Adlaw By Request : Advertising & Marketing Lawyer & Attorney : Reed Smith Law Firm : AdLaw By Request & KidAdLaw

Dear ICANN and Members of the ICANN Board:

In just five months, since the Association of National Advertisers formed the Coalition for Responsible Internet Domain Oversight (“CRIDO”) and organized the global constituencies that have partnered and irrefutably shown that serious problems with ICANN’s proposal to open the DNS to unlimited TLDs remain unresolved despite years of deliberation by ICANN. It is clear that should ICANN proceed without heeding the calls of these constituencies for improvements and reform, the result will be irreparable damage to countless stakeholders, including the global law enforcement community, NGO’s, IGO’s, consumers and brand owners in the commercial sector. Yet, despite the unprecedented groundswell of objections from these constituencies and others, ICANN remains unwavering in its decision to implement, in just a couple days, the resolution made in June 2011, over vociferous opposition from many within the ICANN community including ICANN’s own Government Advisory Committee.

Since CRIDO was formed, the following statements have been made and events have transpired:

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Bloomberg Businessweek: Justice Dept settles with tobacco cos on database

The nation's two biggest tobacco companies, Philip Morris USA Inc. and R.J. Reynolds Tobacco Co., have agreed to pay $6.25 million to support the country's largest online collection of internal tobacco industry documents, the Justice Department announced Wednesday.

Breaking Lawsuit News: Lawsuit Filed Against Frito-Lay over All-Natural Claims

Richmond, California resident Julie Gengo has filed a class action lawsuit in the Central District Court of California against PepsiCo snack unit Frito-Lay over claims made by the company that some of its Tostitos and SunChips products are made with all natural ingredients.

Reuters: RIM now faces legal challenge on "BBM" trademark

Research In Motion, still smarting over having to change the name of its yet-to-come operating system, faces a similar trademark challenge to its popular instant-messaging service BlackBerry Messenger.

FTC.Gov: For Your Information

FTC Sends Biennial Report to Congress on the National Do Not Call Registry

The Federal Trade Commission has approved a biennial report to Congress focusing on the use of the Do Not Call Registry by both consumers and businesses over the past two years, as well as the impact that new technologies have had on the Registry.

 The Gaurdian: Russia bans beer ads as number of child addicts rises

The Russian parliament is poised to introduce new legislation that will ban beer advertising on television between 7am and 10pm because of growing concerns about the number of children who have become addicted to alcohol.

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New French regulations, mirroring similar rules in the United States, place health care and cosmetics companies operating in France with heavy disclosure requirement if they have any pecuniary relationship with researchers, universities, or any other third parties in connection with the marketing of their products. For a full bulletin on this development, please visit our sister blog, the Global Regulatory Enforcement Law Blog.

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U.S. States may soon have the ability to run full scale on line gambling activities based on a 180 degree turn by the United States Department of Justice, the regulator that has historically held that any online gambling is illegal in the United States.

For more information, please visit our Legal Bytes blog or read the issued Client Alert here: U.S. Federal Government Reverses its Stance on Online Gaming.

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Environmental Leader: Style Beats Substance in Sustainable Packaging, Report Says

Products that show they are “sustainable” with simple, emotive pack designs are more likely to win when shoppers make snap decisions on environmental credentials in the grocery store aisle, according to a study by design research firm The Big Picture.

Excite News: China court rejects Apple lawsuit over iPad name

A court in southern China has rejected a claim by Apple Inc. that a Hong Kong-headquartered tech company has violated its iPad trademark, in the latest development in a case that could affect the U.S. company's financial prospects in the country.

FTC To Provide Refunds to Victims of Bogus Scareware Scam

Starting this week, more than 300,000 consumers who were victims of a "scareware" scam will receive refunds resulting from Federal Trade Commission settlements with Innovative Marketing and other parties involved in the scheme.

Environmental Leader: 90% of Manufacturers Think Their Sustainability is Better than Average

Three-quarters of consumers think manufacturers have not taken enough steps to ensure that their production follows environmental procedures, according to a study from UL, and 70 percent feel companies do not conduct thorough testing before launching new products.

LA Times: FCC passes rules against excessively loud TV commercials

The FCC requires broadcasters to ensure that the sound level on commercials is the same as on programming. It will go into effect in December 2012.

Excessively loud television commercials should be a thing of the past, thanks to the Federal Communications Commission.

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Reuters: TV Pitchman Trudeau Loses Appeal of $37.6 Million Fine

Infomercial pitchman Kevin Trudeau lost his bid to throw out a $37.6 million fine for violating a 2004 Federal Trade Commission settlement over his advertising and a federal appeals court said the amount might even be too low.

