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

In September 2008, the Virginia Supreme Court unanimously ruled that Virginia’s then-enacted anti-spam laws were per se unconstitutional on the grounds that they violated the First Amendment right of freedom of speech. At the time, Virginia’s anti-spam laws prohibited the sending of unwanted, unsolicited e-mails, both commercial and non-commercial.

The Virginia Supreme Court argued that since the law failed to make any distinction between the different types of emails a user could be sending, it would have prevented political, religious and other messages covered under the First Amendment, as well as general commercial solicitations. The court also noted that the statute failed to meet strict scrutiny, pointing out that similar anti-spam statutes had been enacted by several states, as well as by the federal government (which passed the CAN-SPAM Act in 2004), but all those statutes were narrowly tailored to target commercial spamming. Justice G. Steven Agee, who wrote the unanimous opinion for the court and cited a 1995 U.S. Supreme Court case, stated “The right to engage in anonymous speech, particularly anonymous political or religious speech, is ‘an aspect of the freedom of speech protected by the First Amendment.’” Along with the State Supreme Court striking down this law, its decision reversed the conviction of Jeremy Jaynes, the first person in the United States convicted of a felony for sending unsolicited bulk-emails. Jaynes was once considered one of the world’s most prolific spammers, sending mass emails anonymously by using false Internet addresses.

Immediately following this ruling in 2008, Virginia Attorney General Robert F. McDonnell promptly announced that he would appeal the case to the United States Supreme Court. Earlier today, the U.S. Supreme Court elected not to consider reinstating Virginia’s anti-spam law.

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As you are all aware, we're approaching the "midnight hour" in our negotiations. While both sides have made major progress and I remain cautiously optimistic, the next couple of days will be critical to reaching a new agreement. In the meantime, there is no reason to believe that there will be any immediate disruption in commercial production even if we don't come to a final agreement before midnight, March 31. Both sides continue to have open and productive negotiations.

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As anyone who has been through a case at the National Advertising Division (“NAD”) can tell you, bragging’s not allowed. One of the cardinal rules in self-regulation is that you cannot use an NAD decision for advertising purposes. What if you just send the decision around to, say, customers of the competitor you challenged? You didn’t actually say anything promotional.

Nope. Won’t work. You can’t send the decision around as if it’s the hot news off the presses. You can’t even send the press release around without a significant degree of risk. Risk of what? Of an embarrassing press release calling you out as a violator of NAD procedures.

Last year, GP Plastics Corp., the maker of PolyGreen plastic bags, made some “green” claims. It was challenged by Mexico Plastic Company, doing business as Continental Products. The NAD eventually recommended that GP Plastics stop making the “green” claims because consumers were likely to misinterpret the claims and take away an unsupported message. GP even started to appeal the decision, but in the end, agreed to change its ads.

All fine. Except Continental Products, the challenger in the case, (and NAD specifies that it was Continental Products’ lawyer who was actively involved), disseminated the decision to third parties, including customers of GP Plastics. To make matters worse, the dissemination happened before NAD even released the decision to the public. NAD announced that Continental Products was in violation of NAD procedures and chastised it, saying, “The self-regulatory process requires fair dealing on the part of both parties; the NAD procedures and participation agreement both note that parties are prohibited from using NAD decisions for promotional purposes.”

Why This Matters

Self-regulation works because industry believes in it. It can lose its integrity if it becomes a tool for promotion by one party against another. Therefore, NAD has to take a strong position against promotional use of decisions. If you want to get your victory in front of the right people, the right way to do it is to tell Linda Bean at the National Advertising Review Council to send the official NAD press release to the news organization you wish to know about your victory. She will send it along with access to, or a copy of, the decision. You get pretty much the same bang without the kick in the pants.

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The Children's Advertising Review Unit (CARU) determined recently that Skechers, the maker of Red Phrans-Phavorite Sneakers, and Marc Ecko Enterprises, which markets the product, should modify or discontinue advertising that suggests the shoes shine red when used. CARU picked up the ad during its monitoring practices, as it aired during after-school hours on Nickelodeon. Vanessa Hudgens is shown dancing in the commercial, and as she does so, her shoelaces light up in bright red. Her back-up dancers also wear shoes that appear to light up. There is even a close-up of the laces illumiunated in red. Oh, and did I mention the shoes are called "Reds"?

