Last week, the Federal Trade Commission (FTC) issued guidance titled “Disclosures 101 for Social Media Influencers.”  The guidance consists of a short, easy-to-read document aimed directly at those who work with brands to recommend or endorse products.  It is intended to give those influencers tips on when and how to make good disclosures about their relationship with a brand, in particular to disclose when the influencer has a material connection in the form of a personal, family, employment, or financial relationship.  However, it also serves as a good reminder to brands and advertisers themselves as to the FTC’s rules surrounding use of influences to increase brand awareness and promotion.

Specific advice from the FTC includes:

  • A financial relationship is not limited to an exchange of money and includes receipt of anything of value.
  • Tags, likes, and pins constitute endorsements of a brand.
  • Disclosures should be placed so that they are hard to miss.  The FTC provides specific ideas for pictures, videos, and live streams.
  • Simple and clear language should be used.
  • Influencers should not talk about a product they haven’t tried.
  • Influencers cannot say a product is terrific if they thought it was terrible.
  • Influencers cannot make claims for which the brand does not have substantiation.

(See Disclosures 101 for Social Media Influencers, November 5, 2019, available at  https://www.ftc.gov/system/files/documents/plain-language/1001a-influencer-guide-508_1.pdf.)

This month, two self-regulatory bodies that are administered by Better Business Bureau National Programs, Inc. (BBB), referred two different companies to the Federal Trade Commission (FTC) for investigation.

First, on October 3, 2019, the Direct Selling Self-Regulatory Council (DSSRC) referred Aloe Veritas, Inc. (a multi-level direct selling company that offers wellness and skincare products) to the FTC.   The DSSRC is a new-as-of-2019 national advertising self-regulation program that independently monitors advertising and marketing claims in the direct selling industry. The DSSRC identified several claims made by Aloe Veritas that it considered problematic: first, claims that Aloe Veritas Lifestyle Coaches made on social media relating to the efficacy of Aloe Veritas’s products (including that the products could prevent or cure diseases or illnesses); second, claims that appeared on Aloe Veritas’s website relating to the health benefits of its NuDerma MD product and that product being “Physician Recommended”; and finally, claims Aloe Veritas made on its website relating to the success a consumer would have in selling its products. The DSSRC ultimately determined that the first set of claims should be taken down, the second was not based on competent and reliable scientific evidence, and the third should be supplemented with disclosures showing what typical earners would make in selling Aloe Veritas’s products. While Aloe Veritas initially responded to DSSRC’s inquiries, it apparently did not provide a statement responding to whether it would comply with DSSRC’s recommendations. As a result, DSSRC referred the matter to FTC for review and possible law enforcement action. The DSSRC’s decision can be found here.

Then, on October 8, 2019, the Digital Advertising Accountability Program (DAAP) referred PlantSnap, Inc., a mobile app developer, to the FTC as well. DAAP stated that the decision came about when PlantSnap did not participate in a self-regulatory review process looking into data privacy practices related to geolocation data and advertising.  (See the press release here.) DAAP works with a division of the Association of National Advertisers to monitor and enforce compliance with Self-Regulatory Principles established by the Digital Advertising Alliance. More information relating to those Principles can be reviewed here.

Both of these referrals serve as good reminders that companies that do not comply with or respond to inquiries from acronym-heavy, self-regulatory bodies such as the DSSRC or DAAP can find themselves facing a referral to the FTC.  And as an article from the BBB’s National Advertising Division (NAD) states, “[w]hen companies take the chance that a referral to the FTC will not result in an investigation of their advertising [NAD’s] statistics show that the gamble is unlikely to pay off . . . . [because] [m]ost gamblers will face an early choice between either undergoing an FTC investigation” or returning to the regulatory process.

Happy Halloween! It is the day (or week, for some) of the year where we venture out pretending to be something we are not. Some may choose to go for a classic costume like a ghost or witch. However, others want to dress up as their favorite character from a TV or movie. But these characters are likely subject to copyright and trademark protection. If you buy a costume of your favorite superhero from the store, you likely have an implied license to use the costume. But what if you make your own Wonder Woman outfit or have your own Aunt May who makes you an amazing Spiderman suit? Should you be worried?

Given most uses on Halloween are not to sell or advertise goods, do not involve an intent to deceive, and would not confuse the public as to the source of goods, any infringement case would be unlikely. In addition, the damages (think – your candy haul) is probably not worth a suit. While lawyers certainly have many tricks, it is probably safe to enjoy your treats.

