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TTAB Refuses to Take Judicial Notice of WIkipedia Entry, Affirms Section 2(d) Refusal of FREEBIRD BY STEVEN for Shoes
Since the Wikipedia evidence was attached to applicant's brief, it was untimely. However, the Board may take judicial notice of dictionary definitions, encyclopedia entries, standard reference works, and commonly known facts. But Wikipedia entries are not so reliable. "Because Wikipedia is a source whose accuracy may be questioned, it is not a source from which the Board may take judicial notice." Wikipedia evidence must be offered at a time when the other party will have an opportunity to challenge the evidence. See In re IP Carrier Consulting Group, 84 USPQ2d 1028 (TTAB 2007). [TTABlogged here].
Turning to the 2(d) refusal, the Board found "Freebird" to be the dominant element in Madden's mark. It is the first word in the mark and furthermore would be seen as "the product mark identifying the source of a specific item," while "by Steven" would be seen as a house mark for a range of products. "Consumers could well think that 'by Steven' identifies the source of the FREE BIRD products or that registrant has licensed applicant to manufacture shoes under the FREEBIRD brand."
Applicant Madden argued that "by Steven" serves to distinguish the marks because Steven Madden is "almost synonymous with shoes." The evidence demonstrated that Steven Madden is a renowned shoe designer and entrepreneur but, the Board noted, there was no evidence that consumers think of him when they see a mark that includes the term "by Steven" in connection with clothing or shoes. In any case, the fame of the mark is only one of the duPont factors. "A junior party's fame cannot excuse likelihood of confusion created by its use of a mark similar to one already in use."
Next, Madden feebly argued that the term "free bird" is highly suggestive for women's apparel, based on the term's reference to the Lynyrd Skynyrd song, "Free Bird," a song that "refers to the relationships between men and women." Madden pointed out that "bird" is an English slang term for "girl."
The Board was not impressed. First, it perceptively noted that "British slang is not American slang." [Hear, hear! - ed.]. Moreover, the Board failed to see that a reference to relationships between men and women "has anything to do with shoes and clothing."
And so the Board found the marks at issue to be similar in appearance, sound, meaning, and commercial impression.
Not surprisingly, third-party registration and website evidence, submitted by Examining Attorney Zachary Bello, as well as applicant's own evidence, demonstrated that applicant's shoes and registrant's shirts, pants, etc., are related and are sold through the same channels of trade.
Madden disagreed, maintained that registrant's goods are inexpensive ($10-12 wholesale) and may be purchased only online at registrant's website, by clothing distributors, whereas Madden's shoes are relatively expensive (well more than $100 retail).
The Board once again pointed out that its Section 2(d) determination must be made on the basis of the goods as identified in the opposed application and the cited registration. Because there are no limitations as to trade channels or customers in the application or registration, the Board must presume that the goods move in all normal channels of trade to the usual classes of consumers. Nor are there any restrictions on the prices of the goods.
Balancing the relevant duPont factors, the Board found confusion likely and it affirmed the refusal.
Read comments and post your comment here.
TTABlog note: "I'm as free as a bird now, And this bird you can not change."
Text Copyright John L. Welch 2013.
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Five new patents filed by Ferrari in Europe detail the company's interest in high performance hybrid vehicles. The addition of hybrid sports cars would put Ferrari in play with rival luxury car makers such as Porsche and McLaren, which have already added hybrids into their lineups. To continue reading, click: Patent Filing Reveals High Performance Hybrids Next Up for Ferrari
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Does anyone else think Amazon’s Jeff Bezos utterly bamboozled Charlie Rose and the good folks over at 60 Minutes last Sunday night?
In his interview with Rose, Bezos unveiled a service he dubs “Amazon Prime Air,” a delivery service that would use autonomous drones to deliver Amazon goods weighing less than five pounds in perhaps as little as 30 minutes after you place your order online.
Very few mainstream accounts of the Amazon Prime Air drone delivery idea following the big reveal see to cast the incredible notion in any light other than awe and hopeful amazement.
But really? For a piece of journalism that was otherwise devoted to a cool, adored company’s commitment to innovation, the drone idea was no innovation at all: it was good old fashioned marketing. And yes, as a few have noted already, it was perfectly placed marketing right on the eve of Cyber Monday.
In the days since, tech writers have lined up to cast doubt on the feasibility of an urban airspace awash in drones ferrying Amazon’s wares. Many point to the F.A.A.’s Integration of Civil Unmanned Aircraft Systems (UAS) in the National Airspace System Roadmap. The Roadmap describes the guidelines and process for revising F.A.A. rules regarding autonomous flight – rules Bezos alluded to on Sunday. On page 33, the Roadmap clearly states: “Autonomous operations are not permitted.”
So what’s going on behind the scenes to make this a reality for Amazon? Is there a team of Amazon lawyers and lobbyists with their sights set on the F.A.A.? That lab-looking setting in Charlie Rose’s piece – is there a huge team of engineers spending millions to make this a reality in the five-year timeframe Bezos mentioned on Sunday? What will it take to win this effort?
And that’s just it. Amazon won when Charlie Rose stepped through that door at Amazon and laid eyes on that drone. Mr. Rose, a consummate journalist I respect very much, took one look at that thing and did what any of us would have done. He got some child-like satisfaction over the thought of the thing buzzing above the treetops. The next morning, just about every local morning news show bantered about it, and the bloggers went bananas. And Amazon had itself top-of-mind, as we say, when we settled in to our chairs at work on Monday to navigate to wherever it was we go when the boss isn’t looking.
