advertising your business

In this article, Janvi Ahuja discusses the legal precautions to take while advertising your business.

Introduction

The advertising business has evolved itself from small-scale business to full-fledged dynamic industry. Earlier it was a way for promoting sales and marketing, it was designed to deliver personalized interactive commercial message and now in the western markets, the industry is quite ahead where there is more experimentation in new media, new customer interface and all of this is integrated with the help of technology.

Indian advertising business is moving with an accelerated growth rate of 11.5% in 2017 according to IPG media report, this is lower than revised estimate of 16.2% put out in 2016. After the effect of GST, it is likely to create a disruption in short term. Within offline it is estimated to grow at 9.7% while digital will grow at 25.5% over next five years. But with these growing needs of the society and advancement in this field, there is an emerging threat to the companies. Digital platforms tend to be far more comprehensive than traditional marketing vehicles. 

Digital marketing paradigm

Advertising revolution is data collection and measurement, which is specific and more precise form for gathering and assessing user interaction and response, yielding response of individual customer’s. Advertising is done to attract more and more customers, but while attracting customers they forget to take some precautions. While advertising they need to be aware that the ad does not infringe a right of an individual or the ad which is posted is in favor of the society.

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Intellectual Property in advertisement

Like the elements of a good product, a good advertising is likely to be imitated by others. So there are some IP rights that comes into play, while developing an advertisement.

  • An advertisement needs to be creative, means it should have some layout of advertisement.
  • A web design is likely to be protected by advertisement.
  • Signs slogans and sounds are protected under circumstances, by trademark and copyright laws.
  • Some forms of advertising technique or means of doing business may be protected by utility models;
  • Unfair advertising methods, including false advertising claims, false endorsement of products, deceptive packaging, dishonest promotion or marketing are prohibited under unfair competition law.

Precautions to be taken while advertising

Advertisements are one which lasts longer, longer than the words of mouth or networking. An advertisement has greater potential to reach to a large number of people, and can affect many people and so it is subject to many regulations. While an advertisement is telecasted it has its fear of being copied and the creative inspiration efforts and skills are vain. Therefore it is advised to maintain an appropriate strategy to protect your creation by using the legal method available through IP system.

  • Make sure your advertisement is registered and there is no similar advertisement to it. Registration includes any other copyright material including your website with national copyright office. By registering an ad and protecting it by copyright material it alerts the competitor of a new advertisement and gives customer assurance that the ad is true and not false.
  • The advertisement should not infringe the privacy rights of other party; it must be taken care that an advertisement is not copied or the idea when an advertisement is made.
  • You can use material owned by other in your advertisement if you are using e-commerce system, computer program advertising technology, or any other technical tool for creation of advertisement make sure you have a written license agreement.
  • Make sure when you are advertising your product or service do not compare it with those of the competitors. E.g. it is always seen that coca-cola and Pepsi are challenging each other in taste test. Comparative advertising may be direct or indirect. In direct advertisement a product is described as superior to named competitors on specific features or benefits, in indirect claims the competitors are not named and advertisement brand is simply described superior but not clashes with the competitor’s brand.
  • Not false or misleading, make sure the advertisement which is broadcasted is not vague of fictitious, it should not be deceptive and not unfair. When promoting a product or service, you need to ensure that any branding, statement or quote is not false and true to your belief and it should always have evidence available to the backup claims they make. False or misleading advertisement also includes bait advertisement where a product is advertised at a certain price and is not available in the market. These categories of advertisements are illegal and are against the trade customs. It is illegal if a business sells the product knowing that they cannot meet expected demand.
  • While direct marketing it is most important to make sure that the company complies with the federal or state laws. Before conducting a direct marketing check that you comply with the privacy legislation and spam regulations.
  • Make sure that the competitor’s confidential information is not disclosed, as it is generally protected by trade secrets. It is generally known as readily ascertainable by public. Although the owner does not need to provide protection to his confidential information, if it is independently obtained, the owner is entitled to the court relief against who has stolen or divulged the confidential information in violation of duty or a written non-disclosure agreement.
  • All the advertisement should comply with the local laws of the area the advertisement target. There are some local requirement which ads need to take care of, in India, there are some ads which are not allowed like prohibited medical services, pre natal gender discrimination (Supreme Court Order (PDF) but this is not an exhaustive list.

Advertising Standards Council of India

It aims to maintain and enhance the public’s confidence in advertising. It is a self regulatory voluntary organization of the advertisement industry, which ensures the protection of interest of consumers.

Aim

  • To ensure the truthfulness and honesty of representations and claims made by advertisements.
  • To ensure that advertisements are not offensive to generally accepted standards of public decency.
  • To safeguard against the indiscriminate use of advertising for the promotion of products regarded as hazardous to society or to individuals.
  • To ensure that advertisements observe fairness in competition so as to inform the consumer on choices in the marketplace while observing the canons of generally accepted competitive behavior in business

Legal issues in advertising

With liberalization and globalizing the Indian economy firms have vigorously been promoting their product and services. In the changing proliferation of advertisement, the law needs to be further strengthened. There are many laws which deals with advertisement like:

  1. Consumer protection act, 1986 section 6 grants consumer to be informed of quality, quantity, potency, purity, standards of goods and services as the case may be to protect the consumers from unfair trade practices.
  2. Drugs and cosmetic act, 1940 section 29 of the act imposes penalty upon whomsoever uses a report or analysis made by central drug lab, or extracts such report, for the purpose of advertisement.
  3. FSSAI act, 2006 section 53 provides penalty upto 10 lakhs for false or misleading ads relating to nature of good, description, substance or quality.
  4. Young person’s harmful publication act, 1956 section 3, imposes a penalty for advertising or making known by any means whatsoever that any harmful publication as defined under the act can be procured from or through any person.
  5. IPC, 1806 widens the array of provision, it prohibits defamatory publication, obscene or statement creating disharmony in the society.
  6. Competition act, 2002 deals with comparative advertising.

In the recent case of HUL vs. P & G the petitioner claimed TV commercial of respondent is in respect of Fairness cream and it is disparagement, as it communicates that other products lack something. The court held that such comparison is permitted as there is no direct attempt to defame HUL’s product and there is no economic loss established. Similar was the dispute between RIN &TIDE.

Conclusion 

Advertisement is whole and sole of a business. It is a part of service industry.  Companies try to compete while advertising where they forget to take legal precautions. As justice Markandeya Katju has pointed out that media shall be given freedom at the same time they need to be controlled. The basic principle of wrongs and crimes are the same, and the laws dealing with that. But the technology may change and you must keep pace with the technology.

Advertisements are common framework for infringement of lawsuits. This article provides some tips that can help while advertising your business. As it is wisely said precaution is better than cure. So before advertisement there are some points which need to be taken care off both from general perspective and legal perspective.

References

 

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