names will provoke a response, though, and the battle may be fought in the regulatory or legal arena rather than the marketplace. An aggrieved competitor may respond in a variety of escalating ways before resorting to litigation under Section 43(a) of the Lanham Act.

Four Alternatives Short of Litigation

Whether your business uses or feels abused by comparative advertising, it is important to be aware of four potential non-litigation responses to claims thought to be false or misleading.

Demand Letter

An attorney’s demand letter, also known as a cease-and-desist, is the least expensive of the alternatives and a likely prelude to any other move.  It sets out the legal argument against the truth of the claim and demands modification or discontinuation of the advertisement. Occasionally that is all that’s necessary, but it does nothing to address the harm that may have been done by false claims.

Takedown Request

In an effort to comply with their internal policies, broadcast outlets and publishers will usually take an offending advertisement down in response to a well-constructed argument with supporting evidence demonstrating that an advertising claim is false or misleading. The same is true of search engines, like Google, which recently took down deceptive pregnancy center ads in response to an investigation by NARAL Pro-Choice America.

Proceeding Before NAD

The advertising industry established the National Advertising Division of the Council of Better Business Bureaus as a forum for industry self-regulation. NAD may review national advertising directed at adults.  It looks particularly at whether advertiser claims may be substantiated.  With respect to disparaging comparative claims, the issue is whether the comparison is factually accurate and the distinction meaningful to consumers.

A decision in a NAD proceeding is made on the basis of briefs submitted by both sides. An advertiser may appeal an adverse NAD decision to the National Advertising Review Board, but NARB will not consider an appeal unless its decision is likely to be different.

In the end however, complying with a NAD recommendation is completely optional.  It’s only enforcement tool is its reputation as the industry watch dog.

State or Federal Regulatory Investigation

Challengers can also ask the FTC or state regulators to investigate comparative advertising claims.  Regulators, however, will focus whether the consumer is being harmed, not on the scuffle between competitors.

Among the factors to be considered will be whether there have been consumer complaints, whether a health and safety issue is involved or whether the activity complained of falls under some current regulatory priority such as green marketing or consumer privacy.

This option may still be cheaper than litigation, but it can take years and even if successful is more likely to lead to a change in industry practices than immediate relief for the challenger.

Litigation under the Lanham Act

On the other hand, a challenger under the Section 43(a) of the Lanham Act can ask for an immediate injunction if the advertisement is false or misleading and likely to cause irreparable harm. This is also the only avenue that may lead to money damages if the challenger can show that consumers were actually deceived or confused and that claim affected consumer behavior in a way that harmed the business. It is a very difficult showing to make.

There is the strategic problem with litigation, though. It can look like sour grapes and may actually make the harm suffered by the challenger worse by bringing public attention to the dispute. This may be one reason that suits against Yelp reviewers are still relatively rare.

Comparative advertising is just part of rough and tumble commerce.  Market responses may be admirably deft, as was McDonald’s response to Taco Bell, or they can be fumbling and awkward and simply make a bad situation worse.

Challengers who want to make a legal response may not want to do anything more than necessary to stop immediate harm. Steps short of litigation may be sufficient to accomplish that goal. The nuclear option, or litigation under Section 43(a) of the Lanham Act, may be expensive and time consuming, but can be a powerful tool  for bringing about a settlement, halting deceptive advertising or recovering damages for harm to a business.

Nasir Pasha

By

Nasir N. Pasha is the managing attorney of Pasha Law, providing essential legal services and support to businesses and corporations in California, Illinois, New York, and Texas. He oversees all of the firm’s operations and is a pivotal force in maintaining client relationships and ensuring that each transaction is brought to its best possible conclusion.

Get Business Legal Updates

Please provide your full name.
Please provide a valid email address.
We respect your privacy, and we will never share your information. Unsubscribe at any time.