Red-faced with frustration, Skechers and Marc Ecko Enterprises have decided that CARU is wrong to assume that kids think the laces really light up. So they are going to appeal to the National Advertising Review Board (NARB). Appeals from CARU cases are rare, so this should be interesting. It should be noted that CARU has no power to pull an advertisement, and it cannot refer the matter to the FTC while an appeal is pending under its procedures. Thus, Skechers and Marc Ecko might be planning to run the spot through Easter and then pull it before the NARB hearing. If so, that's an interesting strategic move.

Why This Matters

You can't misrepresent how a product works, but the threshold is very low when it comes to kids. Shoes that appear to light up or that make you jump really high are two ways in which CARU has limited marketers' ability to exaggerate in the area of kids' advertising. Also, when it comes to the self-regulatory process, it's good to know the rules.

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Reuters: Cybersquatting cases hit record in 2008

Companies and celebrities ranging from Arsenal football club to actress Scarlett Johansson filed a record number of "cybersquatting" cases in 2008 to stop others from profiting from their famous names, brands and events, a United Nations agency said on Sunday.

The New York Times:  Many See Privacy on Web as Big Issue, Survey Says

As arguments swirl over online privacy, a new survey indicates the issue is a dominant concern for Americans.

More than 90 percent of respondents called online privacy a “really” or “somewhat” important issue, according to the survey of more than 1,000 Americans conducted by TRUSTe, an organization that monitors the privacy practices of Web sites of companies like I.B.M., Yahoo and WebMD for a fee.

FTC.gov:  FTC Order Bars Firm From Failing to Provide Timely Rebates

Company Sold Phones and Services at Stores Including Office Depot, Staples, and CVS

A company that sold telephones and telephone services through retailers nationwide has been barred from failing to provide the rebates it promised to consumers in a timely manner. The Federal Trade Commission charged the company with deceptive marketing by promising consumers they would receive their rebates within eight weeks of submitting properly completed forms. In reality, tens of thousands of consumers did not receive their rebates within the time promised, and some had to wait up to a year or more for their checks.

Adage:  Feds Push for FDA Oversight of Tobacco, but What's Left to Regulate?

With Anti-Smoking Marketing Goals Achieved, Critics Say Agency Has Other Priorities

Fourteen years ago, Clinton administration Food and Drug Administration Commissioner David Kessler proposed that his agency regulate tobacco and impose unprecedented marketing curbs. Since that time, much traditional tobacco marketing has become all but illegal, and Congress is readying to finally grant his wish.

Environmental Leader:  Study: Green Packaging Wins Out for Most Shoppers

Brand marketers are focusing more attention on environmentally friendly packaging, but environmental considerations for shoppers generally are secondary to overall package appearance and functional concerns, says Scott Young, president, Perception Research Services (PRS), in an article written for Packworld.com.

Adweek:  Discovery Sues Amazon Over Kindle

Claims the book reading device employs Discovery-patented technology

Discovery Communications is suing Amazon.com, claiming the online retailer’s popular electronic book reader the Kindle employs a Discovery-patented technology. 

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Yesterday, you may have read reports in the trades that SAG and AFTRA had prepared a strike authorization letter to send to their members and that talks were not going well. As reported by the unions, the release of the draft letter was unauthorized. In a joint statement from SAG and AFTRA, the unions stated, “We are making every effort to negotiate a fair contract and remain optimistic that we will bring these talks to a successful conclusion. Today, there was an unauthorized distribution of a draft strike authorization letter. This is one of many contingency documents that we prepare in the course of any negotiations, particularly as we approach the expiration of a contract. Our members understand that this is a normal part of the bargaining process. We will continue to bargain in good faith with the industry in an effort to get a deal.”

As I reported earlier, the rumors that things are “grim”, as one reporter opined, could not be further from the truth. Both sides continue to negotiate in good faith with every intention of avoiding labor disruption. While there are serious issues on the table, those who are bargaining for both the unions and the industry continue to build on the positive relationship the two sides have developed since first embarking on the joint study on performer compensation the two sides commissioned from Booz & Company in 2006.

Nor is the JPC concerned that the unions may be drafting potential notices to their members. Doing so, as the unions reported, is a normal part of the process and no different than the JPC’s preparation of draft notices to authorizers should developments require alternative planning.

