Help Reed Smith Get to SXSW 2015

Stacy Marcus and Barbara Bispham recently submitted a proposal to present a panel session entitled “Make it Rain: Prep for Acquisitions, IPOs & More” at South by Southwest (SXSW) 2015, the leading annual film, interactive, and music festival/conference held in Austin, TX.

Part of getting selected is determined by a public voting component, which accounts for 30 percent of the decision-making process.

We are asking for your votes to help ensure that Stacy and Barbara’s panel is chosen, and we have outlined below three easy steps to submit your vote (which should take approximately 2-3 minutes of your time).  Voting closes on Friday, September 5.

How to vote for their panel:

1.) Visit the SXSW site and create a login.
2.) Confirm your account and sign in.
3.) Search for “Make it Rain: Prep for Acquisitions, IPOs & More” and cast your vote.

Announcements regarding the selected panels will be made after October 20, and with your assistance we hope that theirs will be one of them.  Thank you in advance for your support!

Reed Smith Teleseminar - Get to Know Wisconsin Attorney General J.B. Van Hollen

Join our partner, Divonne Smoyer, on Tuesday, September 9, 2014, for a teleseminar featuring Wisconsin Attorney General J.B. Van Hollen.

Van Hollen, Wisconsin's Attorney General since 2007, will discuss how AGs generally approach legal and policy issues and work either alone or together to resolve complex issues.

Register now for this teleseminar.

Tuesday, September 9, 2014
12:00 p.m. ET / 11:00 a.m. CT / 9:00 a.m. PT (Teleseminar length is 60 minutes)

Dial-in information:
Details will be provided via e-mail to all registered attendees prior to the teleseminar.

But I Thought They Really Liked Me! Facebook's Prohibition on Like-Gating Apps

This post was written by Keri S. Bruce and Matthew Y. Kane.

A recent Facebook Platform Policy change may affect the way many promotions are run on Facebook.  The change, effective November 5, 2014, prohibits Facebook Page owners from requiring a user to “like” their Page in order to access content, such as entry into a contest or sweepstakes, via a Facebook application (“App”).  Advertisers often use this technique, known as “like-gating,” as a way to increase the amount of likes their Pages receive. 

Facebook believes that a prohibition on like-gating will benefit both advertisers and consumers.  In announcing the change, Facebook stated in a blog post: “[T]o ensure quality connections and help businesses reach the people who matter to them, we want people to like Pages because they want to connect and hear from the business, not because of artificial incentives.” 

A like can be valuable to an advertiser, regardless of whether it is generated organically or artificially. When a user likes a Facebook Page, the like may appear on the user’s Timeline, stories from the Page may show up on the user’s news feeds, and users may also appear in advertisements for that Page.

While the implications of the change are yet to be seen, here are a few things that advertisers should keep in mind:

  • The new prohibition is part of the Facebook Platform Policy that applies to Apps on Facebook Pages.  Facebook’s Page Terms require that all Page Apps comply with the Platform Policy.  Although Facebook has not yet updated its Page Terms to prohibit like-gating for on-Page promotions that don’t use Apps, advertisers – given Facebook’s rationale for the Platform Policy change, and given the FTC’s recent guidance on social media promotions – should not be surprised to see Facebook amend its Page Terms even further to address incentivizing likes for on-Page promotions and other benefits, such as discounts or free items. 
  • For now, though, if an advertiser plans to run a Facebook promotion via an App that will extend past November 4, 2014, the advertiser should no longer require a Facebook user to like its Page in order for the user to participate. 
  • The prohibition on like-gating applies to all content provided by an advertiser via an App – not just an entry into a contest or sweepstakes.  Thus, if an advertiser is offering songs, brochures, or any other custom content where access is through an App, it should not require a user to like its Page in order to download or access this content.
  • Although incentivizing Page-likes will be prohibited, advertisers are still permitted to incentivize users in other ways, such as to log in to the advertiser’s App, enter a promotion through an App, and check-in to a location via an App. 

Facebook's Platform Policy change is just another reminder that the terms and conditions of using social media platforms such as Facebook, Twitter, Instagram, Pinterest and the like are constantly evolving.  In order to ‎take advantage of the opportunities presented in social media, advertisers, agencies and mobile app developers must stay abreast‎ of these changes and ensure their activities remain in compliance with the applicable platform's terms and conditions of use.

