April Warning Letter Showers: The FDA Issues Over Twenty Warning Letters to Companies Making Fraudulent Coronavirus Claims

Last month, the U.S. Food and Drug Administration (“FDA”) issued over twenty warning letters to companies located in both the United States and abroad for allegedly selling unapproved products that may violate federal law by making deceptive or scientifically unsupported claims about their ability to treat coronavirus (COVID-19).

The companies subject to the FDA’s warning letters include CBD sellers and companies selling colloidal silver, salt therapy, essential oils, and chlorine dioxide products. The companies’ products, which the FDA described as “unapproved and unauthorized” and “intended to mitigate, prevent, treat, diagnose, or cure COVID-19 in people” were marketed with such claims as: cannabis “speeds recovery” from COVID-19; CBD boosts T-cells with “powerful weapons” that could ward off COVID-19; “Colloidal silver is the key to protecting yourself from the corona virus”; “Saline therapy strengthens the lungs to fight against the novel Coronavirus”; and “…we are confident that the proper mixture of chlorine dioxide (MMS) has every hope of eradicating COVID-19.”

Despite the companies’ claims, according to the FDA, there currently are no products that are scientifically proven to treat or prevent the virus. The FDA’s letters order the companies to “immediately cease making all such claims” and to respond within forty-eight hours describing the specific steps they have taken to correct their violations or risk legal action, including, without limitation, seizure and injunction.

Takeaway:  The onslaught of warning letters issued last month, which show no signs of slowing, illustrates the FDA’s continued effort to aggressively protect consumers from companies making bogus coronavirus treatment claims and from preying upon consumers desperately looking for any potential treatments against the virus, which has already infected over 3.5 million people worldwide.

Webinar: Advertising and Litigation Risks for Food and Dietary Supplement Companies

Join Jason Gordon on Wednesday, May 13, 2020, for a live webinar hosted by the FDLI and titled, “Influencers, Social Media Advertising, and Litigation Risks for Food and Dietary Supplement Companies.

Food and dietary supplement companies are increasingly using influencers and social media to advertise their products. These marketing strategies are even more important during the current Coronavirus-driven lockdown, as consumers spend more time online. Beyond the current pandemic, online advertising is a valuable tool for reaching younger generations of consumers, communicating proven and potential health benefits, and drawing attention to new product releases. However, for companies that are unaware of or ignore the rules and guidance set forth by the FDA and FTC, these strategies can easily lead to both government actions and private litigation.

In this webinar, panelists will discuss both general and industry-specific issues, such as the recently released FTC guidelines for social media influencers, recent FTC activity and areas of focus, trends in online marketing, and litigation risks for touting nutritional and health benefits for both foods and dietary supplements.

May 13, 2020, 2:00 – 3:30 p.m. EDT

For registration details, please click here.

Fash-Shunned: Selena Gomez Sues Fashion App for $10 Million for Allegedly Using Her Name and Likeness Without Permission

This month, actress and singer Selena Gomez filed a lawsuit in California state court against the makers of a fashion smartphone game for allegedly using her name and likeness without permission.

According to the complaint, Gomez claims that the makers of the “Clothes Forever – Styling Game” app, which lets players dress celebrity avatars, “blatantly rips off” a popular image of Gomez taken for a fashion publication, as seen below:

The complaint further states that while Gomez’s reputation, public image and influence would make her “ideal” to endorse mobile games, she has never made any such endorsements and would never have consented to allowing her publicity rights to be used in such an “unsavory” game, which allegedly lures its users to make large in-game purchases.

The complaint alleges that Gomez has suffered and will continue to suffer actual damages of no less than $10 million. The complaint further describes the defendants’ unauthorized use of Gomez’s publicity rights in its “bug-riddled” mobile game as having “injured” and “harms” Gomez’s right to market her own fashion-focused games.

The complaint seeks damages (including punitive damages), restitution and/or all profits derived from the defendants’ conduct, as well as requesting that the defendants be preliminarily and permanently enjoined from continuing the alleged unlawful activity.

Takeaway: Advertisers should be aware that a use of a look-alike may still give rise to a right of publicity claim. Accordingly, the use of a celebrity’s persona for a commercial purpose, without permission, may give rise to a lawsuit.

