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

This post was written by John P. Feldman and Michael L. Sacks.

The Interagency Working Group of Food Marketed to Children (“Working Group”) today has requested comments on proposed nutritional principles that it hopes will help in the fight against childhood obesity. The Working Group, established in 2009 by the FTC, FDA, CDC, and USDA at Congress’s request, hopes that by 2016 industry actors will meet its two-pronged self-regulatory vision: a marketing environment in which advertisers encourage kids to choose foods that make for a healthy diet; and a production environment in which food companies will police limits on the fat, sugar, and sodium content of their products marketed to kids.

In formulating its principles, the Working Group set its sights on the most heavily marketed foods to children and adolescents, ages 2-17: breakfast cereals, snack foods, candy, dairy products, baked goods, carbonated beverages, fruit juice and non-carbonated beverages, prepared foods and meals, frozen and chilled desserts, and restaurant foods. In a press release, the Association of National Advertisers, calling the proposals “sweeping” and “overly restrictive,” criticized the Working Group for inappropriately “treating teenagers as if they were young children” and employing “limited and outdated” data.

Despite these differences, the Working Group and Food Marketers can agree that these voluntary proposed principles respect industry’s preference for and progress in its self-regulatory efforts to keep our kids healthy.

Action item? Take time now to determine just how divorced from business reality these principles are for your company. If they end up suggesting that a formulation tweak would be all that it takes to be a poster child for the Working Group then go for it. If they suggest to you that it will be impossible or very costly to reformulate then get set to comment. Objective, quantifiable data is needed to make your comment useful. So, do the analysis as soon as possible and let's see if what they're imagining has any semblance of reason.

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As I was working away yesterday on a SAS (software-as-a-service) agreement and enjoying a most delicious piece of matzah and chocolate egg (a veritable ecumenical feast), I received a call from a client asking me if I knew why his site was down. I'm sure some of you know where I'm going with this -- the Amazon cloud was down. Sounds chicken-littleseque, right? Actually it's true and this rarity brought down many of the largest and most highly visited sites on the Web, which are similarly hosted out of the Cloud. Please enjoy this LegalBytes post prepared by my colleague, Joe Rosenbaum, and me about this development.

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You may want to read this Reed Smith Alert after the holidays are over, but if you can't wait this alert will shed some important light on certain important evolving dynamics that we've written on previously within the universe of domain name registrations, and how they are likely to affect your trademark on the Web.

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After months of deliberations, Senators John McCain and John Kerry introduced a comprehensive privacy bill entitled, the Commercial Privacy Bill of Rights Act of 2011 (the Act). Released in a press conference held by McCain and Kerry last week, the bill establishes a baseline framework for the privacy, security and management of personal information, an issue of growing concern to all businesses and consumers.

We have provided a summary of the bill’s definitions and key provisions (which contemplates five FTC rulemakings), all of which might change once the bill is debated within the Senate. To learn more, I encourage you to read our recent client alert.

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Mercury News:  FDA proposes more calorie count information

It could get harder to indulge in a double cheeseburger and fries without feeling guilty.
Menu labeling requirements proposed Friday by the Food and Drug Administration will require chain restaurants with 20 or more locations, along with bakeries, grocery stores, convenience stores and coffee chains, to clearly post the calorie count for each item on their menus.

SF Gate:  State senator's Do Not Track bill on Internet data

A California state senator on Monday unveiled a bill that would force Internet companies doing business in the state to allow local consumers to opt out of online monitoring, adding to the building momentum behind a "Do Not Track" mandate.

Environmental Leader:  Executives Say They’re Improving Environment – But Say Most Other Companies Aren’t

Nearly nine out of ten executives – 88 percent – report that their company is “going green”, but only 29 percent believe a majority of businesses are doing the same, according to a survey.

FTC.gov:  FTC Settlement Requires Oreck Corporation to Stop Making False and Unproven Claims That Its Ultraviolet Vacuum and Air Cleaner Can Prevent Illness

Marketer Must Pay $750,000

As part of its ongoing efforts to protect consumers from bogus health claims, the Federal Trade Commission has reached a settlement requiring Oreck Corporation to stop making allegedly false and unproven claims that two of its appliances can reduce the risk of flu and other illnesses, and eliminate virtually all common germs and allergens. The company also has agreed to pay $750,000 to the FTC.

Daily Caller:  Boston mayor takes on sugary drinks

City of Boston Mayor Tom Menino signed an executive order, Thursday, banning the sale, promotion and advertising of sugary drinks on government-owned property. The order requires departments under the city government to take steps to comply with the ban within six months.