Enjoy the night and stay safe everyone!

As predicted, the United States Patent and Trademark Office (“USPTO”) has now extended its inquiry on the impact of artificial intelligence (“AI”) technologies to copyright, trademark, and other intellectual property rights. Last month’s blog post on this topic explained that the USPTO had filed a Notice in the Federal Register seeking comments as to whether AI can be considered an inventor on a patent. This led us to wonder whether the same could be asked for trademarks and copyrights, and now that is exactly what the USPTO’s newest Notice covers.

Specifically, the USPTO seeks comments on how AI might impact these other types of intellectual property protection, including with respect to registration and liability issues, using thirteen enumerated questions set forth verbatim below:

1. Should a work produced by an AI algorithm or process, without the involvement of a natural person contributing expression to the resulting work, qualify as a work of authorship protectable under U.S. copyright law? Why or why not?

2. Assuming involvement by a natural person is or should be required, what kind of involvement would or should be sufficient so that the work qualifies for copyright protection? For example, should it be sufficient if a person (i) designed the AI algorithm or process that created the work; (ii) contributed to the design of the algorithm or process; (iii) chose data used by the algorithm for training or otherwise; (iv) caused the AI algorithm or process to be used to yield the work; or (v) engaged in some specific combination of the foregoing activities? Are there other contributions a person could make in a potentially copyrightable AI-generated work in order to be considered an “author”?

3. To the extent an AI algorithm or process learns its function(s) by ingesting large volumes of copyrighted material, does the existing statutory language (e.g., the fair use doctrine) and related case law adequately address the legality of making such use? Should authors be recognized for this type of use of their works? If so, how?

4. Are current laws for assigning liability for copyright infringement adequate to address a situation in which an AI process creates a work that infringes a copyrighted work?

5. Should an entity or entities other than a natural person, or company to which a natural person assigns a copyrighted work, be able to own the copyright on the AI work? For example: Should a company who trains the artificial intelligence process that creates the work be able to be an owner?

6. Are there other copyright issues that need to be addressed to promote the goals of copyright law in connection with the use of AI?

7. Would the use of AI in trademark searching impact the registrablity of trademarks? If so, how?

8. How, if at all, does AI impact trademark law? Is the existing statutory language in the Lanham Act adequate to address the use of AI in the marketplace?

9. How, if at all, does AI impact the need to protect databases and data sets? Are existing laws adequate to protect such data?

10. How, if at all, does AI impact trade secret law? Is the Defend Trade Secrets Act (DTSA), 18 U.S.C. 1836 et seq., adequate to address the use of AI in the marketplace?

11. Do any laws, policies, or practices need to change in order to ensure an appropriate balance between maintaining trade secrets on the one hand and obtaining patents, copyrights, or other forms of intellectual property protection related to AI on the other?

12. Are there any other AI-related issues pertinent to intellectual property rights (other than those related to patent rights) that the USPTO should examine?

13. Are there any relevant policies or practices from intellectual property agencies or legal systems in other countries that may help inform USPTO’s policies and practices regarding intellectual property rights (other than those related to patent rights)?

(See A Notice by the Patent and Trademark Office, October 30, 2019, available at https://www.federalregister.gov/documents/2019/10/30/2019-23638/request-for-comments-on-intellectual-property-protection-for-artificial-intelligence-innovation.)

In this day of online consumerism, the success of a product can change drastically with a simple addition, or subtraction, of a “star.” In October of 2018, a whistleblower shed light on the drastic measure one particular company, Sunday Riley Skincare, had taken to ensure its products’ “stars,” and their corresponding success, remained as high as possible.  According to this whistleblower and former employee, as well as a subsequent complaint brought by the Federal Trade Commission, Sunday Riley’s managers attempted to solidify its products’ standing in the cosmetics market by posting various positive fake reviews and attempting to bury negative reviews of their products on Sephora.com.

Between October 2015 and August 2017, Sunday Riley’s employees posted fake positive reviews on Sephora’s website, and would strategically “Dislike” negative reviews in an effort to have such reviews removed.  According to the FTC, this strategy came from the very top, with Sunday Riley’s founder urging her employees to dislike any negative reviews and use VPNs (“virtual private networks”) while posting reviews in order to hide their identity. According to its founder, this would “directly translate[] to sales” for Sunday Riley. There is even some indication that this type of behavior took place as recently as April of 2018, as interns of Sunday Riley were encouraged to write fake reviews for the company.

