Making a Good Thing Better? NAD’s Plans to Modify Its Procedures

The National Advertising Division (NAD) has for more than 40 years been the premier avenue for self-regulation in the advertising industry. Born in the ’70s at a time when there was pressure from government and consumer advocates to regulate advertising, the industry stepped up and promised to regulate itself. Under the auspices of the Council of Better Business Bureaus, the industry associations formed the NAD.

At the annual NAD Law Conference held in New York September 28-29, the NAD announced that some procedural changes would be made in response to an ABA assessment of NAD process.

Here are the highlights of the NAD’s proposed new procedures:

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Copyright Protection Goes ‘To the Batmobile!’ says the Ninth Circuit

While the Caped Crusader drives around in his Batmobile protecting Gotham from its fringe, copyright law protects the Batmobile from infringers—this, according to the Ninth Circuit in DC Comics v. Towle. The Batmobile is more than just Batman’s ride; it is its own comic-book character worthy of copyright protection. In reaching this conclusion, the Ninth Circuit articulated a “three-part test for determining whether a character in a comic book, television program, or motion picture is entitled to copyright protection.” Read below for an analysis of this test in action (POW!).

Here are the facts: DC Comics, the plaintiff, claimed to own a copyright in the Batman comic-book series, which included the Batmobile. It entered into two licensing agreements that allowed for the creation of the 1966 Batman television show and the 1989 motion picture Batman (the one with Michael Keaton). Versions—importantly, different versions—of the Batmobile appeared in both the TV show and the movie. Both versions, however, maintained a “bat-like physical appearance” and were “equipped with futuristic technology and crime-fighting weaponry.”

As part of his business at Gotham Garage, the defendant, Mark Towle, created replicas of the Batmobile as it appeared in the TV show and movie. Towle admitted that he designed his vehicles to replicate the Batmobile. Indeed, he advertised the Batmobile look-a-likes for sale via his website:

DC Comics sued. After the District Court granted summary judgment in favor of DC Comics’ copyright infringement claim, and a final stipulation was entered, Towle appealed to the Ninth Circuit.

The Ninth Circuit’s analysis (worth reading in its entirety because of the humorous Batman references) largely focused on the issue of whether the Batmobile is copyrightable. It began with a discussion of precedents supporting the proposition that characters, including comic book characters, are afforded copyright protection, despite their omission from the Copyright Act. These precedents, it said, gave rise to a three-part test:

  1. The character must generally have physical as well as conceptual qualities;
  2. The character must be sufficiently delineated to be recognizable as the same character where it appears; and
  3. The character must be especially distinctive and contain some unique elements of expression.

In short, under this framework, the Ninth Circuit concluded that the Batmobile was a character deserving of copyright protection. First, the court found that the Batmobile—having appeared graphically in comic books and in three-dimension on TV and motion pictures—had physical and conceptual qualities (as opposed to being a mere literary character). Second, the court found that the Batmobile’s core features—bat-like appearance, high-tech weaponry and crime-fighting purpose—were recognizable traits traceable through DC Comics’ original comic books through the ’66 TV show and the ’89 movie. This portion of the analysis was derived from precedent considering the copyrights of characters like James Bond and Godzilla. Third, and finally, the court said the Batmobile is unique; it is more than just a stock character.

Holding that the Batmobile was copyright-protected, the court turned to the issue of infringement. Towle’s principal argument was that DC Comics lacked standing to sue because, if he had indeed infringed, such infringement related to the TV show and movie, not DC Comics’ comic books. The court was unpersuaded. Instead, DC Comics, as the original copyright owner of the Batmobile, owned exclusive rights in all work underlying any licensed derivative work (the TV show and movie). It necessarily followed then, as the Ninth Circuit had held in a 1994 case, that an original copyright owner has standing to sue for any infringement of work underlying authorized derivative work.

In light of this conclusion, the court ultimately determined that Towle’s replicas unequivocally infringed upon DC Comics’ copyright in the Batmobile. Now, Batman can continue fighting crime, knowing that no one can steal his ride (at least figuratively, without paying . . . ).

Just a Fantasy? Toeing the Line between Fantasy Sports and Illegal Online Sports Betting

It’s fall. And in the professional sports world, that means the National Football League  is back and Major League Baseball is gearing up for its playoffs.