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Rumor has it that Google will be launching its much-publicized "interest-based advertising" in April, allowing advertisers to serve ads based on a user's prior interactions (e.g., browsing the advertisers' websites, tracking interests). Google will track categories of web pages that users visit in Google's content network and if, for example, a user visits motion picture and film pages, Google may add them to a corresponding interest category that might be labeled "motion picture aficionado." As we understand it, Google will enable use of the DoubleClick DART cookie in advertising served on websites with AdSense for content advertising. Thus, when a user browses an AdSense publishers' site and views or clicks an ad, the user's browser may have a cookie added.

For the full article, please visit LegalBytes.

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Nigeria’s Consumer Protection Council (“CPC”) is calling for a global ban on advertising for food that is high in fat, sugar, and salt, at least with regard to children’s advertising. According to an article in Africa News, CPC is calling on the World Health Organization to support a strong international code that would ban marketing low-nutrition food to children.

CPC is seizing the opportunity of this year's World Consumer Rights Day (March 15, 2009) to strongly urge the Nigerian Federal Ministry of Health to support a ban on radio or TV advertisements promoting “unhealthy” food between 6 a.m. and 9 p.m., and no marketing of unhealthy foods using news media (such as websites, social networking sites and text messaging). In addition, the proposed code would ban promotion of unhealthy foods in schools; free gifts, toys or collectable items that appeal to children to promote unhealthy foods; and the use of celebrities, cartoon characters or competitions to market unhealthy food.

This proposal is also supported by Consumers International (“CI”), the self-proclaimed global campaigning voice for consumers.

Why this Matters: This sort of international movement has the potential to turn a spotlight on what food marketers are doing outside of the United States. Clearly, the U.S. food and beverage marketers have done more than their fair share of retooling and shifting the messages toward “better for you” food, and there is strong self-regulatory oversight provided by the CBBB’s Children’s Food and Beverage Advertising Initiative (“CFBAI”). This is not satisfying the public interest groups that seek to trample commercial free speech and the responsibility of parents here in the United States, and it clearly isn’t satisfying the rest of the world. The CFBAI should engage in more international outreach so that the reactionary forces that threaten to undermine truthful and useful advertising, not to mention the sponsorship dollars for media content, do not take us down a path of unwise and unnecessary posturing, as appears to be going on in Nigeria.

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Excite News:  Obama nominates friend, adviser to head FCC 

President Barack Obama on Tuesday named Julius Genachowski, a friend from Harvard Law School, as his nominee to chair the Federal Communications Commission.

Adweek: Nielsen: Social Nets Overtake E-mail - As online paradigm shifts, advertisers must find a way to add value, rather than follow the 'push' model

Social networking has overtaken e-mail as the most popular Internet activity, according to a new study released by Nielsen.

Active reach in what Nielsen defines as "member communities" now exceeds e-mail participation by 67 percent to 65 percent. What's more, the reach of social networking and blogging venues is growing at twice the rate of other large drivers of Internet use such as portals, e-mail and search.

Brandweek:  FTC Takes On Freecreditreport.com

Maybe that tuneful trio that shifts from lousy job to lousy job really will have something bad to sing about now. The Federal Trade Commission, tomorrow, will take aim at the popular Freecreditreport.com ad campaign. The government organization is releasing two online videos (at www.ftc.gov/freereports and www.YouTube.com/FTCVideos) that explain that AnnualCreditReport.com is the only site where consumers can truly get their credit reports for free.

Brandweek:  Recyclable Packaging Ranks Highest With Consumers

Here’s the tricky thing about sustainable packaging: While it’s not a primary purchase motivator for most people, a blatant disregard for it may turn off consumers, who have increasing expectations for brands to incorporate green business practices.

BBC News:  Al Gore says domain .eco logical - The former US vice president, Al Gore, is backing the creation of a new green .eco domain name.

Dot Eco applied to create the domain which would then be used to host sites supporting environmental causes.

"This is a truly exciting opportunity for the environmental movement and for the internet as a whole," said Mr Gore.

Environmental Leader:  Consumer Survey: Growth of ‘Green’ Consumption On Hold 

At 36 percent, the number of Americans who say they “almost always” or “regularly” buy green products remains unchanged, according to recent Mintel consumer survey data. This lack of growth comes after tripling from 12% in 2007 to 36% in 2008.

Reuters:  U.S. privacy bill on Internet companies coming

A top U.S. lawmaker in the U.S. House of Representatives on Wednesday said he is working to develop a bill to impose mandatory guidelines on Internet companies to protect user privacy, because the current voluntary approach is falling short.

