Elizabeth A. Patton

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Soy milk. Almond milk. Coconut milk. With the increase in health-conscious shopping and non-dairy diets, these terms and others have become household names.

But the Food & Drug Administration (“FDA”) recently suggested these products don’t constitute milk at all, since they do not come from animals. According to multiple sources, during the Politico Pro Summit in July, the FDA Commissioner commented that the FDA is probably not currently enforcing its “standard of identify” for milk considering the FDA defines “milk” by referencing the milking of cows.

Manufacturers and sellers of non-dairy products currently advertised and labeled as “milk” should keep watch on whether the FDA issues guidance on this issue or decides to strictly enforce its current definition of “milk.” If it does, the marketing for these products may drastically change.

When a trademark owner/licensor files for bankruptcy, there is an open question as to whether the licensee of the trademark can legally continue use of the mark or whether the trademark owner/licensor can reject its obligations under the licensing agreement and effectively prohibit the licensee’s continued use of the mark.  When it comes to the licensing of patents and copyrights, the question is already closed: Congress created an exception in U.S. bankruptcy law that allows licensees of such intellectual property to retain their rights even after a licensing agreement has been rejected by the intellectual property owner who has filed for bankruptcy.  However, whether purposely or not, Congress did not mention trademarks in the exception, thereby leading to the current question.

The U.S. Supreme Court is currently considering whether to grant certiorari in a case that would answer this question and resolve a circuit-split on the issue.  That case is Mission Products Holdings, Inc. v. Tempnology, LLC N/K/A Old Cold LLC, which was decided by the First Circuit early this year in favor of the trademark licensor, Tempnology.  The First Circuit held that Tempnology’s rejection of its licensing agreement with Mission Products Holdings caused the latter to lose its trademark rights under the parties’ agreement in light of Tempnology’s bankruptcy.  Now Mission Products Holdings, Inc., the trademark licensee, has filed a petition seeking review by the Supreme Court and a ruling that a trademark licensee’s rights to use a trademark cannot be revoked upon the trademark owner/licensor filing for bankruptcy.

The International Trademark Association (INTA) has already filed an amicus brief asking that the Supreme Court take the case and resolve the dispute in favor of trademark licensees, who make significant investments in their businesses using the licensed marks.  According to INTA’s brief, trademarks “are the most widely used form of registered intellectual property” and a ruling in favor of trademark licensees “enhances the value of trademark licenses and promotes the stability of the trademark system.”  Tempnology’s response to Mission Product Holdings’ petition is due in early September, and the case is set for conference in late September, after which the justices may decide to hear the case (or not).

When evaluating how to address what you believe constitutes infringement, false advertising, or unfair competition, the decision to send a cease and desist letter or to file a lawsuit becomes an important one.  Is there a right approach in each instance?  No.  There are pros and cons to each and, in a typical lawyer answer, the best approach “depends.”

On the one hand, sending a cease and desist letter has the potential of resolving the issue outside of court, with fewer legal fees and on a quicker timeline.  It also has the effect of placing the other party on notice of your claim and allowing you to make an argument for willfulness down the road (if the party continues the conduct despite the allegations).

On the other hand, filing a lawsuit shows the seriousness of the allegations and preserves your choice of venue—i.e. which court you want to be in.  Sending a cease and desist letter first would let the other party know that there is a potential of a lawsuit, which would allow that party to file a declaratory judgment action in its own choice of venue before you have the chance to do so.  As a reminder, under the Declaratory Judgment Act, a party who has been accused of illegal conduct like infringement, false advertising, or unfair competition can affirmatively file suit and ask that a court declare its conduct lawful.

Deciding which approach to take will depend on the situation and any prior history with the alleged infringer or advertiser.  Make sure to weigh all of your options and discuss with your legal counsel if necessary.

Yesterday the United States Supreme Court announced that it was granting the petition for writ of certiorari in the copyright infringement case previously discussed on this blog here and here.  The case is Fourth Estate Public Benefit Corp. v. Wall-Street.com LLC and involves the question of when a copyright holder can properly file a copyright infringement lawsuit.