New SIFMA Guidance May Ease Accredited Investor Verification Worries, Assist Reg D Offerings Using General Solicitation

This post was written by Robert K. Morris.

One of the goals of the federal JOBS Act, enacted in 2012, was to expand the ability of companies (both operating companies and funds) to make non-registered securities offerings using general solicitation and advertising.  Offers made through general solicitation and advertising have been prohibited under the SEC’s private offering safe harbor ever since Regulation D was adopted in 1982, and many have complained that the restriction was pointless where all purchasers were accredited investors as defined in Regulation D.  However, the SEC believed a change required legislation.

The JOBS Act made that change.  However, the Act, and the new rule adopted in 2013, imposed a new requirement – the issuer of the securities must take reasonable steps to “verify” that all the purchasers in a general solicitation offering are accredited investors. Failure to take reasonable verification steps would violate the rule even if it turned out that all purchasers actually were accredited.

For an individual to be an accredited investor, he or she must have net worth excluding principal residence of at least $1 million, or net income of $200,000 ($300,000 with spouse) in each of the two most recent years and a reasonable expectation of achieving the same in the current year.  Under the new rule, reasonable steps by the issuer to verify these criteria would include reviewing tax returns, bank statements, brokerage statements and consumer reports from recognized agencies.  To date, these steps have not seen significant use, as issuers have found them burdensome, and investors have asserted privacy concerns.  Critically, the SEC has made it clear that an issuer may not simply rely on the investor’s own representation that he or she is an accredited investor.

Continue Reading...

Wearable is the New Black (and Latest Privacy Risk)

There has been a proliferation of wearable devices hitting the market, such as Google Glass, Fitbit and others, all with the ability to collect data and track behavior.  These "wearables" have begun to receive some scrutiny by senators and regulators, including New York's senior senator Chuck Schumer, who recently urged the FTC to push fitness device and app companies to provide users with a clear opportunity to "opt-out", since personal information may be potentially sold to third parties without the users' knowledge or consent.  For additional information on this story, please read the latest post on our firm's Global Regulatory Enforcement Law Blog.

Just Released: This Quarter's GALA Gazette

Read the latest issue of the Global Advertising Lawyers Alliance (GALA) quarterly e-newsletter, the GALA Gazette, containing advertising law news and updates from around the world.
Reed Smith is founder and member of GALA, a network of local counsel who specialize in advertising, promotions and media law, in more than 50 countries.

Snapchat Settlement with MD AG Marks Latest State-Level Privacy Enforcement Action

This post was written by Michael Schaeppi and Frederick Lah.

Last month, Snapchat reached a settlement with the Maryland Attorney General over alleged deceptive trade practices regarding Snapchat’s marketing claims that user “snaps” disappear forever.  In addition, the Attorney General alleged that Snapchat had violated the Children’s Online Privacy Protection Act (COPPA).  This settlement follows a similar settlement between Snapchat and the Federal Trade Commission, which we reported on previously.

After announcing the settlement, Attorney General Douglas F. Gansler said that “despite Snapchat’s marketing claims to the contrary, no company can fully prevent content you send to someone else from being copied, shared or posted online[.]” Attorney General Gansler went on to state that companies operating online or through mobile devices have a responsibility to safeguard user privacy and to be transparent about the information they collect. According to Attorney General Gansler, Snapchat misrepresented to consumers that pictures and video messages sent using the Snapchat mobile application are only viewable temporarily, when in fact they can be captured by the recipient for future viewing or circulation. As a result of these representations, some Snapchat mobile application users may have sent pictures or video messages they would not have sent were these risks adequately disclosed.  The Attorney General further alleged that Snapchat secretly collected information from users’ contact lists without their consent, and that Snapchat failed to comply with COPPA by knowingly collecting the personal information of children under the age of 13 without verifiable parental consent.

While Snapchat did not accept liability in the settlement (and made that very clear on its own website), it did agree to implement measures to address the Attorney General’s allegations, including, by agreeing to disclose to users that the recipients of “snaps” have the ability to copy photos and video messages they receive. Snapchat further agreed to comply with COPPA for a period of 10 years, and said that it would take specific steps to ensure children under 13 were not creating accounts.  Snapchat also agreed to pay $100,000 to the State of Maryland as part of the settlement.

