The legal term "misappropriation of advertising ideas" addresses a wide range of intellectual property constructs that are protected under current copyright laws. When a company is found to have misappropriated another firm's advertising ideas, the offending firm may be forced to pay millions of dollars in damages to the plaintiffs. In many instances, advertisers find it difficult to determine the boundaries between legitimate usage and outright theft of advertising concepts. These misunderstandings leave firms vulnerable to claims of misappropriation.

Legal Definition

In legal terms, the word "misappropriation" means an act involving the intentional and illegal use of someone else's property or money for one's own use without permission. The misappropriation of advertising ideas occurs when a company uses advertising concepts from another firm for its own use. The definition also includes the misappropriation of another firm's "style of doing business." Companies often purchase liability insurance policies to protect themselves from charges of advertising injury and intellectual property theft.

Misappropriation Insurance

In today's advertising world, intellectual property insurers employ clear and narrow language to define the concept of misappropriation. The task for insurers is to specify that the misuse of advertising ideas is the repurposing of another firm's advertising concept in the insured's advertisement. This narrow language allows competitors in the same industry to advertise in the same manner and through the same channels, but does not allow them to use the same concepts.

Misappropriation Example

Examples of misappropriation include the use of slogans, trademarks, logos or product names recognized as unique to another firm. The more recognizable the advertising items are, the more likely the company would be found liable for its misappropriation. For instance, a startup fast food restaurant that used golden curves in its logo, served sandwiches such as the "Big Mic" and the "One-Fourth Pounder" and named itself "McDonnell's" could find itself the target of a suit from McDonald's alleging misappropriation of advertising ideas.

Misappropriation and Parody

A firm may choose to make fun of its competitors by producing "parody" ads. These ads use many advertising ideas associated with the target company but spins them in a humorous way. Although the U.S. Supreme Court has ruled that parody is protected speech under the Constitution, companies can still sue for the misappropriation of advertising ideas. Some advertisers have successfully defended themselves against lawsuits over their parody ads, but the expenses involved in such legal defenses can be prohibitive for defendants.