Related Publications

Nasir and Matt discuss the life cycle of a negative online review. They talk about how businesses should properly respond, how to determine if the review is defamatory, the options available to seek removal of the review, how to identify anonymous reviewers, whether businesses can require clients to agree not to write negative reviews, and…

June 28, 2017

In today’s digital age, people have no hesitation in sharing their opinions on just about anything online. Internet reviews on review aggregation websites like Yelp.com or TripAdvisor.com have become a fact of life for most business owners. And while most savvy consumers know that reviews should always be taken with a grain of salt, most…

December 29, 2016

Last Saturday, I was scrolling through Facebook past the usual Bernie/Hillary/Trump/Oscars/kitten-video back-and-forth, when I saw that one of my FB friends had “liked” an article entitled, “Woman Fired by Yelp After Making Viral Post About Low Wages.” What caught my eye was the name of the woman in question at the start of the article…

February 25, 2016

Nasir and Matt recap how some shopping mallsrequired stores to be open on Thanksgiving.

November 30, 2015

After having a terrible experience with an online retailer, you decide to go and leave a review. After carefully crafting your experience into words, you go to one of the more well-known review sites and let the company have it. You feel good that you warned others not to make a purchase with them and…

November 20, 2015

Nutmeg Investment Management Services and Pizza Hut have more in common then perhaps they know. Two polar opposite industries, investment and restaurant. Two very different actors caught up in decisions that would impact the lives of others. Their actions could impact positively or negatively. Their actions are representative of the companies they represent. Both chose…

November 19, 2015

The guys kick off the week by discussing the Federal law thatwould prevent companies from using non-disparagement clauses. They also discuss how to detect whether Yelp reviews are fake.

November 9, 2015

Nasir and Matt discuss how a Houston nightclub is facing claims of discrimination for charging customers different cover charges based on their race.

October 28, 2015

Nasir and Matt talk about a judge in New York awarding a business owner $1,000 as a result of a bad Yelp review left by a disgruntled customer. They also discuss a recent lawsuit appeal made against Yelp and how Yelp determines what reviews are hidden.

September 30, 2015

Nasir and Matt discuss the recently firing of a popular Reddit employee that causedan uproar and questioned the status of Reddit’s unpaid volunteers.

July 15, 2015

Nasir and Matt look back at the last 100 episodes.

June 29, 2015

Nasir and Matt discuss the decision handed down by the California Labor Commissioner that classified an Uber driver as an employee instead ofan independent contractor.

June 22, 2015
Legally Sound Smart Business cover art

Legally Sound Smart Business

A business podcast with a legal twist

Legally Sound Smart Business is a podcast by Pasha Law PC covering different topics in business advice and news with a legal twist with attorneys Nasir Pasha and Matt Staub.
Apple Podcast badge
Google Podcast badge
Spotify Podcast badge

Latest Episodes

July 14, 2021

Through a five-round championship bout, Matt travels to Texas from California to determine which state is better for business. Will it be a knockout with a clear winner or will it go to the scorecards?

June 16, 2021

Covered in this episode of Legally Sound Smart Business are some typical business mistakes blunders small businesses often make and how to avoid them. Blunder #1: Copying and pasting agreements It may sound like a good idea at the time, but this blunder comes with hidden pitfalls. Having an attorney draft terms that are specific…

February 4, 2021

How you terminate an employee can make the difference between a graceful transition to avoidable negative outcomes like a dramatic exit or even a lawsuit. We gathered a panel of experts and asked them – is there a “right way” to fire an employee? We would like to thank our guests for this episode: Amr…

December 2, 2020

The COVID-19 pandemic has turned nearly every aspect of life on its head, and that certainly holds true for the business world. In this episode, Matt and Nasir explain how the early days of the pandemic felt like the Wild West and how the shifting legal playing field left a lot open to interpretation and…

November 16, 2020

After plenty of ups and downs, our buyer has finally closed on the purchase of their business. While we’re marking this down in the ‘wins’ column, it never hurts to review the game tape. In this final episode, our hosts, Matt Staub and Nasir Pasha, return to the deal almost a year later to reflect…

