The Women Entrepreneurs Blog @ Simon

Advertising and Marketing on the Internet: Rules of the Road

by Victoria Reynolds

The Internet is connecting advertisers and marketers to customers to advertisers and marketers to customers again from Boston to Bali with text, interactive graphics, video, and audio. As you and your business join the masses online, it’s important to remember that many of the same rules that apply to other forms of advertising apply to electronic marketing. These rules and guidelines protect businesses and consumers and help maintain the credibility of the Internet as an advertising medium.

The Federal Trade Commission (FTC) is an agency of the federal government charged, among other things, with consumer protection. The FTC offers two fundamental principles to remember: Advertising must tell the truth and not mislead consumers and in addition, claims must be substantiated.


General Offers and Claims Products and Services

The Federal Trade Commission Act allows the FTC to act in the interest of all consumers to prevent deceptive and unfair acts or practices. In interpreting Section 5 of the Act, the Commission has determined that a representation, omission, or practice is deceptive if it is likely to:

• mislead consumers or
• affect consumers' behavior of decisions about the product or service.


In addition, an act or practice is unfair if the injury it causes, or is likely to cause, is:

• substantial,
• not outweighed by other benefits, and
• not reasonably avoidable.

The FTC Act prohibits unfair or deceptive advertising in any medium. That is, advertising must tell the truth and not mislead consumers. A claim can be misleading if relevant information is left out or if the claim implies something that's not true. For example, a lease advertisement for an automobile that promotes "$0 Down" may be misleading if significant and undisclosed charges are due at lease signing.



In addition, claims must be substantiated, especially when they concern health, safety, or performance. The type of evidence may depend on the product, the claims, and what experts believe necessary. If your ad specifies a certain level of support for a claim - "tests show X" - you must have at least that level of support.



Sellers are responsible for claims they make about their products and services. Third parties - such as advertising agencies, website designers, and catalog marketers - also may be liable for making or disseminating deceptive representations if they participate in the preparation or distribution of the advertising, or know about the deceptive claims.

Other points to consider:

• Disclaimers and disclosures must be clear and conspicuous. That is, consumers must be able to notice, read or hear, and understand the information. Still, a disclaimer or disclosure alone usually is not enough to remedy a false or deceptive claim.

• Demonstrations must show how the product will perform under normal use. Refunds must be made to dissatisfied consumers if you promised to make them.

• Advertising directed to children raises special issues. That's because children may have greater difficulty evaluating advertising claims and understanding the nature of the information you provide. Sellers should take special care not to misrepresent a product or its performance when advertising to children. Additionally, as a result of The Children's Online Privacy Protection Act (COPPA) and the FTC's implementing Rule which took effect April 21, 2000, commercial websites directed to children under 13 years old or general audience sites that have actual knowledge that they are collecting information from a child must obtain parental permission before collecting such information.

The Internet has provided us with unprecedented opportunities for reaching consumers and collecting and sharing information and it is important as we to protect the credibility of this medium. Remember, the internet may be the “New Frontier” of commerce but it cannot be treated like the “Wild West”. 

Source: Advertising and Marketing on the Internet

*SBA’s participation in this blog does not constitute an endorsement of the William E. Simon Graduate School of Business Administration or any other person or entity. SBA’s programs and services are provided to the public on a non-discriminatory basis.

How to Patent Your Idea

by Victoria Reynolds

SBA’s Office of Advocacy research shows that small businesses outperform their larger counterparts in producing more patents per employee (a measure of innovation). Small firm’s patents outperform those of larger firms in a number of measures, including growth, citation, and originality. In fact, small “patenting firms” produce 13 times more patents per employee than large firms do.

Now it is your turn. You have developed a product and are interested in protecting that investment. Let’s start with the basics.

What is a patent and how do I know if my invention is eligible for a patent? 

A patent for an invention is the grant of a property right to the inventor issued by the U.S. Patent and Trademark Office. Patent holders have the right to exclude others from making, using, or selling the invention described in the patent deed. The intent of patents is to give the developer of a new product time to recover development expenditures and startup costs without having to fight competition.

Patents cannot be obtained for inventions that have been publicly disclosed, are in use, or are marketed in the United States for one year prior to the filing of the patent application. Secondly, a thorough patent search, preferably done by a professional, must be conducted to make certain that the applicant's idea hasn't already been patented.

