Advertising

On July 1, 2017, an important grace period terminated for Canada’s Anti-Spam Law (CASL), which initially took effect on July 1, 2014. The beginning of this month marked the end of the two-year grace period for entities to rely on “implied consent” as a basis for sending commercial electronic messages to potential customers, donors, clients or the like. Going forward, entities will need to obtain express consent from all email recipients, or expunge “stale” contacts to avoid potential violations of CASL. A private right of action against offenders that was also set to become available on July 1, 2017 has been put on hold indefinitely subject to Canadian government review. (more…)

Killing the Buzz: The “Highs” and Lows of Marijuana-Related Trademarks

KumarHeadshotThis post is the first in a series by Kumar Jayasuriya, attorney and Ober’s multi-talented Legal Research Manager.

 

May a company register a trademark connected to the use of a controlled substance, such as marijuana?

Recently, a federal court said “Yes.”  Started in 1974, the periodical magazine High Times reports on the medical and recreational use of marijuana and continues to advocate for the relaxation of state and federal drug laws.  High Times’ publisher, Trans-High Corp. (“THC”), owns the trademark HIGH TIMES for use on, among other things, “books about cannabis” and “magazines about hemp.”  In August of last year, THC filed an infringement lawsuit targeting Richard Reimers, a Washington State-licensed marijuana dispensary owner operating under the name High Time Station (“Reimers”).  In response to the suit, Reimers counterclaimed that THC’s trademarks be cancelled because THC had allegedly used them on unlawful goods not listed in the registration certificates.

Reimers’ counterclaim alleged sale of drug paraphernalia and controlled substances based on the claim that THC’s act of printing advertisements by third-party companies in its HIGH TIMES magazine violates the Controlled Substances Act.  In fact, the United States Patent and Trademark Office is expressly permitted by statute to inquire about compliance with federal laws to confirm that the trademark applicant’s use of the trademark in commerce is in fact lawful.  Use of a trademark on unlawful goods is grounds for cancellation.

However, the United States District Court for the Eastern District of Washington dismissed Reimers’ counterclaim upon a finding that a trademark registration is only vulnerable to cancellation if the goods and services listed in the registration are proven to be unlawful. None of the goods and services in the THC registrations were unlawful, said the Court, because the Controlled Substances Act expressly permits publications and advertisements “which merely advocate the use of a similar material, which advocates a position or practice, and does not attempt to propose or facilitate an actual transaction in a Schedule I controlled substance.” 21 U.S.C. 843.

The court dismissed (with prejudice) Reimer’s counterclaim for cancellation of THC’s federal registrations. This is not the last word on trademarks related to  unlawful goods.  In addition to the Reimer case in Washington State, THC has filed similar trademark infringement claims in Texas, New York and Colorado. It is just the beginning for protection of marijuana related marks.  As more and more lawful marijuana-related businesses spring up in the wake of marijuana legalization, trademark use will be only one of the many issues that presents a case of first impression to the nation’s courts.

Trans-High Corp., Inc. v. Richard Reimers, No. 2:14-CV-00279-LRS, (E.D. Wash. Jan. 12, 2015).

 

On September 25, 2014, the Internet Corporation for the Assigned Names and Numbers (ICANN) granted the application of fTLD Registry Services (FRS) to operate a new Top Level Domain (TLD) exclusively for the banking industry: .bank. When general registration for the new TLD opens next year, banks and other members of the banking community will be able to operate through custom websites such as Local.bank, as opposed to the traditional LocalBank.com. To avoid the internet land rush for .bank extensions expected during the general registration window, banks with federally registered trademarks can get a 30-day head start towards TheirTrademark.bank by applying (and paying) for a spot on ICANN’s Trademark Clearinghouse registry. (more…)

On November 19, 2014, the Federal Trade Commission announced that it is seeking public comment on a second proposed verifiable parental consent method by AgeCheq, an online privacy protection service. The Children’s Online Privacy Protection Act (COPPA) requires children and family-friendly website operators and app developers to (1) post privacy policies and (2) notify and obtain verifiable consent from parents prior to collecting, using, or disclosing personal information from children under the age of 13.

