Advertising Law Blog

A podcast of Part I of Andrew Lustigman's radio interview on Mobile Presence is now live.

Twitter, the social networking site and service, has become a very powerful tool for marketers. Twitter allows marketers to reach consumers directly, bypassing spam filters and enabling both one-to-many and one-to-one interactions.

The following is an excerpt from The Lustigman Firm's Jonathan I. Ezor's new free e-book Shooting From the Hip: Managing the Risks of Portable Computing and Smartphones in Your Business.

A July 2009 copyright decision in New York confirmed a trend towards strengthening copyright protection for fictional characters by limiting the ability of others to make commercial use of the fictional characters in outside works of literature.

As we have discussed multiple times in our blog and our recent Webinar, the efforts by states (led by New York) to impose new sales tax collection burdens on affiliate marketers continue to spread.

On June 19, 2009 the Ninth Circuit ruled that the District Court had erred in ruling in Simon & Schuster's favor in a class action suit brought by Laci Satterfield.

On May 25, 2009, President Obama signed the Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009. The Act amends the Truth in Lending Act and imposes a number of new requirements on gift certificates, store gift cards, and general use prepaid cards by putting limits on expiration dates and fees that can be imposed, and setting forth new disclosure requirements. The new law will become effective on August 22, 2010.

A Branchburg, New Jersey woman who was employed as Regional manager of a Pharmaceutical company was sentenced upon criminal conviction for having instructed sales reps to market a drug product for conditions for which it had not been approved.

Florida's Attorney General announced a $1.5 million dollar settlement with Verizon Wireless and Alltel over "free" ringtone offers.

Andrew Lustigman, member of The Olshan Firm, LLP., has been named an industry leader and notable practitioner in his primary practice area for the second consecutive year.

On June 9, 2009 the FTC charged Kmart Corp., Tender Corp., and Dyna-E International with making false and unsubstantiated claims that their paper products were "biodegradable." Kmart and Tender have agreed to settle the cases against them; the case against Dyna-E will be litigated.

The Federal Trade Commission is seeking public comment on its Rule Concerning the Use of Prenotification Negative Option Plans (Negative Option Rule), 16 C.F.R. Part 425, as part of the agency's systematic review of its rules and guides.

Signaling a new focus on food health-related claims, the FDA has issued a Warning Letter to General Mills with respect to the labeling of Cheerios® Toasted Whole Grain Oat Cereal.

In a Federal Register announcement, the FTC announced that it plans to conduct a study to examine consumer perception of environmental marketing claims.

The Red Flags Rule is summarized by the FTC's release.

As described in this article from Reuters, FTC Chairman Jon Leibowitz told the Reuters Global Financial Regulation Summit in Washington on Monday, April 27th, 2009...

The Federal Trade Commission has announced that it will hold a day-long public workshop on June 1, 2009 in Washington, DC, to explore proposed changes to the FTC's Business Opportunity Rule.

Signaling an increased activism on consumer protection issues, newly appointed FTC Chair Jon Leibowitz appointed Georgetown Law Professor David C. Vladeck as the Director of the Bureau of Consumer Protection.

On May 11, 2009, Andrew Lustigman will be presenting on "Avoiding GREENWASHING Accusations on the Global Stage" before the International Intellectual Property Society in New York.

Just last week, the Second Circuit Court of Appeals issued an important trademark ruling that affects how businesses can advertise with Internet search engines.

The New Jersey Attorney General filed suit against Verizon alleging that its marketing, sales, billing and customer service practices for its FiOS television, telephone and internet services are deceptive and misleading.

Chase offered some credit cardholders promotional rates for balance transfers that clearly included a one-time transaction fee.

There is a proposed Settlement of a consolidated class action lawsuit known as In Re: Webloyalty.com, Inc. Marketing and Sales Practices Litigation, MDL No. 07-01820-JLT, Lead Case No. 06-11620 JLT, that is pending in the U.S. District Court for the District of Massachusetts.

In January, 2009, the Ninth Circuit Court of Appeals ruled that Taco Bell is liable for the $42 million in breach-of-contract damages award to two Michigan admen who created the Chihuahua idea that served as the foundation for the fast-food chain's hit $500 million ad campaign in the 1990s. The campaign starring the talking dog as a beret-wearing revolutionary or sombrero-sporting bandit was a huge success.

Without the benefit of public comment, The FTC has announced that it is rescinding the agency's enforcement policy regarding the advertising of books and publications, known as the Mirror Image Doctrine.