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On Aug. 27, 2008, in the case Io Group, Inc. v. Veoh Networks [1] (Veoh), U.S. Magistrate Judge Howard R. Lloyd granted Veoh’s motion for summary judgment, that it qualified for “safe harbor” protection under the Digital Millennium Copyright Act (DMCA), 17 U.S.C. § 512. The Veoh decision has been hailed by some as a major victory for Internet service providers and proponents of the sufficiency of the DMCA in addressing copyright infringement issues over the Internet. Does this decision supplant Grokster as the current precedent of U.S. courts with respect to an analysis of the legality of websites featuring user-generated content (UGC)? The Supreme Court’s decision in Grokster established that a service provider that has provided a platform and has promoted its use to infringe copyright or foster infringement could be found liable for the resulting acts of infringement by third parties. [2] In other words, if the service provider’s website has been used, to a significant degree, as a hub of infringing content, then such service provider may not be able to raise the safe harbor provisions of the DMCA as a defense to secondary copyright infringement.[3] Precedential considerations aside, a closer look at the facts of Veoh reveals that the court’s holding is actually quite limited in scope. 

The plaintiff in Veoh, Io Group, Inc. (Io), a publisher of adult video content, claimed in the lawsuit that it discovered clips from 10 of its copyrighted films had been uploaded and viewed on veoh.com without its authorization. Considering that the DMCA was created, in part, to provide a process for copyright owners to police and limit infringing activity, it would be paramount for any copyright owner seeking recourse for a claim of infringement to have complied with the procedures in place under the DMCA[4] prior to filing a lawsuit. Assuming that the website provided a copyright-infringement-claim designated agent to contact regarding infringement claims, a copyright owner would be required to have submitted DMCA-compliant notices of infringement to such designated agent, and have such agent fail to remove the allegedly infringing content, to have an actionable claim. In this case, Veoh had a designated agent assigned to review takedown notices, and maintained terms of use that set forth procedures that were compliant with the DMCA. Plaintiff Io, on the other hand, seemingly ignoring the DMCA procedures entirely, did not send a takedown notice to, or otherwise inform, Veoh that it had determined that its film content had been uploaded to the Veoh website without authorization. Actually, receipt of the complaint was the first notice Veoh received regarding Io’s infringement issues. Strike one.

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This post was written by Milan Joshi and Carolyn E. Pepper.

Sky One, a UK satellite channel that broadcasts "The Simpsons," has been told that the sponsorship of the programme by Domino's Pizza, a leading UK pizza delivery company, breaches sponsorship rules, despite the fact that no products that were high in fat, salt or sugar (HFSS) were shown in the credits.

Ofcom, the UK media watchdog, published rules in February 2007 concerning advertisements of HFSS foods to under-16s.

The National Heart Forum (NHF), an alliance of more than 60 UK organisations working to reduce the risk of coronary heart disease and related conditions, contacted Ofcom regarding Domino's Pizza's sponsorship of "The Simpsons." The NHF complained that Domino's Pizza "appears to be avoiding the restriction on HFSS advertising or sponsorship by simply not showing the pizza product during the sponsor's credits around the programme."

In response to the complaint, Ofcom requested a recording of "The Simpsons" from Jan. 30, 2008. This consisted of four recordings, back-to-back, between 19:00 and 21:00, with each episode containing four sponsorship credits. The credits featured one or more of the following - at least one person involved in the pizza order/delivery process, the sponsor's pizza packaging, the pizza case preparation and the sprinkling of pizza topping ingredients. The closing image contained the Domino's Pizza logo and the words "Domino's Delivery Service," followed by the website details and order telephone number. Each credit ended with a voice-over stating: "'The Simpsons' on Sky One with Domino's - the pizza delivery experts."

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Yesterday, the Federal Communications Commission solicited comments regarding a petition for declaratory ruling under the Telephone Consumer Protection Act (TCPA). Specifically, the Commission seeks clarification on whether a creditor may place autodialed or prerecorded message calls to a telephone number associated with wireless service that was provided to the creditor initially as a telephone number associated with landline service. Section 64.1200(a)(1)(iii) of the Commission’s rules prohibits the initiation of “any telephone call (other than a call made for emergency purposes or made with the prior express consent of the called party) using an automatic telephone dialing system or an artificial or prerecorded voice, to any telephone number assigned to . . . cellular telephone service. . . .” The Commission concluded that such calls to wireless numbers that are provided by the called party to a creditor in connection with an existing debt are permissible as calls made with the “prior express consent” of the called party.

