This post is part of a series of posts entitled A Legal Guide to the Internet. For a comprehensive list of articles contained in this series, click here.

As a general rule, the test of legality for advertising on the Internet is similar to the test for advertising in general. Advertising must not be “false, deceptive or misleading” to the consumer. Generally, advertising may refer to other trademarks if it is not likely to cause confusion, if it is literally true, and if it is not implicitly misleading.

Use of the trademark of a competitor or another company can result in trademark infringement. Nonetheless, one can make fair use of a mark, such as through comparative advertising and through free speech to talk about another’s product. To increase the likelihood such fair use will be considered permissible, care must be taken to adhere to the following:

  1. dispel any implicit affiliation with the famous mark, such as with a disclaimer,
  2. use the trademark truthfully,
  3. only use the trademark as much and as minimally necessary, and
  4. not use color schemes, logos, or other distinctive features of the competitor that are unnecessary to convey the truthful information.

Trademark Fair Use

The fair use of the mark of another is generally a very fact-specific inquiry and any factors that suggest improper motives or bad faith of some actions can result in negative implications for even legitimate other actions. When referring to another‘s trademark or advertising materials, a business must make sure that it does not infringe any intellectual property, including copyrights, owned by the other party. Finally, disclaimers may be advisable when referring to another‘s trademark.

Comparison shopping applications, which search vendor websites and produce information about lower-priced options, are another new and relatively controversial method of web advertising. With regard to these and other types of web advertising, the advice of counsel may be useful to businesses in order to evaluate the potential risks involved.

The Federal Trade Commission released its staff paper “Dot Com Disclosures” in May 2000 to guide parties using the Internet for advertising as to the applicability of product and business specific FTC laws to Internet advertising. The paper is available at http://www.ftc.gov/bcp/conline/pubs/buspubs/dotcom/index.html.

This and the following posts have been copied or adopted from A Legal Guide To The INTERNET – Sixth Edition, published through a collaborative effort by the Minnesota Department of Employment & Economic Development and Merchant & Gould.