But there are other leagues garnering increased attention as the crisp air rolls in. These are the leagues where no one faces career-ending hits or 100 mile-per-hour fastballs, yet the leagues’ players have the potential to earn professional athlete paychecks. Yes, we’re talking about fantasy sports. And yes, the potential for a big payout is real.

As of late, it is fair to say the fantasy sports industry is both hot and in the hot seat. Hot because an estimated 57 million people in the United States and Canada play, with several million paying entry fees in hopes of winning cash prizes. In the hot seat because some think it is time for regulators to bring fantasy sports leagues—where cash prizes are the objective—back to reality.

Specifically, critics of fantasy sports leagues are concerned that the game has devolved into one of chance, not knowledge and skill; a criticism that strikes at the very core of the law governing online fantasy sports. If these critics are in fact correct, under the Unlawful Internet Gambling Enforcement Act (“UIGEA”) fantasy sports players are simply ‘betting’ or ‘wagering’ on the outcome of a sporting event, which is unlawful.

The renewed scrutiny is not without base. Traditional fantasy sports leagues, for instance one based on the NFL, require season-long time commitments, statistical analysis, and knowledge of positions, players, coaches, and teams. Winning takes skill, which is why the UIGEA exempted “participation in any fantasy or simulation sports game” from falling under the umbrella of unlawful Internet betting or wagering.

Now, with the advent of Daily Fantasy Sports (“DFS”) leagues—short term, easy entry and play games—some say no such knowledge and skill are necessary to win cash prizes. Indeed, in a letter dated September 14, 2015, United States Representative Frank Pallone (D-NJ) asked the House Energy and Commerce Committee to ”review the legal status of fantasy sports and sports betting.” Fred Upton (R-Mich.), the chairman of the committee, says a hearing is likely.

Fantasy sports leagues are facing similar scrutiny from state legislators and regulators.  While California proposed a bill that included new regulations for fantasy sites, such as licensure and fee requirements, Massachusetts Attorney General, Maura Healey, announced her office will investigate whether DraftKings, a DFS operator, is running a business in violation of state gambling laws.

Can fantasy sports hold the line against its critics or has the luck run out? Check back with AdLaw By Request for an update on this important topic.

Today: ANA Webinar – The FTC’s “Start With Security” Initiative: Where To Start?

Join John Feldman and Lesley Fair of the FTC Bureau of Consumer Protection for a webinar on the FTC’s “Start With Security” initiative, which is aimed at providing businesses with new guidance to better protect consumer information and maintain trust.  The initiative will include conferences around the country, with two scheduled in the coming months.

Today’s webinar will cover why the FTC is taking the show on the road, what issues might arise (privacy by design principles, app security, the Internet of Things, and more), and the overall trends in data security enforcement.

Visit the ANA website to register.

Date and Time:
Tuesday, September 22, 2015
1:00 p.m. EDT

Judge Orders Yelp to Identify Anonymous Negative Commenter

This post was written by Kimberly R. Chow and John P. Feldman.

On September 15, a judge in Boston ruled that Yelp must reveal the identity of an anonymous commenter who wrote a negative review of a jeweler on the online review site.

The order to non-party Yelp in the attempted defamation suit of the jeweler against the commenter is the latest in a series of attempts by libel plaintiffs and the government to force content hosts to unmask anonymous commenters.  Content hosts have argued that the First Amendment protects the right to speak anonymously, and that identifying online commenters threatens to chill freedom of expression on the Internet.  Boston Municipal Judge Robert J. McKenna Jr.’s ruling that Yelp must reveal a commenter’s identity stands in contrast to a recent Virginia Supreme Court case holding that a subpoena to Yelp for reviewers’ identities could not be enforced.

After the commenter, identified in the suit as Linda G. Doe, left a negative review of Pageo, a jewelry store in Boston, on Yelp, claiming that the owner had maliciously paid her a price much less than the worth of the jewelry she sold him, the owner, George Pelz, sued Doe in Boston Municipal Court and issued a subpoena to Yelp to discover Doe’s true identity.  Pelz argued that he could tell that Doe was not an actual customer of his store because she claimed to have been a frequent customer and he was familiar with his longtime clients.

Yelp argued that, under the First Amendment, protection of anonymous commentary is vital to encouraging contributions to the public marketplace of ideas.  Additionally, Yelp challenged the court’s jurisdiction over the case, maintaining that California was the proper forum for adjudication.  In California, at least one court has found that the right to comment anonymously is protected under the state constitution.