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The domain name system is now poised to change dramatically based on a highly controversial proposal for new generic top level domains (gTLDs) approved initially in 2008 by the International Corporation for Assigned Names and Numbers (ICANN), the not-for-profit organization responsible for coordinating the Internet addressing system. Currently, the domain name system is limited to 21 "generic" gTLDs (.com, .org, .net, .info, .biz, etc.). Under the new proposal, organizations located anywhere in the world would be able to apply to operate a gTLD that corresponds just about to any word or phrase, including an organization's name or brand. This is relevant to nearly all businesses, and in particular their marketing/advertising efforts, because it places new burdens on companies to police their brands through the ocean of hundreds, if not thousands, of new channels. My colleagues at Reed Smith outlined the relevant aspects and implications of the proposal and I encourage you to read it here.

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Is my website an active or passive website? This is a question that many companies and their counsel have grappled over, as it has important legal and regulatory applications. Recent case law in the 9th Circuit has shed some light on this issue, and it's well worth a read. Please click here for our just released, hot off the press Client Alert.

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In recent months, a number of major brands have faced complex legal and reputational risks that arose from the hacking of email fulfillment vendors.

These cases generally present the following challenges:

1. Gaining a technical, business and legal understanding of what happened, to who, when and how, and developing privileged and unprivileged messaging about the event to interested constituencies;
2. Analyzing US and non-US notice obligations to customers, business partners, government and others, as well as assisting with identifying the judgment calls regarding such notice that must often be made, in real time;
3. Monitoring and helping in discussions with responding/complaining customers, including developing scripts, protocols and a risk-based triage approach;
4. Analyzing relevant insurance coverage and coordinating with in-house insurance experts or brokers on notice to carriers and responses to initial denials;
5. Preparing a litigation-ready story, and advising the on privilege issues that arise during investigation and response activities.

In light of these recent email vendor breaches, forward-looking and consumer-focused companies are working around these ongoing challenges:

1. Your own company's policies, procedures and training, including event and litigation-preparedness ("is my own house in order?");
2. Knowledge/due diligence concerning vendors on these issues ("are we working with the right people and how do we measure that?");
3. The process/flow among the company and its business partners ("do we have to outsource this work at all, and, if so, is there a simpler or lower risk way to do design the system?");
4. The information being collected ("what are we collecting, how long are we keeping it, and why?");
5. Contracts/indemnification provisions and insurance coverage ("if the worst happens, do we have the right contractual protections and insurance coverage?").

The recent data security breaches have highlighted legal and reputational vulnerabilities for the national brands. No amount of spending on data security technology or attention to policies, procedures and training on consumer privacy issues at the national brands immunizes one from reliance on vendors. Their data security events end up becoming yours. The letter notifying customers of such a breach ends up on your letterhead.

For more information, feel free to contact Douglas J. Wood at 212 549-0377, email dwood@reedsmith.com or Mark Melodia at 609 520-6015, email mmelodia@reedsmith.com.

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FTC.gov:  Firm to Pay FTC $250,000 to Settle Charges That It Used Misleading Online "Consumer" and "Independent" Reviews

A company selling a popular series of guitar-lesson DVDs will pay $250,000 to settle Federal Trade Commission charges that it deceptively advertised its products through online affiliate marketers who falsely posed as ordinary consumers or independent reviewers.

Reuters:  EU wants Facebook, Google to comply with new data rules

Social-networking sites such as Facebook, or search engines such as Google, may face court action if they fail to obey planned EU data privacy rules, European Union justice chief Viviane Reding said on Wednesday.

Reuters:  Judge slaps down Google's digital library settlement

A U.S. judge on Tuesday rejected a $125 million settlement between Google Inc (GOOG.O) and authors that would have let the company publish millions of books online to create the world's largest digital library.

ClickZ:  Google, Yahoo and TRUSTe Advance Self-Reg Plans

Google, Yahoo and privacy certification firm TRUSTe have each taken steps to advance industry self-regulation for online behavioral advertising. Google and Yahoo are switching to the standard behavioral ad icon associated with the Digital Advertising Alliance's self-regulatory initiative. Meanwhile, TRUSTe is trying to help consumers prevent online tracking by bad actors.

MediaPost:  Kerry Privacy Bill Could Impose 'Major' Obligations On Ad Networks

A draft of privacy legislation floated by Sen. John Kerry (D-Mass.) would give the Federal Trade Commission authority to craft privacy regulations and to operate a Web site where consumers can opt out of online behavioral targeting. The potential measure would generally require companies to notify consumers about the collection of their data, and also allow them to opt out of having data used by third parties, like ad networks.

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Earlier this week, Google, Inc. agreed to a proposed consent order over charges that it used deceptive tactics and violated its privacy promises to consumers when it launched its social network, Google Buzz. For more on this important development, please click here.

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