This is the third, and final, part of a blog series about the ways to keep your marketing material from being misleading or deceptive. Read the first and second blog here.

Balance

An advertisement stating or implying that a particular benefit or positive outcome is likely, should also include a statement about the risks associated with obtaining that benefit, or the product generally. This may include a discussion of the assumptions made in predicting that benefit.

For example, if a financial product is linked to the markets and advertised as having an expected rate of return, it should also be explained that this expected return may not arise, and that the client's balance may even fall.

In the 2012 case of ASIC v Camelot Derivatives Pty Ltd , the Federal Court considered Camelot's promotion of an options trading strategy known as the 'Iron Condor'. Camelot was an options trading house that advised and dealt on behalf of its clients in derivatives and other financial products, particularly options. Its managing director made statements to the effect that clients had and could expect to earn significant returns from this strategy, which Camelot had substantial experience in implementing successfully.

Unfortunately, the GFC intervened and between 2008 and 2010 many clients incurred significant losses. The Court found that Camelot's clients were induced to use the Camelot strategy by the representations that they could make significant profits through options trading. Camelot's conduct was misleading and deceptive because it did not adequately explain the risks involved, and did not make the potential for Camelot to make significant profits from brokerage on these transactions – while its clients made significant losses in the market – sufficiently clear.

Tip 8:

Remember to acknowledge the risks as well as the benefits when marketing your products or services.

In addition to misleading or deceptive conduct, you should also consider copyright and defamation.

Copyright and intellectual property

Under the Copyright Act 1968 (Cth), the creator of any artistic or literary work has economic and moral rights that enable that person to control how their work is used and copied, including use in derivative works that are based on it. Coverage is automatic as soon as the work is reduced to a material form. Similar rights protect the owners of trademarks, brands, music, images and characters (from Donald Duck to Harry Potter to Dirty Harry).

Music or a known fictional, or other character can be a powerful marketing tool. Similarly, you may find a book or a website that expresses perfectly the words that you want to say, or that adds useful depth to your offering (as in the case of market research for particular financial assets). If you use the intellectual property of another person without their permission you risk a claim for damages from the owner.

Using other people's work without their permission, or giving them credit (attribution), is often a tempting shortcut but ultimately it poses a risk to your reputation, and if you have to settle a claim for damages from an intellectual property owner, you may have to pay to the owner the profits you have made from using their IP.

Tip 9:

When you are using the words, trademarks or other work of others, check carefully before you use them as to whether you should get permission from the owner. Always cite your sources.

Defamation

Under the common law, and now the uniform legislation in all States, if something you say or publish harms the reputation of someone else, then that person has a right to recover damages from you. Companies can't generally sue for defamation, unless they employ less than 10 people, but individuals associated with the company who are named in the publication can.

Tip 10:

Before you "go negative" against a competitor, consider whether anything you plan to say reflects on their character in a way that makes it likely people may think less of them as a result.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.