Minnesota Advertising & Media Law

• Advertising & Media Law
  • Defamation
  • Obscenity
  • Advertising
    • Minnesota Law
    • Federal Law
    • Contests, Sweepstakes, and Game Promotions

Media and advertising law and arts and entertainment law are related in the real world because many artists find themselves involved in free speech issues. Although free speech may sound like a straightforward issue, its practical applications have been the subject of much case law and are almost perpetually debated in the courts, which must try to balance individual and community rights. This section focuses on some of the significant concerns in media law including defamation, obscenity, libel, and slander.

Defamation

Freedom of speech is not absolute. Defamatory speech, speech that negatively reflects on someone else's reputation, is one type of speech that is limited. The two kinds of defamation are libel and slander. Libel occurs when the defamation is done in writing; slander occurs when the defamation is spoken. In order to sue for defamation, a plaintiff must prove that the information was false. The courts treat private persons differently than public figures in deciding defamation. Public figures have to prove not only that the information is false, but that the speaker or publisher either knew the words were false, or spoke or published the words with a reckless disregard for whether they were false or not.

During the ninth century, at the time of Alfred the Great, the minimum penalty for defamation was loss of one's tongue. Modern laws offer somewhat lesser punishments. Minnesota law provides for both criminal and civil cases against libel, but the criminal statues have not been used for many years and it is likely that they are unconstitutional. In Minnesota, there is a somewhat different test when the defendant is a member of the media. The desire to provide for freedom of the press makes it more difficult to win a libel case against a media defendant.

There are usually two defenses against libel: truth and consent. In general, if a statement is true it is not actionable as libel or slander even though it may harm one's reputation. Any person who offers his or her consent to the transmission or publication of defaming information cannot then sue for libel or slander. Also, a statement of opinion cannot ordinarily be the basis of a libel suit. Furthermore, a person must be identified in order for defamation to have occurred. The identification occurs either when a person is directly named or when he or she is described so specifically as to be recognizable. In general, false statements that hurt the reputation of a business, accuse someone of a crime or impugn chastity are likely to be found to be defamatory. Clearly, the safest approach in publishing or broadcasting negative information about someone else is to make sure it is factually accurate, or to limit negative remarks to those regarding deceased persons, who under the law do not have reputations and therefore cannot be defamed. In addition, people who are not in the public spotlight, or whose livelihoods do not otherwise depend on a favorable public perception, cannot generally be greatly damaged by defamatory remarks.

In determining damage awards, courts also take into account how many people heard the slander or read the libel. The more people who heard or read the defamation, the greater a damage award is likely to be. State and federal laws almost never allow for punishment that would prevent a libel or slander from occurring. That is, one cannot go to court and use libel law to prevent someone else from publishing a defamatory book. But because defamation law does allow for civil action after the libel or slander has occurred, many times the subject of the potentially defamatory material is successful in preventing the defamation by threatening to go to court if the material is published.

Obscenity

Material that has been deemed to be obscene is illegal to distribute or produce in any way. It is also illegal to participate in an obscene performance if a person knew or should have known that the performance material was obscene. The fines for violating these laws can be as high as $10,000 for the first offense. It is also illegal to use minors in sexually explicit representations and to show sexually explicit materials to minors.

Ever since the U.S. Supreme Court's famous 1973 decision in an obscenity case, determining whether material is obscene depends on this test: (a) whether the average person applying contemporary community standards would find that the work, taken as a whole, appeals to the prurient interest; (b) whether the work depicts or describes, in a patently offensive way, sexual conduct; and (c) whether the work, taken as a whole, lacks serious literary, artistic, political, or scientific value.

Many people find this test vague. Obscenity is particularly difficult to define, and whether a particular piece of material or performance is found obscene depends greatly on the particular judge or jury deciding the case. As a result, lawyers are justifiably reluctant to give specific advice on how to avoid crossing the line from acceptable sexual material into obscenity. At best, all they can do is recite the legal definition and discuss some of the details of a court's previous decisions.

Advertising issues can affect all business people, whether or not they think they are directly involved in the advertising, entertainment or media industries. Good communication with the public is one of the most important assets a business can have, whether it involves placing advertisements, dealing with the government or talking to the media.

Advertisements include a wide range of items - from television spots to catalogs. Advertisements are invitations to the public for offers on products or services. Advertisements are not considered offers under contract law, but are announcements that goods are available and offers from the public are solicited. Although advertisements do not constitute offers, they can raise liability issues in several different ways. Both the state of Minnesota and the federal government have laws regulating advertisements.

