Advertising Law Blog

Next year will likely see recommendations and rules from the U.S. Patent and Trademark Office (USPTO) and the U.S. Copyright Office in relation to artificial intelligence and its impact on intellectual property. Recognizing the lack of laws governing AI, on October 20, 2023, President Biden issued an Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence (Order). The Order acknowledges AI’s “extraordinary potential for both promise and peril,” and parts of the Order deal specifically with intellectual property.

2024 is poised to be a year that the FTC increases its authority over the abuse of artificial intelligence in advertising. FTC chair Lina M. Khan wrote in a New York Times opinion piece, “As companies race to deploy and monetize A.I., the FTC is taking a close look at how we can best achieve our dual mandate to promote fair competition and to protect Americans from unfair or deceptive practices.” In late November, the FTC authorized its staff members to begin issuing non-public subpoena-like information demands for products and services that use or claim to be produced using AI. One of the FTC’s main concerns will be how AI uses consumer data. For example, in 2023, Amazon was accused of, and settled charges, that its Alexa software indefinitely kept recordings of children in order to perfect its voice recognition algorithm.

Privacy laws relating to the collection and use personal information continue to be a hot topic for 2024. While there is still no over-arching federal privacy law in the United States, several states have passed privacy laws that affect businesses that collect (whether online or off-line) and use personal information. California, Connecticut, Virginia, and Colorado already have privacy laws in effect. Utah’s privacy law goes into effect on December 31, 2023. Five more states’ privacy laws will become effective in 2024 – Washington (3/31/24), Oregon (7/1/24), Texas (7/1/24), Florida (7/1/24), and Montana (10/1/24). Additional state laws will become effective beyond 2024 – Delaware (1/1/25), Iowa (1/1/25), Tennessee (7/1/25), and Indiana (1/1/26). Beyond the laws that have been enacted, numerous state legislatures will be reviewing and debating proposed privacy legislation in 2024, namely: Missouri, Wisconsin, Michigan, Ohio, Pennsylvania, New Jersey, North Carolina, Maine, and Massachusetts.

Although not final as of the time this is being published, the FCC is poised to make life difficult for lead generators and the companies that rely on them. In late November, the FCC proposed a rule that would require texters and robocallers obtain prior express written consent that is specific to a single seller in order to comply with the Telephone Consumer Protection Act. The problem, according to the FCC, is the “lead generator loophole,” which currently allows lead generators to obtain consent on behalf of multiple sellers from consumers who complete a single lead form, often hyperlinked to a long list of sellers. The FCC is expected to pass the rule during in mid to late December, effective in 2024. Another possible change will be extending the National Do-Not-Call Registry to text messages instead of just phone calls.

Significant developments in the FTC’s treatment of endorsements and reviews occurred this year. In June, the FTC finalized its revised Endorsement Guides. In addition to adding a definition of “clear and conspicuous,” explaining the potential liability advertisers, endorsers and intermediaries, and highlighting child-directed advertising as an area of specific concern, the revised guides include a new principle regarding procuring, suppressing, boosting, organizing, publishing, upvoting, downvoting, or editing consumer reviews that can alter how consumers interpret a product. In addition to the revised Endorsement Guides, the FTC has proposed a new rule that would specifically address deceptive practices involving consumer reviews. Further, it has continued to pursue enforcement actions against advertisers that utilize such consumer reviews in what the FTC purports to be a deceptive manner. For example, this year the FTC reached a settlement with room and roommate-finder platform, Roomster, in relation to charges that the company bought fake reviews to encourage consumers to pay for the platform. The FTC’s rulemaking process will continue into 2024, and we expect that the FTC will continue to prioritize this issue through both the rulemaking process and potential enforcement efforts.

Both federal and state legislators and regulators continue to focus on auto-renewal/continuous service programs, particularly emphasizing the necessity of online cancellation for orders initiated via the Internet. In March 2023, the FTC aimed to modernize its “negative option rule,” aligning it with state laws and increasingly common continuity programs. The proposed FTC Rule Concerning Recurring Subscriptions and Other Negative Option Plans would mandate  disclosure of continuity program terms and cancellation processes before acquiring a consumer's billing ...

Public comments to the FTC now extended until February 7, 2024

Chair of Olshan’s Intellectual Property Law Group and Co-Chair of the firm’s Brand Management & Protection Group Mary Grieco and Olshan Co-Managing partner, Chair of the firm's Advertising, Marketing & Promotion's Group and Co-Chair of the firm’s Brand Management & Protection Group Andrew Lustigman published a Law360 (subscription required) article entitled “Open Issues At The USPTO And Beyond After Biden AI Order” In the article, they discuss how President Biden’s Executive Order relating to AI could potentially make it harder for businesses to protect AI-created inventions.

Chair of Olshan’s Intellectual Property Law Group and Co-Chair of the firm’s Brand Management & Protection Group Mary Grieco and Olshan Co-Managing partner, Chair of the firm's Advertising, Marketing & Promotion's Group and Co-Chair of the firm’s Brand Management & Protection Group Andrew Lustigman published a New York Law Journal (subscription required) guest column entitled “Will Biden’s AI Executive Order Give Clarity on the Issue of Inventorship?” concerning President Biden's AI Executive Order and how AI output will be categorized as intellectual property.