34126235 - copyrightCurrently there is a circuit-split as to whether the term “registration” as used in the Copyright Act includes the mere filing of a registration application or whether it requires that the Copyright Office have actually approved or denied the registration application.  The plaintiff in the case, Fourth Estate Public Benefit Corp., filed suit before the Copyright Office had approved or denied its application, and the Eleventh Circuit affirmed the lower court’s dismissal of its complaint on that basis.  The United States Solicitor General, who the Supreme Court invited to weigh in earlier this year, urged the Court to take the case and uphold the Eleventh Circuit’s position.

The Supreme Court is now poised to resolve the dispute and to give copyright holders clarity as to whether they may file suit merely after filing an application for a copyright registration.

Justice Anthony Kennedy of the United States Supreme Court announced his retirement yesterday, after having served three decades on the bench.  Justice Kennedy is known for casting the swing vote in a number of major cases and has drafted opinions on a myriad of hotly-contested issues, including LGBT rights and the First Amendment.  His retirement places President Trump in a position to select a conservative justice that will shift the ideological balance of the Court for years to come.

How this will impact future rulings in advertising, trademark, and other intellectual property cases remains to be seen, but we can certainly expect a more conservative slant from the bench going forward.

When hoping to resolve advertising concerns or disputes quickly and easily, companies should not only consider utilizing the National Advertising Division (“NAD”), but also the potentially lesser-known Electronic Retailing Self-Regulation Program (“ERSP”).  ESRP is a self-regulatory program administrated for the Advertising Self-Regulatory Council (“ASRC”) by the Council of Better Business Bureaus.  The program was established in 2004 and its mission is “to enhance consumer confidence in electronic retailing by providing a quick and effective mechanism for resolving inquiries regarding the truthfulness and accuracy of claims in direct response advertising.”

Like actions before the NAD, ERSP actions provide guidance regarding certain advertisements.  ERSP is focused on reviewing direct-to-consumer advertising campaigns—largely infomercials but also radio ads, internet marketing efforts, TV shopping channel marketing, and pop-up advertising—for substantiation of claims, with the goal of preventing continued dissemination of deceptive claims.  ERSP members, as well as consumer or advocacy groups, can refer campaigns to ERSP for review, and ERSP reviews approximately 7-10 per month.  After review, ERSP may recommend that marketers discontinue making certain claims and may even alert the Federal Trade Commission about non-compliant companies.  ERSP reports that it has worked with companies to modify or discontinue use of almost 200 advertisements.

For more information, visit the Electronic Retailing Association’s website or read the ASRC’s blog posts regarding recent ERSP actions.

Although they may not immediately connote a traditional form of advertising, food menus and labels serve as a form of advertising in the minds of many consumers and are regulated by Food & Drug Administration (“FDA”).  Read below for two important updates/reminders in the food-related space.

62909081 - calorie dessert for each piece. problem with obesity. popular dessert menu.Menu Labeling:  As a follow up on a prior blog post and as detailed in today’s Consumer Update from the FDA, the FDA is requiring this month that certain types of food establishments post calorie information on menus and menu boards and provide nutrition information upon request in order to help consumers make informed choices in ordering food items.  The FDA’s requirement applies to chain restaurants as well as eating establishments with more than 20 locations, and the FDA’s Consumer Update provides examples of the types of locations where consumers should expect to now see calorie posting, if they don’t already.

Nutrition Facts Label:  Following up on another prior blog post, the FDA recently announced that it is extending the deadline to comply with its Nutrition Facts Label rule and its Serving Size rule by 18 months.  Instead of requiring compliance by certain manufacturers this summer, the FDA will now require compliance by January 1, 2020 for larger food manufacturers and January 1, 2021 for smaller food manufacturers.  This extension is intended to provide sufficient time to ensure industry compliance.

When marketing products or services to children, companies should be aware of applicable statutes and guidance and should be particularly cautious with their advertising claims.