There are considerable challenges to obtaining verifiable consent from parents in real time–particularly for use of online services by children. The rule lays out a number of acceptable methods for gaining verifiable parental consent and includes a provision allowing parties to submit new consent methods to the FTC for approval. Age Cheq’s new proposal eliminates the need for paper signatures by providing a digitally signed parental declaration authenticated by a verification code on the parent’s mobile device.

(more…)

The WSJ Corporate Intelligence blog has an interesting article today that highlights the risks inherent in un-vetted advertising claims.  Apparently Proctor & Gamble took issue with “99% Natural” claim that toothpaste maker Hello Products, LLC was making with respect to its toothpastes which come in unusual flavors (for toothpaste) like pink grapefruit mint and mojito mint. Neither the FDA nor FTC have guidelines for what constitutes “natural” or “all natural” products.  In practice, the FDA takes the position that it will “not object[] to the use of the term if the food does not contain added color, artificial flavors, or synthetic substances,” but you are apparently on your own to determine what exactly is or is not a “synthetic substance.”  Because of the regulatory confusion over the meaning of “natural,” litigation over what does or does not qualify often resorts to claims sounding in state false advertising, unfair trade practices, or consumer protection statutes, or alleging common law fraud or breach of warranty.  Some clarity as to what it means to be natural that we can all agree on (or at least rely on) would be helpful from both the consumer and advertiser perspective, much like the USDA’s National Organic Program that tries to put some meaning into that word as used on food labels.  Apparently, though,  it is difficult from a food science perspective  to define a food product that is natural “because the food has probably been processed and is no longer the product of the earth,” according to the FDA.  That seems to have been part of P&G’s problem as the maker of one of the country’s leading toothpastes, Crest,  asserted that some of the Hello Product’s toothpaste’s ingredients, like fluoride, were chemically processed and thus not “natural.”

For its part, Hello Products offered to change its packaging after it had sold its existing stock but that did not satisfy P&G which filed suit and obtained an injunction to block the sale of the offending toothpaste. The upside for those of you in NYC tomorrow is that Hello Products plans to give away the 100,000 tubes it can no longer sell as free samples on the streets of Manhattan. Grab a tube (I recommend the grapefruit) and remember that FTC truth-in-advertising rules require that:

  1. advertising must be truthful and non-deceptive;
  2. advertisers have evidence to back up their claims; and
  3. advertisements are not unfair.
Using the term Natural in food advertising? Products claiming to be 'au natural' may need to meet a higher standard

all natural badge“My food is more natural than your food” lawsuits have been bountiful in the last few years. Following this trend is a “food advertising modernization” bill, HR 3147, introduced by U.S. Representatives Pallone and DeLauro, that would require advertisers who claim their products are ‘All Natural’ to prove that the food does not contain synthesized artificial ingredients that mimic natural ingredients, unless such artificial ingredients result from traditional methods of processing food to make food food edible, to preserve food, or to make food safe for human consumption (such as smoking, roasting, freezing, drying and fermenting processes).

Presently,  ‘natural’ can refer only to food products s that can show that no artifical ingredient was added to the product, including food coloring from any source.

While the FDA and Congress sort out the definitions, the Wall Street Journal reports that food advertisers are quietly dropping the ‘All Natural’ claim as ambiguous and prone to law suits.

 

Banksy on branding. The elusive street artist is seemingly frustrated with his own commercial success. To him great street artists need to remain criminal to keep their art pure. Most appropriation art could violate commercial law but is not criminal, unless it involves a violation of Copyright law’s DMCA. The image above is not a copyright infringement, but is potentially trademark infringement and dilution of Coca Cola’s famous trademarks in the shape of the bottle and the coca-cola script.