September 15, 2020

The ink is drying on the signature line and things are looking great for our buyer. After so much hard work, the finish line is in sight and the cheering within ear shot.   Though the landlord is still serving friction, things seem safe to move forward and for now, our buyer will be keeping…

July 31, 2020

Though things are coming along well, the journey would not be interesting if it was purely smooth sailing. After our buyer opens escrow, they are forced to push the closing date back when suddenly a letter from an attorney was received claiming the business, we are buying has a trade mark on the name!  Now…

June 12, 2020

With frustration at an all-time high and professionalism at an all-time low, our friend the Buyer has “had it” with the Seller and quite frankly their lack of knowledge. At present our Buyer is rightfully concerned that the latest misstep from our loose-lipped Seller will threaten not only the entire operation of the businesses but…

May 11, 2020

As we go deeper into the buying process, we start to uncover more challenges from our seller and encounter some of the wrenches they are tossing our way. When we last left off in episode three our team was knee deep in due diligence for our buyer, had already penned and signed the Letter of…

April 4, 2020

One word–interloper! When a new mysterious broker enters the transaction and starts to kick up dust, Nasir and Matt take the reins. The seller signed off on the letter of intent (see episode 2), yet this “business broker” serves only friction and challenges by refusing to send financials, whilst demanding more of a firm commitment…

April 4, 2020

Just as most stories and deals start out, everyone is optimistic, idealistic and full of hope for clear skies. It’s a perfect outlook with a perfect setup for the ups and downs yet to come. Peek further behind the curtain and into the first steps of buying a business: the letter of intent. After the…

April 4, 2020

When a savvy buyer hears opportunity knocking to purchase a prime positioned business, she decides not to go it alone and taps in the professionals to help navigate what could potentially be a fruitful acquisition. “Behind the Buy” is a truly rare and exclusive peak into the actual process, dangers, pitfalls and achievements, that can…

August 7, 2019

GrubHub is subject to two “matters of controversy” that have likely become common knowledge to business owners: “fake” orders and unfriendly microsites.

May 28, 2019

In this podcast episode, Matt and Nasir breakdown the legal issues of the subscription industry’s business on the internet. Resources A good 50-state survey for data breach notifications as of July 2018. California Auto-Renewal Law (July 2018) Privacy Policies Law by State Why Users of Ashley Madison May Not Sue for Data Breach [e210] Ultimate…

March 12, 2019

In recording this episode’s topic on the business buying process, Matt’s metaphor, in comparing the process to getting married probably went too far, but they do resemble one another. Listen to the episode for legal advice on buying a business.

December 3, 2018

Nasir and Matt return to discuss the different options available to companies looking to raise funds through general solicitation and crowdfunding. They discuss the rules associated with the various offerings under SEC regulations and state laws, as well as more informal arrangements. The two also discuss the intriguing story about a couple who raised over…

July 24, 2018

Flight Sim Labs, a software add-on creator for flight simulators, stepped into a PR disaster and possibly some substantial legal issues when it allegedly included a Trojan horse of sorts as malware to combat pirating of its $100 Airbus A320 software. The hidden test.exe file triggered anti-virus software for good reason as it was actually…

April 17, 2018

Attorneys Matt Staub and Nasir Pasha examine Mark Zuckerberg’s congressional hearings about the state of Facebook. The two also discuss Cambridge Analytica and the series of events that led to the congressional hearings, the former and current versions of Facebook’s Terms of Service, and how businesses should be handling data privacy. Full Podcast Transcript NASIR:…

March 10, 2018

The Trump presidency has led to a major increase in ICE immigration enforcement. It’s critical for business owners to both comply with and know their rights when it comes to an ICE audit or raid. Nasir, Matt, and Pasha Law attorney Karen McConville discuss how businesses can prepare for potential ICE action and how to…

February 5, 2018

New years always bring new laws. Effective January 1, 2018, California has made general contractors jointly liable for the unpaid wages, fringe benefits, and other benefit payments of a subcontractor. Nasir and Matt discuss who the new law applies to and how this affects all tiers in the general contractor-subcontractor relationship. Click here to learn…

