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”

Are paid search terms about to receive a lot more Federal Trade Commission (FTC) attention?  That’s the question you could be asking after the FTC last week announced a settlement with Nourish Life LLC.  Defendants marketed a dietary supplement called Speak that contains among other things omega-3 and omega-6 fatty acids, vitamin E and vitamin K.  According to the FTC, defendants lacked adequate substantiation for the claim that Speak would help children develop and maintain normal speech, including children who suffer from autism and verbal apraxia (a speech disorder).

The FTC’s complaint cites claims made on websites and social media as well as in direct mail, brochures, and displays at medical conferences.  In addition, the complaint makes reference to paid search terms and sponsored links as one of the mechanisms by which the defendants marketed their product.  The paid search terms cited included “toddler speech problems,” “help my child talk,” “autism treatment,” and “verbal apraxia treatment.”

Does this mean that paid search terms and sponsored links are now fair game for FTC scrutiny?  Well like any good lawyer, we think the answer is “it depends.” 
Continue Reading The FTC Speaks Softly But Carries a Big Stick – Do Paid Search Terms Go Under the Microscope?

We’re all pretty used to seeing sweepstakes that require entrants to “like” an advertiser’s or app’s Facebook® page in order to enter—they’re probably the most common type of promotion on Facebook.  Many marketers require consumers to “like” an application’s Page as a condition of entry into a sweepstakes or contest, in order to receive coupons or other rewards, or in order to watch a video or some other type of content.  Advertisers like to do this because in exchange for offering consumers benefits for “liking” their applications’ Pages, the advertisers obtain a guaranteed base of Facebook fans and extend their brand’s reach on Facebook.

But, in a few months, as a result of recent changes to Facebook’s Platform Policy, these examples of “like-gating” will no longer be kosher on the Facebook platform.  Facebook’s revised Platform Policy, updated August 7, 2014, states that developers of Facebook applications may “[o]nly incentivize a person to log into your app, like your app’s Page, enter a promotion on your app’s Page, or check-in at a place.”  The revised policy goes on to state that “Effective November 5th, 2014, you may no longer incentivize people to like your app’s Page.”

Facebook provides these examples of what is no longer allowed:

Facebook


Continue Reading Facebook Changes the Rules Again: The Sally Field Principle of “Likes” on Social Media

Zack (Danger) Brown recently made headlines for his Kickstarter® Campaign, which was featured in CNN.com, The Washington Post, and The New Yorker as well as on Good Morning America (I guess TV stars eat carbs after all).  Unlike other entrepreneurs on the popular crowdfunding platform, who use Kickstarter to launch a business idea or concept, Brown has been raising money for … potato salad.  And not a special family recipe for a potato salad, either – according to Brown, this will be his first potato salad and “[i]t might not be that good.”  The campaign has gone viral, and people have given upwards of $42,000 (the amount is still growing) – a sum that should more than cover the bag of Idaho spuds, mayonnaise, chives, and other ingredients to make the picnic staple.

potatosalad

Brown’s promised deliverables have evolved as he has acquired more and more money.  Now, folks who contribute $20 are enticed by the following:  “Receive a potato-salad themed haiku written by me, your name carved into a potato that will be used in the potato salad, a signed jar of mayonnaise, the potato salad recipe, hang out in the kitchen with me while I make the potato salad, choose a potato-salad-appropriate ingredient to add to the potato salad, receive a bite of the potato salad, a photo of me making the potato salad, a ‘thank you’ posted to our website and I will say your name out loud while making the potato salad.”  Regardless of whatever spud-themed poetry Brown writes, according to the Kickstarter Terms of Use, Brown has to follow through on what he promises to backers.  And a recent proceeding by the Washington Attorney General suggests that Brown had better get ready to wax poetic about that most soulful of tubers, the potato. 
Continue Reading Seeking Backers for That Kickstarter Campaign You’re Cooking Up? Better Make It One Heck Of A Dish…

Katherine Heigl, a star of the television series Grey’s Anatomy and films like Knocked Up and 27 Dresses, recently made non-TMZ headlines when she sued drugstore chain Duane Reade for $6 million dollars for posting a photo of her to its Twitter and Facebook accounts, accompanied the text “Love a quick #DuaneReade run? Even @KatieHeigl can’t resist shopping #NYC’s favorite drugstore.” Here’s a copy of the Twitter post that has caused such a stir:

heigel

What’s the problem, you ask? In a time when celebrities regularly post photos of their daily lives to public Twitter accounts and selfies dominate the social media space, what’s the big deal with a company posting a paparazzi photo of a celebrity that no doubt was already available in the public domain? The problem, according to Ms. Heigl, is that Duane Reade used the photograph for its own commercial advertising without her permission, exploiting Ms. Heigl’s celebrity status for its own commercial gain.  This conduct, according to Ms. Heigl’s complaint, is a violation of the Lanham Act, her right of privacy and publicity under New York Civil Rights Law, and New York unfair competition.


Continue Reading What’s in a Name? Dollars – At Least When You’re A Celebrity