Part 2: Tips for Effectively Searching the USPTO Database Using TESS - California IP Bar Webinar: Dec. 10 at Noon (PST)
Tips for Effectively Searching the USPTO Database Using TESS
State Bar of California Intellectual Property Section Trademark Interest Group
Moderator: Mary A. Harris
Ed Timberlake is a former Trademark Examining Attorney at the U.S. Patent & Trademark Office, and former Copyright Examiner at the U.S. Copyright Office. He now has his own practice, Timberlake Law. Ed’s practice focuses entirely on trademarks and copyrights, primarily providing advice, preparing and filing applications, and maintaining registrations.
Alex Butterman is an attorney specializing in trademark and copyright law with the Washington, D.C. intellectual property boutique firm of Staas & Halsey LLP. Alex has been representing a diverse group of businesses in a variety of industries and commercial sectors since 1995 while working in several IP boutique law firms and as an Attorney Advisor (“Trademark Examining Attorney”) at the U.S. Patent and Trademark Office (USPTO).
Alex and Ed will discuss design searching basics using the Design Code Manual, and searching for nontraditional marks.
I’m only discussing the Lanham Act claims, but there are many other claims in this case. First Data and SecurityMetrics generally sit at different points in the market for servicing merchants who take credit card payments, but apparently First Data is encroaching into SecurityMetric’s space. “PCI” originally stood for “Payment Card Industry,” but now also is used to refer to the PCI Security Standards Council and the PCI Data Security Standard administered by the council. Major credit card brands formed the council, which developed the security standard now adopted by all the credit card brands. They penalize noncompliance with the security standard.
While the PCI standard is universal, the various brands have different requirements for demonstrating or validating compliance with the standard. There are a number of different types of PCI compliance service vendors assessing various aspects of transactions; the credit card brands recognize certifications for several different functions, and the PCI Council certifies the vendors. SecurityMetrics is certified by the PCI Council for several specific functions, and First Data isn’t.
Instead, First Data is a payment processor: it processes transactions for merchants and independent sales organizations. SecurityMetrics provided compliance services to some merchants for whom First Data provides processing services. They worked together by contract for several years. First Data promoted SecurityMetrics to certain customers as a preferred vendor for compliance validation services, and SecurityMetrics used a protocol for reporting validation of compliance known as the START system. SecurityMetrics alleged that First Data breached the agreement, then prematurely terminated it.
SecurityMetrics alleged that, in mid-2012, First Data began offering a service called “PCI Rapid Comply,” in competition with SecurityMetrics. First Data imposes billing minimums on certain customers. SecurityMetrics alleged that, when calculating the minimums, First Data counted fees for PCI Rapid Comply towards them, but not fees paid to vendors of other PCI compliance services. First Data also allegedly told merchants who used other compliance vendors that they’d have to pay for those services in addition to the cost of PCI Rapid Comply. This was allegedly false because First Data refunds amounts paid to third-party vendors by merchants who use the services of those vendors to become compliant.
The court noted uncertainty whether failure to disclose can be actionable in the Fourth Circuit, which is odd since implied falsity is, as the court notes, actionable everywhere, and one way to imply a falsehood is to say some things and withhold relevant information. In any event, SecurityMetrics stated a Lanham Act false advertising claim because First Data’s advertising said that merchants “will pay” the additional cost—that could be understood as an affirmative misstatement.
SecurityMetrics’ false endorsement claim also survived. It alleged that First Data’s use of the phrase “PCI” in the name of its “PCI Rapid Comply” service was likely to cause merchants and others to incorrectly believe that the service is associated with or approved by the PCI Council. First Data argued that SecurityMetrics lacked standing to raise this claim, since it didn’t own any PCI marks. However, SecurityMetrics alleged that it had actually been harmed by this misstatement. Dastarsays that § 43 goes beyond trademark protection, and false endorsement covers use of words that are likely to cause confusion “as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person.” Thus there are three distinct individuals involved: (1) the user of the term, (2) the misrepresented party, and (3) the plaintiff. First Data argued that (2) and (3) had to be the same, but the court disagreed. While some people, like consumers, lack standing to bring a false endorsement claim, and while the plaintiff must have some sort of commercial or competitive interest (what sort will soon be decided by the Supreme Court), the plaintiff need not have an interest in the mark itself. See Famous Horse. This is consistent with the statutory language covering “any person who believes that he or she is or is likely to be damaged by such act.” SecurityMetrics alleged damage to its commercial interests and its ability to stay competitive in the marketplace; that was enough.
The same alleged damage made SecurityMetrics more than a mere intermeddler and gave it standing to seek cancellation of First Data’s trademark registration for the term.
In 2006, hackers infiltrated Symantec’s network and stole the source code used in the 2006 versions of its antivirus etc. products. Symantec allegedly knew this, but neither performed a reasonable investigation into the breach nor informed consumers. Haskins bought Symantec’s Norton Antivirus software online in late 2007 or early 2008. She alleged that she was exposed to Symantec’s claims on its website that Norton Antivirus provided computer, data, and email security by, inter alia, blocking viruses and spyware, that she bought the product unaware that it was compromised and believing that it would protect her, and that had she known the truth she wouldn’t have bought the product. “In 2012, a hacking group publicly claimed to possess the 2006 stolen source code and posted certain code on the internet, and Symantec disclosed for the first time that its systems had been breached in 2006 and the source code stolen.”