Lanham Act & FTC Act

The prohibitions against false, misleading, and deceptive advertising under the Lanham Act and Section 5 of the FTC Act of course apply to advertising claims directed at children.  It’s important to remember that the advertisements may be viewed by a court or by the FTC as ordinary children would view them (not as the actual buyers, i.e. parents or other adults, would view them).  Therefore, companies should ensure that any advertising claims directed at children do not have the tendency to mislead or deceive those children.

FTC Guidance

The FTC advises companies to comply with truth-in-advertising standards when advertising directly to children or when marketing kid-related products to parents.  For example, the FTC is concerned with child privacy, marketing violent entertainment to children, and, given the rise in childhood obesity rates, food advertising to children.

COPPA

38772807 - little girl hand touch touch pad notebookThe Children’s Online Privacy Protection Act (COPPA) is a federal statute meant to protect children’s privacy and safety online by prohibiting unfair or deceptive practices relating to the collection of personal information from internet users under the age of 13.  COPPA requires providing certain information in privacy policies, giving parents direct notice, and obtaining parental consent before collecting personal information from children.  The FTC’s step-by-step COPPA compliance guide can help a company determine if it is covered by COPPA and, if so, how to comply with the rule.

CARU

The Children’s Advertising Review Unit (CARU) is an investigative unit of the advertising industry administrated by the Council of Better Business Bureaus.  CARU monitors advertisements (tv, print, radio, and online media) with the goal of advancing truthfulness, accuracy, and consistency and eliminating deceptive or inappropriate advertising directed toward children.  CARU publishes self-regulatory guidelines for advertisers and relies upon voluntary cooperation and change by advertisers themselves.

Though apparently not when it comes to suing for copyright infringement.  Earlier this week, the Ninth Circuit issued a ruling in a case involving photographs taken by a monkey on a camera left unattended by a nature photographer in Indonesia—aptly deemed the “Monkey Selfies.”  The copyright infringement case was filed by People for the Ethical Treatment of Animals, Inc. (PETA) as “Next Friends” of the monkey named Naruto against the photographer and entity that published the Monkey Selfies in a book that identified themselves as the copyright owners (although also noting that Naruto took the photographs).  After a lengthy dispute, the Ninth Circuit affirmed the district court’s ruling and held that animals like Naruto cannot sue for copyright infringement because, as nonhumans, they lack the required standing under the Copyright Act, which does not expressly authorize animals to sue.

March Madness always brings about trademark enforcement-related news.  What we generally don’t see is news about a participating school submitting trademark applications while the basketball tournament takes place.  But according to numerous articles last week, including this one in the Baltimore Sun, the University of Maryland Baltimore County hadn’t sought trademark registrations prior to securing the first upset of a #16 seed over a #1 seed two weeks ago.  After that historic victory, however, the University asked attorneys to file trademark applications for the phrases “16 over 1,” “UMBC Retrievers,” and “Retriever Nation”—which the Baltimore Sun poignantly characterized as capitalizing on the University’s “skyrocketing commercial cachet.”  Given the immediate increase in university bookstore apparel sales, the University’s quick response to that newfound cachet is more than timely.

Contrast UMBC’s recent trademark enforcement efforts with those of Iowa State University, which we’ve previously covered on this blog.  As a reminder, Iowa State University had refused to continue to license university trademarks to two of its students and their chapter of the National Organization for the Reform of Marijuana Laws because the organization was using the university’s mark on pro-marijuana t-shirts.  That dispute raised issues of the interplay between trademark licensing principles for public universities and students’ First Amendment rights, the latter of which the federal court found was trump.  Last week, in addition to the $150,000 emotional distress damages and $193,000 in legal bills already awarded, the judge approved another $598,208 in attorneys’ fees and costs, bringing the total cost to state taxpayers to almost $1 million.

These quite varying anecdotes serve as a reminder that it isn’t just public and private companies that think and care about trademark enforcement—universities do too, even if they’re late to the party.