Hard times apparently bring out the imagination in some folks. A recent piece in the Wall Street Journal, featured the story of Cyrus Hassankola, a rug salesman, who decided to avoid the problem of making misleading “going out of business” claims by calling his store “going out of business.” The Texas Attorney General's office, however, was not amused, finding the store name itself to be misleading.
This is a good reminder that the FTC and courts interpret the term “advertising” broadly, including product names, press releases, statements by salespersons and even press interviews. In the late 1980s the FTC successfully sued Thompson Medical Company claiming that the name of its product “Aspercreme” misled consumers into believing that the product contained aspirin. More recently, in a 2005 settlement with the FTC, defendants were prohibited from using trademarks “Fat Trapper,” “Fat Trapper Plus,” and “Exercise In a Bottle,” and any other “deceptively named products,” in conjunction with the sale of weight-loss products (FTC press release can be found here).
If you want to avoid the FTC or the courts telling you that your product has to “go out of business”, look carefully at all the different ways your company is communicating to the marketplace about its products.