The court first found that Rule 9(b) applied to the UCL and CLRA claims. Haskins identified specific statements on Symantec’s website and in its ads, e.g., the products are supposed to “secure and manage ... information against more risks” and “eliminate risks to information, technology and processes....” Symantec argued that this was insufficient because she failed to identify any specific ad she saw and relied on, and that these statements were mere puffery.
Haskins did identify specific statements in ads, and appended the relevant documents. Also, Tobacco II said that plaintiffs can sometimes state a UCL claim without showing that they viewed any particular ad where misrepresentations were part of an extensive, longterm ad campaign. If a plaintiff can prevail at trial without showing that she saw any specific ad, Rule 9(b) shouldn’t have a higher standard; that would turn Rule 9(b) from a procedural rule to a substantive one.
Even named class members can have standing without proof they saw a specific ad under Tobacco II, but that case offers a narrow exception to the general rule where the defendants engaged in decades-long saturation advertising. Here, Haskins based her allegations on ads 2006-2012, while purchasing in 2007/2008. To have standing, she’d have to allege that she was in a Tobacco II situation, and also that the long-term ad campaign to which she was exposed affected her purchase decision. This complaint didn’t, though the court would allow her to amend.
Symantec also argued that the claims were mostly nonactionable puffery. But that apparently conceded that some of the claims weren’t. Plus, even statements that might be puffery standing alone can in context contribute to deception and be actionable. But the court accepted Symantec’s argument that Haskins didn’t provide enough explanation of what was false. Though she attached the ads she was attacking and therefore Symantec was on notice, she still didn’t “set forth what is false or misleading about a statement, and why it is false” with sufficient particularity—she appended “nearly the entirety of Symantec’s 2006–12 advertisements for, and website descriptions of, the Products.” Even claims for fraud by omission need to identify the information Symantec communicated “that was rendered misleading by the failure to disclose the 2006 source code theft.” Her burden was to “at least make a prima facie explanation of how each of the complained-of statements constitute fraud.” Thus, the complaint was dismissed, but the court went on to address a few other issues in case she filed an amended complaint.
Haskins needed to show injury to have standing under the UCL; that can come from paying more than she would otherwise have been willing to pay because the product was not as advertised. Symantec argued that she didn’t have standing because she didn’t allege that she viewed any specific ad or representation, but this didn’t necessarily matter under Tobacco II. If she could win at trial on a long-term ad campaign theory, her economic injury is the purchase that wouldn’t have occurred but for the misrepresentation. Likewise, on a motion to dismiss, such harm would at least plausibly ground a claim of “unfair” business practices, as well as fraudulent ones. The same theory would give her CLRA standing.
Symantec argued that software wasn’t “goods” or “services” covered by the CLRA. The court disagreed, in a brief but pithy discussion. Goods are “tangible chattels bought or leased for use primarily for personal, family, or household purposes.” Symantec argued that (1) because Haskins downloaded the software, it wasn’t a tangible chattel, and (2) all software is outside the CLRA even if purchased on disk. The CLRA’s language is from 1970. “It seems unlikely that the Legislature knowingly exempted computer software from the CLRA’s scope two years before the invention of Pong.” More likely, the legislature meant to exempt credit and insurance from the scope of the law, “since those commodities are inherently intangible promises which have no direct and concrete impact on the physical universe.”
Of course, that reasoning wouldn’t justify expanding the statute beyond its terms. But “tangible” means “[h]aving or possessing physical form; corporeal.” Symantec’s software is often purchased in physical form, as other “goods” are; other intangibles aren’t. Plus, even downloaded, “it works a physical change on a physical hard drive. It possesses corporeal form in a way that credit or insurance inherently cannot.”
Symantec argued that the disk was irrelevant, “nothing but a physical mechanism for delivering a nonphysical right to use intangible software.” That was slicing the salami too thinly. A book is a “tangible chattel,” despite being “merely a delivery mechanism for the transmission of information.” By contrast, insurance contracts and credit cards aren’t delivery mechanisms, but physical representations of an intangible agreement. “Consumers do not purchase software discs or books to memorialize or prove the existence of an agreement; they purchase the objects to possess and use them. As a physical object purchased for a consumer’s use, a software disc is a tangible chattel.”Though it was a close call, the court deferred to the CLRA’s own instruction to construe the statute liberally. At least where there’s a physical version, construing the statute to cover only the in-store version wouldn’t be a liberal construction.
One of fashion's most well known designs, the Burberry tartan print, is in trouble in China after the Chinese Intellectual Property Office cancelled its protection due to non-use. Burberry has filed paperwork to appeal the cancellation, but the cancellation is alarming nonetheless. To continue reading, click: Iconic Burberry Plaid Trademark Under Fire in China
Fascinating to have this case come out just as I’m teaching remedies in my trademark class. The casebook (Ginsburg et al.) is hanging on by its fingernails to the pre-eBay world in which likely success routinely translated to irreparable injury for purposes of preliminary injunctive relief. The Ninth Circuit gives the most explicit rejection yet of finding irreparable injury based on the theory that likely confusion inherently involves the risk that the plaintiff will lose control over its reputation.
The Platters were one of the most successful performing groups of the 1950s. Defendants (known here as Marshak) appealed the preliminary injunction in favor of plaintiff HRE, enjoining Marshak from using The Platters in connection with any vocal group (with narrow exceptions). Herb Reed was one founder; others who came to be recognized as “original” members were Paul Robi, David Lynch, Zola Taylor, and Tony Williams. The original members left one by one, but continued to perform under some version of “The Platters.” Multiple legal disputes followed.
