Thursday, December 13, 2012
President Obama is Expected to Issue Executive Order on Cyber Security and Privacy
The Draft Executive Order requires certain federal agencies to identify critical infrastructure where a cyber security incident could have national or regional effects on public health or safety, or economic or national security.
Tuesday, October 23, 2012
As has been reported, the FTC recently issued a revised "Green Guides" to guide marketers when making claims regarding the environmental attributes about their products.
We have published a Locke Lord Article entitled “FTC Unveils Final Revised Green Guides for Environmental Marketing- Energy Industry and B2B Included” available here.
Monday, October 1, 2012
Today, FTC Releases the Revised Green Guides for Environmental Marketing
Author: Paul Van Slyke |
The FTC released today the long-awaited
final, revised version of its Guides for the Use of Environmental
Marketing Claims — the Green Guides.
If your company makes green
or environmental claims in its advertising, labeling or marketing, you will
want to seize on the link above and start figuring out what is new, what is
changed and what has stayed the same. In
the next few weeks, we will be issuing a series of posts with analysis and
implications of the revised Green Guides for various industries.
For now, here are a few ways to get started in understanding
the revised Green Guides and how they might impact advertising, labeling and
marketing for your business.
After briefly reviewing the
text of the Green Guides, the next stop should be the EnvironmentalClaims: Summary of the Green Guides prepared by the FTC. It is written for marketers with a brief
explanation of the FTC’s approach to environmental benefit claims, and
terminology often used in green marketing .
Next, you can watch the video with an overview of the revised Green Guides prepared by the FTC.
Finally,
check out the FTC’s Environmental Marketing page with all kinds of resources for green
claims, natural claims and energy pitches.
You will find links to legal resources such as:
Monday, September 10, 2012
Louboutin v. YSL – Second Circuit misses the ‘mark’
Robin Barnes |
Hamad Hamad |
Last November, we wrote an article on the Louboutin red sole trademark case against YSL shortly after Tiffany filed its amicus brief supporting Louboutin’s position at the Second Circuit. Our primary focus was the difference between Tiffany’s and Louboutin’s trademark registrations. Tiffany’s registrations claimed a fairly specific color, namely “robin’s-egg blue,” while Louboutin’s registration simply and broadly claimed “red.” We noted that, at least until the Second Circuit ruled on the issue, it would be advisable to claim colors with some specificity in trademark applications.
As we previously noted, while not perfect, the opinion did a good job of criticizing the breadth and vagueness of the color description in Louboutin’s registration. Now that the Second Circuit has ruled, we feel that we should reexamine the district court’s opinion in light of its characterization by the Second Circuit.
According to the Second Circuit, the district court held “that a single color can never serve as a trademark in the fashion industry” and that “in the fashion industry, single-color marks are inherently ‘functional.’” That’s not how we read the district court’s decision. As we previously noted, the district court did analyze the question of whether a single color could serve as a trademark in the fashion industry and spent considerable time on the functionality issue, but ultimately did not issue any direct holding or per se rule on the viability of single-color marks in this context. Specifically, the district court denied Louboutin’s request for a preliminary injunction (which is based on a likelihood of success standard) because the court had “serious doubts that Louboutin possesses a protectable mark.” Had the district court held that a single color can never serve as a trademark in the fashion industry, it would have stated that Louboutin did not possess a protectable mark rather than merely expressing doubt.
Putting aside the issue of how far the district court did or did not go, it seems the Second Circuit missed the mark by not going far enough to limit Louboutin’s trademark rights. The Second Circuit reversed the district court’s order to the extent that it denied Louboutin trademark protection (which it really did not at the preliminary injunction stage, but might have at a later stage of the proceedings) and limited the mark to a red outsole contrasting with the other parts of the shoe (and ordered that Louboutin’s registration be amended accordingly). Since YSL’s allegedly infringing shoes were monochromatic, the Second Circuit affirmed the denial of the injunction based on its ruling that Louboutin’s rights were limited to contrasting uppers. However, the Second Circuit did not address the claimed “red” color itself or the type of footwear to which the red color is applied.
The district court spent a good number of paragraphs discussing the vagueness and ambiguity of Louboutin’s trademark with respect to both of these issues. Let’s first take a look at the color dimension. Here’s what we said last November concerning the vagueness and breadth of the claimed color:
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?