This action by the Maryland Attorney General is the latest in a growing number of state-level privacy enforcement actions.  When we reported on the privacy enforcement actions brought in New Jersey and California, we questioned whether other states would follow suit in their focus on consumer privacy.  It looks like we have our answer.    

ANA Webinar - Managing the Risk of Social Media

While social media has matured over the past decade as a marketing platform, it is still very much a legal work in progress.  Join Reed Smith partner and ANA General Counsel, Douglas J. Wood, on Tuesday, July 29 at 1:00 p.m. EDT for a complimentary webinar entitled Social Media’s Murky Legal Waters to hear what legal risks lie ahead for marketers operating in the social media space, and how they can work to build powerful creative while keeping those risks within reason.

Visit the ANA website to register for this webinar.

Get Your Docs in a Row: A Practice Tip for Promotions

We wanted to share the following best practice tip with our readers who conduct sweepstakes, contests, and other prize-based promotions:  When conducting such promotions, we always recommend that our clients have the potential winners execute and return a set of verification documents before confirming them as winners.  Generally, this involves having the winner sign an affidavit and release form confirming their eligibility, compliance with the official rules of the promotion, and releasing the sponsor (and their agencies and parents, subsidiaries, and affiliates) from any liability that may arise in connection with the promotion.  In addition, if you need to conduct a background check on the potential winners before issuing a prize to them, you should have them complete a form authorizing you (and/or your agencies) to do so prior to obtaining any consumer reports from a consumer reporting agency.  Under the federal Fair Credit Reporting Act (FCRA), consumer reporting agencies may only issue consumer reports with a consumer’s consent, or for one of the other delineated permissible purposes.  Obtaining a properly executed authorization will not only allow you to conduct your background check more seamlessly, but it will also help to reduce the risk in playing part to a potential FCRA violation, which can result in high statutory penalties.

Canada Requires Closed Captioning for All TV Commercials

Effective September 1, 2014, all advertising commercials, sponsorship messages and promotions broadcast on television stations in Canada must be aired with closed captions for the hearing impaired.  This requirement may necessitate that you add closed captioning to commercials previously produced and aired that will be broadcast on or after September 1st.

For a complete explanation of the requirements, please download the Institute of Communications Agencies (ICA) member bulletin.

JPC and AFM Reach Agreement on New CBA

On June 5, 2014, the Joint Policy Committee on Broadcast Talent Union Relations (JPC) and the American Federation of Musicians (AFM) reached agreement on a new three-year collective bargaining agreement.  Attached is the summary and MOA.  The agreement is subject to ratification by AFM members.

Massachusetts Enhances Protections for Celebrities (and Others) After Death

This post was written by Rebecca Maller and Keri S. Bruce.

On June 13, 2014, the Massachusetts Senate passed S. 2022, beginning the process of joining 13 other states that prohibit companies from using celebrities’ identities after they die. The bill amends Section 3A of Chapter 214 of Massachusetts General Laws, and creates a post-mortem “Right of Publicity” interest. The bill prohibits commercial use of the name, image, and likeness of a “personality” for 70 years after his or her death without written permission from either the personality or “persons who collectively own more than 50 per cent of the aspect of the personality’s right of publicity that was commercially used . . . .” “Personality” is defined as “an individual whose identity has commercial value.” To garner the bill’s protection, however, the personality must be domiciled in Massachusetts as of the date of his or her death.

Championed by Massachusetts resident Bill Cosby and sponsored by Democratic State Senator Stanley Rosenberg of Amherst, the bill continues the trend of states providing additional publicity rights after death, as discussed in our earlier post regarding California’s protection of the rights of deceased soldiers who became famous because of their deaths. The bill—designed to control commercial exploitation of the benefits of the personality’s name and image following death—is merely an extension of the protection afforded a personality during his or her lifetime. Of the states providing this safeguard, Massachusetts’ bill ranks among the strongest protection by providing a 70-year period within which the statute applies, joining California (70 years), Indiana (100 years), and Tennessee (perpetual).