This mare’s nest, brutally simplified, is roughly as follows: Marshak claims rights descending from 1956 employment contracts between the original members and Five Platters, Inc. (“FPI”), the company belonging the group’s then-manager. FPI transferred its rights to a company that then transferred rights to Marshak. “Litigation over the validity of the contracts and ownership of the mark left a trail of conflicting decisions in various jurisdictions, which provide the backdrop for the present controversy.” FPI sued Robi and Taylor in 1972; a 1974 California decision held that FPI was a sham. But an analogous dispute between FPI and Williams in New York resulted in a 1982 decision that FPI had lawful exclusive ownership of the name.
The Ninth Circuit upheld an award of compensatory and punitive damages to Robi, as well as cancellation of FPI’s registered Platters marks. FPI sued Reed for trademark infringement in Florida, and avoided Reed’s preclusion argument based on the California judgment. Reed then settled, assigning FPI all his rights in FPI stock but retaining the right to perform as “Herb Reed and the Platters.” The settlement had an escape clause if a final order by a court of competent jurisdiction provided that FPI had no right to the name The Platters. A key question was whether the escape clause had been triggered.
Marshak, FPI, and others sued Reed in New York, and Reed counterclaimed. The court ruled that the settlement barred Reed from asserting rights against FPI, and that the escape clause hadn’t been triggered because the earlier decisions didn’t count as a final judgment that FPI wasn’t entitled to use the name, leaving open a remote possibility that FPI could establish common law trademark rights. (It was remote because the Ninth Circuit held that FPI would need to present evidence that they used the mark in a way that was not false and misleading, and noted that FPI was “unlikely” to be able to make the required showing. FPI abandoned its trademark claim on remand and the evidentiary hearing ordered by the court of appeals never occurred.)
HRE, acting for Reed, sued FPI in Nevada. “To get around the restrictions in the 1987 settlement, HRE creatively alleged that it owned the ‘Herb Reed and the Platters’ mark and that defendants used a confusingly similar mark, namely ‘The Platters.’” FPI, then defunct and (according to Marshak) already having transferred its rights, defaulted, and a permanent injunction issued declaring that FPI never had common law rights to the mark and that Reed had superior rights. Then, HRE obtained a preliminary injunction against a former performer-employee of FPI; the court in that Nevada case held that the escape clause had been triggered because the time to appeal the default judgment had expired.
HRE then sued Marshak in Nevada, alleging trademark infringement. The district court held that HRE wasn’t precluded in asserting a right in “The Platters” either by the settlement, because the escape clause had been triggered, or by laches. The court found that HRE established all the factors needed to support a preliminary injunction: likely success on the merits, a balance of hardships in its favor, irreparable harm, and a public interest favoring relief.
The court of appeals first found that the res judicata effect of the New York cases didn’t bar HRE from bringing the underlying suit. Then the court found that laches did not foreclose the suit, because HRE couldn’t have brought its lawsuit until there was a final ruling with all appeals exhausted that triggered the escape clause. HRE sued less than a year after the escape clause was triggered, which was shorter than the analogous state statute of limitations, creating a strong presumption against laches.
Marshak didn’t challenge likely success on the merits except to argue that Reed abandoned “The Platters” by signing the settlement agreement in 1987. But abandonment must be strictly proved, and the district court didn’t err in concluding that Marshak failed to meet his burden of showing discontinuance plus intent not to resume use. HRE presented evidence that, despite the settlement, it continued to receive royalties from previously recorded material. “The receipt of royalties is a genuine but limited usage of the mark that satisfies the ‘use’ requirement, especially when viewed within the totality of the circumstances—namely, that Reed was constrained by the settlement.” (Comment: Whoa. So abandonment is basically impossible when you've created copyrighted works with ongoing value.) Receiving royalties “certainly qualifies” as placing the mark on goods. The court rejected Marshak’s argument that HRE’s receipt of royalties violated the settlement agreement and thus wasn’t bona fide. The settlement focused on the right to perform and explicitly excluded commercial recordings.
However, the injunction faltered on irreparable harm. eBaymade clear that the Court “has consistently rejected . . . a rule that an injunction automatically follows a determination that a copyright has been infringed,” and emphasized that a departure from the traditional principles of equity “should not be lightly implied.” The Ninth Circuit concluded: “The same principle applies to trademark infringement under the Lanham Act.” Nothing in the Lanham Act indicates that Congress intended a departure in trademark cases; instead, like the Patent Act, the Lanham Act provides that injunctions may be granted in accordance with “the principles of equity.” A possibility of irreparable harm is too lenient; it must be likely.
This foreclosed a presumption of irreparable harm in trademark cases. The Ninth Circuit considered this consistent with other circuits’ holdings—N. Am. Med. Corp. v. Axiom Worldwide, Inc., 522 F.3d 1211 (11th Cir. 2008) and Audi AG v. D’Amato, 469 F.3d 534 (6th Cir. 2006). But the court is about to go further.
