Tag: Business

Advertising, Affiliate Marketing, Branding, Compliance, Contracts, Creative Content, FTC, Internet, Law, Legislation, Litigation, Marketing, Media, Networks, Regulation, Regulatory Compliance, Technology, Uncategorized

Success = Scrutiny: recent trends in FTC actions against affiliate/online marketers

Online marketing continues to evolve and affiliate marketing can be a great method of building brand awareness. Online marketers need to stay ahead of legal and regulatory compliance trends. This article looks at recent Federal Trade Commission (“FTC,” “Commission,” or “agency”) activity that impacts online marketing.

Given the lack of a comprehensive federal regulatory scheme, and the increasing awareness of deceptive marketing practices, it is not surprising that the FTC has ramped up enforcement efforts against entities not covered by existing, industry-specific federal regulations over the last decade. Notably, one company has defended itself against the FTC by challenging the FTC’s authority to pursue such broad enforcement.

Jurisdiction

The widely-watched case of FTC v. Wyndham Worldwide Corp is not just about Cybersecurity.

The Federal Trade Commission (FTC) has just won the first major round of its fight with Wyndham Hotels over data security. However, the importance of the case has more to do with the FTC’s jurisdiction, challenged when Wyndham moved to dismiss the FTC’s case. Affirming the FTC’s broad jurisdiction, the federal judge overseeing the controversy noted that the case highlights “a variety of thorny legal issues that Congress and the courts will continue to grapple with for the foreseeable future.”

Affiliate Marketing: A Roadmap for Compliance: Text Message Marketing

The Commission is cracking down on affiliate marketers that allegedly bombard consumers with unwanted text messages in an effort to steer these consumers towards deceptive websites falsely promising “free” gift cards.

For example, in eight different complaints filed in courts around the United States, the FTC charged 29 defendants with collectively sending more than 180 million unwanted text messages to consumers, many of whom had to pay for receiving the texts. The messages promised consumers free gifts or prizes, including gift cards worth $1,000 to major retailers such as Best Buy, Walmart and Target.

By now, many in the Affiliate Marketing industry are familiar with the Legacy Learning Systems case. In March, 2011 the FTC settled charges against Legacy — which sells instructional DVDs — that Legacy represented, directly or indirectly, expressly or by implication, reviews of their products were endorsements reflecting the opinions of ordinary consumers or independent reviewers, when many of the favorable endorsements were posted by affiliate marketers who received a commission from Legacy for sales they generated.

Regardless of the form of affiliate marketing – email campaigns or text message campaigns – there are a couple key take-aways here.

First, identify and disclose a material connection between a product user or endorser and any other party involved in promoting the product. A “material connection” is a relationship that affects the credibility of an endorsement and wouldn’t be reasonably expected by consumers. See our article about complying with the endorsement guides here.

Second, set up and maintain a system to monitor and review affiliates’ representations and disclosures to ensure compliance. For example, Legacy looked at its top 50 revenue-generating affiliates at least once a month, visiting their sites to review their representations and disclosures. It has to be done in a way designed not to disclose to the affiliates that they’re being monitored.

Third, understand he requirements for conducting legally-compliant text message marketing. The Telephone Consumer Protection Act (TCPA) makes it unlawful to make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system or an artificial or prerecorded voice … to any telephone number assigned to a . . . cellular telephone service … or any service for which the called party is charged for the call. The prohibition on calls to cell phones applies to text messaging.

Advertising, cloud computing, Compliance, Computing, Content Development, cybersecurity, Data, data privacy, enterprise, Entrepreneurs, Facebook, Internet, Law, Legislation, Marketing, Media, Networks, Platforms, Privacy, Regulation, Regulatory Compliance, Security, Social Media, Technology, Twitter, Uncategorized, YouTube

Is Your Company’s Web Site Privacy Policy Compliant With New California Law?

Privacy Law Update: California “Do Not Track” 

Two California laws went into effect at the beginning of the year that  require additional notifications to consumers.  The California Online Privacy Protection Act (“CalOPPA”) requires that web sites, mobile apps and other online services available to California residents (in reality anyone with a web site that may be accessed by a CA resident) post a privacy policy that gives notice to consumers regarding behavioral or interest-based advertising practices (“OBA”).

