Those running promotions such as sweepstakes or contests on social media may seek to engage influencers, or individuals with significant social media followings, to enhance their promotions’ visibility and boost engagement. But before doing so, there are a variety of rules and regulations to consider and evaluate, including Federal Trade Commission (“FTC”) rules relating to misleading, deceptive, and unfair advertising, state-specific rules relating to promotions, and social-media-platform-specific rules, among others. This post gives a high-level overview of issues to consider before engaging influencers to boost your next contest or promotion.
It is an all-too-common occurrence: The phone rings and a panicked client on the other end of the line has been impacted by an online fraud. Fraud on the internet is carried out daily, with new and inventive methods of attack being put into practice to mask and conceal the crime at hand until it is “too late.” While we have all learned to identify and avoid certain suspicious behaviors, bad actors continue to develop new and inventive ways to procure sensitive data, receive payments under fraudulent pretexts and otherwise perpetrate crimes with the benefit of the relative anonymity and obscurity that is afforded by the internet.
According to the 2021 report from the FBI’s Internet Crime Complaint Center (IC3), the IC3 alone received more than 2.75 million complaints and reported losses of $18.7 billion from 2017 to 2021. See Federal Bureau of Investigation, Internet Crime Report 2021. Broader studies seeking to understand the global impact of such activities suggest total losses actually range in the hundreds of billions per year, depending on the study. Regardless of the source, one thing is clear: The cost of frauds resulting from spoofed websites designed to collect sensitive consumer data, email account compromise designed to extract payments from unwitting customers by sending apparently legitimate requests for invoice payment, and even more involved frauds are impacting clients by costing them real dollars, damaging their reputation and customer relationships, and otherwise putting a strain on their ability to conduct business.
As college freshmen head to campus for the start of classes, there is one vital campus bookstore purchase before classes begin: a T-shirt bearing the college’s logo. This purchase is not only a rite of passage for freshmen; it also touches on an important concept in trademark law: ornamental use of trademarks on T-shirts.
What is ornamental use?
Under sections 1, 2, and 45 of the Trademark Act, the United States Patent and Trademark Office (“PTO”) can refuse registration of a trademark on the ground that the applied-for matter is decorative and therefore does not function as a mark because it is merely ornamentation. In re Peace Love World Live, LLC, 127 U.S.P.Q.2d 1400 (TTAB 2018). Ornamental matter can include words, designs, slogans, or trade dress.
We all know a picture is worth a thousand words, but did you know a trademark can be worth BILLIONS of dollars? In fact, some of the top trademarks in the world are worth hundreds of billions. What’s the secret to this branding success? A strong trademark!
A trademark serves many purposes. Two of the more important purposes are: (1) identifying the source of a company’s or individual’s goods or services; and (2) indicating to consumers the quality or type of goods or services identified by the mark. Consumers rely on trademarks to make informed decisions about the goods and services they purchase or use.
Since Halloween candy is already in stores (why…?), we‘re here to tell you some trademark tales that are sure to make you shiver – if you care about your pocketbook, that is. We’ve encountered these spooky situations – with worldwide implications — when we’ve been brought in to clean up. (Who you gonna call? Faegre Drinker!)
This time last year, we introduced a series of blog posts in which we provided an overview of the new ex parte examination and expungement proceedings introduced by the Trademark Modernization Act (“TMA”) and pondered a question sure to be on the minds of many a practitioner – will these proceedings truly be a faster and more efficient vehicle for removing improper trademark registrations from the registrar? While the answer to this question is yet to be seen, the first six months of proceedings have provided some insights to consider when assessing whether an expungement or reexamination proceeding is the right option for you.
Graduates of The Ohio State University (“Ohio State”) are familiar with fans and supporters (and sometimes, Michigan fans) placing an emphasis on the “THE” when saying the school’s name. But the United States Patent and Trademark Office’s (“USPTO”) recent decision1 to grant federal trademark registration No. 6,763,118 to Ohio State for the most popular word in the English language2 has garnered much mainstream media attention and confusion. This blog post provides a brief overview of the background and potential implications of this registration.
How did Ohio State register such a common word?
Ohio State first applied to register the word THE in 2019 in connection with Clothing, namely, t-shirts, baseball caps and hats3. The application was initially refused4 by the USPTO because: (1) a third-party clothing company had already filed an application for the word THE beforehand; and (2) because the mark was “merely ornamental” (in other words, the USPTO believed that THE did not function to indicate the source of Ohio State’s clothing goods). Ohio State eventually overcame those issues by submitting evidence and images to demonstrate that THE had source-indicating function, and by entering into a consent agreement with the third-party clothing company5. With these issues both resolved, and no additional refusals or challenges being raised, the USPTO granted a federal registration to Ohio State for THE on June 21, 2022, to many commentators’ surprise.
First released in 2000 and updated in 2013, the FTC’s .com Disclosures guidance has been relied on by advertisers hoping to “make effective disclosures in digital advertising” for the last two decades. The FTC’s Leslie Fair recently explained that the guidance has grown a bit stale, especially in light of how quickly technology changes. In a June 3, 2022 blog post, Ms. Fair shared that the .com Disclosures document would be getting a “start to finish reboot, given the major changes in advertising tactics and techniques that marketers use.” In connection with this effort, the FTC issued an extensive Request for Information from the public, with all comments due to the FTC on or before August 2, 2022. Being aware that new guidance is likely coming sometime in 2023 is useful as a “save-the-date” and makes the advertising law nerds among us excited, but an update to the .com Disclosures also has practical implications.
Due to the sheer volume of recent media coverage, readers of this blog are likely familiar with the “metaverse,” or the idea of a virtual world where users can interact with an immersive computer-generated environment, objects, and other users. But why does anyone care about trademarks in the metaverse? Put simply, trademarks are almost certain to insert themselves in several scenarios in these immersive environments that are designed to be an extension or replica of the real world, such as:
- Creation of virtual shops to buy branded “virtual” goods;
- Branded virtual services, such as fitness classes, concerts, performances, or sporting events;
- Product placement, such as virtual characters wearing branded virtual goods or display of virtual advertisements within the metaverse; and
- Real and virtual combination marketing, where buying a real-world product allows the user to obtain a copy of the product in the virtual world as well for use in the metaverse.
The last thing the parties to a class action settlement want to see is an objection from state Attorneys General (AGs). AG objections to class action settlements are relatively rare and courts tend to give AG objections more weight than objections from private parties. Not all AG objections are successful, however, and in the recent consumer fraud case of Hesse v. Godiva Chocolatier, Inc., No. 1:19-cv-972-LAP (S.D.N.Y.), a six-state objection filed by the AGs of Florida, Idaho, Maryland, New Jersey, Ohio, and Utah failed to persuade Judge Loretta Preska to reject the proposed settlement.
Hesse concerned Godiva’s use of the word “Belgium” in labeling and promoting its products. According to the complaint, this practice led consumers to believe, incorrectly, that Godiva’s chocolates are made exclusively in Belgium and to pay higher prices for these products than they otherwise would have. The parties’ proposed settlement of those claims is fairly standard stuff. Anyone who purchased Godiva chocolate products between 2015 and last year could file claims to recover $1.25 per purchase. Class members with proof of purchase could recover up to $25 (for 20 purchases); those without proof were capped at $15 (for 12 purchases). Plaintiffs claimed actual damages to be $0.46 per purchase, so they characterized this relief as more than full recovery.