Extending Lanham Act Liability to Deal-of-the-Day Distributors

Deal-of-the-Day Distributors (i.e., companies whose business models look something like LivingSocial) may be liable for damages to plaintiffs in Lanham Act cases if they do not take precautions to limit their exposure.

The Lanham Act, of course, allows a plaintiff to pursue an injunction, as well as damages and other remedies.  However, Lanham Act also provides that where “the infringement or violation complained of is contained in or is part of paid advertising matters in a newspaper, magazine, or other similar periodical or in an electronic communication . . . the remedies . . . shall be limited to an injunction” so long as that defendant was an innocent infringer or violator.  Continue Reading

3D Printing Series: Can You Put my Boyfriend’s Face Inside That Pizza?

We are entering a brave new world of food design and regulation brought to us through the mechanical development and visual artistry of 3D printing. As with any new medium, understanding what we confront and its regulation lag behind the medium’s implementation.

3D printing, also referred to as “additive manufacturing” or “rapid prototyping,” is the process of making three-dimensional objects from digital designs. Two of the most common types of printers are “disposition printers,” which deposit layers of materials until the 3D object is built, and “binding printers” which build the object by binding, usually with adhesive or laser fusing, the underlying layers, to create a whole object at the end of the process.

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Fantasy League Competitors Battle on the NAD Court for Decision Over Who Can Claim “Largest US-Based Website”

We love a good March Madness legal blog (see here and here and here)  and NAD gave us some great fodder this month deciding a case between two large daily fantasy sports league websites.   This one wasn’t exactly an upset like so many of the games this year leading to the Sweet 16.   DraftKings claimed it was the “largest US-based destination for daily fantasy sports.”  FanDuel cried foul.  There was no dispute that FanDuel is larger by a significant margin.  The issue was whether the company was US or non-US based, the key factor which would render the claim either literally true or literally false.  This case is a riff on Made in USA analysis.  Instead of focusing on where a good is manufactured, including its component parts, this case looked to the right definition for determining where a corporation is based.  The NAD noted that consumers “often care very much about the domestic nature of products that they purchase, and such sentiments are likely to also be felt about services that they patronize.  For example, for consumers concerned about unemployment in the United States, the fact that a competing company’s labor force resides in another country may be quite important when deciding which company’s website to patronize.”  As an aside, we are not so sure there are consumers who would base a purchase decision on where key executives sit or where key corporate decision are made, as opposed to where a company’s employees reside.  That said, there is certainly an advantage in claiming to be the largest or No. 1, as it may well convey a message that a company has passed the test by rising to the top in terms of market share.   And it is not unusual for a company to try to create a category in which it can be the champion.  NAD said such a claim is particularly impactful in this case because “consumers are attracted to ‘larger’ daily fantasy sports websites because they have larger pools of players and prizes.”

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3D Printing Series: Before You Click “Print” On Your Pizza, Palette or Prosthetic: FDA and IP Considerations With 3D-Printed Foods, Cosmetics And Medical Devices

3DPrinterWe agree – the Jetsons era has indeed arrived. Beyond the days of “smart” everything, now 3D printing has taken center stage in the tech world. While it is not so farfetched to imagine 3D-printed machine parts, prototype models, or even toys, it is might be harder to watch it printing foods, implantable medical devices, cosmetics, drugs and even human tissue. All too futuristic? Not really. The technology of 3D-print FDA-regulated products is, in large part, already here and rapidly progressing.

Yet, as technology continues to develop, questions arise as to whether, and how, the U.S. Food and Drug Administration’s (“FDA”) regulatory framework will keep pace to impose the same safety, quality and efficacy standards to 3D-printed foods, drugs, cosmetics, and medical devices that currently apply to traditionally manufactured goods. How FDA chooses to deal with 3D-printed products will significantly impact not only barriers to market entry, but also post-marketing enforcement risks. Similarly, even assuming an FDA-regulated 3D-printed product is successfully brought to market in accordance with FDA standards, manufacturers must still assess options and potential challenges associated with protecting their intellectual property.

Through this multi-part blog series, we will explore these questions, considerations and challenges for 3D printing that are likely to be regulated by FDA, with particular focus on foods (consumed on earth and in space), cosmetics and medical devices. While, at this stage, FDA issues may raise more questions than clear answers, this blog series will explore and discuss the topics that are at the forefront of FDA’s agenda regarding 3D printing and, therefore, require careful consideration by any company that contemplates involvement in the 3D-printed foods, cosmetics or devices industries.  Continue Reading

Venable LLP “Cause We Never Go Out of Style”: Or, Litigating a Trademarked Phrase

Once again, we have Taylor Swift to thank for inspiring a blog. In the past few weeks the news has featured Ms. Swift’s decision to trademark various phrases, such as “This Sick Beat,” “Nice to Meet You. Where You Been?”, and “Cause We Never Go Out Of Style.”Oprah

A recent case out of the Southern District of New York demonstrates some of the limits to protecting and successfully litigating over a trademarked phrase. In Simone Kelly-Brown and Own Your Power Communications Inc. v. Oprah Winfrey et al, Case No. 11 cv 7875, the plaintiff owned a trademark for “Own Your Power.” Defendants (Oprah Winfrey and her empire) allegedly used the same phrase on the cover of their magazine, at a magazine-related event, on their website, on social media accounts, and on their TV show.

The plaintiff’s mark, in addition to the phrase Own Your Power, included the color light blue and scripted letters which created the word “power.” Continue Reading

The FTC and CFPB are Coordinating, but How Closely?

