Wednesday, November 30, 2011

Packaging Awards Do Not Insulate Companies from Greenwashing Litigation

Just in case you thought that winning an award for your new environmentally-friendly packaging would insulate your company from a greenwashing complaint – better think again.  In the EU, DANNON Yogurt introduced its Activia product in a container labeled with the phrase (in German) "new environmentally-friendly tub":
Danone’s “Green” PLA Packaging

Danone is the French food-product giant that is best known here as the maker of Dannon Yogurt.  Danone released its packaging in the EU with pride in the summer of 2011.  According to Danone, the packaging was developed after “years of research and work” and is made from renewable resources, with less raw material use, less CO2 emissions, and less end-of-life waste generated.  The editors of Bioplastics Magazine bestowed their Annual Global Bioplastics Award to Danone for using the packaging for its yogurt products.  More on the award can be found here.

The German Greenwashing Lawsuit

Danone’s inclusion on the packaging of the phrase "new environmentally-friendly tub" raised the ire of a German environmental organization, known as DUH, which promptly filed a complaint against Danone in the Munich District Court.  DUH's accusations of greenwashing by Danone centered on two supposed environmental deficiencies of the packaging: (1) the new packaging is not recyclable; and (2) the packaging did not represent an environmentally-discernible improvement over Danone's predecessor polystyrene packaging because it was made from genetically-modified corn – an environmental no-no in DUH's estimation.

The Settlement

While Danone initially denied all the charges and argued that its environmental claims were supported by solid research, it just last week agreed to a settlement with DUH.

As part of the settlement, Danone has agreed to replace the allegedly offending claim on the packaging, immediately remove all existing references from its websites, and also remove all instances of the offending packaging from store shelves by year's-end.  Not surprisingly, both sides claim a form of moral victory.  On the one hand, Danone stands by its packaging and expressed displeasure at the "uncalled-for public discussion" spurred by DUH's complaint.  DUH, on the other hand, hailed its "great success" in securing the settlement and in securing what it felt was an admission by Danone that it had engaged in greenwashing.


Whether one agrees with Danone or DUH, this episode should serve as a cautionary tale for companies around the globe that are enthusiastic about promoting the environmental benefits of a new product or service - especially in an environment where the watchdogs won’t be distracted by glittery awards.  There are many eyes looking for examples of greenwashing, be they organizations like DUH, public agencies, or activist consumers – and examples of legal enforcement are sure to increase because of that scrutiny.

Author:  Gaston Kroub

Tuesday, November 29, 2011

Congressmen Ask FTC to Investigate Secret Use of Supercookies For Behavioral Advertising

Two Congressmen recently wrote the Federal Trade Commission (FTC) asking the FTC to investigate the privacy implications of the installation of files called Flash cookies or Supercookies on consumers’ computers.  These Supercookies allow companies such as to gain personal information from consumers without their knowledge for behavioral advertising targeting. The two Congressmen, Joe Barton (R-TX) and Ed Markey (D-MA), are Co-Chairman of the Congressional Bi-Partisan Privacy Caucus.
Supercookies are Hidden
The Congressmen’s letter is based on an August Wall Street Journal article discussing the use of Supercookies.  Supercookies differ from regular “cookies” because Supercookies are hidden from view and cannot be deleted.  Consumers are unaware these files are placed on their computer.  They remain on a computer even when the consumer clears the browsing history and cache.  And they record information even when the consumer is browsing in “private browsing” mode.
Supercookies Common on Many Top Websites
A recent study found 100 Supercookies placed on users’ computers by 37 of the top 100 websites.  Some Supercookies can even “respawn” traditional cookies after a consumer deletes them. Amazingly, the study also suggests that owners of the top website surveyed have little or even no knowledge that their websites are being used by third party tracking companies to place Supercookies on consumers’ computers.
Class Action Suits Filed on Secret Use of Supercookies
Earlier this year, a California class action lawsuit against Web measurement company Quantcast and widget maker Clearspring based on surreptitious placement of Supercookies settled for $2.5 Million. Another class action lawsuit in California against Kissmetrics and alleging that surreptitious placement of cookies and similar tracking files violates the Computer Fraud and Abuse, Electronic Communications, and Video Privacy Protection Acts, as well as several similar state laws, is still pending.  Most recently, on Nov. 23, 2011 web video company Metacafe settled a similar suit by the agreeing to stop use of Supercookies to recreate users’ regular cookies. 