The district court, anticipating that eBay and Winter were relevant, said that it was requiring HRE to establish irreparable harm. “Although the district court identified the correct legal principle, we conclude that the record does not support a determination of the likelihood of irreparable harm…. The district court’s analysis of irreparable harm is cursory and conclusory, rather than being grounded in any evidence or showing offered by HRE.” The district court stated that it couldn’t condone infringement just because it had been occurring for a long time; that could encourage wide-scale infringement by people trading on the goodwill of vintage music groups. The court of appeals responded:
Evidence of loss of control over business reputation and damage to goodwill could constitute irreparable harm. Here, however, the court’s pronouncements are grounded in platitudes rather than evidence, and relate neither to whether “irreparable injury is likely in the absence of an injunction,” nor to whether legal remedies, such as money damages, are inadequate in this case.
HRE might be able to establish likely irreparable harm, but it hadn’t on this record. The district court “simply cited to another district court case in Nevada ‘with a substantially similar claim’ in which the court found that ‘the harm to Reed’s reputation caused by a different unauthorized Platters group warranted a preliminary injunction.’” But “citation to a different case with a different record does not meet the standard of showing ‘likely’ irreparable harm.” (I added the emphasis because this is really big, if the court is serious. The “different case” here involved the same trademark and the same type of infringing conduct; if that’s not enough, general citations to other infringement cases in which “goodwill” was at risk can’t possibly be—which means that the tradition of considering infringement to cause irreparable harm has to be rethought.)
The strongest record evidence—not cited by the district court—was an email from a potential customer complaining to Marshak’s booking agent that the customer wanted Reed’s band, not another tribute band. But that just showed confusion, not irreparable harm. “The practical effect of the district court’s conclusions, which included no factual findings, is to reinsert the now-rejected presumption of irreparable harm based solely on a strong case of trademark infringement.” One cannot collapse likely success and irreparable harm; evidence of irreparable harm is required. Remand for another look.
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Carried over from a previous case: the burden is on the senior user to provide “proof that the use of the later mark is or would be detrimental to the distinctive character of the earlier mark requires evidence of a change in the economic behaviour of the average consumer of the goods or services for which the earlier mark was registered consequent on the use of the later mark, or evidence of a serious likelihood that such a change will occur in the future.” This proof has to come from objective elements and “cannot be deduced solely from subjective elements such as consumers’ perceptions.” Moreover, “the mere fact that consumers note the presence of a new sign similar to an earlier sign is not sufficient of itself to establish the existence of a detriment or a risk of detriment to the distinctive character of the earlier mark.”
Growing up in the ’80s, I have fond memories of music, TV shows, and toys from that era, like Transformers, Michael Jackson, Reading Rainbow with LeVar Burton, My Buddy & Kid Sister, Glow Worms, hair bands, He-Man, Square One, and rap music from acts like the Beastie Boys. The ’80s were a fabulous time. If you need to take a few moments to wax nostalgic on the ’80s, you should check out this and this.
What was lacking in the ’80s though, at least for this girl just wantin’ to have fun, were construction-type toys geared to young girls. I certainly was more interested in playing with LEGOs, trucks, and Transformers than with Barbies, Disney princesses, or toting around a doll in a stroller.
Last year, a friend sent me an email simply titled “awesome” that included a link to a Kickstarter campaign for a toy construction kit geared to girls called GoldieBlox. It struck a nerve with my inner child; this was exactly what was missing from my toy box as a kid. Nothing screamed “tomboy.” It was smart, graceful, and colorful, and it told a story. It was like Angelina Ballerina on steroids.
However, GoldieBlox recently got into a bit of a tiff with the Boys. The Beastie Boys, that is. In a genius ad featuring a Rube Goldberg machine, the GoldieBlox team deftly tears down stereotypes regarding toys for girls with their own version of the Beastie Boys’ song “Girls”.
“Not so fast,” said the Beastie Boys. They reportedly sent a letter to the GoldieBlox team claiming the ad infringed on their copyright in the song. Probably assuming public opinion would be on their side, GoldieBlox appeared to have promptly responded by filing a declaratory judgment action, asserting that their ad did not infringe the Beastie Boys’ copyright because it was a parody. Courts consider four factors in determining whether a use of a copyrighted song is a fair use:
- the purpose and character of the use, including whether the use has a commercial purpose;
- the nature of the copyrighted work;
- the amount and substantiality of the portion used in the newly created work in relation to the copyrighted work; and
- the effect of the use upon the potential market for or value of the copyrighted work.
Although this was an advertisement for GoldieBlox that may have had a commercial purpose, it still likely qualified as a fair use as a parody because of its critique on gender stereotypes. The Supreme Court previously has held in Campbell v. Acuff-Rose Music that a parody’s commercial value is only one factor and determined that 2 Live Crew’s “Oh, Pretty Woman” did not infringe Roy Orbison’s “Pretty Woman” song based on the other factors.
Unfortunately, the GoldieBlox dispute with the three rappers dispute won’t be going the distance. In view of the late Adam Yauch’s request in his will that his songs never be used for a commercial purpose, the GoldieBlox team pulled the ad.
Interestingly, Queen didn’t seem to have a problem with GoldieBlox’s “We Are the Champions” ad – at least not publicly or at least not until the Beastie Boys’ controversy gained so much media traction. Like the “Girls” ad, it is no longer available on GoldieBlox’s website.
Moderator: Mary K. Engle, Associate Director, Division of Advertising Practices, FTC
Examples of native ads: “sponsored” story, labeled as such in gray at the top of the headline, in the middle of news stories; story is that American eyesight is worse than you think; is it attributable to mobile devices? Advertiser is FourEyes, eyewear provider.
