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Recap: 2023 ANA Annual Advertising and Marketing Law Conference

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If artificial intelligence is so great, why can’t it reliably predict the weather?

The weekend has just closed on another very rainy Floridian ANA Masters of Advertising Law Conference (Last year we had a hurricane, so this would qualify as an uninspiring upgrade). The Masters Conference is the largest advertising, marketing and promotion law conference in the nation, bringing together major brands, storied advertising agencies, and prominent regulators to discuss cutting-edge topics impacting the industry. Each year – not by design but by happenstance – a different theme is featured. This year, to no one’s surprise, the focus was on AI.

While not every session discussed AI in depth, most speakers devoted some time to the subject throughout the 3-day event.  Panelists confronted questions like: does algorithmic bias, increasingly employed in various industries, constitute an unfair trade practice?  How will regulators view advertising claims based on next gen tech?  What copyright traps exist for the unwary utilizing AI to generate advertising content?  Are US and international privacy laws evolving fast enough to keep up with new challenges posed by AI?  And while it had nearly zero to do with AI, the conference would have felt incomplete without a discussion of what drag queens can teach advertising lawyers about intellectual property protection.  Many learned more about Cardi B’s album covers during that session than they could have imagined in their wildest dreams.

There is no doubt that AI will affect the advertising and marketing landscape for years to come.  Like the metaverse (last year’s theme) and crypto assets (the year before that), these issues are not new.  But despite AI having been around for some time, the leaps forward that generative AI applications have made this year appear poised to significantly transform the landscape of advertising content creation and delivery.  President Biden’s October 30th Executive Order is one of the first major steps being taken to set limits on AI technologies while funneling their potential for good.  Among other things, that Order directs the U.S. Patent and Trademark Office and U.S. Copyright Office to issue a report on “potential executive actions relating to copyright and AI.”

We will of course be following this issue closely as the technology – and its implications for intellectual property and advertising issues – evolves.  But we will hold our concerns regarding AI singularity at bay until such time as we receive an accurate forecast for the next ANA Conference.  (It’s in Arizona, so we’re blithely optimistic.)

Until next year!

The FTC’s Updated Endorsement Guides: Do They Say More Than We Already Know?

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On June 29, the Federal Trade Commission (FTC) published its updated Guides Concerning the Use of Endorsements and Testimonials in Advertising (“Guides”), together with an FAQ document, FTC’s Endorsement Guides:  What People Are Asking (“FAQ”).  One day later, it announced its proposal for a new Trade Regulation Rule on the Use of Consumer Reviews and Testimonials (“Trade Regulation”).  In the spirt of the FTC’s FAQ, we figured we would post a brief one of our own, highlighting some of the big changes (and non-changes).

Can you please explain what’s going on in one paragraph or less?

As background, the Guides explain the FTC’s view on the propriety of endorsements and testimonials made by third parties on behalf of advertisers under Section 5 of the FTC Act, which prohibits unfair and deceptive trade practices.  The Guides were last updated in 2009.  This update therefore brings a refresh and clarifies the FTC’s view on various scenarios that have arisen since 2009 given changes in technology and marketing practices.  The Trade Regulation, by comparison, is focused on the narrow topic of fake consumer reviews, which are singled out because (a) they have been a particular focus of the FTC of late; and (b) the regulation would clearly entitle the FTC to seek civil penalties for violations (whereas its ability to do so under Section 5 of the FTC Act is somewhat murky).

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The Ninth Circuit Just Provided a Roadmap On How to Defend California Consumer Fraud Claims

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Companies that may face consumer fraud claims in West Coast courts will want to take a close look at the Ninth Circuit’s decision this month in McGinity v. Procter & Gamble Co., __ F.4th __, 2023 WL 3911531 (9th Cir. June 9, 2023).  The Ninth Circuit provided some much-needed clarity on how lower courts within its jurisdiction should reconcile two seemingly conflicting precedents on how to apply the “reasonable consumer” test to seemingly fanciful claims brought under California’s consumer fraud laws.

