1. What are the risks I face as a marketer from regulators and competitors?

As a marketer, you must comply with a wide range of laws governing your advertising and marketing business practices. These laws are enforced by various federal, state and local law enforcement authorities, including the Federal Trade Commission (FTC) and state attorneys general. In addition, certain statutes enable competitors and class action plaintiffs to initiate private lawsuits. The potential harm from a law enforcement investigation or class action lawsuit is catastrophic—a court could order your company—and you, personally—to pay massive money judgments, and require you to comply with broad prohibitions on future business activities. Your corporate and individual assets could be seized and, in rare circumstances, criminal penalties could apply. Moreover, you also face numerous competitive risks from knock-off artists who will steal your product design, infringe on your trademarks, and copy your advertisements. Putting a solid legal strategy in place to help you handle these risks maximizes your potential for success.

2. Do I make claims about the performance or effectiveness of my product or service?

Advertising is unlawful if it is false or misleading. The FTC, state attorneys general, consumers, and even competitors regularly file lawsuits against companies suspected of making false or misleading advertising claims. Statements about performance, effectiveness, superiority, or other features or benefits of your product or service require adequate substantiation. If you answered yes to this question, then your advertising must be in compliance with state and federal laws regulating advertising content.

3. Do I use testimonials in my advertising?

The use of testimonial statements from consumers is subject to a special set of federal regulations. The testimonial rules are complex and a constant source of trouble for marketers. The FTC recently proposed changes to the testimonial rules that will place even more burdens on advertisers and marketers to substantiate the claims made by someone endorsing a product or service. If you answered yes, your advertising triggers the requirements of the FTC’s testimonial rules.

4. Do I market my product by e-mail, pop-up ads, banner ads, or any another Internet marketing system? 

The federal CAN-SPAM Act and some state regulations place a number of demands on Internet and e-mail marketers, including opt-out notice obligations and other provisions requiring the careful crafting of e-mail subject lines and advertising content. Some of your Internet marketing mechanisms can inadvertently be tied to spyware, phishing applications, or other illegal practices that may subject you to liability. If you answered yes to this question, your business activity may trigger the requirements of Internet and e-mail marketing laws.

5. Do I make telemarketing calls or use telemarketing vendors?

The FTC has a number of regulations regarding telemarketing services. These include prohibitions on abandoned calls and violations of the Do Not Call List. Similarly, a number of states have telemarketing or telephone solicitation statutes that require registration and fee payment, mandate certain disclosures, and otherwise place significant limitations on telemarketing activities. If you answered yes to this question, you are subject to the various laws regulating telemarketing practices.

6. Do I sell a product or invention that I know is original or believe is original?

Product copying and counterfeiting is a multi-billion dollar per year industry. Identifying an innovative aspect of your product (which is not always readily apparent) can enable you to obtain patent protection and prevent others from stealing your marketable creation. Conversely, your product may infringe the patent of another without your knowledge. If you answered yes to this question, you may be at risk of losing your design to a competitor unless you obtain patent protection, or be subject to a claim of patent infringement yourself.

7. Do I use a distinctive trade name, logo, overall appearance, or advertising material?

Taking the simple step of seeking trademark protection can help you prevent others from cashing in on your success by using a similar business or brand name, logo, or your overall trade dress. Similarly, you can heighten the protection of your advertising materials by seeking a registered copyright on your ads. Without trademark or copyright protection, competitors may use your packaging design to misdirect consumers who have seen your advertising into purchasing your competitor’s product. Copyrighting affords added protection and redress against knockoffs and counterfeiters. If you answered yes to this question, you should seek protection for your intellectual property.

8 . Do I sell a product that is regulated by the Food and Drug Administration?

The FDA regulates approximately one-quarter of every consumer dollar spent in this country. Its authority goes well beyond the foods, drugs and cosmetics that it is commonly known to regulate. Just a few of the products subject to various FDA labeling, manufacturing and other requirements include herbal supplements, exercise equipment, tanning beds, and tooth whiteners. Failure to comply with FDA requirements can result in the seizure of product, an injunction, and even criminal penalties. If you answered yes to this question, you must assess whether your product is labeled, manufactured, formulated, and promoted in a manner that complies with FDA rules.

9. Do I collect personal information from my customers?

There are dozens of state and federal laws governing the collection, storage, and use of personal data, and mandating the posting of privacy policies on your website. These laws place limitations on your ability to use consumer information such as a consumer’s address and telephone number, obligate you to protect the storage of personal information through adequate encryption measures, and require website privacy policies containing certain notices. If you answered yes to this question, your practices trigger various state and federal privacy and data security laws and regulations.

10. Do I think I can fly under the radar and avoid regulatory scrutiny or challenges from competitors?

This may be the most important question of all. Many marketers think that investigations and lawsuits and unfair competition cannot happen to them, either because they are too small, they haven’t been on the market long, or because there are worse offenders or bigger targets out there . Almost every marketer who has faced a subpoena from a State Attorney General or the FTC, or who has been sued by a competitor, or who has found a knock-off of their product on a store shelf has failed to take adequate, early steps to ensure compliance with applicable laws, or to protect their business from predators. If you answered yes to this question, you should consider planning a compliance review of your business practices.