NEWSLETTER: Advertising, Marketing & Promotions, Fall 2011
Dear Clients, Colleagues and Friends,
We are pleased to send you Olshan's Advertising, Marketing and Promotions Group's Fall 2011 Newsletter.
There have been a number of important developments and activities of interest to those involved in advertising and promotional marketing matters. Below is a summary of those developments that we believe to be of particular importance.
As always, if you would like to discuss any of these developments, have concerns about their impact on your business or marketing campaign, or have any questions about the legal aspects of advertising and promotional marketing, please feel free to contact us.
IN THIS ISSUE
Class Actions Against Premium SMS Sweepstakes Promotions Resolved
FTC Seeks Comments On Amending The Mail Order Sales Rule
FTC Releases For Comment Proposed Revisions To COPPA Regulations
Oregon Passes Laws Regulating Free Trial Offers And Negative Option Plans
Subscription-Based Website Hit With Class Action After Failure To Make Refunds
Second Circuit Limits Applicability Of FTC v. Verity And Affirms Burden On Marketers
FCC Publishes Proposed Anti-Cramming Rule
Lawsuit Claims Opt-Out Acknowledgments Are Illegal Texts
President Wants To Limit TCPA's Application To Government Calls
New .xxx Domain Name Extension
Supreme Court To Hear TCPA Case
Supreme Court Decisions Of Interest To Advertisers And Marketers - October Term 2010
Amazon's Kindle Fire Tablet Raises Potential Privacy Concerns
BUZZ AT THE ADVERTISING, MARKETING & PROMOTIONS LAW GROUP
Andrew Lustigman Authors Article For Mobile Marketer
Andrew B. Lustigman authored an article in Mobile Marketer which discussed the settlements of the class action suits brought against popular television shows such as American Idol, strengthening the requirement to offer equivalent value when charging for an entry to a mobile sweepstakes.
Adam Solomon And Andrew Lustigman Promotion Featured In Business Insider
Business Insider featured the NYC BigApps Idea challenge. The contest, hosted by Olshan client ChallengePost, Inc., and sponsored by the New York City Economic Development Corporation and the New York City Department of Information Technology & Telecommunications, was developed with the assistance of Olshan attorneys Adam Z. Solomon and Andrew B. Lustigman.
Anti-Counterfeiting Seminar At Olshan
Olshan partner Martin J. Feinberg will present, "It's Fugazi: Assessing Your International Criminal and Civil Enforcement Option," on Tuesday, November 8, 2011 from 6:00 to 8:00pm at Olshan. The program will focus on steps that companies can take to help battle counterfeiting.
Jonathan Ezor Quoted In LA Times
Jonathan I. Ezor was quoted in the Los Angeles Times regarding amazon.com's battle over the online sales tax in several states.
NEWS AT OLSHAN
Sixteen Olshan Lawyers Have Been Named By Super Lawyers For 2011
Sixteen Olshan Lawyers have been named by Super Lawyers for 2011: Steve Wolosky, Jeffrey A. Udell, Kenneth A. Schlesinger, Samuel P. Ross, Andrew B. Lustigman, Sheldon S. Lustigman, Barry Salkin, Hyman Kindler, Thomas D. Kearns, Aliza F. Herzberg, Steven R. Gursky, Eric L. Goldberg, Warren R. Gleicher, Adam H. Friedman, Thomas J. Fleming and Kyle C. Bisceglie. In addition, Elizabeth R. Gonzalez has been named for inclusion in the Super Lawyers - Rising Stars Edition 2011.
Bisceglie And Ross Represent Atari In Settlement
Hasbro and Atari announced settlement of all claims in the 2009 "Dungeons & Dragon" Hasbro and Atari lawsuit. Kyle C. Bisceglie, Herbert C. Ross, Peter M. Sartorius, Howard J. Smith, Charles R. Fritch and Alexander J. Sperber as well as Brooks Magratten and Michael Daly of Pierce Atwood represented Atari. Hasbro was represented by O'Melveny & Myers and Adler Pollack. GameSpot and gameinformer among other gaming industry websites closely watched and widely reported on the settlement.