Radio & Television Business Report: FTC wants to study voluntary alcohol ads restrictions

The FTC’s goal is not to regulate alcohol advertising – at least not on the face of its latest call for commentary. The goal is to study the effectiveness of the alcohol industry’s voluntary guidelines on advertising in keeping the messaging away from the attention of those too young to use their products.

Bloomberg: Cablevision Sues Verizon Over Claims in Advertisements for Internet Speeds

Cablevision Systems Corp. (CVC), the fifth- largest U.S. cable-television provider by subscribers, sued Verizon Communications Inc. for allegedly running an advertising campaign that misrepresents Cablevision’s Internet speeds.

PC World: Yahoo Awarded $610 Million in Spam Case

Yahoo has won a lawsuit against spammers, a legal victory that also includes a default judgment of US$610 million.

ClickZ: Senators Press ICANN on Generic Top-Level Domains

Senators asked the Internet Corporation for Assigned Names and Numbers (ICANN) to slow down the process of releasing new top-level domains today at a hearing of the U.S. Senate Committee on Commerce, Science, and Transportation. But the discussion was moot. ICANN, not under the governance of the Senate, sees it as a done deal.

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eWeek.com:  ISPs Can't Be Forced to Monitor Web Traffic: ECJ

The Court of Justice of the European Union rules that EU law precludes an injunction requiring an ISP to install a system for filtering Web traffic.

The Court of Justice of the European Union ruled that Internet service providers cannot be forced to continually monitor Web traffic in an effort to stem copyright infringement efforts. This case has its origin in a dispute between Scarlet Extended SA, an ISP, and SABAM, a Belgian management company, which is responsible for authorizing the use by third parties of the musical works of authors, composers and editors.

NY Times:  Telemarketer Abuse Statute Confounds Supreme Court

“This is the strangest statute I have ever seen,” Chief Justice John G. Roberts Jr. said near the end of a Supreme Court argument on Monday.

The justices had spent most of the previous hour trying to puzzle out the meaning of a part of 1991 federal law that addresses telemarketing abuses, and they had reached consensus on only one point.

Broadcasting & Cable:  Facebook Settles Privacy Issues With FTC

Will try to do business only with ISPs who can protect the privacy of covered information they get from social media site

Facebook has settled Federal Trade Commission charges that it deceived consumers by not living up to privacy assurances it gave its users. The settlement includes the promise that Facebook will try to do business only with ISPs who can protect the privacy of covered information they get from Facebook.

Broadcasting & Cable:  Rep. Markey Not Satisfied With Amazon's Reponse to Kindle Privacy Concerns

Responds that Amazon did not provide enough details about planned use of customer information

Rep. Ed Markey (D-Mass.) was not satisfied with Amazon's response to his questions about the security of its new Kindle Fire tablet.

Yahoo News:  Obama admin appeals cigarette warning ruling

The Obama administration on Tuesday appealed a U.S. judge's ruling and injunction that blocked tobacco companies from having to display graphic images on cigarette packs and advertising, such as a man exhaling smoke through a hole in his throat.

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No need to fret over Thanksgiving! The Federal Trade Commission has extended until December 23, 2011, the deadline for the public to submit comments on proposed amendments to the Children’s Online Privacy Protection Rule. That's good news because the revisions are significant and include the demise of the flexible "sliding scale" approach that permitted operators to install an "email plus" method of obtaining verifiable parental consent when the collection and use was of a very limited nature. Without any data or evidence of consumer harm, the FTC has determined that the "shelf life of 'email plus' has expired," to use the phrase of Commissioner Julie Brill at a recent Promotion Marketing Association conference. Apparently, making it harder for industry to market to children will force it to "innovate" new ways to comply. Sounds expensive. But, unless industry can come up with some hard evidence of those costs, the process of engaging children in interactive media will be significantly altered. There are other major changes. (The proposed changes will mean the end of user-generated contests for kids if they involve any uploaded photographs of themselves, for example.) Several industry groups, including the PMA, are planning to file comments. This extension will give industry more time to come up with hard numbers. Our sources at the staff level indicate that although there is a definite desire to kill email plus, carving out exceptions might be possible (at least in the Frequently Asked Questions that the FTC has published to help operators comply with the COPPA Rule) if commenters can produce solid reasons why this removal of the flexible approach is going to impose unreasonable costs, compared with the potential protection from admittedly hypothetical harm.

