Roedel Parsons Koch Blache Balhoff & McCollister

Disclaimers can sometimes do more harm than good

Many business professionals think of disclaimers as impervious shields, lines of fine print that guard against all lawsuits. If marketing practices are edging into questionable legal territory, many companies simply slap a disclaimer on it. That is an all-too-common solution.

However, the fact is that disclaimers are not shields or magic spells that guarantee legal immunity. That is a dangerous myth. The truth is that certain disclaimers have the potential to work against you – not for you – when a case goes to court. Here is an example:

The recent perfume dispute

Recently, a New York judge ruled against Excell, a manufacturer of knock-off brands of perfume. These perfumes were produced in India and marketed as “alternative versions” of some very popular and very high-priced brands, such as Calvin Klein, manufactured by Coty.

What is surprising about this case is not the fact that the judge called Excell’s imitation perfumes examples of unfair competition, false advertising and other unlawful business practices. What is surprising is that Excell’s disclaimer did little to ward off this lawsuit. It actually harmed Excell’s case.

What was the problem?

The disclaimer printed on the bottles stated that Excell’s product was only “our version of” Coty’s high-priced scent, and that the cheap perfume was “not associated with” Coty.

However, the judge pointed out that the disclaimer was itself misleading because it displayed Coty’s marks and the Calvin Klein name much more prominently than it did Excell’s marks and brand name. In short, Excell was accused of using the disclaimer as a form of false advertising, catching consumers’ eyes with the large “Calvin Klein” and unfairly profiting from the goodwill associated with the high-priced brand. As a result, the judge awarded injunctive relief and Excell’s profits to Coty.

Obviously, this ruling was in New York, not Louisiana. However, the moral of the story is that trademark disputes are often very complex. This is true no matter which state you are in. The outcome of a dispute may easily hinge upon subtleties of the law that the average business owner would not take into account. When trademark-related questions or concerns arise, it is always wise to consult an attorney skilled in this particular area of law.

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