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My kids watch a lot of YouTube videos, ranging in topics from taking an alligator to the vet to the world’s longest walk on Legos. They have their favorites – YouTubers under the names LoserFruit and Dude Perfect come to mind. I have caught my daughter practicing for her own channel about making slime.

Those aspirations had me thinking about the career path of being an “influencer.” Indeed, trickshot stars and video game aficionados have been hired as brand ambassadors for everything from sports equipment and toys to automobiles and insurance. By some accounts, YouTubers are making five-to-seven figures as brand partners.

While brand ambassadors can influence the purchasing choices of their audience, there are rules in the U.S. about influencer marketing that influencers must follow and brand marketers must monitor. This post outlines the basics in three golden rules.

Continue Reading Influencer Marketing – Three Golden Rules

Olympic Bobsled TeamSummer may just be heating up, but advertisers should already be thinking about and planning for the 2018 PyeongChang Winter Olympic Games because the “Rule 40” deadline is fast approaching. The opening ceremony of the PyeongChang Olympics isn’t until February 9th of next year, but advertisers that are not official Team USA sponsors but want to include Team USA members in campaigns that run during the PyeongChang Olympics must act by August 1, 2017.

As we discussed in our previous blog post titled Golden Rules: Diving Into Rule 40, Rule 40 restricts participants in the Olympic Games from allowing their “person, name, picture or sports performances to be used for advertising during the Olympic Games.” This restriction, which is contained in a bye-law to the International Olympic Committee (IOC) Charter, is administered by each country’s Olympic authority and was relaxed somewhat in 2015 to permit Olympic participants to be featured in so-called “generic” advertising during the Olympic Games.

Continue Reading Golden Rules: The Rule 40 Deadline is Nearing the (Slalom) Gate; Advertisers Cannot Just (Figure) Skate Over the Regulation

Demand for Olympic merchandise in the United States is resurrected every 4 years by the fervor of the televised Games. Officially, authorized and licensed gear is readily available in stores and on the Internet; however, every iteration of the Games brings with it a flood of counterfeit Olympic goods as well. The broadcasting of this year’s Olympics in Rio de Janeiro has, as expected, beckoned all sorts of counterfeit Olympic items to the U.S. market. From t-shirts illegally emblazoned with “Team USA”, to phony gold medals inscribed with the Olympic Rings. This blog post explores the laws that protect consumers and Olympics rights-holders in the United States from counterfeit Olympic goods.

Under 15 U.S.C. § 1127, a counterfeit is an article that includes unauthorized use of a logo, name, or other trademark that is “identical with, or substantially indistinguishable from” a registered trademark. The widely recognizable signs, symbols, and words affiliated with the Olympics, Paralympics, and Pan-American games are all registered trademarks. This includes, but is not limited to, the torch, the five interlocking rings, and the words “Team USA.”

Continue Reading Golden Rules: Counterfeits and the Olympics

winner-1445797_640The next issue in our series of blog posts about the Olympics considers “Rule 40,” which can get both advertisers and athletes into trouble. We think Rule 40 deserves a gold medal for generating buzz in the advertising world, and a silver for generating confusion.

Rule 40 restricts participants in the Olympic Games (i.e., competitors, coaches, trainers, and officials) from allowing their “person, name, picture or sports performances to be used for advertising during the Olympic Games.” The advertising blackout period for the Rio 2016 Olympics is from July 27th through August 28th, which is from 9 days prior to the Opening Ceremony until  3 days after the Closing Ceremony.  Continue Reading Golden Rules: Diving Into Rule 40

With the opening ceremony for the Rio 2016 Olympic Games less than 1 month away, Olympic sponsors and non-sponsors alike are thinking about how they may be able to capitalize on the event’s popularity. Brands must, however, beware of using Olympic trademarks (as discussed in our previous blog post, Golden Rules: Wrestling with the Use of Trademarks), in large part, because of the relative ease with which Olympic rights-holders, such as the United States Olympic Committee (USOC), can take legal action. In the United States, under the Ted Stevens Amateur Sports Act (Ted Stevens Act), the USOC has exclusive rights to use “Olympic,” “Olympiad,” the interlocking rings, event mottos and other Olympic trademarks. The Ted Stevens Act also prohibits use of any word, symbol, or combination thereof that “tends to cause confusion or mistake, to deceive, or to falsely suggest a connection with the user and the Olympics”. In practice, this is a very broad prohibition.

For example, the interlocking ring design is a trademark owned and controlled by the USOC. Unauthorized use of the image of the rings is not permitted on the basis of copyright defenses, such as the public domain or fair use, despite popular misconceptions to the contrary. The rings, and other Olympic trademarks, including the word “Olympics,” are also not generic. Use of the word “Olympics” can be protected by free speech in narrow circumstances, but if you are an advertiser reading this blog, it’s highly unlikely that you will be able to fit your uses into that “protected speech” category, even if you can credibly claim that your use is expressive.

Continue Reading Golden Rules: Lowering the Uneven Bars on Likelihood of Confusion

As excitement builds for the 2016 Olympics and Paralympics in Rio, companies and organizations, big and small, will be tempted to use the “Games” or the “Olympics” to promote their products, services and agendas. But, they must beware of getting too caught up in the Olympic spirit. Although Olympic and Paralympic trademarks such as the interlocking rings, “Rio 2016,” and “Faster Higher Stronger” may be ubiquitous, especially this summer, an unauthorized use of such trademarks could bring a lot of legal headaches to the user.