What is a provisional patent?

Provisional applications are like temporary placeholders; they allow inventors to file inexpensively without a formal patent claim, oath, or declaration. Once the application is filed, the applicant has one year to investigate the feasibility, marketability, patentability, and potential license interest of the invention before deciding to file a formal patent application. Meanwhile, the term patent pending can be applied to the invention, and the inventor enjoys a calendar edge on other inventors who may file for the same invention.

What exactly does copyright protect?

Copyright, a form of intellectual property law, protects original works of authorship, including literary, dramatic, musical, and artistic works such as poetry, novels, movies, songs, computer software, and architecture. Copyright does not protect facts, ideas, systems, or methods of operation, although it may protect the way these things are expressed. For more information refer go to the US Copyright Office.

Do I need a patent attorney or agent to file my patent application?

The U.S. Patent and Trademark Office (USPTO) strongly recommends that all prospective applicants retain the services of a registered patent attorney or patent agent to prepare and prosecute their applications. For information on registered patent attorneys and agents in your area, you may visit the USPTO's Office of Enrollment and Discipline website. Upon request, the USPTO will send information that provides a broad overview of the process of obtaining a United States patent. They will include general requirements and a listing of the Patent and Trademark Depository Libraries. Success in a global economy depends more and more on intellectual property (IP) assets. Unfortunately, intellectual property has captured the attention of pirates and organized crime. Today, piracy, counterfeiting and the theft of intellectual property pose a serious threat to all U.S. businesses. Industry estimates of the cost of such theft range from $250 billion to 750,000 jobs per year. These threats to ongoing invention and innovation make it important to consider securing IP protection, whether you're a major multinational firm or a 1-person home business. Protect your IP assets and investments

*SBA's participation in this blog does not constitute an endorsement of the William E. Simon Graduate School of Business Administration or any other person or entity. SBA's programs and services are provided to the public on a non-discriminatory basis.

Tip of the Week – Create clear policies around electronic media

Staying connected while keeping a focus on the bottom line is important. 

 

With social networking, blogs,Twitter, and many other sources of communication, businesses and employees are finding increasing access to outside sources of information-- instantly and with a sense unprecedented immediacy. 

While these are amazing and exciting developments for businesses, they present a number of sensitive issues relating to privacy, productivity, and employee relations.  

When should you protect your intellectual property? Now and forever.

Your intellectual property – that is, intangibles like your business name and product brands (trademarks), marketing brochures, web content, and advertising campaigns (copyright), novel inventions and business processes (patents), and business secrets, such as unique software code, research and development, and customer lists (trade secrets) – often are the most valuable assets of your business. 

How you protect your intellectual property can dramatically impact both the valuation of your company and the level of success it can achieve.

  Not only do you want to ensure you have secured your rights in your intellectual property to the maximum extent possible, you also want to be sure your intellectual property isn’t infringing anyone else’s rights. 

"The first thing we do, let's kill all the lawyers." Shakespeare, HenryVI

Hopefully, our readers will find the quote in the title of this post strictly humorous, rather than a call to act.

I am a lawyer. There, I said it. Contrary to the evil persona depicted in the many cartoons and email anecdotes my father and friends have sent me over the years, I pride myself in being a kinder, gentler lawyer and I believe I am in the company of many.

To me, a good business attorney is one of the most important assets a business owner can have, and the sooner he or she retains a reputable business attorney for guidance through the creation and operation of a new business, the better off that business owner will be.

As an attorney who bills by the hour, I understand why someone creating a new business may be reluctant to hire a lawyer initially. It is difficult enough to find the means to fund a new business and often times there just isn’t enough extra cash sitting around to pay a lawyer for legal assistance.

I am confronted with this issue regularly when I take calls from client prospects who ask me to help them differentiate between what is absolutely necessary and what can be overlooked in the beginning stages of operation. Unfortunately, for them – and for me – I don’t have a crystal ball and can’t predict with any certainty what crisis a particular client will face in the near or distant future.

However, experience has taught me that dealing with crises is an expected part of running a business. That knowledge is by no means intended to incite clients to act through fear; it is merely the practical reality of operating a business and ignorance is not bliss in the business world. It is far better to be aware today of potential problems rather than learn about them when they have become the crisis du jour.