Law 360 Reports On Nike Trademark Infringement
Law 360 (subscription required) reported that Nike Inc., sued an importer for over $32 million Federal Court in New Jersey, claiming it violated trademark law by using false documents to clear counterfeit sneakers through U.S. Customs. Martin J. Feinberg is co-counsel to Nike Inc. on the suit.
Steven Gursky Speaks At MLK Memorial Dedication Event
Olshan Partner Steven R. Gursky delivered a speech during the August 2011 dedication of the Dr. Martin Luther King, Jr. National Memorial commemorating the life and works of Dr. King. Steve is a member of the Board of Directors of the Martin Luther King, Jr. National Memorial Project Foundation, Inc. and provided extensive pro bono legal work to the Foundation. The Foundation raised almost $120 Million in private funds to erect the memorial.
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CLASS ACTIONS AGAINST PREMIUM SMS SWEEPSTAKES PROMOTIONS RESOLVED
The class action lawsuits challenging premium SMS sweepstakes promotions for the play-at-home version of popular TV shows such as American Idol and Deal or No Deal as illegal lotteries have reportedly been settled. The terms of the settlement, which include injunctive requirements on sweepstakes involving premium SMS entries, further strengthen the requirement to offer equivalent value when charging for a sweepstakes entry.
FTC SEEKS COMMENTS ON AMENDING THE MAIL ORDER SALES RULE
FTC is seeking public comment on proposed amendments to its Mail or Telephone Order Merchandise Rule. The amendments seek to clarify that the Rule covers all orders placed over the Internet and to revise the Rule to permit new refund delivery options to allow sellers to provide refunds and refund notices; to clarify a merchant's obligations when buyers use payment methods not spelled out in the Rule, such as debit cards or prepaid gift cards; and to require that refunds be made within seven working days for purchases that were made using third-party credit, such as Visa or MasterCard cards. Comments must be received by the FTC by December 14, 2011.
FTC RELEASES FOR COMMENT PROPOSED REVISIONS TO COPPA REGULATIONS
The FTC has sought public comment and input for a number of years on whether its regulations under the Children's Online Privacy Protection Act of 1998 need to be revised or updated to keep pace with changes in technology and business. The FTC released its proposed revisions to COPPA for public comment, which are due by November 28, 2011. The following sections are included in the proposed changes: Definitions, Parental Notice, Parental Consent Mechanisms, Confidentiality and Security Requirements, Safe Harbor.
FACEBOOK POSTINGS CONSIDERED PROTECTED CONCERTED ACTIVITY: HISPANICS UNITED OF BUFFALO, INC. AND CARLOS ORTIZ
A National Labor Relations Board administrative law judge declared that a New York not-for-profit employer violated the National Labor Relations Act by discharging a group of employees for engaging in a Facebook discussion criticizing their supervisor and complaining about working conditions. The employer discharged five employees on the grounds that, among other things, their behavior was harassing towards the supervisor and caused him to have a heart attack, thereby creating liability for the employer. The administrative law judge found that the Facebook communications were protected activity within the meaning of Section 7 of the NLRA, and ordered the employer to reinstate the five discharged employees, with backpay. The decision highlights the need to carefully craft social media policies.
OREGON PASSES LAWS REGULATING FREE TRIAL OFFERS AND NEGATIVE OPTION PLANS
The State of Oregon recently passed two new laws regulating free trial offers and negative option plans. Both laws will go into effect January 1, 2012.
Oregon Senate Bill 292 will regulate free trial offers, including specific disclosure requirements and restrictions on the collection and sharing of billing information. Similarly, Oregon Senate Bill 487 addresses automatic renewal and continuous service offers. The bill is very similar to the statutory provision adopted by California in 2009.
SUBSCRIPTION-BASED WEBSITE HIT WITH CLASS ACTION AFTER FAILURE TO MAKE REFUNDS
A class action against MyLife.com has been filed relating to an e-mail marketing campaign soliciting enrollments based on the alleged false claim that someone was searching for them. The case highlights the need to monitor the advertising by affiliates.