If Banksy’s use of Coca Cola’s trademarks are a fair use there would not be an infringment. The test for trademark fair use is different from copyright fair use. In fact there are a few trademark fair use tests. (more…)

You may have heard this before, social media is not exempt from the ad rules regarding testimonials and endorsements. The FTC announced (again) that marketers placing short form ads in social media must comply with three basic truth-in-advertising principles:

  • Endorsements must be truthful and not misleading;
  • If the advertiser doesn’t have proof that the endorser’s experience represents what consumers will achieve by using the product, the ad must clearly and conspicuously disclose the generally expected results in the depicted circumstances; and
  • If there’s a connection between the endorser and the marketer of the product that would affect how people evaluate the endorsement, it should be disclosed.

The FTC has a helpful guide with tips on how to comply, including using “#Ad or #Sponsored in a tweet or post to avoid consumer confusion.

 

Banking on a dead celebrity’s right of publicity being public domain is an extremely dangerous advertising practice. Rights of publicity are a suite of legal rights that have developed from invasion of privacy and trademark law since the early 20th Century. There is a web of state and federal laws that can protect dead celebrities– even celebrities from states like New York that specifically do not recognize a post-mortem right of publicity. And the laws can protect rights of publicity for as much as 100 years after death.

As a young lawyer, a common task was determining which state laws apply to a dead celebrity so to determine whether his or her name or image could be used for free.  The analysis is extremely detailed. Which law applies, New York (no protection) or California (broad protection)?  Does the use violate the celeb’s trademark or constitute a false designation under federal law?  An article in Slate today made some stunningly dangerous over-simplifications about how a dead celebrity’s persona is protected.

In my entertainment and sports law seminar, we spend a few classes examining the various ways of protecting a persona. A right of publicity protects the commercial value of a celebrity’s persona. A 1941 Texas case involving Davey O’Brien is my hands down favorite for explaining the basis for protecting a celebrity’s right of publicity. The Texas court gets the analysis wrong, and a dissent by Justice Holmes provides the foundation for modern ROP laws.

All American and Heisman award winner Texas Christian University quarterback Davey O’Brien (more…)

@FTC: Google pays $22M for (unintentional) misrepresentation of privacy practices - no intent required

The FTC hosted a super fascinating Twitter “conversation” following its announcement of the $22 million settlement with Google over its privacy violation in overriding the Safari browser’s privacy settings without notifying users. FTC Department of Enforcement staffers  exchanged tweets with a few privacy-focused Twitter users. Many tweets focused on whether Google intentionally deceived users as to its privacy practices, or if the privacy breach was an accident. Other tweets keyed in on how Google’s fine was calculated, and asked when the FTC first learned of Google’s secret Safari tracking. The FTC responded that Goggle’s intent is irrelevant to the question of whether there are misrepresentations in privacy policies. This reflects FTC precededent. One FTC tweet reflected cynicism that the tech giant is unable to control its privacy practices, saying  “unintentional is Google’s story.”

The takeaway is that over promising protection of personal data in a privacy policy is a bad idea.  Even accidental violations of a privacy policy are actionable. Too many unforeseeable risks are poised by collecting and sharing user data (from hackers to a lack of coordination with technology partners) to make such promises. Ask Twitter about its own FTC settlement.  Expectations (of both consumers and regulators) about the content of privacy policies have changed. Most websites need new policies that contemplate the changes to COPPA,  increased expectations for privacy disclosures for mobile devices and protection of offline data.  Website operators must understand how their technology use the website’s customer data. Details about how both personally identifiable and non-personally identifiable information is collected, shared and protected should be disclosed.

Tweeps who engaged with the FTC last week might wonder how their tweets are being used.  The FTC’s privacy preactices are disclosed in the FTC’s Privacy Impact Assessment and chart showing how user information is collected when interacting with the FTC.