Unlike some of the recent FTC initiatives, which are arguably overreaches, these revisions, albeit aggressive, are probably within the broad Congressional authority granted to the Commission under COPPA. That makes it even more important that commenters come up with numbers about the costs of these revisions and how they might be likely to affect jobs. Even with regard to the Commission's apparent usurpation of oversight from self-regulatory bodies in the area of children's privacy, those bodies are subject to regulation by the FTC by virtue of the safe-harbor provisions. Thus, even though it will be imposing new costs and requirements on the Children's Advertising Review Unit (CARU), which was monitoring the collection and use of information from children before there even was COPPA, CARU, because it sought safe harbor status, is subject to whatever new requirements the Commission may impose. One has to wonder, however, whether the existing safe harbor entities are sanguine about the new burdens because the FTC will be effectively making the barrier to entry for new safe harbor competitors nearly impossible. Interesting anti-competitive question.

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Excite News:  Judge blocks graphic images on cigarette packages

A judge on Monday blocked a federal requirement that would have begun forcing tobacco companies next year to put graphic images including dead and diseased smokers on their cigarette packages.

Broadcasting & Cable:  Advertisers Modify Online Data Collection Self-Regs

DAA says newly codified set of principles reflect FTC's recommendations on boosting data privacy protections

The Digital Advertising Alliance (DAA) has announced a new and newly codified set of online data collection principles it says expand "significantly" on its current self-regulatory guidelines for online data collection.

FTC.gov:  Online Advertiser Settles FTC Charges ScanScout Deceptively Used Flash Cookies to Track Consumers Online

Online advertiser ScanScout has agreed to settle Federal Trade Commission charges that it deceptively claimed that consumers could opt out of receiving targeted ads by changing their computer’s web browser settings to block cookies. In fact, ScanScout used Flash cookies, which browser settings could not block. The proposed settlement bars misrepresentations about the company’s data-collection practices and consumers’ ability to control collection of their data. It also requires that ScanScout take steps to improve disclosure of their data collection practices and to provide a user-friendly mechanism that allows consumers to opt out of being tracked.

The Hill:  New coalition forms to fight Web domain-name plan

Eighty-seven companies and business associations announced on Thursday that they have formed a coalition to fight a plan that would allow for new domain addresses.

NY Times:  E.U. to Tighten Web Privacy Law, Risking Trans-Atlantic Dispute

The European Commission is planning a legal change next year that may prompt U.S. Web giants like Google and Facebook to rethink how they store and process consumer data, raising the prospect of a trans-Atlantic dispute over Internet privacy.

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FTC.gov:  FTC Approves Final Settlement Orders Against Marketers Who Claimed Their Mobile Apps Could Cure Acne

Following a public comment period, the Federal Trade Commission has finalized two settlement orders with three individuals who allegedly claimed that their smartphone applications could cure acne. The settlements bar the marketers of AcneApp and Acne Pwner from making acne-treatment claims about their mobile apps and other medical devices, or claims about the safety, performance, benefits, or efficacy of any device unless they have scientific evidence. The two marketers of AcneApp are also barred from misrepresenting research, tests, or studies.

Environmental Leader:  Calif. Sues Firms Over Degradable Bottle Claims

Bottle manufacturer ENSO Plastics, and drinks companies Aquamantra and Balance Water are being sued by the California attorney general’s office over claims that they misled customers by falsely marketing water bottles as biodegradable, the Huffington Post reports.

Environmental Leader:  Recyclers Petition FTC Over Car Dealer Warranty Claims

Trade body the Automotive Recyclers Association has filed comments with the Federal Trade Commission asking the agency to keep a close eye on potentially unfair language used by auto parts dealers regarding the use of recycled vehicle parts and their impact on car warranties, according to SearchAutoParts.com.

FTC.gov:  FTC Seeks Public Input in Review of Textile Labeling Rules

As part of the Federal Trade Commission's systematic review of all current FTC rules and guides, the FTC is seeking public comment on its Textile Rules, which require that textiles sold in the United States carry labels disclosing the generic names and percentages by weight of the fibers in the product, the manufacturer or marketer name, and the country where the product was processed or manufactured. The FTC's Textile Rules implement the Textile Fiber Products Identification Act.

Huffington Post:  FCC To Rule On Online Political Advertisement Disclosure

Everyone is used to seeing a flood of political advertising, whether they are vicious attack ads or saccharine puff pieces, in the months before an election. Soon, the public may get a huge amount of information about the source and cost of all of those advertisements in a way that has never been done before.

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USA Today:  Facebook's new features remain unpopular

The more you use Facebook, the less likely you are to be concerned about privacy invasion.

That's the core finding of a USA TODAY/Gallup Poll telephone survey last week of more than 2,000 adults.