In its complaint, the FTC alleges that Sunday Riley committed two violations of the FTC act: 1) it made false or misleading claims that the fake reviews reflected the opinions of impartial ordinary users of the products; and 2) it deceptively failed to disclose, after implying the reviews were written by users of the product, that reviews were written by Sunday Riley employees. Shortly after bringing its complaint, the FTC approved a proposed consent order to settle these allegations. In particular, pursuant to the order, Sunday Riley would be prohibited from misrepresenting the status of an endorser or person reviewing a product. Further, going forward, Sunday Riley employees could only endorse one of the company’s products if they clearly and conspicuously disclose their connection to the products.

Not all commissioners agreed with this proposed settlement, however, as the proposed settlement moved forward by a narrow three to two margin.  Commissioners Rohit Chopra and Rebecca Kelly Slaughter voted against the settlement, and issued a separate statement in which they expressed concern that the proposed settlement does not go far enough in light of Sunday Riley’s behavior.  Notably, Chopra and Slaughter commented in their letter that the “proposed settlement includes no redress, no disgorgement of ill-gotten gains, no notice to consumers, and no admission of wrongdoing. Sunday Riley and its CEO have clearly broken the law, and the Commission has ordered that they not break the law again.”

Now, the FTC must publish the proposed settlement in the Federal Register, and open it up to public comment for thirty days.  After that time, the Commission will consider said comments and determine whether or not to finalize the proposed settlement.

“The” is the most commonly used word in the English language.  However, “trademarks” and “common” are not typically synonymous; rather, a trademark “is a word, phrase, symbol, and/or design that identifies and distinguishes the source of the goods of one party from those of others.”  So how could anyone imagine that the most commonly used word could, in fact, distinguish or identify the source of goods to any degree?  Well, if anyone was able to trademark “The”, the most commonly used word in the English language, it may just be “THE” Ohio State University, who applied to register “The” on August 8, 2019.

College football fans know it well – Buckeyes football players don’t play simply for Ohio State University; rather, they play for THE Ohio State University. For years, Ohio State’s football team has solidified itself as one of the top programs in the country. Fans and players alike take great pride in that success, and as an homage to Ohio State’s formal name, “The Ohio State University,” they have taken to emphasizing the “THE” when verbalizing the school’s name. For example, if anyone has watched an NFL game where the players on the broadcast announce what college they attended, former Buckeyes players announce their alma mater as “THE” Ohio State University.

Importantly, Ohio didn’t attempt to simply trademark the use of “The” in all shapes and forms, but instead sought to register “The” as a standalone brand for apparel. In fact, even prior to registering for the mark, Ohio State sold T-shirts and other apparel with “THE” printed on it. One would imagine that, many onlookers, when they see the emphasized “THE” accompanied with the school’s red and silver colors, may find themselves thinking of the Ohio State Buckeyes. Similarly, one could argue that, in at least a football setting, when someone says or writes “THE” with extra emphasis, most observers would expect “Ohio State University” to follow.

But, even considering these unique indicators, the USPTO refused to register “The” as a trademark—at least for now. In issuing its decision, the USPTO refused registration “because the applied-for mark as used on the specimen of record is merely a decorative or ornamental feature of applicant’s clothing, and, thus, does not function as a trademark to indicate the source of applicant’s clothing and to identify and distinguish applicant’s clothing from others.” Ohio State, however, still has an opportunity to amend its application, and may be granted a trademark if it can prove that its “extensive use and promotion of the mark allowed consumers now directly to associate the mark with [Ohio State] as the source of the goods.”

So, for at least the time being, “The” remains a non-trademarked term—which is a relief, as I used “the” 47 times in this post alone.

On September 10, 2019, the Federal Trade Commission (FTC) posted a press release on its website stating that it sent warning letters to three unidentified companies that sell cannabidiol (CBD) products.  CBD is a chemical compound that is derived from cannabis that is legal under federal law (although still illegal in some states), and is often advertised as having health benefits.  According to the FTC, the companies had advertised on their websites that CBD could be used to treat a variety of diseases, including cancer, AIDS, diabetes, arthritis, PTSD, and depression, among other things.  This is not the first time the FTC has sent out warning letters to CBD companies.  In March 2019, the FTC and the Food and Drug Administration sent out joint warning letters to other companies for allegedly making similar types of health claims.