Disclosures must explain:
1. If a web site operator allows other parties to use tracking technologies in connection with the site or service to collect certain user data over time and across sites and services; and
2. How it responds to browser “do not track” signals or other mechanisms designed to give consumers choice as to the collection of certain of their data over time and across sites and services

In addition, the “California Shine the Light Act” requires that companies (except non-profits and businesses with less than 20 employees) collecting broadly defined personal information from California consumers on or offline either: (a) give consumers a choice as to the sharing of that information with third parties (including affiliates) for direct marketing purposes; or (b) provide notice of, and maintain, a method by which consumers can annually obtain information on the categories of information disclosed the names and addresses of the recipients of that data, and a description of the recipients’ business.

If an e-commerce service offers tangible goods or services, or vouchers for them, to California consumers, it must give certain notices to consumers, including how they can file a complaint with the CA Department of Consumer Affairs.

Are you  concerned about how to disclose how your service responds to “Do Not Track” signals or similar tools and settings, and whether third parties are permitted to collect personally identifiable information about consumer online activities over time and across different websites when a consumer uses that online service? We may be able to help. We can review your policies, your information gathering and sharing practices, and advise on whether there is room for improvement.

Please contact us for a no-fee consultation.

Compliance, Contracts, Law, Litigation, Patent, Strategy, Technology, Uncategorized

Drafting Contract Termination Clauses – Termination for Breach by Non-Breaching Party

One of the key issues that must be examined when negotiating or drafting any contract is how the parties may get out of, or “terminate,” that contract. While many attorneys will rest on standard “termination for breach with notice and cure” language, the recent case of Powertech Tech. v. Tessera, Inc. demonstrates how artful drafting can put limitations on a party’s right to terminate. The Opinion in U.S. District Court for the Northern District of California case No. C 11-6121 can be found here.

Powertech and Tessera were parties to a patent license agreement, although the court’s reasoning does not seem limited to only those types of agreements. The license agreement allowed Powertech to use Tessera’s patents in exchange for payment of license fees.

The contract contained the following clause regarding termination for breach:

“Termination for Breach. Either party may terminate this Agreement due to the other party’s breach of this Agreement, such as failure to perform its duties, obligations, or responsibilities herein (including, without limitation, failure to pay royalties and provide reports as set forth herein). The parties agree that such breach will cause substantial damages to the party not in breach. Therefore, the parties agree to work together to mitigate the effect of any such breach; however, the non-breaching party may terminate this Agreement if such breach is not cured or sufficiently mitigated (to the non-breaching party’s satisfaction) within sixty (60) days of notice thereof.”

The court held that Powertech was not permitted to terminate a license agreement with Tessera for Tessera’s breach because Powertech itself was in breach of the agreement by its failure to pay royalties to Tessera.

Acknowledging Powertech’s argument that Tessera was itself in breach, that in and of itself did not give Powertech the right to terminate the contract. Only a “non-breaching” party may terminate the agreement. Said the court “[a]lthough the first sentence of the termination clause is broad – ‘Either party may terminate this Agreement due to the other party’s breach’ — the language of the clause as a whole makes clear that only a non-breaching party may terminate. Reading the clause as a whole, the court concluded “[t]he termination clause refers to a “breaching party” and a “non-breaching party” in every sentence after the first… [therefore]…the clause requires the party seeking to terminate for the other party’s purported breach to be substantially in compliance with its own obligations first.

The Powertech agreement’s termination clause is useful because it put conditions on a party’s ability to terminate the agreement even when the other party was in breach.

Advertising, Compliance, Content Development, Creative Content, Data, data privacy, Internet, Law, Legislation, Marketing, Media, Mobile, Monetizing Content, Regulation, Regulatory Compliance, Social Media, Strategy, Technology

Amended California Do Not Track Disclosure Law Requires Websites Disclose Do Not Track Signal Response

At the end of August, the California passed an amendment to the California Online Privacy Protection Act that will require commercial websites and services that collect personal data to disclose how they respond to Do Not Track signals from Web browsers.

AB 370, as introduced by California Assemblyman Al Muratsuchi, requires a business that discloses a customer’s personal information to a third party for direct marketing purposes to provide the customer, within 30 days after the customer’s request, as specified, in writing or by e-mail the names and addresses of the recipients of that information and specified details regarding the information disclosed.