FTC Action/Settlement

The FTC itself on Nov. 8, 2011 both filed a complaint and announced a settlement agreement containing a consent injunction against ad network ScanScout (which was acquired last year by Tremor Media).  The agreement requires ScanScout and Tremor to give prominent notice on its website that it is collecting information to send the consumer targeted ads, unless the consumer opts out by clicking on a hyperlink declining to receive targeted ads. The agreement also requires that the hyperlink take consumers to a mechanism that allows them to block the company from collecting information that can identify them or their computer, from redirecting their browser to third parties that collect date with their approval; and from associating any previously collected personal data with them.  The consumer’s choice must last for at least five years, unless the consumer changes it. The agreement will be subject to public comment for 30 days, continuing through December 8, 2011, after which the Commission will decide whether to make it final.

Implications of Secret Use of Supercookies
The FTC investigation requested by Congressmen Barton and Markey, the pending class action lawsuits, and actions by the FTC are likely to lead to additional regulations and limits on behavioral advertising through the use of Supercookies.  The FTC is likely to rule that obtaining personal data using Supercookies without notice and an opportunity for consumers to opt out violates current laws and FTC privacy guides.  It is unclear whether companies will be liable for engaging in behavioral advertising by acquiring and using personal data obtained by third parties with the use of Supercookies, but we expect further limits on such use.

Authors: Paul Van Slyke

Gregory Casamento
Patrick Hatfield

Tuesday, November 8, 2011

Louboutin red sole trademark dispute gets Tiffany-twisted

Authors:  Robin Barnes and Hamad Hamad             

Whether you are a regular fashionista or a certified shoe fanatic, you probably know about Christian Louboutin’s suit against Yves Saint Laurent alleging infringement of Louboutin’s registered trademark for red soles.  After the district court denied Louboutin’s preliminary injunction request and set a hearing to consider cancelling Louboutin’s registration, Louboutin appealed to the Second Circuit. Last week, Tiffany & Co. filed a brief supporting Louboutin’s position.
You can watch this CBS News segment for a quick recap of the case.
One issue on appeal is the breadth of Louboutin’s registration, which simply recites that the “mark consists of a lacquered red sole.”  While the court’s opinion is not perfect, it astutely questioned the breadth and vagueness of this description.  Imagine the difficulty for competitors – are fire engine, cherry, and brick red all covered by Louboutin’s registration?  There are difficulties on the consumer side too – can multiple shades of red establish sufficient secondary meaning to support the registration, and can the average person even tell the difference between certain shades?

 Interestingly, the red color depicted in Louboutin’s registration for the color of the sole of a shoe

is not the same color used in its design mark registration,

, which makes you wonder if Louboutin even knows his own shade of red. 
Tiffany’s interest is not surprising given the trademark registrations on its famous blue boxes and little blue bags.  In an effort to protect its own blue registration, Tiffany argued that the court erred by creating a rule that a single color can never be a valid mark for fashion items.  While the court did seriously question the ability to protect a single color for fashion items, its decision was ultimately based on its determination that Louboutin didn’t have a protectable mark, not just because a single color was claimed.  Although functionality issues were addressed by the court and by Tiffany, what’s interesting here is the discussion and concerns over the broad assertion of trademark in the single color “red.”
The issue of the breadth of a single claimed color is interesting because of the contrast between Louboutin’s and Tiffany’s registrations.  Tiffany’s registrations claim “robin’s-egg blue.”  Would a similar level of specificity have satisfied the Louboutin court?  Who knows, but Tiffany could at least rely on a distinct shade of blue if it were in Louboutin’s position, perhaps alleviating the court’s concerns about an overly broad and vague registration.
Even more interesting (in a non-legal sense) is the Tiffany twist: the law firm that wrote Tiffany’s amicus brief also prosecuted its robin’s-egg blue registrations AND Louboutin’s red sole registration.  Was there a strategic decision by counsel to go broad in Louboutin’s application and narrower in Tiffany’s?  It’s also possible (perhaps probable?) that Louboutin instructed his counsel to seek broad trademark protection for “red.”  Until the Second Circuit rules, however, it’s too early to draw concrete conclusions for prosecution strategy, but this distinction suggests that specificity in single color mark descriptions (at least in the fashion industry) may avoid future litigation complications.