Or perhaps it is “Chinese Red” (Pantone No. 18-1663 TP) that is covered by Louboutin’s registration, as Louboutin asserted in his preliminary injunction reply brief? Oh, but wait, after YSL pointed out that it never used Chinese Red, Louboutin insisted that YSL used a (different) shade that was still too close. Which shade? We don’t know. Apparently, neither does Louboutin. At one point in argument, Louboutin asked the district court to pick a particular range of colors above and below Pantone No. 18-1663 TP and find that anything within that range of hues and shades of red would be infringing its trademark. The district court declined because it found that such an approach would have “the effect of appropriating more than a dozen shades of red-and perhaps other colors [such as pink and orange] as well.”
It appears that the real problem is not that Louboutin’s registration claimed a single color. The real problem is that Louboutin’s registration claimed an entire spectrum of red colors.
And what about the type of footwear? The registration states “women’s high fashion designer footwear.” What is high fashion? As the district court pointed out, Louboutin sued Zara in France. And while Zara makes some nice, trendy stuff, it’s not exactly the type of brand that would be considered “high fashion.” And what types of shoes exactly? Would flats and flip-flops be included? What about low-heeled shoes? At one point Louboutin tried to limit his registration to “high-heeled” shoes, but as the district court also pointed out, the registration doesn’t include that limitation.
Here’s something else to consider: what about design-your-own shoe websites and stores? Would a customer be liable for infringing Louboutin’s mark for using Nike ID to make Air Force 1’s with a glossy red sole and a black upper? Would a customer be liable for infringing Louboutin’s mark for ordering a custom pair of sandals to be made with a glossy red sole and brown straps? Would the manufacturers have any liability?
Perhaps these are bad analogies because designers would know better than to pursue an infringement claim against a competitor’s shoe that is clearly not going to cause customer confusion, right? Maybe not, since Louboutin sued YSL for a monochromatic shoe that wasn’t lacquered and didn’t use the Chinese Red that Louboutin now claims is his shade of red. Customers and competitors alike are left without proper guidance as to which hues or shades of “red” are off limits.
Louboutin’s registration was too broad and too vague and remains so even after the Second Circuit’s ruling. Although the Second Circuit did well to at least limit the registration to contrasting uppers, it could have taken this opportunity to rein in a clearly overbroad and vague registration. Having passed on that opportunity, did the Second Circuit effectively hand Louboutin an exclusive palette of the entire spectrum of “red” to be used on shoe outsoles as long as the uppers are a contrasting color? We’re not suggesting that Louboutin should necessarily be tied to a specific Pantone No. (although, interestingly, some foreign countries require a specific Pantone No. when a color claim is made in a trademark application), but Louboutin’s registration should have at least been limited to a word-description of the particular hue or shade of red that he intended to claim. In the end, the Second Circuit’s opinion does not shed much light on the boundaries of color claims in the fashion world, but we still think is advisable to claim color marks with some specificity. After all, Tiffany seems to be doing just fine with “robin’s-egg blue.”
Tuesday, August 28, 2012
Consumer Privacy and Cookies: What the FTC's $22.5 Million Settlement With Google Means For Your Company
Author: Paul C. Van Slyke |
Recently the Federal Trade Commission reached a record $22.5 million settlement with Google for consumer privacy violations of an
earlier order involving what is called “online behavioral advertising” or OBA.
The Google case is a roadmap for avoiding serious legal missteps for
tracking of consumer interests in violation of a company’s own policies and
claims that are commonly made and often overlooked. In the Google settlement, the FTC sent a loud
and clear message that it will not tolerate promises and claims made in fine
print to protect the privacy of consumers and breaking those promises by use of
cookies and user tracking tools in day-to-day operations long after the
promises in fine print are forgotten.
Overlooked Privacy Claims in the Google
Case
Most companies have gotten the message that what they say in their privacy
policies has to line up with their day-to-day operations. The problem is
that many companies are conveying claims not just in a formal privacy policy in
the fine print on the website, blog or social media brand page, but also where
the company states choice mechanisms, opt-outs, and other ways consumers can
customize their experience. The FTC’s complaint against Google highlights alleged
misrepresentations on the company’s Advertising Cookie Opt-Out Plug-in page
that were overlooked for compliance.
Cookies are the unique file codes placed on a consumer’s computer when a
website is opened and consumer choices are made on the website.
Google claimed in its fine print that for users of the Safari browser that
it would not place tracking cookies on the users’ computers or serve them
targeted advertisements. The FTC alleged that Google used codes to
disguise its cookies to work around Safari’s opt-out default setting.