This bill, available here, would declare the intent of the Legislature to enact legislation that would regulate online behavioral tracking of consumers.
Advertising, Branding, Certification Marks, Content Development, Copyright, Creative Content, Design, Entertainment, Fashion, Fashion Design, Fashion Law, Infringement, Law, Litigation, Marketing, Media, Patent, Photography, Strategy, Trademarks

Owning Design: Protecting Original Design in an Age of Knock-Offs

A presentation on what goes into creating original designs and how these differ from copycats.

WHERE: Decoration & Design Building, J. Robert Scott Showroom, Suite 220

WHEN: Wednesday, October 2,2013 !2 p.m.

WHAT: From film to fashion, creative industries are taking steps to protect and promote original work. Designers and manufacturers need to know what steps they can take to protect their designs, their businesses, and their profits. The discussion will address issues related to how to protect original design (copyright & design patent) and the manufacturers (trademark, unfair competition).

WHO:

INTERIORS Magazine Editorial Director Michael Wollaeger

J. Robert Scott Founder Sally Sirkin Lewis

Designer Laura Kirar [Web Site]

Intellectual Property lawyer David Adler

Showroom reception to follow.

 

Download the full Fall Decoration & Design Building Market Brochure Here.

Law, Litigation, Patent

Bad Faith Not Required for Attorney Fees in Patent Disputes

Monolithic Power Sys., Inc. v. O2 Micro Int’l Ltd., Fed. Cir., No. 2012-1221, 8/13/13

On August 13, 2013 the Federal Circuit held that litigation misconduct and unprofessional behavior may be sufficient to meet the “exceptional case” standard under 35 U.S.C. §285 for an attorney fees award of $9 million.

Relying on Brooks Furniture Manufacturing, Inc. v. Dutailier International, Inc., 393 F.3d 1378 (Fed. Cir. 2005), the court clarified that “it is only absent litigation misconduct or misconduct in securing the patent that we require the finding of both ‘bad faith’ and ‘objectively baseless’ litigation to warrant sanctions under §285.” In this case, the district court did not err in awarding attorney fees for the entire litigation because Defendant’s “extensive misconduct was enough to comprise an abusive ‘pattern’ or a vexatious ‘strategy’ that was ‘pervasive’ enough to infect the entire litigation.”

Advertising, Branding, Compliance, Content Development, Copyright, Creative Content, Entrepreneurs, Facebook, FTC, Infringement, Internet, Law, Legislation, Marketing, Media, Mobile, Monetizing Content, Networks, Platforms, Small Business, Social Media, Start-ups, Strategy, Technology, Trademarks, Video

Managing Risk: Legal Issues for Merchants & Affiliate Managers

I will be speaking at Affiliate Management Days SF 2013 (April 16-17, 2013) on the topic of “Managing Risk: Legal Issues for Merchants & Affiliate Managers.”

 

Affiliate marketing is one of the most cost-effective techniques for monetizing web site traffic and driving sales. Unfortunately, it has a reputation for high risk. While the industry is unlikely to ever be risk-free, it is possible to manage risk by: (1) understanding how techniques like behavioral and contextual targeting affect consumers, affiliates and merchants, (2) understanding the legal and regulatory environment, (3) understating risks involved with prospective marketing partners, (4) using and maintaining proper contracts that allocate risk and provide appropriate indemnifications, and (5) keeping informed about the changes in technology, marketing practices and the regulatory environment. Attendees will learn how to identify these issues and develop policies and procedures to keep informed about the current technology, marketing strategies and regulatory compliance.

 

Topics covered include:

 

  • Behavioral/Contextual Advertising
  • Regulatory/Industry Compliance : FTC Guides & Enforcement Actions
  • CAN-SPAM compliance
  • IP Law: Rules governing use of others™ Trademarks/Keywords, Right of Publicity/Endorsement Issues.
  • Identifying, protecting against, and disputing accusations of Click-Fraud

 

Geno Prussakov, the Founder & Chair of Affiliate Management Days and the CEO & founder of AM Navigator LLC did a pre-interview with me on Small Business Trends that can be found here.