While the dialogue around CBD oils (and marijuana in general) has shifted over the last decade, the warning letters the FTC sent out are a good reminder that regardless of what product a company is selling, it needs scientific support for its claims about the health benefits of that product.  As put by the FTC in another recent press release: “The gist of the warning letters is that the companies should review their product promises – including representations conveyed through testimonials – to ensure they’re backed up by competent and reliable scientific evidence. Like any other advertiser, CBD sellers who make unsubstantiated health claims could be subject to law enforcement.”  All companies, including those that sell CBD oils, should make sure they comply with the FTC’s guidelines regarding health claims or risk being subject to the FTC’s scrutiny.  The FTC provides resources for curious advertisers; for example, some tips can be found here.

During this coming term, the U.S. Supreme Court will hear an interesting case involving the State of Georgia’s ability to copyright the annotations to the Official Code of Georgia Annotated (“OCGA”).  The issue is framed as follows: “Whether the government edicts doctrine extends to—and thus renders uncopyrightable—works that lack the force of law, such as the annotations in the Official Code of Georgia Annotated.”

34126235 - copyrightThe State of Georgia argues that there is a distinction between the law itself, which it agrees is not copyrightable, and the OCGA annotations it hires a private entity to create, which it says have no legal force and are copyrightable.  The opposing party in the case, Public.Resource.Org, Inc., is a non-profit advocacy group that argues the law belongs to the people and thus cannot be copyrighted.  In the underlying decision, the Eleventh Circuit sided with the latter, ruling that “the People are the ultimate authors of the annotations,” which are “inherently public domain material and therefore uncopyrightable.”  As a result, the Eleventh Circuit found Public.Resource.Org., Inc. not to have committed copyright infringement by posting various OCGA volumes and supplements online.

The State of Georgia’s petition to the Supreme Court for certiorari on the issue was granted, and numerous amicus curiae briefs have been filed, demonstrating this is an issue many organizations and people care about (indeed, one brief was filed by 119 law students, 54 solo practitioners and small-firm attorneys, and 21 law professors/educators). The Supreme Court will likely issue a ruling next year.

 

Late last month, the United States Patent & Trademark Office (“USPTO”) issued a Notice seeking comments as to whether Artificial Intelligence (“AI”) can be considered an inventor on a patent.  Its questions “are designed to cover a variety of topics from patent examination policy to whether new forms of intellectual property protected are needed.”

This caused some of us to wonder whether the same could be asked for trademarks and copyrights.  Although the USPTO’s request relates solely to patents, which lend themselves to inventions that utilize or are even developed by AI, one cannot help but envision situations where AI assists in creating other forms of intellectual property too.  Indeed, we already know that AI is creating materials, such as news updates for various organizations, that could be subject to multiple forms of IP rights, making the question even more appropriate.

Confirming exactly that, a post on the USPTO’s Leadership blog states that the patent-related Notice is “only the first step” and that the USPTO plans to “examine the full spectrum of intellectual property policy issues that have arisen, or may arise, as AI technologies become more advanced.”  This includes looking at “AI’s impact on existing intellectual property, including copyright and trademarks, to considering if new legal rights are needed in the wake of more advanced AI.”

An interesting trademark story recently unfolded involving an NBA draft pick and a team’s new star player.  In this year’s NBA draft, the New Orleans Pelicans drafted college standout Zion Williamson with the first overall pick. This pick was almost unanimously a no brainer: Zion Williamson is one of the most anticipated basketball players to come out of college in years.  With this anticipation, both Williamson and the Pelicans saw a marketing opportunity, and in particular an opportunity centered around what Williamson sees as his own catch phrase: “Let’s Dance.”  With that in mind, the Pelicans filed an application with the Trademark Office the day after the NBA draft for that very phrase.  Shortly thereafter, Williamson also filed a trademark application for “Let’s Dance.”

Obviously, this string of events would have the potential to lead to some real issues: possible litigation, royalty and licensing fights, and not to mention an NBA team alienating its young superstar. With these thoughts in mind, the Pelicans wisely decided to withdraw their trademark claim by filing an “express abandonment” of their request. Now, the path is (relatively) clear for one of the NBA’s youngest stars to trademark his favorite phrase, and stamp “Let’s Dance” on clothing, beverages, and everything in between.