Andrew Lustigman to present on "Direct Marketing Enforcement - Emails, Mailings, and Telemarketing" at ACI's 3^rd Annual Advertisers' and Marketers' Regulatory Summit to be held on June 25-26, 2009 in Washington, D.C.

ndrew Lustigman to present on "Recent Developments in Advertising and Claim Substantiation "at the Insight 6^th Annual Cosmeceuticals" Conference on June 30, 2009 at the Marriott New York East Side in New York.

In January 2007 the Federal Trade Commission (FTC) hosted a workshop to discuss negative option marketing. The workshop focused particularly on Internet-based negative option offers, because they were relatively new and presented distinct issues regarding the form, content, and timing of disclosures.

Six state and national environmental health groups, including the Sierra Club and the American Lung Association, lead by Earthjustice, a non-profit public interest law firm based in Oakland, California, filed a lawsuit in New York state court this month to force major U.S. manufacturers-Church & Dwight, Colgate-Palmolive and Proctor & Gamble as well as England-based Reckitt Benckiser Group-to disclose ingredients in their household cleaning products.

On March 4, 2009 the U.S. Supreme Court decided the controversial case of Wyeth v. Levine in favor of patient-plaintiff Diana Levine. The Court rejected Wyeth's argument that the FDA's approval of its labeling pre-empted a claim for personal injury arising from a failure to warn.

Andrew B. Lustigman will co-present on legal compliance matters at the "Mobile Marketing for Agencies and Media Buyers" event on April 28, 2009.

On March 11, 2009, Scott Shaffer participated as a panel member on a presentation concerning the negotiation of endorsements and sponsorship deals in professional sports.

The New York Attorney General's Office has entered into a settlement agreement with AT&T Mobility that will require the company to pay up to $2.63 million dollars to consumers who were entitled to rebates but instead were given "rebate cards" that expired in just 120 days and were difficult to use.

President Barack Obama has appointed FTC Commissioner Jon Leibowitz as the Chairman of the Commission, who is expected to bring about a significant increase in the FTC's enforcement activities, particularly in the area of online advertising and privacy protection.

The Webinar covered both the overall legal concerns about running affiliate programs as well as the new tax law, Amazon's lawsuit and what merchants must do to comply with the law.

On Thursday, February 26, 2009, Andrew Lustigman will participate as a panelist in the "Mobile Marketing and the Law" at DMA's Mobile Marketing Day.

Andrew Lustigman to Chair ABA Section of Intellectual Property Law: Committee 463 - Special Committee On Promotion and Marketing Law.

Recently-enacted New York law requires those online marketers with affiliate programs whose NY-based affiliates generated $10,000 or more in sales to collect and pay sales tax on all New York-bound shipments.

The FTC has extended the current public comment period related to proposed revisions of its Guides Concerning the Use of Endorsements and Testimonials in Advertising until March 2, 2009.

Fourteen defendants involved in the telemarketing operation by Largo, Florida-based Suntasia Marketing, Inc. have agreed to pay a total of more than $16 million to settle Federal Trade Commission charges.

According to the joint press release, the American Association of Advertising Agencies (AAAA), the Association of National Advertisers (ANA), the Direct Marketing Association (DMA), and the Interactive Advertising Bureau (IAB) are "working together to develop enhanced self-regulatory principles for online behavioral advertising in order to address privacy concerns and to increase consumers' trust and confidence in how online information is gathered and used."

The April 2008 law required those online marketers with affiliate programs whose NY-based affiliates generated $10,000 or more in sales to collect and pay sales tax on all New York-bound shipments. Amazon.com had challenged the law as being unconstitutional.

On December 15, 2008, the United States Supreme Court issued a decision in Altria Group, Inc. v. Good, the latest in a series of cases over the last two decades addressing pre-emption under the Federal Cigarette Labeling and Advertising Act ("Labeling Act").

On March 2, 2009, Andrew Lustigman will present at HBA's Global X-Ceuticals Expo on the legal framework for Marketing Innovative, Synergistic Food/Cosmetic Products.

A District Court in Texas has been asked to decide whether an athlete has the exclusive right to his own nicknames.

The Federal Trade Commission announced that it had approved new rule provisions intended to clarify CAN-SPAM requirements.

The FTC recently proposed significant revisions to its endorsement and testimonial guides that if implemented, will greatly impact advertising utilizing testimonials.

A District Court in Texas has been asked to decide whether an athlete has the exclusive right to his own nicknames.

We are proud to announce that our Advertising Law Blog has been included on e-Justice Law Blog's top 100 free do it yourself legal resources on the web.

The FTC continues to crack down on Free Trail Offers sold on the Internet. The most recent settlement with Ultralife Fitness, Inc. is similar to the FTC's settlement with Think All Publishing and NextClick Media that we reported on back in June 2008.