When you click you get the story:
Sid Holt, Chief Executive, American Society of Magazine Editors
If it’s not from the publisher, it should be disclosed. Journalistic ethics: who’s talking here? Good manners: someone talking to you should identify themselves before you buy.
Laura Brett, Staff Attorney, National Advertising Division of the Council of Better Business Bureaus
Depends on whether it leaves you with any impression of advertiser’s products or services. Content determines whether it needs disclosure.
Amy Ralph Mudge, Partner, Venable LLP
Agrees: you have to look at whether it’s about a specific product, otherwise §5 isn’t implicated.
Engle: suppose the article had nothing to do with eyewear and was about the natural wonders of the world. In that situation, would the eyewear manufacturer need to disclose?
Jon Steinberg, President and Chief Operating Officer, BuzzFeed Inc.
They wouldn’t get any benefit if they didn’t identify themselves. Brands can sometimes post content but they should ID themselves. Wants more than that the placement is paid—wants disclosure of who’s behind the content. There may not be a media relationship but there should be a statement of whose voice is being expressed.
Mike Zaneis, Senior Vice President, Public Policy and General Counsel, Interactive Advertising Bureau
Heart of FTC’s jurisdiction: this is a dynamic area. Is this an ad? That’s a legal issue, not a one size fits all notification requirement. We can all agree that the disclosure on the first page is really good. (We can’t. Interested parties can consult the slides.)
Holt: I don’t think this is good at all. I don’t know what sponsored means, who sponsored it, where it came from. Needs to be clear it’s advertising, who created the content, who paid for it.
Mudge: if it’s not about a product characteristic, no §5 problem.
Robert Weissman, President, Public Citizen
The first thing that consumers need to know is who produced this? They should know it’s not there because of the independent editorial judgment of the publisher.
Robin Riddle, Global Publisher of WSJ Custom Content Studios, The Wall Street Journal
Consumers’ trust is from trust in our editorial decisions. Once you can buy a place in our environment, that’s a completely different decision, even if legally it’s not a requirement. If you start asking “is it benefiting the brand?” that’s subjective. It’s there as the direct result of a commercial relationship.
Engle: suppose it doesn’t mention the brand but does advocate attention to eyewear?
Mudge: yes, that’s an ad.
Brett: NAD agrees. Even if it were fashion eyewear for fall, they’d need to disclose sponsorship.
Mudge: NAD said sponsorship disclosure was appropriate where advertiser was identifying other cool stuff like its product—she thinks that’s on the line. We’re here to talk about the FTC’s proper role—have to ask whether there’s a consumer protection harm in any of these scenarios.
Engle: publishers may have ethical reasons to disclose when the law doesn’t require.
What about when the publisher runs an article about problems with competitor’s technology?
Mudge: that’s an ad!
Steinberg: distinguish between an ad and where the content is from. Lots of places brands can post without paying—e.g., Tumblr. Competitor should have a byline, but wouldn’t necessarily call that an ad because they may be doing that without paid media. (Talking past each other just a tiny bit. Under the law, it’s still “advertising” because of the economic benefit to the speaker, but the website host isn’t responsible for it the way the NYT would be for stuff it published!)
Brett: if editor creates content without consultation then seeks sponsorship for it, that’s ordinary.
Weissman: if they wouldn’t run the article absent payment, then it’s an ad.
Brett: her view would change if they mentioned the sponsor of the article in the article—but if the article’s already written and they seek a sponsor.
Holt: very dangerous to suggest that there should be a market for specific articles to be run if paid for.
Brett: we look at it from consumer deception viewpoint: we’d look to whether consumers were confused about the independence of the article.
Mudge: should come down to content of the article. Not necessarily dispositive how much/when advertiser participated—the question is whether consumers are deceived. Brand will want some control of editorial content; if the journalist gets it wrong, the brand wouldn’t want to be associated with that.
Weissman: if the advertiser has that kind of authority, shouldn’t consumers have reason to know about it?
Mudge: §5 disclosure obligation is different from whether consumers are interested.
Engle: suppose WP reviews a new car and the reviewer loves it. The manufacturer wants to disseminate that far and wide.
Steinberg: as long as the payment of the ad placement is disclosed, I think that’s fine. This is an overarching question about labeling and whether or not the media is paid. You can sometimes see ads for products/movies where an actor/actress is interviewed in a subsequent TV segment. Why focus on online when this is a global labeling issue?
Zaneis: picks up on point that NYT reviewer doesn’t have to disclose that she gets books free, but blogger may have to.
Engle: defends FTC position.
Mudge: if 5 Guys wants to amplify a positive review that some random person gave them, doesn’t think they have to always disclose that it’s a 5 Guys ad—always have to disclose if there’s a material connection between them and the reviewer.
Weissman: but if it appears on the front page of the WSJ not because the WSJ decided to put it there, but because 5 Guys paid for it to be there, then you should know that someone paid to post it.
Riddle: that’s where the relationship changes and it becomes commercial.
Engle: how about best practices when disclosure is desired?
Brett: contextual. Thought that “sponsored by” denotes placement, though see last panel; “promoted by” or “you may also like” are less clear.
Zaneis: “promoted” works on Twitter; shading and other indications work. May not work on different platform. (Okay, why are we asking these people, who while talented, intelligent and experienced clearly are not well positioned to answer “what actually works” as opposed to “what seems reasonable to me from my position”?)
Weissman: people in this room may know, but we are not a representative sample.
Steinberg: sometimes it’s not “sponsored”—they’re actually creating the content. There needs to be a statement, but sponsored is the wrong English word.