Inside TV:  'Happy Days' lawsuit: Fraud claim thrown out by judge

Back in April, members of the cast of Happy Days, including Marion Ross, Erin Moran, Don Most, Anson Williams, and the estate of the late Tom Bosley, filed a lawsuit against CBS, claiming that the network violated breach of contract and owed them for merchandising revenues that they had been cut out of. The $10 million suit claimed the stars of the sitcom “were guaranteed five percent of royalties profits if their images appeared on a product.”

Excite News:  Report: Food labels need Energy Star-like ratings

Just as that Energy Star tag helps you choose your appliances, a new report says a rating symbol on the front of every soup can, cereal box and yogurt container could help hurried shoppers go home with the healthiest foods.

The Hill:  FTC approves Google Buzz settlement

The Federal Trade Commission voted 4-0 to give final approval to its settlement with Google over the failed rollout of its Buzz social network last year.

CNET:  Google, Facebook go retro in push to update 1986 privacy law

For a few hours on Capitol Hill yesterday evening, it was October 1986 again, complete with legwarmers, an Apple IIc, pop rocks, Duran Duran, and cell phones the size of a cat.

The companies sponsoring this night of nostalgia include Google and Facebook, which are hoping to visibly highlight how out-of-date a law enacted 25 years ago today has become in an age of cloud computing, gigabit networks, and terabyte storage.

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Information Week:  Government officials tell companies at Web 2.0 Summit that they are asking for trouble if they collect data first and ask questions later.

Would-be data miners were urged to dig carefully at the Web 2.0 Summit in San Francisco on Tuesday.

Ann Cavoukian, information and privacy commissioner of Ontario, Canada, and David Vladeck, director of the Federal Trade Commission's Bureau of Consumer Protection, took turns advising the entrepreneurs and business leaders in the audience to gather only data that's necessary and to do so in a way that respects user privacy.

LA Times:  No fruit in Fruit by the Foot? General Mills sued over snacks [Updated]

There’s not much fruit in General Mills snacks such as Fruit Roll-Ups, Fruit by the Foot and Fruit Gushers, alleges a new suit against the giant food company.

Instead, the candies are stuffed with sugars, artificial additives and dyes, according to a complaint filed Friday in federal court in California. The nonprofit Center for Science in the Public Interest, filing on behalf of Northern California mother Annie Lam, claims that the products give a misleading impression of being healthy by professing to be low in calories, fat and gluten.

Direct Marketing News:  Study: Consumers most willing to share shopping data with brands

Consumers are most willing to share shopping data with brands online, according to a study released by agency network McCann Worldgroup's McCann Truth Central on Oct. 18. "The Truth About Privacy” study found that 71% of consumers said they would share shopping-related data, such as product “likes” and browsing history, with a brand online.

New York Law Journal:  Viacom Urges Second Circuit to Revive YouTube Suit

Viacom International and a host of content providers asked a federal appeals court yesterday to reverse a decision dooming their claim that YouTube is liable for $1 billion in damages for copyright infringement.

Tech Daily Dose:  Energy And Commerce Panel To Examine Net Gambling

It looks like supporters of fully legalizing online poker may get a chance to make their case before Congress.

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After a swift left to the chin in early September from the Republican-controlled House Energy and Commerce Committee Chair, Rep. Fred Upton, David Vladeck, the FTC Director of the Bureau of Consumer Protection, testified before the Subcommittee on Commerce, Manufacturing, and Trade, and the Subcommittee on Health, October 12, 2011, discussing the International Working Group (IWG) and changes that are underway.