The Federal Trade Commission (“FTC”) and Consumer Financial Protection Bureau (“CFPB”) have renewed their vow to continue to coordinate their activities and avoid duplication of federal law enforcement and regulatory efforts.  The FTC and CFPB have recently announced they reauthorized their ongoing Memorandum of Understanding (“MOU”), under the terms of the Consumer Financial Protection Act (“Act”), to coordinate efforts to protect consumers and avoid duplication of federal law enforcement and regulatory efforts, for three years.

As you may recall, back when the Dodd-Frank Act passed, there was much discussion about the potential for overlap between the FTC and CFPB’s jurisdiction to regulate and enforce consumer financial services laws.  The resulting act significantly altered the consumer financial protection landscape by consolidating rulemaking authority and, to a lesser extent, supervisory and enforcement authority in one regulator—the CFPB.  In contrast, the FTC had and retained statutory authority for enforcing general consumer protection requirements over nonbanks, but is prevented from conducting supervision over nonbanks and from regulating depository institutions altogether.  Due to the overlap between the FTC and CFPB’s authorities, the two agencies are required to coordinate. Continue Reading

FTC Dishes Out ROSCA Complaint with Focus on Disclosures

The Federal Trade Commission (“FTC” or “the Commission”) has clearly subscribed to enforcing ROSCA recently.  On Tuesday, the FTC filed a complaint against DIRECTV’s negative option program and contract pricing structure under Section 5 of the FTC Act and ROSCA.

In the complaint, the FTC alleged that DIRECTV required customers to agree to a mandatory 24-month contract to receive television programming; customers who canceled their subscriptions before 24 months were charged an early cancellation fee.  Although the rates were set at a specific monthly charge for the first year of a 2-year customer agreement, in the second year of the agreement, the FTC alleged that DIRECTV would increase the monthly charges by 50-70% higher than customers paid in the first year.  After the first year of the agreement, customers either had to pay significant cancellation fees or pay the higher monthly price.   Continue Reading

When “New” Advertising Gets Too Settled In

Few words in the advertiser’s dictionary have the alluring effect of “New.”  It jumps off the shelf (or out of the web browser) at the consumer and hints that something exciting, innovative, and maybe even trendsetting can be discovered just by reading further, learning more, clicking here, or calling now.  That’s why the NAD’s decision earlier this week recommending that Sprint abandon its ubiquitous “America’s Newest Network” slogan got us thinking that perhaps a refresher on “new” advertising is in order.

The NAD has long applied a general rule that “new” claims should only be made for a period of six months after national introduction.  For products previously or already on the market, the term “new” can be re-used (for six months) so long as the product being described has undergone a material change or substantial reformulation from its traditional or previous makeup.  Small or isolated changes to particular attributes of the product will not justify using the term “new” to describe the product as a whole if the underlying function, properties, or core services remain the same.  However, advertisers may use “new” to describe recently added properties or functions if the term is expressly limited to those particular attributes.

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And the Oscar Goes to . . . the FTC?

February 22, 2015, marked the 87th Academy Awards ceremony.  Some people tuned in because they love the movies, others for the fashion and celebrities, but, as for me, I watched it with my wife and was simply counting the minutes until “The Walking Dead” came on.  As I watched the celebrities work the red carpet, I did my best to feign interest in cut-away dresses, plunging necklines, jumpsuits matched with capes, and Emma Stone’s wardrobe malfunction, which caused her to accidentally flash the crowd (actually, I can’t lie, that gaffe did grab my attention).  I listened to the interviews that the A-listers gave, describing their dresses or tuxedos, and extolling the responsible designers’ brilliance, daringness, and/or overall fashion IQ.  They were effusive.  Heck, they made me feel like rushing out and buying a new trendy suit myself.

But, then, the advertising and marketing attorney side of me took over – did these actors, actresses, and the designers whose fashion they were shilling violate the Federal Trade Commission’s (“FTC”) Guides Concerning the Use of Endorsements and Testimonials in Advertising by not explicitly disclosing their relationships?  I started stepping through the issues.  First, were the celebrities even providing endorsements for their respective designers’ products?  Absolutely.  Under the Guides, an “endorsement” is broadly defined as “any advertising message . . . that consumers are likely to believe reflects the opinions, beliefs, findings, or experiences of a party other than the sponsoring advertiser[.]”

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Court Rules That Dialing Equipment Must Have “Present Capacity” to Autodial to Come Within the Telephone Consumer Protection Act

On February 4, 2015, in Glauser v. GroupMe, Inc., No. 4:11-cv-02584, the U.S. District Court for the Northern District of California struck a blow to class action plaintiffs asserting claims under the Telephone Consumer Protection Act (“TCPA”), interpreting the TCPA’s definition of “automatic telephone dialing system” (“ATDS”) narrowly to mean equipment that has the “present capacity” – as opposed to “potential capacity” – to perform autodialing functions.

In GroupMe, the plaintiff received several text messages that were sent through GroupMe’s group messaging application, which allows users to create a “group” of personal contacts and transmit text messages to all members of the group at the same time.  One of the plaintiff’s friends had created a group and sent a text to the group members seeking to arrange a poker game; group members, in turn, began responding via text message to all other members about the game through GroupMe’s platform.  After receiving these messages, in May 2011, the plaintiff filed a putative class action, alleging that GroupMe violated the TCPA by sending text messages using an ATDS without his prior express consent.  The TCPA defines ATDS as equipment that “has the capacity (A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.”

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