Riddle: sponsored is a term we reserve for when the brand hasn’t had editorial input—they just paid for it. Where they had input, we call it sponsor-generated, and we feel that more clearly represents that sponsor’s involvement. Byline: WSJ Custom Content Studios for Brand [X].
Steinberg: we use brand logo, “presented by.” We want people to know that it’s coming from the brand, create “lift” before they consume the content.
Engle: why not use the term “advertisement” or “commercial advertisement”?
Mudge: if it’s talking about the brand it’s an ad, but it’s not necessarily an ad—see the four wonders of the world isn’t an ad for FourEyes—struggled with this in the context of sponsored tweets. Sometimes this is an ad, and sometimes it’s content.
Holt: look, if it’s paid media, it’s an ad. The key isn’t the language/nature of the label, though it would be great if all words meant the same thing across publications. But the key is special signalling. There are reasons why people don’t use ad/advertisement—disruptive to reader experience from marketer perspective. You can use any word you want as long as you explain it (e.g., roll over).
Weissman: Disruptive cuts both ways. Understands why advertiser doesn’t want that, but another way to understand that is that the consumer actually received the message “this is an ad.” Consumer interest in knowing that is the disruption.
Zaneis: one label assumes a well-curated site, which isn’t necessarily the case. One size fits all works really well for consumers, but then consumers grow blind to it.
Holt: my understanding of native ads is that the intention is to not disrupt the reader experience with ads.
Zaneis: it’s to be part of the experience—to engage the consumer as the content engages them.
Steinberg: these products arose because they create a better experience—consumers complain lots more about “welcome” screens than they do about other ads. When you have an ethical publisher, the consumer sees what it is, and if they like it they click and share. This works better for the advertiser and the consumer; needs to be clearly labeled, but solves a problem of a broken ad economy.
Engle: how important is ID at the headline level versus disclosure once you’ve already clicked?
Brett: deceptive door-opening. If you need to label, you need to tell consumers that they’re headed to ad content.
Riddle: if there as a result of commercial relationship, it should be called out.
Mudge: there’s a difference between clicking on something and having someone enter your home. The consumer harm is less.
Engle: If consumers don’t know it’s an ad they won’t necessarily look for the signals that it is an ad once they arrive.
Holt: we can only provide the information; we can’t make them consume it.
Brett: we need to safeguard that the disclosure is clear and conspicuous; not our issue if consumers disregard it or don’t care.
Steinberg: if a brand creates content that’s clearly labeled, and the consumer gets there through paid placement or whatever, and the consumer chooses to share that, that’s not a paid action so that shouldn’t need to be labeled paid. Needs to be clear that Coca Cola is the creator, but it’s not a paid media relationship. FB won’t allow publishers to put in the name of a brand when content is shared out; we would gladly do that with our content shared onto FB if that were allowed.
Riddle: I make an editorial decision when I share the Five Guys review. We’re editors of our own social media channels. We have to think about our own brands. If we care about people in our communities and want to remain credible, we think about what we want to share. Should we be paid? Maybe, but in this instance it’s organic decision, so that doesn’t need to be disclosed.
Engle: suggests that’s important for original content to be labeled in a way that carries through. So that recipients know the source.
Holt: all they need to know is that it came from their friend.
Weissman: if it ultimately came from Coke, you should know that.
Engle: if the advertiser pays for placement in the Post Gazette, what should happen when it’s shared?
Zaneis: the original publisher doesn’t have control over how it’s shared; we all use link shorteners when we tweet. There’s no mechanism, and a different relationship with the consumer—probably comes from the friends.
Mudge: if my mom wants to share the article with me, when I go back to the article, I can see it comes from Four Eyes. If it’s a dancing cat video holding a can of Coke, that’s product placement. We have clear guidance on that: not all product placements require disclosure.
Holt: again, that’s something to take up with your friend sharing cat dancing videos.
Weissman: if Coke produced the dancing cat video, maybe the tweet doesn’t have to tell you, but when you get there you need to be told.
Mudge: but we don’t need to disclose product placement on TV. (Again, a bit of talking past—might depend on whether it’s actually full-on paid for by Coke, or they just gave free product.)
Steinberg: if I get my ideas about what’s a good car from TV ads, I don’t have to disclose that when I tell my friends.
Engle: Another example: content from around the web:
Brett: disclosure that some content is sponsored is hard to read; placed in places consumers aren’t likely to look. Goes to clear and conspicuous.
Zaneis: looks fine to him! If there’s a sponsored link in the gray box that’s ok.
Weissman: those disclosures are awful, almost unidentifiable unless you’re in the business of knowing that these things are ads. The “what is this?” statement is unhelpful in the extreme.
Riddle: we look for graceful transparency—not telling people not to read it, but clearly calling it out.
Brett: if it’s on “most read” the question arises whether it’s actually there because it’s most read or because someone paid for it.
Holt: if it’s not really most read, then disclosure is substandard just from the consumer’s perspective.
Engle: if it’s under the most read heading, it ought to be most read, agree?
Mudge: not going to disagree, but Bureau of Economics would say that the market will take care of this. Trust is important, and don’t want to make consumers suspicious. This wouldn’t happen. (Buh? How are consumers supposed to verify whether that was really “most read”?)
Steinberg: sites that did popunders and installed toolbars are no longer around; the market worked.
Engle: please note that the FTC took action there as well, not just the market.
