Behind the Scenes

Arent Fox's advertising law blog - latest news and trends in advertising, data security & privacy, and fashion & entertainment.

Behind the Scenes
E-Commerce
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New York Tells DraftKings and FanDuel to Stop Taking Bets

New York's Top Regulator Steps In

On November 10, New York's attorney general ordered DraftKings and FanDuel to stop accepting bets from the state's residents, arguing the games constituted illegal gambling. The cease-and-desist order is the most recent in a string of setbacks for the burgeoning multi-billion-dollar industry that intertwines betting with fantasy sports.

Critically for DraftKings and FanDuel, the move by Attorney General Eric T. Schneiderman could create a domino effect, leading other states to take similar action. For their part, fantasy sports companies say the games are not gambling because they involve skill and are legal due to a 2006 federal law that exempts fantasy sports from a ban against processing online sports betting.

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Publicity Rights
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District Court Gives Go-Ahead to Marilyn Monroe’s Estate on False Endorsement Claim

What’s the News?

A federal judge in the Southern District of New York recently held in A.V.E.L.A., Inc. v. Estate of Marilyn Monroe, LLC that the Lanham Act protects rights in a celebrity’s image long after his or her death. Specifically, the court determined that Marilyn Monroe’s estate could proceed with a Lanham Act false endorsement claim against a vintage collectibles licensor who was creating and marketing various products featuring images of the iconic celebrity. Notably, the court issued this holding over the licensor’s objection that the false endorsement claim was a “thinly veiled” attempt to enforce publicity rights, a separate type of claim not available under the Lanham Act.
 

The Legal Backdrop: Milton H. Greene Archives, Inc. v. Estate of Marilyn Monroe, LLC

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Privacy & Security - US & Abroad
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10 Steps to Mitigate A Data Breach Before It Happens

Many of the clients that we advise are nervous about data protection, cyber issues, and the privacy of their customers and employees. Who can blame them? Every day we read news about another privacy breach. Some of the companies that we counsel are light years ahead – talking coding strategies and testing for vulnerabilities – while others are trying to determine how to be compliant and implement internal protocols in response to a breach.

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E-Commerce
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Online Retailers Beware: ADA Expansion to Require Enhanced Web Accessibility for Disabled

Wheelchair ramps and accessible parking spaces soon may not be enough for retailers to comply with the Americans with Disabilities Act (ADA). As companies continue to expand their online presence, the number of suits brought against retailers for non-compliance with the ADA has grown, especially litigation related to the websites of large retail chains, many of whose websites allegedly do not allow hearing- or sight-impaired individuals easy access to the services provided by retail websites. Trade associations have filed similar claims as they continue to petition for non-discriminatory treatment for those with disabilities, with the ultimate goal of retail websites that cater to the needs of the disabled by providing features such as closed captioning for the deaf or screen reader-compatible content for the blind.
 

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Promotions, Sweepstakes & Contests
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Paid to Play: FTC Cracks Down on Marketing Company for Deceptive Video Game Endorsements

The Federal Trade Commission (FTC) continues to pursue companies for failing to disclose material connections in endorsements. In a recent action, the FTC settled with Machinima, Inc. a marketing company that paid gamers to post YouTube videos endorsing Microsoft’s Xbox system and games. The gamers posted the videos without informing viewers that they had been given pre-release access to the games and paid to produce the videos.     
 
Under the FTC’s Guides Concerning the Use of Endorsements and Testimonials in Advertising (the Guide), “material connections” between advertisers and endorsers – those that consumers would not expect – must be fully disclosed. Such connections may involve payments or free products, or any other benefit that might materially affect the weight or credibility of the endorsement.
 

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Social Media
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Social Media Law: U Can't Always Post What U Want

Partner Sarah Bruno is featured as a potential panelist at SXSW 2016 for a discussion that would focus on the latest in ad law, new tech, and social media.

The panel, which also features, Andrew Udin of Publicis, Brian Heidelberger of Winston & Strawn, and  Marc Yudkin of Vayner Media will address:

  • The legal considerations when utilizing technology found in the best new platforms and tech products at SXSW 2016.
  • The increased scrutiny brands face with their advertising practices on social media.
  • The motivation as brands continue to exploit celebrities’ names and likenesses for commercial purposes without permission.

To learn more about the planned panel and to vote for its inclusion is SXSW 2016, click here.

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Advertising
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FuelBand Advertising Claims Spark Settlement Agreement

Nike Inc. (Nike) recently agreed to pay more than $2.4 million to settle a class action lawsuit related to the Nike FuelBand activity tracker. The lawsuit, Levin v. Nike, was filed May 17, 2013, in California Superior Court in Los Angeles County. The Plaintiffs alleged violations of California unfair competition and false advertising laws, as well as breach of warranty.
 
The FuelBand Advertising Claims

The Plaintiffs’ allegations center around claims made in connection with the Nike FuelBand, which is a wristband activity tracker. Specifically, advertising for the FuelBand suggests that the product is capable of tracking every calorie burned and step taken by a FuelBand user. The complaint singles out the following claims:

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Payment Processing, Electronic Fund Transfers & Mobile Payments
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Chips or No Chips? Retailers and Merchants Must Implement New Payment Card Standards or Face Fraud Charges

Major US credit card associations including Visa, MasterCard, American Express, and Discover have set October 1, 2015, as the deadline for merchants to implement the Europay, MasterCard, and Visa (EMV) standards. EMV standards include requirements for physical card terminals and a shift from magnetic stripe cards to chip-embedded cards. In order to comply with these standards, banks have been sending out compliant chip-embedded credit and debit cards to their customers. These chip-embedded cards are more secure than traditional magnetic swipe cards since each use of the chip-embedded card creates a unique transaction code that cannot be used to process another transaction or create a fraudulent card. Merchants and retailers also have to take action by updating their card reader terminals and technology if it is not EMV compliant already. This push for compliance will bring the U.S.

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Advertising
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False Ad Plaintiffs Out of Joint and Out of Luck in Fourth Circuit

The Fourth Circuit has recently made it more difficult for false advertising plaintiffs to survive a motion to dismiss where their claims are based on an allegation of “literal falsity.” In the suit, plaintiffs, purchasers of certain joint health supplements, alleged that GNC and Rite Aid engaged in false advertising and violated various state consumer protection laws, deceptive advertising, and express warranty statutes in marketing joint health supplements containing glucosamine and chondroitin. Specifically, plaintiffs alleged that the joint health representations on defendants’ product packaging were false because the “vast weight” of scientific evidence has shown that those ingredients are not more effective than placebos at treating osteoarthritis. 
 

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Advertising
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Industrial Parts Manufacturer Rockwell Accuses Unauthorized Distributor of Lanham Act Violations

Rockwell Automation, Inc. (Rockwell), a leading industrial parts manufacturer, recently sued industrial parts distributor Radwell International, Inc. (Radwell), alleging numerous violations of the Lanham Act, including claims of trademark infringement and false advertising, as well as multiple violations of state unfair competitions laws.  According to the complaint, Radwell has sold various Rockwell-branded products without authorization, while falsely claiming that these products are warranted by Rockwell.  The case, Rockwell Automation, Inc., v. Radwell International, Inc., No. 1:15-cv-05246 (D. N.J. filed July 6, 2015), is currently pending in New Jersey federal district court.
 

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ABOUT ARENT FOX LLP

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.