FTC Sends More Warning Letters to Companies Selling Fraudulent Products that Claim to Treat or Prevent the Coronavirus

The Federal Trade Commission (“FTC”) announced it has issued ten additional warning letters to companies located in both the United States and abroad for allegedly selling unapproved products that may violate federal law by making deceptive or scientifically unsupported claims about their ability to treat coronavirus (COVID-19).

The companies advertise products including a bundle of supplements called an “ANTI-VIRUS KIT” to “Sonic Silicone Face Brushes” and even intravenous (IV) “therapies” with high doses of Vitamin C to “fight off Coronavirus.” Despite the companies’ claims, according to the U.S. Food and Drug Administration (“FDA”), there currently are no products that are scientifically proven to treat or prevent the virus.

The letters indicate that one or more of the efficacy claims made by the marketers are unsubstantiated because they are not supported by scientific evidence, and therefore, violate the FTC Act. Accordingly, the FTC’s letters order the companies to “immediately cease making all such claims.”

The FTC requested the companies respond within forty-eight hours describing the specific steps they have taken to address the FTC’s concerns.

Takeaway:  This is the latest round of warning letters issued by the FTC alleging unapproved and/or unsupported claims that products can treat or prevent coronavirus. As we wrote about here, the FTC, in conjunction with the FDA, previously issued several warning letters to companies making similar coronavirus efficacy claims. The warnings represent the continued effort by regulators to stop scams and remove from the marketplace bogus treatments and cures to purportedly combat COVID-19.

Keeping Up with Copyright: Kendall Jenner Sued for Infringement over Instagram Video

Last month, Kendall Jenner was sued for copyright infringement by a woman who claims Jenner posted her copyrighted video on Instagram without permission.

The video shows Jenner walking out of a New York City building – waving and smiling at the camera and a group of fans and paparazzi gathered nearby. According to the complaint, the video is the copyrighted property of plaintiff Angela Ma, and she claims that Jenner did not license the video or have her permission or consent to publish the video on Instagram.

The complaint, which alleges Jenner’s acts of infringement were “willful, intentional, and purposeful, in disregard of and indifference [sic] to Plaintiff’s rights” seeks unspecified damages and Jenner’s profits from the video, or alternatively, statutory damages of up to $150,000 per work infringed.

Takeaway: This suit is the latest in a stream of “celebrity infringer of the week” lawsuits, whereby various individuals are alleging celebrities are infringing their copyrighted work in photos or videos of themselves on their own social media handle.  As we previously wrote about, Gigi Hadid was sued for copyright infringement for allegedly similar conduct.

John Feldman and Jason Gordon discuss COVID-19 Charity Marketing and Compliance Challenges for brands in Law360 Article

John Feldman and Jason Gordon published an article in Law360 this week titled, “Compliance Challenges In Cos.’ COVID-19 Charity Marketing.” A copy of the article is available here. You may also view a PDF copy of the article here.

COPPA Consent in the Time of COVID-19

Remote learning has become the new normal amid orders across the globe to stay home and shelter in place to combat the spread of COVID-19.  While it is fortunate that technology allows students to continue the school year at home, remote learning presents an obstacle where children’s privacy is concerned.

In the United States, the Children’s Online Privacy Protection Act (COPPA) governs the collection of personal information from children under the age of 13.  It generally requires the provider of a website or online service directed at children to obtain “verifiable parental consent” before collecting any personal information from children.  In general, “verifiable parental consent” can be obtained in a number of ways—for example, through a signed consent form that is returned via mail or electronic scan, or the use of a credit card or other online payment system that provides notification of each separate transaction to the account holder—but whatever method is used must be reasonably designed to ensure that the person giving the consent is the child’s parent or legal guardian.  In the past, the Federal Trade Commission (FTC) has explained how educational institutions can provide consent to a website or mobile application’s collection of personal information from students.  It recently provided a helpful reminder for the education technology (EdTech) companies that are enabling remote learning in this brave new world, and for the schools and parents as well, of the requirements surrounding consent in this context.

In a blog post written by FTC attorney Lisa Weintraub Schifferle, the FTC reiterated that schools can provide consent on behalf of parents to the collection of their students’ personal information in the educational context, “but only if such information is used for a school-authorized educational purpose and for no other commercial purpose.”  While this guidance is not a new interpretation of COPPA, it serves as a useful reminder for EdTech companies in this trying time, easing the burden they would otherwise have if they were to need to obtain verifiable parental consent for each individual student under 13.  The FTC has previously clarified that as a best practice, schools or school districts should be providing consent, rather than individual teachers, as many schools and districts already have processes in place for assessing sites’ and services’ practices.  The companies must still provide COPPA notices to the schools of the data collection and use practices of their educational tools, and such notices must be written in such a way that students, parents and educators can easily understand.  The FTC notes that these COPPA notices should be made available to parents as well—for example, by the company on the company’s website, or by the school to parents—and if possible, the company should allow parents to review or access the personal information that is collected from the child.