Mudge: keep eyes on the prize—can’t have too many disclosures. If one of the pieces in a column will take me to sponsored content, I’ll find that out when I’m there; don’t muddle the page.
Weissman: then you’ve got too many ads on the page. How does your responsibility change because you’ve got a lot of ads on the page?
Mudge: consider what you can do clearly and conspicuously.
Weissman: but if you need to disclose if you’re doing X, that’s a constraint. If you say you’re recommending it but don’t disclose your paid relationship, that’s deceptive.
Mudge: not anti disclosure but we need to think clearly. Too much disclosure can muddle. Balancing disclosure and native feel. Users should be comfortable.
Zaneis: some content is labeled as advertising. If you have an unlabeled ad next to it, that’s not a hard question.
Engle: the question of mobile. “Powered by TotSmart”—what does that banner mean?
Panelists thought that the links below that wouldn’t be TotSmart-paid/generated content. Confusing if it was. What can be done?
If the article below the banner is custom content for TotSmart, but other articles aren’t: Riddle says put visual cues, clearly demarcated area; “sponsor-generated content”; byline should be clear that it’s written for TotSmart.
Steinberg: you really need two indications: disclosure that advertiser is behind the section on the website; they need a disclosure that the content in a specific article is sponsored by TotSmart
Engle: what about when some of the articles have nothing to do with TotSmart?
Steinberg: if TotSmart is sponsoring a section of the website, they should have to label the native ad—the part of the content they’re responsible for. Otherwise it’s just a sponsorship. (Note here the use of “sponsor” in a way completely different than you see on many sites.)
Mudge: when it’s about their product.
Q: two separate discussions—whether something is advertising and who it’s from. In print media/TV, I know when something is advertising even if I don’t know who’s doing the advertising. Why should it be any different in the online space?
Brett: again, depends on what the content is. If it’s “help your child learn to read” and you’re recommending your own product, consumers need to know that to understand the context of the recommendation. Conflicts come because article may discuss more product attributes than a 15-second commercial.
Q: but is there an obligation, regardless of context, to disclose—why isn’t that just a business call?
[because you’re asking people to click, which is different than presenting them with the ad as they turn the page/change the channel.]
Steinberg: it’s a matter of where you are in the cycle. When you turn the TV on, are you watching an ad? There is a type of ad campaign, the teaser, which doesn’t disclose its full source—you just see Tom Cruise twisting in space. We’d love to do those campaigns on Buzzfeed. We think they can be done ethically and legally, but there’s so much confusion now. It’s a hot button for online.
Zaneis: but you can certainly tease out the message.
Steinberg: discussed using “this is a teaser campaign.”
Zaneis: legally speaking, it can’t be the standard that you must label it with the sponsor’s name. (How would labeling it “Warner Bros.” interfere with the tease? Just asking.)
Mudge: ask when the omission of the brand would be material to the consumer. Would be in a disparagement context.
Brett: editorial/publisher’s perspective has an interest in protecting itself different from whether consumers are being misled.
Q from audience: is the publisher potentially liable if the content of the ad is misleading, like an ad agency can be? FTC holds ad agencies liable if they participate in creating/disseminating and knew or should’ve known that it was misleading.
Riddle: we wouldn’t get into the level of detail of endorsing specific products. But we hold custom content to the same standard as news. Completely separate buildings, but we write to the same standard to maintain trust.
Brett: If publisher is acting like an advertiser, we’d want to hold them responsible, but we try not to get into First Amendment issues.
Mudge: the FTC will certainly attempt to hold you liable if the conduct is egregious enough—health claims, curing cancer. Be careful.
Q from audience: where do we go from here? How is the FTC thinking about enforcement?
Engle: we have an open mind.
Jessica Rich, Director, Bureau of Consumer Protection, FTC
These issues aren’t new; the basic concepts have been addressed again and again over the years. But today the interest in native advertising is stronger than ever and we expect billions in revenue shortly. Offer more than traditional internet advertising models; reaches more targeted and tracked audience responses; offers possibilities of realtime interactions; can be shared and seen more places; it gets better real estate; could be more interesting for consumers.
In re Grain Audio, LLC, Serial No. 85528202 (November 22, 2013) [not precedential]. [Refusal of GRAIN AUDIO for audio speakers, amplifiers, receivers, and other audio equipment [AUDIO disclaimed], in view of the registered mark EGRAIN for, inter alia, radio transmitters and audio
In re Sunton Enterprises Inc., Serial No. 85253147 (November 25, 2013) [not precedential].[Refusal of AY LAZZARO for "handbags; trunks," in view of the registered mark LAZARO for "handbags, briefcases, briefcase-type portfolios, wallets"].
In re Jay at Play International Hong Kong Limited, Serial Nos. 76709622 and 76709776 (November 26, 2013) [not precedential]. [Refusals of CUDDLEUP FRIENDS and CUDDLEUPPETS for "plush stuffed animals integrally attached to blankets," in light of the registered mark CUDDLE-UPS for "plush toys, namely, soft cushioned animal figures"].
In re The Works Gourmet Burger Bistro, Inc., Serial No. 76704958 (November 29, 2013) [not precedential]. [Refusal to register THE WORKS for "Clothing, namely, t-shirts, tank tops, vests, jackets,sweatshirts, hats and baseball caps related to restaurant services and food products," in view of the registered mark WORKS for "clothing, namely, t-shirts related to motorsports, motorsports racing jerseys, and motorcycle racing pants"].
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Text Copyright John L. Welch 2013.