Andrew Lustigman to present at ACI's Advertising Law Conference in New York on January 27, 2009 and January 28, 2009.

To deal with the growing problem of identity theft, the Federal Trade Commission last year, working with other federal agencies, jointly issued regulations called the "Red Flag Rules", which are now in effect.

Andrew Lustigman has been selected for inclusion in Super Lawyers - New York Metro 2008 in his practice area of Media and Advertising.

Andrew Lustigman will be presenting on online promotional marketing issues at the Law Seminars International's 17^th Annual Seattle Conference on New Developments in Technology Law.

The Federal Trade Commission announced that it will suspend enforcement of the new "Red Flags Rule" until May 1, 2009, to give creditors and financial institutions additional time in which to develop and implement written identity theft prevention programs.

Court imposes three year ban on marketer for participation in production or publication of any infomercials, for products including any books or publications in which he has an interest.

In FTC v. Direct Marketing Concepts, Inc., et al., the FTC obtained summary judgment against the marketers and its supporting firms relating to disease treatment, and weight loss infomercials, "Coral Calcium" and "Supreme Greens."

Andrew Lustigman will be presenting at the 30^th Annual Promotion Marketing Association law Conference in Chicago, Illinois on November 21, 2008.

The California State Assembly and Senate recently passed a bill that would amend existing state law by adding numerous disclosure requirements for sweepstakes materials. California Senate Bill 1400, which could have been construed to prevent alternate methods of entry from satisfying the requirement of no consideration, and which by its terms required opt-in consent before selling or sharing information about sweepstakes participants, was substantially modified before it was put into final form.

A Magistrate Judge in the United States District Court, Northern District of California, recently rendered an important decision with potential implications for (1) any website that hosts user-supplied content; and, (2) owners of copyrighted material that is placed by others on such websites.

On October 22, 2008, Andrew Lustigman will speak at The Association of the Bar of the City of New York annual CLE "HOT TOPICS IN ADVERTISING & MARKETING-2008".

The Federal Trade Commission recently announced two important amendments to the Telemarketing Sales Rule. Published on August 29, 2008 in the Federal Register, one amendment harmonizes the FTC's call abandonment calculation standard with that of the Federal Communications Commission's standard and the other dramatically limits the FTC's current policy on pre-recorded voice calls.

A business owner has just been convicted of defrauding customers seeking sexual enhancement drugs as well as a variety of other dietary herbal supplements. Steve Warshak, CEO of Berkeley Premium Nutraceuticals ("Nutraceuticals"), was sentenced last week to 25 years in federal prison. Eight other former executives and employees also received sentences ranging from one month to one year for their roles in assisting the fraud.

New York's new tax on online sales generated by New York-based affiliate marketers is raising significant concerns for online retailers and affiliates, who are struggling to meet the State's evolving exemptions.

The Pennsylvania Department of Banking will require Internet payday lenders and other out-of-state companies that make consumer loans to Pennsylvania residents to be licensed by the Department of Banking and comply with state laws.

A Nassau County auto dealer will pay consumers for persistently using misleading promotions intended to lure them into the dealership. The consumers, once baited into the dealership, were also subject to other fraudulent and unfair sales practices.

New York Attorney General has settled with the tax preparation company H&R Block regarding two sweepstakes promoted by the company to induce consumers to utilize its tax preparation services.

The First Amendment's constitutional protection of speech loomed large in a recent Second Circuit Court of Appeals decision.

Less than a mile from The Lustigman Firm's offices in midtown Manhattan, a man calling himself The Naked Cowboy struts around Times Square in his tighty whities, posing for pictures with tourists in exchange for a couple of bucks.

Two payday loan lead generators have agreed to settle FTC charges that their Internet advertising stated payday loan costs and repayment periods without disclosing annual percentage rate (APR) information as federal law requires.

Chances are you've gotten offers to try a product or service through a "free trial." Companies use these offers to sell a variety of items, from books and CDs to videos, magazines, and pills. But as part of a trial offer, a company also must tell you if any conditions are attached to the deal.

The UK recently enacted sweeping new consumer protection rules that provide civil and criminal penalties for a variety marketing practices.

Fantasy football and rotisserie baseball players rejoice! The Supreme Court has allowed fantasy sports websites to use the names and statistics of professional athletes without the permission of the sports leagues or players unions.

Andrew B. Lustigman, partner at Olshan Frome Wolosky LLP, has been named an industry leader and notable practitioner in his primary practice area.

Andrew Lustigman to lead panel including FTC Senior attorney Thomas Cohn and NAD attorney Jennifer Fried on Cosmetic Marketing Law Developments at the SRI/American Lawyer Media's 5th Annual Cosmeceuticals Conference scheduled for June 26-27, 2008 at the Marriott Eastside Hotel in NYC.