Minnesota Law

Under Minnesota's Deceptive Trade Practices Act, a person in the course of business engages in a deceptive trade practice when he or she:

• Passes off goods or services as those of another
• Causes likelihood of confusion or misunderstanding as to the source, approval, or certification of goods or services
• Causes likelihood of confusion or misunderstanding as to the affiliation, association, or connection with or certification by another
• Uses deceptive representations or designations of geographical origin in connection with goods or services
• Represents that goods or services have sponsorship approval, ingredients, uses, benefits that they do not have or that a person has sponsorship, approval, affiliation that the person does not have
• Represents that goods are new if they are used, reconditioned, or altered
• Represents goods or services are of a particular quality or standard of which they are not
• Disparages goods, services, or the business of another by false or misleading representations of fact
• Advertises goods or services with the intent not to sell them as advertised
• Advertises goods or services with intent not to supply reasonably expected public demand unless the advertisement discloses the limited quantity
• Makes false or misleading statements of fact concerning the reasons for, existence, or amounts of price reductions
• Engages in any other conduct which creates confusion or misunderstanding

Minnesota has a specific statute regarding false statements in advertising. This law states that any person, firm, corporation, or business, with the intent to sell or dispose of goods or services, who publishes or disseminates an advertisement that contains any material assertion, representation, or statement of fact that is untrue, deceptive, or misleading is guilty of a misdemeanor.

In addition, the Minnesota Prevention of Consumer Fraud Act states the use by any person of fraud, false pretense or promise, misrepresentation, misleading statement, or deceptive practice with the intent that others rely on it in connection with a sale is unlawful.

Minnesota law states that in addition to any civil penalties one may receive for violating these statutes, he or she may also receive a penalty if the conduct was perpetrated against a senior citizen or a disabled person.

Advertisements may also lead to product liability. Words, photographs, or a combination of the two may create liability if a product does not meet the claims stated or shown. An advertisement does not have to use the word "warranty" for a warranty to be created. For example, if an advertisement shows a photograph of a product being used in a particular fashion and the product fails when a consumer uses the product in that manner, the consumer may bring an action for failure of the product to meet its warranty.

Federal Law

There are several federal statutes that regulate advertising. It is unlawful for a person, partnership, or corporation to disseminate any false advertisement. Unfair or deceptive acts or practices affecting commerce are also unlawful. Under the federal Lanham Act, any person, who in connection with any goods or services, uses any word, term, name, symbol, device, or any combination thereof or any false designation of origin, false or misleading description or representation of fact that is likely to cause confusion, mistakes, or deception shall be liable for civil damages. Also, a person can be liable for damages if his or her commercial advertising or promotion misrepresents the nature, characteristics, qualities, or geographical origin of goods, services, or commercial activities. Advertising agencies have been held liable under this statute when the advertising agency participates in the creation, development, and propagation of a false advertising campaign when it has knowledge of its falsity.

Advertisements may also cause copyright infringement claims. Advertisements may parody other advertisements or copyrighted works. A copyright owner has the exclusive right to control the reproduction, distribution, performance, display, and creation of derivative works. However, the Fair Use doctrine permits the limited use of a copyrighted work without the owner's permission. There are four factors to consider when determining whether use is fair use:

• Purpose and character of use, including whether the use is of a commercial nature or for nonprofit educational purposes
• Nature of the copyrighted work
• Amount of the work used in relation to the copyright work as a whole
• Effect of the use upon the potential market or value of the copyrighted work

Courts have used these four factors and reached various results. In some cases, courts have held that advertisements constituted fair use, and in other cases courts have held that copyright infringement occurred. Courts must decide whether the use constitutes a parody, which may constitute fair use, or if the use is using copyrighted material for purely commercial reasons. There is a presumption that a commercial use of copyrighted work is not fair use. However, the fact that the use is commercial is only one of the four factors to consider. When courts look at the nature of the copyrighted work, there is stronger protection for some works. Advertisements do not receive as much protection as literary works, so an advertisement parodying another advertisement may be acceptable, while an advertisement using a copyrighted song may be unacceptable.

Contests, Sweepstakes, and Game Promotions

In addition to the state and federal laws described above, a complex set of rules governs contests, sweepstakes, and game promotions. Such promotions are a popular way of promoting a product or service, but if done improperly, can plunge an advertiser into a morass of legal problems. One recent game promotion in England, sponsored by an American vacuum cleaner manufacturer, was so poorly planned it cost the company millions of dollars in legal fees and settlements with angry customers. Clearly, it pays to have game promotions carefully scrutinized before launching a new advertising campaign built upon prizes. Often, a properly worded disclaimer can prevent a lot of headaches.

One of the highest hurdles facing advertisers is that, while most states prohibit lotteries, each state has its own definition of what constitutes a lottery. If an advertiser is not careful, it can quickly run afoul of state laws against lotteries. Many states also have unique laws requiring posted rules, distribution of lists of winners, record retention, and postings of odds. In addition, the United States Postal Service, the Federal Communications Commission, and all major television networks have their own rules for contest advertisements, sweepstakes, and game promotions. Only an experienced advertising attorney can adequately advise on all these issues.