Why This Matters: If the Massachusetts House passes its version of the bill, Massachusetts will be one of only 14 states that provide post-mortem Right of Publicity protection. Other states in addition to those mentioned above include Arizona, Florida, Kentucky, Nevada, Ohio, Oklahoma, Pennsylvania, Texas, Virginia and Washington.

Supreme Court Rules that Aereo Violated Copyrights

Earlier this week, the U.S. Supreme Court handed its decision in ABC v. Aereo, ruling that Aereo's service of providing its subscribers with streaming broadcasts obtained through the company's miniature antennas is illegal.  The court ruled that over-the-air broadcasts count as a public performance and that Aereo essentially is no different from cable companies, which are subject to limitations on freely transmitting programming under the Copyright Act.  For additional information on this story, please read the recent Reed Smith Client Alert written by Brad R. Newberg.

Copyright Owners Go the Distance with 'Raging Bull' Victory

This post was written by Michael E. Strauss and Stacy K. Marcus.

In a recent Forbes article, Brad Newberg discussed in depth the Supreme Court’s recent decision in Petrella v. Metro-Goldwyn-Mayer, Inc., and ways for businesses to adapt in light of the shocking decision.  With its decision in Petrella, the U.S. Supreme Court made clear that in the world of copyright infringement litigation, time is not always of the essence.  The question presented was simple: “[W]hether the equitable defense of laches (unreasonable, prejudicial delay in commencing suit) may bar relief on a copyright infringement claim brought within § 507(b) [of the Copyright Act]’s three-year statute of limitations period.”  And the Court’s answer was clear: “[C]ourts are not at liberty to jettison Congress’ judgment on the timeliness of suit.  Laches, we hold, cannot be invoked to preclude adjudication of a claim for damages brought within the three-year window.”  Yet, the implications of this case going forward are not quite as simple or clear.

Frank Petrella wrote a screenplay depicting the career of famed boxer Jake LaMotta.  In 1963, the screenplay became a copyrighted work registered with the United States Copyright Office.  Metro-Goldwyn-Mayer (“MGM”) acquired the rights to use Petrella’s screenplay in 1976.  Eventually, through famed director Martin Scorsese and Academy Award winning actor Robert De Niro, MGM transformed Petrella’s screenplay into the critically acclaimed 1980 motion picture “Raging Bull.”  When Petrella died in 1981, his renewal rights reverted to his daughter, Paula Petrella.  Paula renewed her father’s copyright in 1991.  Though Paula informed MGM of the renewed copyright, MGM continued to market and sell “Raging Bull” without permission.  Paula brought an action against MGM in 2009, 18 years after the renewal.  She alleged that MGM’s “Raging Bull”—a derivative of her father’s 1963 screenplay—infringed upon her renewed copyright.

Relying on the equitable doctrine of laches, MGM successfully dismissed Paula’s action as untimely.  On appeal to the Ninth Circuit, the trial court’s order was affirmed.  However, when Paula’s case reached the Supreme Court, an alternate ending was written.  Writing for the 6–3 majority, Justice Ginsburg noted that the Copyright Act (the “Act”) does not require copyright owners to “sue soon, or forever hold [their] peace.”  Instead, the Act expressly contemplates the limitations period for copyright infringement actions, and courts need not render equitable decisions on the timeliness of such suits.  Accordingly, the laches defense—once a permissible ground for dismissing an action where Congress failed to enact a statute of limitations—is not viable under the Copyright Act because Congress has mandated a three-year limitations period.  Under the Act, each infringing act equates to a new wrong, thus triggering a new limitations period.  This means, no matter how long a plaintiff knew of the infringing conduct, he or she is not time-barred from litigating claims that fall within the three-year window.  Therefore, despite waiting 18 years, Paula Petrella will have her day in court to argue that she is entitled to damages resulting from any MGM infringing conduct that occurred from 2006 through 2009.

FDA Writes Prescription for Social Media for Drug and Device Companies

The FDA issued two draft guidance documents on social media last week. The first guidance pertains to product claims and risk information on platforms such as Twitter and Google’s sponsored links, while the second guidance covers correcting misinformation that originates from independent third parties on the Internet and social media sites.  The FDA has opened up a comment period and will be accepting comments until September 16, 2014.

For additional information and a full analysis on both guidances, please read the latest post on our firm's Life Sciences Legal Update blog.