Andrew Lustigman was featured in a National Law Journal story covering the premium SMS class action litigations.

Andrew Lustigman's article "Legal Considerations For Promotions Involving User Generated Content" appears in the American Bar Association's The Practical Lawyer (June 2008) .

The New York Online Sales Tax (commonly known as the Amazon tax because of its presumed target Amazon.com), went into effect on June 1, 2008.

In what is likely to be a sign of things to come, major online retailer Overstock.com has decided to terminate its relationship with any affiliate based in New York in order to avoid remitting NY states sales tax under the "Amazon" tax law slated to take effect June 1^st.

found in public domain, such as court records, real estate records and telephone directories. The company also offered businesses non-public personally identifiable information from credit reporting agencies - Equifax, TransUnion and Experian - and financial institutions.

A website that offered "free trials" of its herbal products, including smoking cessation patches, has agreed to halt its allegedly deceptive practices, pending trial.

Parents who purchased Gerber "Fruit Juice Snacks" brought a class action against Gerber alleging that its Fruit Juice Snacks product contained no fruit juice from oranges, peaches, strawberries or cherries as illustrated on the packaging. Instead it contained only grape juice from concentrate.

Competitors Sanderson Farms and Perdue Farms sued Tyson for nationally advertising its chicken as "Raised Without Antibiotics" and "Raised Without Antibiotics that impact antibiotic resistance in humans."

Amazon.com has filed a lawsuit challenging New York State's new law forcing out of state online retailers to collect sales tax on shipments to state residents.

The Georgia Supreme Court recently ruled that the SMS game conducted during the NBC broadcast of Deal or No Deal does not violate Georgia's gambling law.

In FTC v. Seasilver USA, Inc., et. al. (CV-S-03-0676-RLH) (D. Nevada) defendants entered into a standard settlement agreement providing for injunctive relief and a monetary judgment, representing the approximate gross sales of the product, which was one hundred twenty million dollars.

According to news reports, New York State will shortly enact a revision to its tax laws that will require online retailers such as Amazon.com, even if they have no offices or warehouses in NY, to begin collecting and remitting sales tax for purchases shipped into the state.

The Lustigman Firm's update on recent sweepstakes and promotion challenges is now online here.

Jonathan Ezor has published an article on encryption and ethics for attorney-client e-mail in Law Technology News.

As recently reported in Direct, Washington-based adult website operator obtained a defense verdict in an action brought by the FTC who alleged that Impulse Media Group, Inc. violated the CAN-SPAM Act by virtue of the acts of its affiliate marketers.

Andrew Lustigman will be presenting at the 23^rd Annual American Bar Association Intellectual Property Law Conference on Landmines, Hot Topics and Red Flags in Promotions Law at the 23^rd Annual Intellectual Property Law Conference on April 11, 2008, in Arlington, Virginia.

As we have previously reported, a number of class actions have been filed against major network game shows that have incorporated a premium sms promotion component to the game show.

Andrew Lustigman will lead a roundtable discussion on Behavioral Advertising. The program is being presented in cooperation with the ABA IP Law Section's Special Committee on Promotions and Marketing Law.

If you have a Web site where users may post their own thoughts, comments or files, you face the very real possibility that the materials your users post may violate someone else’s copyright.

As we previously reported, contests incorporated into popular shows such as American Idol, Deal or No Deal, 1 vs. 100, and The Apprentice have generated lawsuits by people claiming the contests are illegal lotteries.

The Food and Drug Law Journal Article, "Regulation of Dietary Supplement Advertising: Current Claims of Interest to the Federal Trade Commission, Food and Drug Administration and National Advertising Division", co-authored by Andrew Lustigman and John Villafranco, 62 Food and Drug Law Journal 709-726 (2007) is available here with permission from FDLI.

The FTC's decision not to challenge Google's planned acquisition of DoubleClick on antitrust grounds opens the door for a potential merger that would combine the industry leaders in targeted portal and third-party advertising.

The FTC announced on December 11, 2007, that it along with seven state attorneys general filed suit in federal court against Your Money Access, LLC, a payment processor and its principals with violating federal and state laws by debiting, or attempting to debit from consumers' bank accounts on behalf of alleged fraudulent telemarketers and Internet-based merchants.

As of yesterday, there are now a limited number of spaces at a substantial discount at the 11/27/07 e-mail law and self-regulation half-day conference in lower Manhattan that I'm chairing and that The Lustigman Firm is sponsoring.

On October 29, 2007 the Washington Attorney General announced settlements with an auto dealer and an advertising firm accused of using deceptive promotions to sell cars.