SECOND CIRCUIT LIMITS APPLICABILITY OF FTC V VERITY AND AFFIRMS BURDEN ON MARKETERS
In FTC-related litigation, the Court of Appeals for the Second Circuit restricted its Verity decision. Under Verity, net profits were the proper baseline measure for a disgorgement award in an FTC action. Now, the court has held that the Verity rule was limited to situations involving third-party processors. In this recent litigation the court found that gross revenues could be the proper award against a defendant engaging in illegal marketing conduct. Additionally, the court found that the burden of proof on showing returns, chargebacks and related expenses belonged to the defendant, who must show product-specific records, and cannot rely on estimates if it wishes to avoid disgorging its gross revenues.
FCC PUBLISHES PROPOSED ANTI-CRAMMING RULE
The FCC announced new rules in connection with the billing of enhanced services and other similar charges on phone bills. The FCC is seeking comments on proposed amendments to the its Truth-in-Billing rules that would require wireline telephone companies (i.e., wireline telecommunications common carriers) to make certain billing disclosures. The deadline for comments is October 24, 2011.
LAWSUIT CLAIMS OPT-OUT ACKNOWLEDGMENTS ARE ILLEGAL TEXTS
A California resident has filed a class action lawsuit against NASCAR alleging she received an unsolicited text message from the auto racing federation. The text message touted a cell phone application that allows consumers to watch NASCAR races live on their cell phone. When the consumer told NASCAR to stop sending her texts, it responded that it had received her opt-out request. The response itself was alleged to be a second illegal text.
In light of her claim that the opt-out confirmation is itself an illegal text message, companies using text messages to solicit consumers should consider whether it is really necessary to acknowledge an opt-out request. Of course, the original text should not be sent unless there is clear authority to do so.
PRESIDENT WANTS TO LIMIT TCPA'S APPLICATION TO GOVERNMENT CALLS
President Obama as part of his plan for economic growth and deficit reduction, he is proposing to relax a portion of the Telephone Consumer Protection Act to help government debt collection efforts. The law, as it currently stands, restricts the ability to make debt collection calls to cell phones. The President's plan includes "allow[ing] agencies to contact delinquent debtors via their cellular phones.”
NEW .XXX DOMAIN NAME EXTENSION
A new ".xxx" domain name extension has been launched. This .xxx domain name extension is being introduced specifically for the adult entertainment industry. ICM Registry, the entity administering the .xxx domain name extension, has announced a "sunrise" period from September 7, 2011 to October 28, 2011 during which a trademark owner can apply to opt-out of .xxx and thus block the ability of another entity to use the trademark as its .xxx domain name.
SUPREME COURT TO HEAR TCPA CASE
The recent Supreme Court term included in a number of very important decisions that impacts advertising and marketing in the United States. Some decisions, such as Walmart and Concepcion were pro-business, particularly in the class action context. Also of significance was the Court's equating data collection practices with First Amendment rights.
SUPREME COURT DECISIONS OF INTEREST TO ADVERTISERS AND MARKETERS - OCTOBER 2010 TERM
The recent Supreme Court term resulted in a number of very important decisions that will impact companies engaging in advertising and marketing in the United States. Some decisions, such as Walmart and Concepcion were pro-business particularly in the class action context. Also of significance was the Court's equating data collection practices with First Amendment rights.
AMAZON'S KINDLE FIRE TABLET RAISES POTENTIAL PRIVACY CONCERNS
Amazon.com recently announced its long-expected new Kindle Fire Tablet, running on Google's Android operating system. Almost lost amidst the announcement was the Kindle Fire's unusual Web browser, called Amazon Silk. According to Amazon, Silk was "cloud-accelerated," offloading some of the processing of requested Web pages from the tablet to Amazon's own cloud processing servers to speed up downloads. However, this cloud-based approach, while technically innovative, raises significant potential privacy questions, since it effectively means that Amazon's servers are intercepting every Web page requested by users.
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We strive to stay on top of all relevant legal issues to provide our clients with the most effective and efficient legal advice. If you find any legal marketing news of interest, send it to us!
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Andrew B. Lustigman
Sheldon S. Lustigman
Scott A. Shaffer
Adam Z. Solomon
Jonathan I. Ezor
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