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The first rule of comparative advertising has always been that you can say pretty much whatever you want so long as you don’t lie.  But there is a new wrinkle—don’t threaten or stalk the competition.  A recent Ninth Circuit decision in Thunder Studios v. Kazal, has shed new light on the extent of protection afforded by the First Amendment to reprehensible and confrontational speech.  The case is quirky in that the individuals protected by the First Amendment were not US Citizens and were not themselves in the US when the “protests” occurred, but the case is a cautionary tale as to the limits of First Amendment protection of comparative claims.  Importantly, however, the case cannot—and should not—be read to provide for an open invitation for competitors to promote or otherwise engage in extraterritorial smear campaigns with impunity.  Indeed, there is nothing in the Ninth Circuit’s opinion to suggest that it should be read to preclude or immunize parties from claims of defamation, product disparagement, or even invasion of privacy torts arising out of similar behavior.  Nor would it likely protect a party from liability from organizing a secondary boycott.  The case is pending en banc review by the Ninth Circuit so stay tuned.

Following the souring of a multimillion-dollar business deal between Australian citizens Roderick David, on the one side and Charif Kazal, Adam Kazal, and Tony Kazal on the other, the Kazals undertook an international campaign to inform the citizens of Los Angeles, California about the “despicable crimes” allegedly committed by David (then a resident of Los Angeles).  The Kazals sent hundreds of emails to David and his employees, hired protesters to picket and distribute flyers near his residence and business—Thunder Studios Inc., in Los Angeles—and had vans emblazoned with their message driven around the city.  Leaflets and signs held by protesters described David as a “corporate thief” and a “fraudster” who “robbed his business partners of $180 million.”

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Continue Reading Sticks and Stones May Break Your Competitor, But Protests May Be Protected

We frequently hear about the “long arm of the law,” but, in the case of the Federal Trade Commission, just how far does that arm actually reach? The FTC recently filed an amended complaint in the U.S. District Court for the Central District of California adding SIA Transact Pro, a Latvian payment processor, and its CEO as additional defendants in its case against Apex Capital Group, LLC and other parties. The amended complaint alleges that Apex Capital defrauded consumers, and that the newly added foreign-based payment processor helped its merchant, Apex Capital, avoid detection by consumers and law enforcement.

Specifically, according to the FTC, Apex Capital offered “free” trials of personal care products and dietary supplements for just the cost of shipping and handling—$4.95. However, approximately two weeks after a consumer ordered a “free” trial, the FTC alleges that Apex Capital would charge that consumer’s credit or debit card the full price of the product ($90) and enroll the consumer in an automatic renewal option—all without that consumer’s knowledge or consent.

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Continue Reading Exactly How Long is the Long Arm of the Law? The FTC Seeks to Extend its Reach to Offshore Payment Processors

We wanted to alert retail readers to these developments in price advertising laws in the United Kingdom from our friends at Lewis Silkin.

Late last year new U.K. Pricing Practices Guidelines were published by the Chartered Trading Standards Institute, replacing the long standing guidelines which retailers and advertisers had been following for many years.

The new Guidelines are not just an edit of the old ones. They are a root and branch reform, taking a “principles-based” approach to the advertising of prices, consistent with the same principles based approach enshrined in the Consumer Protection Regulations 2008.

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Continue Reading Guest Blog: The U.K. Pricing Practices Guidelines Are Now in Force – Are You Compliant?

Keep Calm and Carry OnBrexit is likely to cause years of future uncertainty around data protection, including the legal mechanisms for data transfer to countries outside of the United Kingdom (“U.K.”). In the short term, there will be little to no impact on existing data transfer solutions implemented by companies that rely on the U.K. as an entry point into the European Union (“EU”). In the mid-term, with the scheduled implementation of the EU-U.S. Privacy Shield (“Privacy Shield”) in 2016 and the EU’s General Data Protection Regulation (“GDPR”) in 2018, the U.K. will either continue to be subject to EU laws by extending its membership in the European Economic Area (“EEA”) or it will create its own national data protection legislation. Although companies may have to rethink data transfer agreements, this will be part of a long term process as the future of U.K. data protection continues to unfold.

Short Term—What to Expect in the Next 12 Months …
Continue Reading Keep Calm and Carry On: Data Protection Post Brexit

It is no surprise that each year more advertisers are turning to bilingual and foreign language advertising to market their products. According to U.S. census data, over 55 million Americans speak a language other than English in the home. Spanish language advertising, in particular, has increased over the years, in response to the growth of the Spanish-speaking audience: Hispanics constituted 17 percent of the nation’s total population and had a current spending power of about $1.4 trillion as of 2014.

In light of these marketing and advertising trends, we thought it would be helpful to publish a quick list of tips to remember when disseminating an advertising message in a foreign language. …
Continue Reading How to Avoid #Translation Fails in Your Next Marketing Campaign

In March, a new federal law quietly went into effect that places additional pressure on importers to develop compliance systems for their supply chains, including identification of items potentially made with forced labor. The Trade Facilitation and Trade Enforcement Act of 2015 (Trade Act) prohibits the import into the United States of goods, wares, articles, and merchandise mined, produced, or manufactured in a foreign country by convict, forced, or indentured labor.

The new law comes at a time when federal and state regulators are turning their focus to supply chain management as a way to combat forced labor overseas. At the National Association of Attorneys General (NAAG) 2016 Winter Meeting, for example, Attorney General Loretta Lynch gave a speech noting that the Department of Justice would prioritize human trafficking for law enforcement at all levels. Susan Coppedge, Ambassador-at-Large to Monitor and Combat Trafficking in Persons and Senior Advisor to the Secretary of State, also presented to the AGs at NAAG. Given this scrutiny, any company—regardless of industry—that imports goods from overseas should review its supply chain management policies to ensure that they are appropriately tailored to address this issue.

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Continue Reading Don’t Import Compliance Troubles—New Supply Chain Law Goes into Effect

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

cubanPresident Obama has created a lot of buzz about opening the Cuban market to Americans, but it is a long way from buzz to profits.  On December 17, 2014, the President and various members of his administration announced sweeping changes in the 50-plus year economic embargo against Cuba.  Normalization of diplomatic relations, increased travel, the ability to use U.S. debit and credit cards, increased commerce, and a number of other changes almost makes one want to break out a Cuban cigar right here in the nation’s capital and start ginning (or rumming, to create a word) up advertisements for the Cuban market.

But that would be premature given what the “buzz” currently allows.  Lighting up the Cubano is still illegal (indeed, even having it in the U.S. is illegal).  Although U.S. law currently allows limited commercial exports to Cuba (mostly agricultural goods and medicines), and the President has proposed expanding trade, a number of major hurdles stand in the way of full scale trade: …
Continue Reading Advertising in Cuba? Not Yet, Says Uncle Sam