Interactive Counsel

Arent Fox's interactive media law blog - latest news and trends in advertising, data security & privacy, and IP.

Interactive Counsel
E-Commerce, Payment Processing, Electronic Fund Transfers & Mobile Payments
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Including Canada? Make Sure Your E-Mail Policies Cover Canada’s Newest Spam Law

What’s New?

One of the world’s most consumer protective spam laws recently went into effect in Canada on July 1, 2014, and many companies operating outside of Canada are learning that the law also impacts them because of how broadly it is drafted.

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Advertising, Prepaid & Stored Value Cards
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Hands Off! Pending Fight Over Abandoned Gift Cards Heats Up

What Made News?

A group of merchants and restaurants, including Netflix Inc., California Pizza Kitchen Inc., and Ralph Lauren Corp., are fighting back in federal court against a Delaware lawsuit alleging that they have been withholding unclaimed gift card balances that are due to the state.

Background on the Case

Delaware law expressly includes gift cards in its abandoned property law. Under Delaware law, if a gift card has been abandoned or unclaimed for a period of five years, then the remaining balance must be turned over to the state if certain criteria are met. The unclaimed property must be turned over to Delaware if the unclaimed property is located in the state, if the owner who abandoned the property has a last known address in Delaware, or if the owner’s identity and last known address are unknown but the property is held by a business incorporated in Delaware.

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Advertising, E-Commerce, Payment Processing, Electronic Fund Transfers & Mobile Payments
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FTC Chooses Not to Update Negative Option Rule

As part of the Federal Trade Commission’s (FTC) regular rule and guidelines review process, it recently reviewed the rule governing the “Use of Prenotification Negative Option Plans” (Negative Option Rule). Under a “prenotification negative option” plan, consumers receive periodic announcements of upcoming merchandise shipments and have a set period of time to decline the shipment. If the consumer fails to decline the shipment, the company ships the merchandise and bills the consumer. The Negative Option Rule requires sellers to clearly disclose the terms of any such negative option plan before consumers subscribe.

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Product Placement & Distribution, Payment Processing, Electronic Fund Transfers & Mobile Payments, Song-Beverly Act
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Ninth Circuit Affirms Dismissal of Suit Against Redbox for ZIP Code Collection Practices

What Made News?

The Ninth Circuit has affirmed the dismissal of a putative class action against Redbox, holding that its ZIP code collection practices fall within an exception to California’s Song-Beverly Credit Card Act of 1971 (Song-Beverly Act).

Details of the Case

Under the Song-Beverly Act, retailers are prohibited from collecting personal identification information in connection with a credit card purchase. Following a California Supreme Court decision, ZIP codes fall within the definition of “personal identification information.” There is, however, an exception to the Song-Beverly Act that allows for the collection of such information where the “credit card is being used as a deposit to secure payment in the event of default, loss, damage, or other similar occurrence.” Redbox was able to rely on this exception.

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Advertising
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Fight On, Fight On? USPTO Cancels Six WASHINGTON REDSKINS Trademarks

Yesterday, the Trademark Trial and Appeal Board (TTAB) of the US Patent & Trademark Office (USPTO) cancelled six registrations related to the Washington Redskins professional football team. The TTAB found the marks violated Section 2(a) of the Federal Lanham Act, which bars registration of trademarks that may disparage persons or bring them into contempt or disrepute.

While this is a setback for Pro Football, Inc., the owner of the WASHINGTON REDSKINS trademarks, it is certainly not the end of the story. The team has already announced that it will appeal the decision to federal court. Furthermore, the TTAB decision only covers the right to register the trademarks. It does not impact the team’s right to use the trademarks, nor does it impact the team’s common law trademark rights, which are based on use of the marks in commerce.

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Advertising
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‘To Pomegranate or Not to Pomegranate…’

In an 8-0 decision, the US Supreme Court ruled last week that a private party may bring a Lanham Act claim challenging a food label regulated by the Federal Food Drug and Cosmetic Act (FDCA). The case originated when POM Wonderful LLC (POM), the makers of POM pomegranate juice drink, sued Coca-Cola Company in 2008, alleging that Coca-Cola had misleadingly labeled as “pomegranate-blueberry blended juice” a product that is more than 99 percent apple and grape juice, violating the Lanham Act. Justice Anthony Kennedy, writing for the Court, ruled that FDCA regulation did not preclude a Lanham Act claim and that Congress’ intention was for both statutes to co-exist: “Congress did not intend the FDCA to preclude Lanham Act suits like POM’s.” Slip. Op. 17

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Advertising, Product Placement & Distribution
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Being Labeled: FTC Amends Wool Products Labeling Rules

What Made News?

The Federal Trade Commission (FTC) has recently approved changes to its Wool Products Labeling Rules (Wool Rules) in order to allow wool manufacturers and sellers greater flexibility and bring the Wool Rules into line with the Wool Suit Fabric Labeling Fairness and International Standards Conforming Act, as well as the FTC’s textile labeling regulations.

What Are the Major Changes?

The most significant change to the Wool Rules concerns hang-tag labels. The FTC will now allow certain hang-tags that disclose fiber trademarks and performance, but do not provide the product’s full fiber content. This amendment may allow companies the flexibility to highlight certain fibers in their products without having to provide the product’s full details on hang-tags. Hang-tags must, however, clearly disclose that they do not provide the product’s full fiber content should the product contain other fibers.

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Advertising, Payment Processing, Electronic Fund Transfers & Mobile Payments
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Major Retailers Sued for Point of Sale Devices Inaccessible to the Blind

What Made News?

Major retailers from Apple to Lucky Brand to J. Crew are being sued for violating the Americans with Disabilities Act (ADA) by failing to provide point of sale (POS) devices that are accessible to the blind.

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Advertising, Privacy & Security
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Victory for FTC in Dispute Over Its Data Security Authority

What Made News?

The Federal Trade Commission (FTC) recently won a significant victory in federal court in its ongoing efforts to hold businesses accountable for their data security practices. The United States District Court for the District of New Jersey rejected a challenge to the FTC’s authority over data security, allowing the FTC to continue with its action in court against the Wyndham Worldwide Corporation (Wyndham) for its data security failures.

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Advertising, Privacy & Security
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Judge Orders FTC to Disclose Data Security Standards

What Made News?

The Federal Trade Commission’s (FTC) chief administrative law judge ruled recently that the agency must disclose the internal standards it uses to determine whether a company maintains adequate data security. The ruling is part of ongoing litigation between the FTC and a company called LabMD, which, according to the FTC, failed to maintain proper security for consumer data. The ruling could make it easier for companies that collect and manage consumer data to audit their data security practices and ensure compliance with FTC standards.

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Arent Fox LLP, founded in 1942, is internationally recognized in core practice areas where business and government intersect. With more than 350 lawyers, the firm provides strategic legal counsel and multidisciplinary solutions to clients that range from Fortune 500 corporations to trade associations. The firm has offices in Los Angeles, New York, San Francisco, and Washington, DC.