Nike False Advertisement Case Study Solution

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Question One

In the recent past, lawsuit against false advertisement has been on the rise, and has resulted in unfair competition. Lanham Act was established to handle cases of false advertisement in the global markets. The act permits firms to file a private suit in the courts following false advertisement. The advertisement “just screw” is very false and misleading. It is unlawful for an advertiser to make statements which are harmful, false and misleading about the nature of business operations, quality of goods and services and other commercial activities. In this case, Nike can claim that the ads resulted in adverse economic effects. The company can claim that the false advertisement has resulted in loss of customers to the competitors hence has not been able to achieve the economic objectives. Nike Corporation can allege that the advertisement has eroded the entity’s reputation, and this might have long term negative economic effects. False advertisement gives rise to lawsuits. The best defense to false advertisement by Candies is to prohibit the case from running. It should appoint an experienced legal counsel who is very clear of all existing advertising before it is run.

The choice of the domain name has become an important business issue in the recent past. The domain name is registered by a firm or company to enable the internet users locates the site on the web very easily. When registering, a firm should choose a domain name that is distinctive from those that have been used by other firms. Using common domain name present numerous issues that might have direct negative effect on the business operations. From the case study, the two companies have used the same common domain names. Therefore, the domain owner is likely to experience negative effects that could have been avoided if the other company had not used it domain. It is difficult for the company to build up any special reputation. In addition, the company’s abilities to protect others during unfair competition are paralyzed.

Nike False Advertisement Case Study Solution

According to the law, it offensive to pick a domain that is used as trademark of another firm, especially if it is widely known. Most laws around the world treat registration of company’s trademark using a domain name of another existing company amounts to trademark infringement, and this has adverse consequences. Therefore, the faulting company should pay the damages incurred by the owner. This is subject to dispute resolution procedures to enable the owner stop the other firms from cyber squatting the domain name.

Question Two

According to the federal laws, it is unlawful for an advertiser to make false or misleading statements about the nature of the products or service that is being offered by the competitor. Following false advertisements, consumers will start to develop negative attitude towards the products and the organization that is being falsely advertised. The competitors will take advantage of such situations thus profiting themselves. The advertisement result in unfair competition in the market since the consumers will try to avoid the products of that particular firm. The advertisement that has been made concerning the Polyglycoat products is false and misleading. The advertiser has used the corporation product to convince larger number of customers that the polyglycoat made by the competitor does not meet the needs and demands of the customers hence they should switch to desirable option, polycracker. Such advertisements amount to product disparagement. The rival firm is trying to discredit the product offered by the competitor. According to Lanham Act amended in 1998, false advertisement of such kind is wrong hence the affected company has the right to sue the advertiser or the rival firm. The advertisement tarnishes the name of the company hence eroding good public reputation.

The descriptions given on the ads amount is going against the law hence Polyglycoat should file a case for the damages suffered. According to law, a competitor has full rights to use the trademark of another company provided that it is unlikely to lead to confusion of customers as concerning the products of the company. However, Polycracker has used the advertisement to confuse the customers about the competitor’s products. This is a white-collar crime which should not be practiced in the competitive environment. The Polycracker should have advertised its products without mentioning the name or the products of its competitors. The advertisement made by Polycracker amounts to disrespecting and harming the competitor.

The advertisement amounts to breach of law and has negative consequences on Polyglycoat products. This is unfair competition hence its can result in numerous economic damages. Through the court, the Polyglycoat should demand corrective advertisement campaign by the rival firm. As a plaintiff, Polyglycoat should obtain injunctive relief from court for. Upon the false advertisement, it is obvious that Polyglycoat will loose great deal of customers to the rival firm. Consequently, Polycracker will profit itself due to unfair competition resulting from false advertisements. Subject to principle of equity, the corporation should demand any profits made by the rival firm after the advertisement was made. Polycracker has no option other than to surrender the profit to injured company. In addition, Polyglycoat Corporation should demand for compensation sustained following false advertisement. As stated earlier, the false advertisement has negative effect on reputation of the company. Along other damages, the Polycracker should Polyglycoat for the damages suffered.  Bringing the case to court involves substantial costs. Therefore, Polyglycoat should demand for compensation for costs of the action for the rival firm.

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