 

Related articles

 

 

Advertising, Branding, censorship, Cloud, cloud computing, Compliance, Computing, Content Development, Copyright, Creative Content, cybersecurity, Data, data privacy, Design, Entertainment, Entrepreneurs, Evidence, Facebook, Infringement, Internet, Law, Legislation, Litigation, Marketing, Media, Mobile, Privacy, Production, Regulation, Regulatory Compliance, SaaS, Security, Small Business, Social Media, Start-ups, Strategy, Technology, Trade Secrets, Trademarks

Whose Social Media Account Is It Anyway?

As a result of the rapid shift in marketing from unilateral one-to-many communications, to the multilateral, many-to-many or many-to-one conversations enabled by Social Media, employees and employers are struggling to manage accounts that are used for both work and personal purposes.

This new phenomenon has benefits, but it also creates a number of legal challenges. For employees, it may result in greater efficiency, more opportunities for authentic customers engagement and the ability to stay on top of the most current grands and business issues. For employers, it presents opportunity to reap substantial benefits from lower communications and customer support costs. For in-house counsel, it raises a host of legal and practical issues with few easy solutions and significant liability and regulatory risks.

First, there are hardware issues. Smartphones, tablets and other personal electronics often have social networking capabilities built in. in addition, they contain contain both personal and business data. Because these devices are always on and always connected, they are more than just personal property. They have become essential business tools. For both sides of the workplace equation, employers and employees must understand where the privacy lines fall between personal versus work-related information.

Second, there are data issues. Employers must balance their needs to monitor employee usage, employees’ privacy concerns, and the risk of liability for theft or exposure of data if a device is lost or stolen, or from lack of proper safeguards on account usage. For in-house counsel tasked with drafting policies to address these risks, , Prior to implementation of any policy, the legal team needs to educate front line employees and management on reasonable expectations of privacy and security and the harms that the organization seeks to prevent.

Lastly, recent cases such as the Cristou v. Beatport litigation, highlight the struggle to define and control the beginning and end of employee social media accounts, ownership and protection of intellectual property and the post termination risks that arise from the absence of appropriate policies.

As we prepare to start a new year, the time is ripe to establish security and privacy policies governing creation, maintenance and use of employees’ social media accounts for work functions. In-house counsel must lead the charge to educate, inform and train employees about privacy, security and evidence-recovery implications associated with use of social media.

Advertising, Branding, Chicago, Content Development, Copyright, Creative Content, Design, Fashion, Fashion Design, Fashion Law, Infringement, Legislation, Marketing, Media, Trademarks

Fashion Design & The Law: A Rulebook for Independent Designers & The Marketers Behind Them

Charles Colton famously stated “Imitation is the sincerest (form) of flattery.” This has never been more true than in the fast-paced world of fashion where designers constantly draw on prior art for inspiration. As Tim Gunn (mentor to would-be fashion designers on the television show Project Runway) often says, “Make it your own.”

Legislation under consideration in the U.S. may provide limited protection for Haute Couture fashion designs.

Read the full article on FasionsCollective.com.

Entrepreneurs, Infringement, Litigation, Trademarks

Trademarks, Goodwill and M&A

A trademark includes any word, name, symbol, or device, or any combination, used, or intended to be used, in commerce to identify and distinguish the goods of one manufacturer or seller from goods manufactured or sold by others, and to indicate the source of the goods. In short, a trademark is a brand name.

In Basile Baumann Prost Cole & Assocs., Inc. v. BBP & Assocs. LLC, the court examined the elasticity of the goodwill concept, which can extend to include brand, firm, and even that associated with individual members.

“Goodwill is “the total of all the imponderable qualities that attract customers to [a] business.” “There may be business or professional goodwill, or both combined in one enterprise.” Professional, or personal goodwill, “is good will that is based on the personal attributes of the individual such as personal skill, training, or reputation.” In Maryland, the concept of personal goodwill most often arises in cases involving the distribution of property in divorce, or covenants not to compete.”

“If … consumer satisfaction and preference is labeled ‘good will,’ then a trademark is the symbol by which the world can identify that good will.” “A sale of a business and of its good will carries with it the sale of the trademark used in connection with the business, although not expressly mentioned in the instrument of sale.”

Since goodwill is elastic – and divisible – attorneys in mergers, acquisitions and divestitures would do well to consult with a trademark lawyer to identify issues related to trademark (goodwill) ownership and transfer.