Seven years ago, in the pro-defense Ebner v. Fresh, Inc., 838 F.3d 958 (9th Cir. 2016), the Ninth Circuit upheld the dismissal of claims that the weight indicator on a tube of lip balm was misleading because some of the balm sits in the tube’s screw mechanism and thus is basically unusable.  In the legalese equivalent of “give me a break,” the Ninth Circuit noted California state appellate precedent holding that consumer fraud claims must be dismissed if it is improbable “that a significant portion of the general consuming public or of targeted consumers, acting reasonably in the circumstances, could be misled” by the challenged practice or language, and called the plaintiff’s lip balm claims “not plausible.”  Id. at 965.  The Ebner decision basically counseled district judges to be on the lookout for, and be ready to dismiss, a plaintiff’s allegations that reflect, at best, the reading “an insignificant and unrepresentative segment” of purchasers might give to a challenged advertisement or language on packaging.  Id. at 966.

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Not So Punny After All? Parody After the Supreme Court’s Jack Daniel’s Decision

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Earlier this year, one of my colleagues posted a guide to parody under U.S. trademark law for those brands hoping to navigate trademark parody without crossing into trademark infringement or dilution. But as we all know, the legal landscape can change in just a few months, especially when the Supreme Court gets involved. In this post, we explore the Court’s recent decision in Jack Daniel’s Properties, Inc. v. VIP Products LLC and discuss what, if anything, it changes for brands navigating that parody tightrope. (Spoiler Alert: Not that Much.)

For those unfamiliar, VIP Products makes a “Bad Spaniels” poop-themed dog toy designed to look like a bottle of . . . you guessed it . . . Jack Daniel’s whiskey. Unamused, Jack Daniel’s demanded VIP Products stop selling the toys, and the parties became embroiled in years-long litigation with Jack Daniel’s claiming infringement and dilution of its trademarks and VIP Products crying parody. While Jack Daniel’s was victorious in the district court, the joke seemed to have landed on more humorous ears in the Ninth Circuit, and the Court held that the “Bad Spaniels” toy was an expressive work warranting heighted First Amendment protection from trademark infringement claims. On the dilution issue, the Court found that the humorous nature of the product rendered the toys “non-commercial” and thus exempt from the dilution claim.

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Protecting Your Certification Marks with Certainty

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A certification mark is an important business tool.  Displaying a certification mark on a product or on marketing materials indicates that a company’s offerings meet certain standards.  Consumers often look for items that have been tested and found to meet their desired standards, so use of a certification mark can provide businesses with a competitive advantage.

A certification mark doesn’t serve the same function as a source-indicating brand.  Instead of helping companies distinguish their offerings from others, certification marks show consumers that products or services have been “certified” as to a particular quality or characteristic.  For example, a certification mark may appear on food that originated in a specific geographic region or on a household product that contains certain materials.  A certification mark may also be used in connection with services that are provided by members of a union or other organization.

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Singapore – Where Global IP Professionals Came Together

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I just recently left Singapore, where the lush gardens and iconic city skyline served as the backdrop for The International Trademark Association’s (INTA) 145th Annual Meeting. This was the second time that INTA’s Annual Meeting was hosted in Asia and the first time in Southeast Asia. While the location was originally planned for the 2020 Meeting, as with most things in life, the pandemic put that on hold. Despite the immense humidity, 8,000 influential brand and IP professionals from around the world came to the Lion City to share their thoughts regarding future considerations for brand owners and the business of innovation.

One consistent theme throughout the conference was that new challenges are facing brand owners today. Several factors appear to be changing the landscape for brands across various industries including, without limitation, the facts that: (1) counterfeiting is on the rise; (2) the value of intangible business assets is increasing; (3) new countries are becoming IP powerhouses due to global trade; and (4) emerging technologies, such as artificial intelligence (AI), NFTs and the metaverse, are changing the way in which consumers interact with the world around them.