Overlooked Claims of Self-Regulatory
Compliance
Many companies promote on their website
their affiliation with self-regulatory programs. For example, to join the
Network Advertising Initiative (NAI), a voluntary self-regulatory group for the
online advertising industry, company members agree to disclose to users their
data collection and use practices. Although Google touted its NAI membership
on its website, the FTC says the company did not truthfully disclose what it
was doing with Safari users’ data.
Key
Points
- The CEO and top executives of your company must often repeat that they are committed to compliance with consumer privacy and advertising laws and they will hold the IT director and Chief Marketing Officer accountable.
- Your information technology staff needs to take the lead in compliance before your marketing managers and legal advisors get involved.
- It helps for a company to adopt an internal consumer privacy policy that places primary responsibility on the IT Department and secondary responsibility on the marketing staff for compliance with laws and regulations on the use of cookies and user tracking tools.
- The internal policy should require that IT department make and update a list of all the places on your company websites, social media promotions and sponsored blogs where privacy representations and claims are made, maintain an inventory of the cookies they use, and not launch new ones without both marketing and legal review.
- The internal policy should also require that the marketing staff make and update a separate list of all the user tracking tools being used on your company websites, social media promotions and sponsored blogs and maintain an inventory of the categories of data being collected from users, and not launch new tracking tools or categories of data being collected without both IT and legal review.
- Sidestepping users’ preferences can lead to costly legal missteps.
Wednesday, July 18, 2012
NAD Finds “Pinned” Content is Testimonial in Nature, Requires Disclosures
By: Paul C. Van Slyke |
The National
Advertising Division, following its review of advertising by Nutrisystem, Inc.
on the new social media site Pinterest, has determined that the weight-loss
success stories “pinned” to such boards represent consumer testimonials and
require the complete disclosure of material information and the results
consumers can generally expect to receive. Nutrisytems currently has many advertisements on Pinterest.com. See http://pinterest.com/search/?q=nutrisystem.
NAD is an
investigative unit of the advertising industry’s system of self-regulation and
is administered by the Council of Better Business Bureaus. NAD decisions are
non-binding, but are given deep respect by the advertising industry and the
advertising legal community. Compliance
with NAD decisions is generally a good guide for avoiding liability in civil
litigation and Federal Trade Commission (“FTC”) enforcement actions.
Pinterest.com
Pinterest.com is a
trendy new virtual bulletin board, often described as a social photo-sharing or
scrapbooking website where users create and manage theme-based image
collections by “pinning” digital content they add or find on the web to their
personal boards. When content is “pinned,” Pinterest automatically grabs the
source link for the content which allows Pinterest to give credit to the
original creator, and allows users to return to the original source of the
content simply by clicking on the image as it appears on the pinboard. When a photo is repinned, Pinterest prompts
the user to direct the image to the specific pinboard they wish to pin to, and,
provide comments or notes about the image (if they wish )
NAD noted in its
decision that Pinterest has become a new way for companies to encourage consumers
to engage with their products and drive traffic to their websites.
Nutrisystem’s “Real
Consumers” pinboard featured photos of “real” NutriSystem customers and
highlighted their weight-loss successes. The customer’s name, total
weight loss and a link to the NutriSystem website appeared below each
photo. If consumers browsing the
Nutrisystem Pinterest board clicked on Nutrisystem’s consumer testimonial pins,
they were redirected to Nutrisystem’s website at www.nutrisystem.com
Express Claims at Issue
Express claims at
issue in NAD’s review included:
• “Christine
B. lost 46 lbs on Nutrisystem.”
• “Michael
H. lost 125 lbs. on Nutrisystem.”
• “Lisa
M. lost 115 lbs. on Nutrisystem.”
•
“Christine H. lost 223 lbs. on Nutrisystem.”
NAD Finding
In its decision, the
NAD found that the claims made on Pinterest were testimonial and required
complete disclosures of “material” information. In re Pinterest (unpublished) (NAD Case # 5479 06/20/12). The NAD found that one board, entitled “Real
Customers. Real Success.” featured photos of “real” Nutrisystem customers and
highlighted their weight loss success. The customer’s name, total weight loss
and a link to the Nutrisystem website appeared below each photo. The NAD found
“[i] t is undisputed that these pins represent consumer testimonials.”
The
NAD cited Section 255.2 (b) of the FTC’s
Guidelines Concerning the Use of Endorsements and Testimonials in Advertising
that states:
An advertisement containing an endorsement relating the experience
of one or more consumers on a central or key attribute of the product or
service also will likely be interpreted as representing that the endorser's
experience is representative of what consumers will generally achieve with the advertised
product or service in actual, albeit variable, conditions of use. Therefore, an
advertiser should possess and rely upon adequate substantiation for this
representation. If the advertiser does not have substantiation that the
endorser's experience is representative of what consumers will generally
achieve, the advertisement should clearly and conspicuously disclose the
generally expected performance in the depicted circumstances, and the
advertiser must possess and rely on adequate substantiation for that
representation.