The Petitioner asserts that the Commission’s ruling permits debt collection calls to a wireless telephone number only when the consumer, in that instance, provides the wireless telephone number to the creditor. The Petitioner contends that when the creditor is initially provided a “landline” telephone number, and subsequently that landline number is ported to a cellular telephone, an established business relationship, “prior express consent,” or other exemption from section 227(b)(1)(A)(iii) of the TCPA is not created. The Petitioner concludes that compliance with the TCPA requires that the consumer must have provided the creditor a telephone number assigned to a wireless service in order for calls to the wireless telephone number to be permissible. Accordingly, the Commission seeks comment for clarification of this position.

Comments are due 15 Days after the item has been published in the Federal Register, and Reply Comments are due 25 days after publication in the Federal Register. This item has not been published in the Federal Register, yet, but we can update you once it is.

Why This Matters?

This is a very interesting issue regarding the use of autodialing devices under the TCPA when a former landline phone number is ported to a wireless device. Typically, in this circumstance, a provider only has 15 days after the landline to wireless port where it can still place automatically dialed messages to consumers (without prior express consent).

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How Much is Available?  Who Is Eligible?  How Do I Apply?

On February 17, 2009, President Obama signed into law the American Recovery and Reinvestment Act of 2009, otherwise known as the stimulus package. That package contains $7.2 billion in appropriations for broadband infrastructure and billions more for broadband-related activities (such as telemedicine, education, intelligent transportation and smart electric grids). Join us for a practical discussion on how to participate in the funding opportunities available.

Everyone expects these funds to move quickly. Most in the industry are wasting no time in devising their business plans and application strategies, and if your organization is interested, neither should you. These applications will require much advanced planning. For example, your organization should: seek matching funds for any broadband-related proposals, interface with government officials to determine your state's broadband priorities, and explore the feasibility of public-private partnerships for any broadband-related proposal. This session is designed to help your organization get up-to-speed quickly, and it will cover broadband funding opportunities for the:

• Telecommunications,
• Education, and
• Health Care sectors.

Our speakers include: Judith L. Harris, a partner in Reed Smith's Washington, D.C. office and a member of the Global Regulatory Enforcement Group. Judy concentrates on telecommunications and antitrust/trade regulation matters before the Federal Communications Commission, the Justice Department, the Federal Trade Commission, in the courts, and on Capitol Hill, especially on behalf of companies in emerging technologies. Amy Mushahwar, an associate in the Washington, D.C. office, is a member of the Advertising Technology & Media Group. Amy concentrates on telecommunications and privacy matters before the Federal Communications Commission, Federal Trade Commission and the Department of Commerce's National Telecommunications and Information Association. Rob Jackson, who is also affiliated with the Washington, D.C. office, is a member of the Global Regulatory Enforcement Group. Rob is a government relations professional with broad experience addressing the legal and regulatory aspects of financial, technical and marketing issues associated with telecommunications, Internet and cable.

Date: Friday, March 13, 2009

Time: 12 p.m. EDT/9 a.m. PDT/4 p.m. UK (GMT)

Length of Teleseminar: 1 Hour

You are invited to participate in this discussion via teleconference. Participation is free, although long-distance telephone charges apply outside of the United States, the UK, France, and Germany, where 800 numbers are used. The call-in ports will be limited, so please contact Sarah Stein no later than Thursday, March 12, to receive a dial-in number and a passcode. This is one call you don't want to miss.

If you require additional information, contact Sarah at +1 312 615 1509.

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On March 3, 2009, the Federal Communications Commission (“FCC”) released a Notice of Inquiry to implement the Child Safe Viewing Act of 2007 (“CSVA”), which directs the FCC to examine advanced parental control technologies that would be compatible with various communications devices and platforms.

Click here to read the full alert, written by Amy S. Mushahwar, Judith L. Harris, and John P. Feldman.

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Reed Smith Advertising, Technology & Media partners John P. Feldman and Anthony E. DiResta filed comments on March 2nd with the Federal Trade Commission on behalf of the firm's clients, Association of National Advertisers (.PDF) and Word of Mouth Marketing Association (.PDF), in response to the FTC's request for comments regarding proposed revisions to its Guides Concerning the Use of Endorsements and Testimonials in Advertising.

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