January 2, 2018

With a seemingly endless amount of new mattress options becoming available, it is unsurprising that the market has become increasingly aggressive. As companies invest in more innovative solutions to get in front of customers, review sites, blogs and YouTube videos have moved to the forefront of how customers are deciding on their mattresses and how…

December 7, 2017

In recent months explosive amounts of high profile allegations of sexual harassment, assault, and varying acts of inappropriate behavior have transcended every sector of our professional world. With a deluge from Hollywood and politics, and the private workforce, accusations have inundated our feeds and mass media. This harassment watershed has not only been felt within…

November 16, 2017

If you are not familiar with the EB-5 program started in 1990 to give green cards to certain qualified investors in the United States, then you may not have been alone a few years ago. Currently, the EB-5 program has since exploded since its inception and now hits its quotas consistently each year. The program…

October 10, 2017

Government requests come in multiple forms. They can come in as requests for client information or even in the form of investigating your company or your employees. Requests for Client Information General Rule to Follow Without understanding the nuances of criminal and constitutional law and having to cite Supreme Court cases, any government requests for…

August 24, 2017

Nasir and Matt suit up to talk about everything pertaining to employee dress codes. They discuss the Federal laws that govern many rules for employers, as well as state specific nuances in California and other states. The two also emphasize the difficulty in identifyingreligious expression in dress and appearance, how gender-related dress codes have evolved…

June 28, 2017

Nasir and Matt discuss the life cycle of a negative online review. They talk about how businesses should properly respond, how to determine if the review is defamatory, the options available to seek removal of the review, how to identify anonymous reviewers, whether businesses can require clients to agree not to write negative reviews, and…

June 7, 2017

On this episode of the Ultimate Legal Breakdown, Nasir and Mattbreak down social media marketing withguests Tyler Sickmeyer and Kyle Weberof Fidelitas Development. They first discuss contests and promotionsand talk about where social media promotions can go wrong,when businesses are actually running an illegal lottery, and the importance of a soundterms and conditions. Next, they…

April 3, 2017

On this episode of the Ultimate Legal Breakdown, Nasir and Matt go in depth with the subscription box business. They discuss where subscription box companies have gone wrong(4:30), the importance of a specifically tailored terms and conditions(6:30), how to structure return policies (11:45), product liability concerns (14:45),the offensive and defensive side of intellectual property (19:00),…

February 1, 2017

Nasir and Matt discuss the suit against Apple that resultedfrom a car crashed caused by the use of FaceTime while driving. They also discuss howforeseeable use of apps can increase liability for companies. Full Podcast Transcript NASIR: Hi and welcome to Legally Sound Smart Business! I’m Nasir Pasha. MATT: And I’m Matt Staub. Two attorneys…

January 5, 2017

The guys kick in the new year by first discussing Cinnabon’s portrayal of Carrie Fisher as Princess Leia soon after her death, as well as other gaffes involving Prince and David Bowie. They alsotalk about right of publicity claims companies could be held liable for based on using someone’s name or likeness for commercial gain.

December 22, 2016

Nasir and Matt discuss the recent incidentat a Victoria’s Secret store where the store manager kicked out all black women after one black woman was caught shoplifting. They then each present dueling steps businesses should take when employees are accused of harassment.

December 8, 2016

Nasir and Matt return to talk about the different types of clients that may have outstanding invoices and how businesses can convert unpaid bills to getting paid.

November 10, 2016

After a long break, Nasir and Matt are back to discuss a Milwaukee frozen custard stand that is now revising it’s English only policy for employees. The guys also discuss how similar policies could be grounds for discrimination and what employers can do to revise their policies.

October 6, 2016

The guys discuss the new California law that allows actors to request the removal of their date of birth and birthdays on their IMDB page and why they think the law won’t last. They also discuss how age discrimination claims arise for business owner.

