FALSE ADVERTISING
“Any advertising or promotion that misrepresents
the nature, characteristics, qualities or geographic
origin of goods, services or commercial activities”
(LANHAM ACT, 15 U.S.C.A. § 1125(a)).
Proof Requirement
To establish that an advertisement is false, a
plaintiff must prove five things: (1) a false state-
ment of fact has been made about the adver-
tiser’s own or another person’s goods, services,
or commercial activity; (2) the statement either
deceives or has the potential to deceive a sub-
stantial portion of its targeted audience; (3) the
deception is also likely to affect the purchasing
decisions of its audience; (4) the advertising
involves goods or services in interstate com-
merce; and (5) the deception has either resulted
in or is likely to result in injury to the plaintiff.
The most heavily weighed factor is the adver-
tisement’s potential to injure a customer. The
injury is usually attributed to money the con-
sumer lost through a purchase that would not
have been made had the advertisement not been
misleading. False statements can be defined in
two ways: those that are false on their face and
those that are implicitly false.
Development of Regulations
One early attempt to create advertising
industry standards was made in 1911 when the
trade journal Printer’s Ink proposed that false
advertising be classified as a crime. As a result,
false advertising became a misdemeanor in 44
states. Statutes were based on the model statute
suggested by Printer’s Ink. These statutes are still
in effect; however, they are rarely used because it
requires proving that the false advertising exists
BEYOND A REASONABLE DOUBT, a difficult stan-
dard to meet.
In place of the Printer’s Ink statute, states
adopted the Uniform Deceptive Trade Practices
Act of 1964 (revised 1966), which lists a dozen
different items that are prohibited in the adver-
tising trade. The only remedy available under
this act is injunctive relief—a court order that
admonishes the guilty party for its actions—
which may explain the low number of states that
have adopted it. (As of 2003, only 12 states have
adopted the statute in some form.) Other states
have different statutes regarding false advertis-
ing. Most of these statutes require the courts to
interpret state laws using federal guidelines pro-
vided by the FEDERAL TRADE COMMISSION
(FTC). According to the FTC, which amended
its standards to help regulate cigarette labeling,
three elements are necessary to show that an
advertisement is false or unfair. The ad has to
offend public policy; be immoral, unethical,
oppressive, or unscrupulous; and substantially
injure consumers.
Types of False Advertising
Today’s regulations define three main acts
that constitute false advertising: failure to dis-
close, flawed and insignificant research, and
product disparagement. The majority of these
regulations are outlined in the Lanham Act of
1946 (15 U.S.C.A. § 1051 et seq), which contains
the statutes that govern TRADEMARK law in the
United States.
Failure to Disclose It is considered false
advertising under the Lanham Act if a represen-
tation is “untrue as a result of the failure to dis-
close a material fact.” Therefore, false advertising
can come from both misstatements and partially
correct statements that are misleading because
they do not disclose something the consumer
should know. The Trademark Law Revision Act
of 1988,which added several amendments to the
Lanham Act, left creation of the line between
sufficient and insufficient disclosure to the dis-
cretion of the courts.
American Home Products Corp. v. Johnson &
Johnson, 654 F. Supp. 568, S.D.N.Y. 1987, is an