While COPPA does not apply to schools themselves, it is now more important than ever for schools to be doing their due diligence on each EdTech tool they are using by carefully reviewing the tools’ privacy and security policies.  Schools should ensure these companies are deleting the students’ personal information once it is no longer needed for its educational purpose.  Parents can also help by talking to their children about how to stay safe online.

Webinar: International developments in the regulation of protecting children online: from GDPR and AVMS to COPPA

Our transatlantic team will be hosting a practical webinar looking at the significant proposed changes in the protection of children online. The webinar will look at the current trends across Europe and the US to provide insights on changes that could impact your business in the year ahead. Please click here to find out more and register.

FTC Sends Warning Letters to VOIP Companies Over COVID-19 Robocalls

The Federal Trade Commission (“FTC”) issued warning letters to nine Voice over Internet Protocol (“VoIP”) service providers to warn them that “assisting and facilitating” illegal telemarketing or robocalls related to the COVID-19 pandemic is strictly against the law.

The FTC’s letters claimed that the VoIP service providers were using practices that “prey upon consumer fear of the pandemic to perpetrate scams or disseminate disinformation.” The letters further warned that the service providers’ actions may violate the FTC Act and/or the Telemarketing Sales Rule (“TSR”) and that the FTC may take legal action against them if they assist a seller or telemarketer who they know, or consciously avoid knowing, is violating the TSR.

The letters highlighted several types of prohibited conduct under the TSR, including: (i) calls about charitable donations; (ii) calls from a fake governmental agency; (iii) fake caller ID numbers; and (iv) making calls to numbers listed on the National Do Not Call Registry.

The FTC requested a response from the companies this week describing the specific actions they have taken to ensure their company’s services are not being used in Coronavirus/COVID-19 robocall schemes.

Takeaway: Advertisers and consumers should be vigilant over the influx of COVID-19 advertising and solicitation from bogus companies.

 

Living in a Fantasy World? Judge Admonishes Plaintiff’s Counsel for Filing Emergency Motion Over Unicorns

Last week, a federal judge admonished a plaintiff’s lawyer for filing a second emergency motion in its trademark infringement suit to halt the sale of counterfeit unicorn drawings amidst the COVID-19 global pandemic.

On March 9, 2020, the plaintiff, Art Ask Agency, filed a complaint in the U.S. District Court for the Northern District of Illinois, alleging that multiple internet sites based in China sold counterfeit items depicting unicorns, dragons and elves designed by British artist, Anne Stokes. Examples of the allegedly infringing products can be found below:

The complaint requested a temporary restraining order. However, on March 16, the U.S. District Court issued an order putting all civil litigation on hold in light of the “coronavirus COVID-19 public emergency.” U.S. District Judge Steven Seeger accordingly rescheduled the temporary restraining motion hearing for April 13. In response, the plaintiff filed a motion for reconsideration, arguing that while it recognized that the community was in the midst of a “coronavirus pandemic” it would suffer an “irreparable injury” if the court did not hold a hearing that week and immediately put a stop to the infringing unicorns and the knock-off elves.

Two days later, the motion was followed by a second emergency motion, which prompted Seeger to swiftly deny the plaintiff’s motion to reconsider. Seeger’s scathing order noted that while the court can still hear emergency motions, “resources are stretched and time is at a premium. Therefore, “if there’s ever a time when emergency motions should be limited to genuine emergencies, now’s the time . . . the world is facing a real emergency, Plaintiff is not.”

Seeger’s order also quoted lawyer Elihu Root, the Secretary of War under Theodore Roosevelt: “About half of the practice of a decent lawyer is telling would-be clients that they are damned fools and should stop.”

Takeaway:   While real emergencies continue to exist in civil litigation during the COVID-19 crisis, prior to filing any request for emergency injunctive relief, attorneys should ensure that the matter truly is urgent and will likely be viewed as such by the court.

 

 

LexBlog