September 29, 2016

Nasir and Matt discuss the racial discrimination claims surroundingAirbnb and how it’s handled the situation. They also discuss some practical tips for businesses experiencing similar issues.

September 8, 2016

Nasir and Matt discuss whyAmazon seller accounts are getting suspended and banned without notice and how business owners can rectify this situation through a Corrective Action Plan.

August 25, 2016

Nasir and Matt talk about the accusations surroundingfashion giant Zararipping off the designs of independent artists like Tuesday Bassen and howsmaller companies can battle the industry giants.

August 18, 2016

Nasir and Matt discuss Brave Software’s ad replacing technology that has caught the eye of almost every national newspaper and has a potential copyright infringement claim looming. They also welcome digital marketing expert Matt Michaelree to speak on the specifics of what Brave is attempting to do and whether it has the answers moving forward.

July 28, 2016

Nasir and Matt discuss the sexual harassment lawsuit filed by Gretchen Carlson against Fox CEO Roger Ailes. They also talk aboutthe importance of sexual harassment training and properly handling such allegations in the office.

July 15, 2016

Nasir and Matt talk about the changes at Starbucks that have led to many disgruntled employees and customers.

June 23, 2016

Nasir and Matt discuss the criminal charges facing FedExinvolving the alleged transportation of illegal drugs. They also talk about how business owners should address working with customers that may be breaking the law.

June 15, 2016

The guys return after a long break to discuss why Yahoo is auctioning off over 3,000 patents and how this decision will affect the longevity of the company.

May 25, 2016

Nasir and Matt discuss the increase in the salary thresholdfor exempt employees and how employerscan try to avoid paying overtime as a result.

May 18, 2016

Nasir and Matt discuss the Baltimore law that makes it very difficult to operate food trucks in the city. They also discuss all the legal restrictions tohaving a food truck.

May 11, 2016

Matt listens to Nasir recap the developing battle in his hometown of Vandalia, Ohio over whether a Dunkin Donuts can move into a location in close proximity to a local favorite donut shop. They then discusswhether the issue is more legal or personal.

May 9, 2016

The guys kick off the week by discussing a Nevada employee who is claiming she was fired for not supporting the Scientology beliefs of her employer.

April 27, 2016

The guys discuss the massive floods in Houston,how employers responded, and why one meteorologist became a local hero. They also discuss the steps businesses should take in preparing for storms outside the workplace.

April 20, 2016

The guys discuss the boycott of Amazon over the products of an unnamed presidential candidate. They also talkabout how a business should handle a boycott and whether it’s possible to exit one unscathed.

April 13, 2016

Click here to read HubSpot’s response on this topic. Nasir and Matt discuss the trend in startups to compensate programmers and other early employees with stock options and how the company culture at HubSpot isn’t what it seems.

April 6, 2016

Nasir and Matt discuss various lawsuits against social media platforms in which users are accused of artificially inflating their social currency.

We represent businesses.
That’s all we do.

Oh, and we love it.

We love our work. We love reviewing that lease for your new location. We thrive on closing that acquisition that nearly fell through. We’re fulfilled when we structure a business to grow, raise capital, and be legally protected.

We focus on developing close relationships with our clients by being like business partners. A partner who provides essential, personalized, proactive legal support.

We do all of this without utilizing the traditional billable hour model. You pay for the value we bring, not the time spent on calls, emails, and meetings.

Our team is made up of attorneys and staff that share these values and we are retained by clients who want the same.

Pasha Law PC operates in the states of California, Illinois, New York, and Texas.

Meet Our Team

Fractional General Counsel Services

Pasha Law Select offers the expertise of a high-end general counsel legal team for every aspect of your business at a fixed monthly rate. Pasha Law Select is deliberately designed to allow our legal team to be proactive, to anticipate, and to be comprehensive in serving our clients. To be great lawyers, we need to know our clients. We can’t know our clients unless we represent a select number of clients in the long-term. This is Pasha Law Select.

Learn More