Group 1
Follero, John Michael
Payba, Khaile
Almeda, Mikaela
Matias, Andrea
Tagapuen, Christine
Legal Environment
1. Trademark Protection
A trademark is a brand, corporate or store name, or
a distinctive symbol that identifies the seller's brand
and thus differentiates it from the brands of other
sellers.
Can be logos, word, slogan, and mascot.
- Unregistered Trademark Symbol
- Registered Trademark Symbol
R.A 8293- Intellectual Property Code
IPO Intellectual Property Office
Trademark Example:
Trademark Infringement - is the unauthorized use of a trademark or
service mark
2. Copyright Protection
A copyright gives an organization the exclusive
right to use or reproduce original work, such as an
advertisement or package design, for a period of
time.
- Copyright Symbol
Copyright infringement - is when a product is used in an ad without
proper permission.
3. International Laws and Regulations
Pricing and distribution laws and regulatory
restrictions vary by country.
Some countries ban ads for certain product
o Alcohol advertisement in muslim
countries
o Advertisements that targets 12 yrs.
Old and below children are ban in
Sweden.
Contests, promotions, and direct mail are
illegal in some countries.
Regulatory Environment
1. Federal Trade Commission (FTC) - Established in 1914, the
FTC regulates deceptive and misleading advertising, focusing
on:
Fairness: unfair competition and deceptive practices
Deception: issues cease and desist orders
Violations: can fine companies for violating 1) a
trade regulation rule or, (2) cease and desist order.
Consumer participation: funds consumers groups
and other interest groups in making rules
Also oversees advertising involving weight loss
products, children and elderly, telemarketing, and
the entertainment industry.
Goals:
a. Protect Consumer
b. Maintain Competition
a. The FTC and Childrens Advertising
The Childrens Advertising Review Unit (CARU) evaluates
ads to children under 12.
The Childrens Television Advertising Practice Act (1990)
placed ceilings on ads during TV programs.
o 10.5 minutes per hour on weekends
o 12 minutes per hour on weekdays
o Ads clearly separated from programs
As of 1996, all stations must air 3 hours per week of
educational programming.
b. Regulating Deception
o Deceptive advertising intends to mislead consumers
by making false or by failing to fully disclose
important facts, or both.
o Current policy contains three elements:
i. Misleadingrepresentation, omission,
practice
ii. Reasonablenessreasonable consumer
iii. Injuriousmust cause material injury
o Deception is difficult to prove due to vague
and hard-to-measure criteria.
c. Regulating Substantiation
o Does the advertiser have a reasonable basis to
make a claim about product performance?
o Factors considered:
a. Type and specificity of claim made
b. Type of product
c. Possible consequences of the false claims
d. Degree of reliance on the claims by consumers
e. Type and accessibility of evidence available
for making the claim
f. Injuriousmust cause material injury
d. Remedies for Deception and Unfair Advertising
Consent decrees
Advertiser agrees to stop the deceptive practice
Cease and desist order
A process similar to court trial precedes the order
Corrective advertising
Advertiser runs messages correcting the false
impressions
Consumer redress
Cancel or reform contracts, refund money or return
property, pay for damages, or public notification
Ad agency legal responsibility
Agency is liable along with advertiser and subject to the
same penalties
2. Food and Drug Administration (FDA)
o Regulatory division of the Department of Health
and Human Services
o Oversees package labeling, ingredient listings, and
advertising for food and drugs
o Determines the safety and purity of foods,
cosmetics
o Watchdog for drug advertising, specifically direct-
to-consumer ads for prescription drugs
3. Federal Communications Commission (FCC)
o Regulates radio and television broadcast
communications (media, not advertisers)
 o Can issue and revoke licenses, ban deceptive Several U.S. companies have their own codes of
messages, or those in poor taste behavior and criteria for acceptability of
o Responds to complaints but doesnt initiate actions advertising.
o Works closely with FTC to eliminate false and Industry self-regulation
deceptive advertising National Advertising Review Council (NARC)
4. Other Regulatory Bodies Negotiates voluntary withdrawal of deceptive
o The Bureau of Alcohol, Tobacco, and Firearms (BATF) advertising
within the Treasury Department regulates deception in National Advertising Division (NAD) consists of ad
advertising and establishes labeling requirements for the industry people who monitor advertising and
liquor industry. review complaints. If they cant resolve the issue,
o The U.S. Postal Service regulates direct mail and they send it to the NARB.
magazine advertising including the areas of obscenity, National Advertising Review Board (NARB) is a
lotteries, and fraud. 50-member group of ad industry people who hear
o The States Attorneys General regulates advertising at the case and try to resolve an issue. If unresolved,
the state level. they can:
Publicly identify the advertiser; share
Specialized Government Agencies That facts about the case
Refer the complaint to a government
Affect Advertising agency like the FTC
Effect on Advertising NARB Appeal Process
Agency
Regulates credit, labeling,
Federal Trade Commission packaging
www.ftc.gov warranties, and advertising.

Regulates packaging, labeling,

Food and Drug Administration and
www.fda.gov manufacturing of food and drug
products
Regulates radio and television
Federal Communications
stations
Commission
and networks.
www.fcc.gov
Controls advertising by
U.S. Postal Service monitoring materials
www.usps.gov sent through the mail. Self-regulation by public and community groups
Local groups like the Better Business Bureau advise
Division of the U.S. Treasury local businesses on legal aspects of advertising.
Bureau of Alcohol, Tobacco, and Department Also receives and investigates complaints,
Firearms that regulates advertising for maintains files on violators, and assists
www.aft.treas.gov alcoholic law enforcement officials in prosecuting
beverages. violators.
Overseas trademark registration Consumer Activist Groups
U.S. Patent Office to protect Action for Childrens Advertising
www.uspto.gov against patent infringement. monitors advertising to children and files
complaints.
Library of Congress Public Citizen group pushed for warnings
Provides controls for copyright
www.loc.gov on print ads for nicotine products.
protection
Cultural Environment Movement is a
nonprofit coalition focused on fairness,
diversity, and justice in media
Media Review of Advertising communications.
The media screens and rejects advertising that violate their
standards of truth and good taste. What guides ethical behavior?
The First Amendment lets publishers refuse to run ads. Ethics
The FTC pressures magazines and newspapers to stop running shoulds and oughts; the right thing to do
misleading weight loss ads. Morals
CBS refused to run an anti-Bush ad endorsed by the MoveOn Frameworks for right actions often based in religion
organization
Three Types of Self-Regulation What guides ethical behavior?
self-discipline Personal Ethics
Organizations exercise self-discipline when they Ethical decisions are complex and involve
develop, use, or enforce norms within its own conflicting forcesstrategyvs. ethics, costs vs.
practices. ethics, effectiveness vs. ethics.
Most major advertisers and advertising agencies Professional Ethics
have in-house ad review procedures. In Gallup poll, advertising practitioners ranked just
above HMO managers and car salesmen
 The American Association of Advertising Agencies Singapore, Malaysia, the Netherlands, and Sweden
publishes a code of standards all have standards of professional behavior
International Standards and Codes