The NAD found that the weight loss “pins” found on Nutrisystem’s
“Real Customers. Real Success.” board tout atypical results (i.e., “Michael H.
lost 125 lbs. on Nutrisystem” or “Lisa M. lost 115 lbs. on Nutrisystem”).
Therefore, as required by the FTC Guidelines, the NAD concluded that these pins
should be accompanied by a clear and conspicuous disclosure noting the typical
results consumers can expect to achieve using the Nutrisystem weight loss
program.
The NAD noted that if consumers browsing the Nutrisystem Pinterest
board clicked on Nutrisystem’s consumer testimonial pins, they were redirected
to Nutrisystem’s website which included the necessary qualifying information
(i.e., the typical results a consumer can expect to achieve using the
Nutrisystem program). The NAD observed, however, that it is well-established
that disclosures should not only be clear, conspicuous and easy to understand,
but placed in immediate proximity to the claim or representation it is intended
to clarify. In re the Campbell Soup
Company (Campbell’s Supper Bakes), Case #4038, NAD/CARU Case Reports
(May/June 2003). Therefore, said the NAD,
providing the disclosure on the website (which the consumer may or may
not visit), is not sufficient.
The advertiser Nutrisystem agreed that such statements require a
disclosure, and immediately added the
necessary disclosure (“Results not typical. On Nutrisystem®, you can expect to
lose at least 1-2 lbs. per week. Individuals are remunerated. Weight lost on
prior Nutrisystem® program.” The NAD
therefore concluded its action.
Take-Aways
Social
media and online sites that may not appear to be traditional advertising media
can have advertising messages of a testimonial or endorsement nature that
require compliance with the requirements for complete disclosures of material
information as well as comply with the FTC guidelines. When there is any reasonable interpretation
that the content is a commercial advertising message of a testimonial or
endorsement nature, it is wise to include a complete disclosure of material
information about the endorser’s connections with the advertiser and whether
the endorser was paid or received a benefit from the advertiser,
accompanied by a clear and conspicuous
disclosure noting the typical results consumers can expect to achieve. The disclosure must be in close proximity to
the advertising claim.
Wednesday, June 13, 2012
ICANN revealed the new gTLD applications today; were any infringements to your Brand revealed?
Today is ICANN’s Reveal Day
for the new generic top level domain (gTLD) applications. Common gTLD’s include .com, .net, .org, and country-specific
domain name extensions such as .uk (United Kingdom) or .ca (Canada). The new gTLD extensions are referred to as
“strings.” ICANN published its list of
applied-for gTLD strings here. You can download a PDF version of the list here. You can search for strings of interest here.
Now
that the gTLD application list has been published, a public review period has begun,
including a 2-month comment period and a 7-month formal objection period. ICANN permits a few objections anyone can
raise(applicants and non-applicants).
The
“Legal Rights Objection” will likely be the most useful and relevant for
purposes of brand protection. Once a
Legal Rights Objection is filed, an independent panel of one or three experts will
decide whether the applied-for gTLD string would be likely to infringe an
existing trademark, intergovernmental organization name, or another acronym in
which an entity has a cognizable right.
The
panel will decide whether the applied-for gTLD takes unfair advantage of the
objecting party’s mark or name, whether it unjustifiably impairs the
distinctive character or reputation of the objecting party’s mark or name, or
whether it creates a likelihood of confusion with the objecting party’s mark or
name. To make these determinations, the
panel looks to various non-exclusive factors, including, whether the
applied-for gTLD is identical or similar in appearance, sound or meaning to the
objecting party’s mark or name, and whether the intended use of the applied-for
gTLD will create a likelihood of confusion with the objecting party’s mark or
name as to the source, sponsorship, affiliation, or endorsement of the gTLD.
Trademark
and brand owners should take the time on the front end to challenge any gTLD
strings that may be encroaching on their trademark or brand names. We think that the effort put into challenging
objectionable gTLD strings now could pay huge dividends in the future,
especially considering the time and cost of after-the-fact trademark
litigation, UDRP proceedings, and ad hoc
brand enforcement and protection.
Authors:
Hamad Hamad |
Jason Mueller |
Jason Nardiello |
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