In April, the Virginia Supreme Court ruled in the case Yelp v. Hadeed Carpet Cleaning, Inc. that, while a local court could exercise personal jurisdiction over out-of-state, nonresident parties to Virginia actions, it could not force those parties to produce documents located out of state.  Thus, since Yelp was headquartered in California, the subpoena for the identities of Yelp commenters must be issued there and not in Virginia, where the plaintiff’s business was based.  The court did not reach the First Amendment implications of the subpoena.

This latest holding that Yelp must release the identities of anonymous commenters heralds possible difficulties for content hosts in the future if courts are beginning to discount First Amendment and jurisdictional reasons to deny subpoena enforcement.  However, other courts around the country have quashed these subpoenas, and Yelp and other content hosts are fighting hard for that trend to continue.

Stay in Tune with SAG-AFTRA – Town Hall Meeting in Columbus

Join us on Friday, October 9, for the Joint Policy Committee’s Columbus Town Hall Meeting, hosted by Nationwide.  Our discussion will include:

  • Resolution of SAG-AFTRA CBA IssuesScreen Shot 2015-09-08 at 9.40.13 AM
  • Overview of the Audit Process
  • Recent SAG-AFTRA Arbitrations
  • Discussion of the Experimental Waiver for “Made Fors”
  • Prep for 2016 Negotiations

Register Now! Space is limited.
RSVP to Kim Stevens at

Date and Time:
8:15 am – 9:00 am  |  Breakfast & Networking
9:00 am – 10:30 am  |  Stacy Marcus, Partner at Reed Smith LLP and JPC Legal Counsel & Kim Stevens, JPC Director of Industry Relations – Columbus Town Hall Meeting
10:30 am – 11:00 am  |  Questions and Answers

One Nationwide Plaza
Columbus, OH 43215
Heritage Room

Stay in Tune with SAG-AFTRA – Town Hall Meeting in Los Angeles

Join us on Wednesday, August 26, for the Joint Policy Committee’s Los Angeles Town Hall Meeting, hosted by The TEAM Companies.  Our discussion will include:

  • Resolution of SAG-AFTRA CBA IssuesJPC LA TOWN HALL
  • Overview of the Audit Process
  • Recent SAG-AFTRA Arbitrations
  • Discussion of the Experimental Waiver for “Made Fors”
  • Prep for 2016 Negotiations

Register Now!  Space is limited.
RSVP to Leon Vaught at The TEAM Companies

Date and Time:
9:30am – 10:00am  |  Breakfast & Networking
10:00am – 11:30am  |  Stacy Marcus & Kimberly Stevens, JPC – Los Angeles Town Hall Meeting
11:30am – Noon  |  Questions & Answers

DoubleTree by Hilton Hotel
Pacifica A room
6161 West Centinela Avenue
Culver City, CA 90230
Parking at hotel will be validated

Today’s Hot Topic: Sponsorship Identification in Advertising

From time to time I like to remind clients of specific network guidelines to keep in mind when developing advertising.  One such guideline involves sponsorship identification.

Per the network guidelines, advertising must contain proper sponsorship identification pursuant to the Communications Act and rules and policies of the Federal Communications Commission (47 C.F.R. § 73.1212).

In the case of advertising for commercial products or services, an announcement stating the sponsor’s corporate or trade name, or the name of the sponsor’s product, may be sufficient when it is clear that the mention of the name of the product constitutes sponsorship identification.  Only one such announcement need be included in the commercial.

In the case of a political advertisement, any paid advertising by a trade association or charity, or in the case of a public service announcement for which the air time is purchased, the sponsorship identification announcement must contain the term “paid for” or “sponsored by,” and must fully and fairly disclose the true identity of the person, committee, or other entity furnishing the consideration.

Sponsorship identification may be made in the audio or video of the commercial.  Any portion in the video should be clearly legible to an average viewer and remain on screen long enough to be read in full by an average viewer.

A website URL generally does not constitute adequate sponsor identification, unless it is the official name of the sponsoring entity.

The networks are careful not to accept advertising that does not contain proper sponsorship identification.  So, if you have plans to create advertising intended to air on the broadcast networks, make sure the sponsorship identification complies with the network guidelines.  And remember, when in doubt, ask questions.  The network editors are there to answer any questions you may have.

Marilyn Colaninno is Director of Rights and Clearances for Reed Smith and is responsible for clearing commercials for the firm’s many clients in the advertising industry.  If you have specific questions, please contact Marilyn directly at 212 549 0347 or at