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Why 3D Printing Doesn’t Have to be a Pandora’s Box for IP Rights

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Personal 3D printing has seen leaps in advancement in recent years, allowing users to render increasingly sophisticated creations from the comfort of their own home. These creations can include anything from gaming miniatures to medical devices, often for pennies on the dollar. With these advancements, however, comes a growing need for intellectual property owners to actively protect their property through trademark and copyright registrations.

To provide a general overview, modern 3D printing typically begins with the creation of an “STL,” a computer file containing information on the model to be printed. This model can be sculpted via computer aided design (“CAD”) software. 3D scanners, which can provide three-dimensional scans of existing physical objects, can also provide a foundation for shaping realistically sculpted CAD models. For example, a sculptor looking to print a miniature of their favorite sports car may scan a toy model to work on in CAD rather than recreate every detail from scratch. The CAD model is then exported into an STL file. “Slicing” software then converts the STL into instructions for the 3D printer to create the actual model. This is done by stacking thousands of thin layers of the printing material, often plastic or resin, atop each other until the particular component is complete—much like how a stack of paper can form a cube, but molded into virtually any shape imaginable. Users can then easily share these STLs online, including through a variety of popular sites that make such files available for free or for purchase.

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Laugh It Off: A Guide to Parody Under U.S. Trademark Law

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Imagine poking fun at a famous brand or logo and getting away with it. In the United States, it’s not only possible, but can also be a recognized form of artistic expression known as trademark parody. Trademark parodies are a form of humorous or satirical commentary that uses a well-known trademark in a playful or critical manner. But typically, the target of that humor or satire is not amused.  Companies invest a lot of time, effort, creativity, and resources into building their brands and creating positive associations with their trademarks. Thus, if a famous brand owner believes that the use of its trademark by a third party may damage its reputation, the company could take legal action against a parody mark to protect its image and trademark rights.

In this post, we will explore what constitutes a trademark parody and when it crosses the line of trademark infringement or dilution (which occurs when the recognition of a distinctive trademark is weakened due to unauthorized use by others).

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Copyrightability of AI-Generated Works

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In recent months, we have been saturated with media coverage involving artificial intelligence (“AI”).  Almost daily there are articles about AI platforms including DALL-E, Midjourney, Stable Diffusion and ChatGPT, alternatively heralding AI as a great resource or a fearsome scourge to humanity.  Even the long-running animated television show South Park devoted an entire episode (Season 26, Episode 4:  Deep Learning) to the use of ChatGPT by students and teachers.

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Under Review: The FTC’s Focus on the Fakes

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You are thinking about buying a new laptop, or you want to try a new restaurant that’s been open a few months, so what do you do first? You check the online reviews, of course. Most consumers rely heavily on online reviews to make purchases and try new services, but how can you be sure the reviews you see are actually written by a real customer? And wouldn’t you want to know if the customer was paid or given free product in exchange for that review? The proliferation of online shopping platforms and social media have increased opportunities for consumers to find information about potential products they want to buy. However, it also makes it easier for companies to manipulate reviews or endorsements to make their products look better or their competitors look worse. Luckily, the Federal Trade Commission (FTC) is currently prioritizing this issue, through regulatory channels, enforcement actions, and litigation.

For background, when an advertiser uses an endorsement or review in connection with its products or services, there are guidelines to follow set forth by the FTC (the Guides Concerning the Use of Endorsements and Testimonials in Advertising). The FTC Endorsement Guides emphasize the basic principle of truth in advertising: that endorsements must be honest and not misleading. The Guides further state that the endorsement must reflect the true opinion of the reviewer, who must actually have experience with the product or service, and that a material connection between the reviewer and the company needs to be disclosed, if that fact would matter to the purchaser. While the Guides are not regulations, and have no civil penalties for a violation, the FTC can investigate whether the practices are deceptive or unfair under the FTC Act if an advertiser does not follow the Guides.

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