Some background:  Continue Reading Golden Rules: Wrestling with the Use of Trademarks

Astroturf was again in the news last week, but not because the big game whose name we can’t mention was played on synthetic turf. Rather, last week, the office of the NY Attorney General (“AG”) announced it reached a precedent-setting settlement with artificial engagement company Devumi LLC and related companies (“Devumi”) over the selling of fake followers, likes, and influencer messaging (a/k/a “astroturfing”). Venable has been tracking the NY AG office’s assault on similar companies engaged in astroturfing for over five years. According to the press release, however, this is the first finding by a law enforcement agency that the sale of fake social media engagement and the use of stolen identities to perpetuate such online engagement is illegal.

Devumi utilized two types of accounts to carry out its large-scale astroturfing operation. Computer-operated accounts (“bot accounts”) and accounts controlled by one person pretending to be many other people (“sock-puppet accounts”) allowed Devumi to sell fake followers, likes, and other activity across platforms such as YouTube, Twitter, and Pinterest. The social media engagement looked like the real thing—it appeared to express genuine opinions of real people. In fact, some of the fake accounts were derived from copies of real people’s social media accounts, using their photos, profile text, and more—of course, without that real person’s knowledge or consent. Using this façade, the artificial engagement aimed to deceive online audiences and the public.

Beyond the bot and sock-puppet accounts, Devumi also sold endorsements from social media influencers but failed to disclose any material connection. The NY AG office found this “especially troubling,” because the high visibility of influencers and their opinions can translate into appreciable changes in viewers’ opinions and spending habits. These deceptive marketing tactics had consequences on the brand side as well—according to the AG’s findings, Devumi’s astroturfing influenced advertisers’ sponsorship decisions. Interestingly, Devumi even deceived some of its own customers, who mistakenly believed they were purchasing authentic endorsements.

While it is clear that Devumi broke Venable’s golden rules for influencer marketing, that this settlement came from a state law enforcement agency leaves open the question of how this would play out at the federal level. We’ll be sure to continue tracking this issue—stay tuned.

In the iconic words of DJ Khaled: “Another one.” That’s right, folks. Another round of celebrities have fallen on the wrong side of the federal government’s enforcement of its advertising disclosure rules. Recently, the SEC announced that it settled charges against Floyd Mayweather (professional boxer) and DJ Khaled (entertainer and music producer) for failing to tell their social media followers that they received money for promoting investments in Initial Coin Offerings (“ICOs”). This case is especially noteworthy, considering that this is the first time the SEC brought an action against a paid celebrity endorser involving ICOs.

In Mayweather’s case, he received a $300,000 payment for ICO tweets like this one: “starts in a few hours. Get yours before they sell out, I got mine…”

Likewise, DJ Khaled received a $50,000 payment for this tweet: “I just received my titanium centra debit card. The Centra Card & Centra Wallet app is the ultimate winner in Cryptocurrency debit cards powered by CTR tokens! Use your bitcoins, ethereum, and more cryptocurrencies in real time across the globe. This is a Game changer here. Get your CTR tokens now!”

Continue Reading All I Do is Win, Win, Win?: SEC Settles Charges with Floyd Mayweather and DJ Khaled

Influencers, if you ever wished you had a handy brochure on how to make proper disclosures in your sponsored posts, you are in luck. On Tuesday, the FTC issued a new guide titled “Disclosures 101 for Social Media Influencers,” along with three videos, that lays out the agency’s guidelines for when and how influencers should disclose their connection to a brand. The principles are nothing new, but they are explained in a way that is straightforward and user-friendly, complete with hearts and thumbs-up emojis. Some of the principles that are covered include:

  • If you endorse a product on social media, you need to make it obvious when you have a relationship with the brand — whether it be a personal, family, employment, or financial relationship (eg., the brand pays you, or you get free or discounted products).
  • As an influencer, it is your responsibility to make endorsement disclosures and to be familiar with the FTC’s guidelines.
  • The disclosure should be hard to miss and placed within the sponsored post itself. It shouldn’t be mixed into a string of hashtags (for example, #Venable #AllAboutAdvertising #Ad #GOAT), and if the endorsement is in a picture or video format, the disclosure should be superimposed on the image itself and/or verbally disclosed throughout the footage.
  • The disclosure should be in simple and clear language. Terms like “ad,” “sponsored,” “BRAND Partner,” and “BRAND Ambassador” are OK; shorthand references (eg., “sp,” “spon,” or “collab”) and stand-alone terms (e.g., “thanks” or “ambassador”) are not OK.
  • Your post must be truthful. Don’t lie and say that you’ve tried a product when you haven’t actually tried it, or that a product is great if you thought it was terrible.

And although this isn’t mentioned in the guide, keep in mind that the FTC is “following” influencers closely, as evidenced by its previous warning letters and complaints, and now the publication of this guide. If you are an influencer, make sure to familiarize yourself with the agency’s rules; if you represent a brand that works with influencers, send them a copy of the guide and double-check that its principles are consistent with your own internal compliance policy. Doing so will help keep you and your influencers on the right side of the law — and on the right side of the FTC.