• The tone of Vladeck’s statement bore a marked respect for, though not deference toward, advertising self-regulation. This is in contrast to his speech before the self-regulatory National Advertising Division of the Council of Better Business Bureaus October 3, 2011, in which he only mentioned in passing the positive role of self-regulation. In his statement before the Subcommittees, he made a much more significant effort to acknowledge the success that has been achieved to date by self regulation both in the form of the Children’s Advertising Review Unit (CARU) and the Children’s Food and Beverage Advertising Initiative (CFBAI).
• Because there is no scientific link between marketing of food and obesity, Vladeck made it clear that the Commission is asking industry to take on a share of the responsibility for solving the obesity problem “regardless of whether or to what extent food marketing may have contributed to the problem of childhood obesity” in the first place. In other words, according to Vladeck, it is a proper role of government to pressure industry to help solve multi-factored social problems by not marketing (and therefore not selling) products that may have no relationship to the social problems that the government is seeking to address. Vladeck referred the Institute of Medicine (IOM) Report from 2008 to highlight the fact that marketing influences food and beverage preferences, purchase requests and short-term diets of children under 12 to support the Commission’s position that industry should use its marketing power to eat certain foods rather than other foods. One can interpret this initiative as simply government telling industry what to advertise and what to sell based on a stated political goal. “Children’s health is the ultimate goal, and marketing of more nutritious foods is one effective tool to help achieve that goal.” 
• Vladeck, who famously dismissed the notion that the IWG proposals could raise First Amendment concerns last summer in a blog post, apparently has been convinced that there may be some validity to the First Amendment arguments made by academics and lawyers in the advertising field. He states, “Our commitment to finding the best balance between what is best for children’s health and what is workable for industry has guided this entire process. . . . .The Working Group’s proposal is strictly voluntary. The Commission recognizes that some forms of regulatory action could raise First Amendment concerns.”
• After 29,000 comments and after new CFBAI guidelines, which go a long way toward achieving the government’s goal of restricting marketing behavior related to certain foods and beverages, the FTC is signaling significant changes to its proposals. Those changes include:
  • Limiting the scope of marketing to children to those aged 2-11, rather than the originally proposed 2-17. Vladeck: “It is often difficult to distinguish marketing designed to appeal to this age group from marketing directed to a general or adult audience.”
  • Limiting the scope of the marketing activities included within the proposals. Vladeck: “The FTC staff believes that philanthropic activities, charitable events, community programs, entertainment and sporting events, and theme parks are, for the most part, directed to families or the general community and do not warrant inclusion with more specifically child-directed marketing. Moreover, it would be counter productive to discourage food company sponsorship of these activities to the extent that many benefit children’s health by promoting physical activity.”
  • Eliminating recommendations regarding trade dress and brands. Vladeck: “The Commission staff does not contemplate recommending that food companies change the trade dress elements of their packaging or remove brand equity characters from food products that don’t meet nutrition recommendations.”
  • Eliminating recommendations regarding in-store displays and packaging of seasonal or holiday confections.
  • Adjusting the proposed audience share criterion for “traditional media marketing,” including television, radio, and print, from 30 percent children ages 2 to 11 years, to 35 percent – which is the same age criterion used by CFBAI.

The IWG proposal is not dead, however. Expect to see the revised version focused more specifically on traditional media and on online, digital, and social marketing. Also, the IWG proposal will still seek to press its recommendations in the area of advertising or product placement in movies and video games. Additionally, it will cover sweepstakes and premium offers. And, in the one remaining proposal that will cover children and adolescents, Vladeck signaled that the proposal will cover marketing activities in schools for both children and adolescents.

Thus, the IWG proposal will be scaled back significantly. One important lesson: Self-regulation is critical, but industry must be careful of using self-regulation so aggressively that it creates a blueprint for “voluntary” regulation by governmental bodies. Cooperation between government and industry that results in co-regulation is not self-regulation. With the FTC standing right beside self-regulatory efforts, tweaking self-regulation as it deems necessary to advance espoused governmental goals of protecting children, the augmented CFBAI standards may be likely to be the presumptive norm for governmental expectations (and enforcement?). Let’s hope that the blueprint we’re now working off of will build a structure we can all live in.

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Environmental Leader:  More Consumers Believe Sustainability Claims – But Many Still Skeptical

Americans today are more likely to believe businesses’ green claims, but 39 percent still say that companies’ assertions about the environment are not accurate, according to a report from GfK Roper Consulting.

Excite News:  NY Sen. Schumer accuses OnStar of invading privacy

The OnStar automobile communication service used by 6 million Americans maintains its two-way connection with a customer even after the service is discontinued, while reserving the right to sell data from that connection.

Mediapost:  Privacy Icons Roll Out On Video Ads

The you-are-being-targeted icons that began rolling out on banner ads late last year are now coming to video ads. Privacy company Truste has entered into an agreement with Adap.tv to carry the icons on the company's online ad platform. As of July, Adap.tv reaches more than 20% of the U.S. population, according to comScore.

Court House News:  Court Axes $100K Award in GoPets Cyber Warfare

The minds behind "virtual pets" cannot tweak what it means to register a domain name on the Internet, the 9th Circuit ruled Thursday, setting aside a $100,000 victory for the South Korean company in a long-running cybersquatting case.

Bloomberg:  M&S, Interflora Both Claim Victory in Case Over Internet Ads

Marks & Spencer Group Plc (MKS) and florist network Interflora both claimed victory following a European Union court ruling on whether companies can use rival’s trademarked terms to trigger advertisements on search engines.

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