Do you work with start-up companies and need a basic understanding of the various intellectual property issues that can arise?

I will be co-presenting in this online seminar that will help you:

  • understand the trademark and copyright problems your client may encounter with branding;
  • learn how to protect your client’s branding once established;
  • familiarize your practice with patents, including what they protect, timing, and strategies to prevent inadvertent loss of patent rights before filing the application;
  • understand trade secrets and the importance of non-disclosure and confidentiality agreements;
  • recognize intellectual property issues relating to technology, including open source code and the cloud;
  • establish a proactive approach toward intellectual property ownership between cofounders, employees, and vendors; understand business names, domain names, promotional issues, and website content concerns.

The program qualifies for 1.5 hours MCLE credit.

I would like to personally invite you to attend the upcoming Law Ed program titled, “Identifying Intellectual Property Issues in Start-Ups,” which I will be co-presenting via live webcast on Tuesday, May 27th.

Presented by the ISBA Business Advice and Financial Planning Section

Co-Sponsored by the ISBA Intellectual Property Section

Online marketing continues to evolve and affiliate marketing can be a great method of building brand awareness. Online marketers need to stay ahead of legal and regulatory compliance trends. This article looks at recent Federal Trade Commission (“FTC,” “Commission,” or “agency”) activity that impacts online marketing.

Given the lack of a comprehensive federal regulatory scheme, and the increasing awareness of deceptive marketing practices, it is not surprising that the FTC has ramped up enforcement efforts against entities not covered by existing, industry-specific federal regulations over the last decade. Notably, one company has defended itself against the FTC by challenging the FTC’s authority to pursue such broad enforcement.

Jurisdiction

The widely-watched case of FTC v. Wyndham Worldwide Corp is not just about Cybersecurity.

The Federal Trade Commission (FTC) has just won the first major round of its fight with Wyndham Hotels over data security. However, the importance of the case has more to do with the FTC’s jurisdiction, challenged when Wyndham moved to dismiss the FTC’s case. Affirming the FTC’s broad jurisdiction, the federal judge overseeing the controversy noted that the case highlights “a variety of thorny legal issues that Congress and the courts will continue to grapple with for the foreseeable future.”

Affiliate Marketing: A Roadmap for Compliance: Text Message Marketing

The Commission is cracking down on affiliate marketers that allegedly bombard consumers with unwanted text messages in an effort to steer these consumers towards deceptive websites falsely promising “free” gift cards.

For example, in eight different complaints filed in courts around the United States, the FTC charged 29 defendants with collectively sending more than 180 million unwanted text messages to consumers, many of whom had to pay for receiving the texts. The messages promised consumers free gifts or prizes, including gift cards worth $1,000 to major retailers such as Best Buy, Walmart and Target.

By now, many in the Affiliate Marketing industry are familiar with the Legacy Learning Systems case. In March, 2011 the FTC settled charges against Legacy — which sells instructional DVDs — that Legacy represented, directly or indirectly, expressly or by implication, reviews of their products were endorsements reflecting the opinions of ordinary consumers or independent reviewers, when many of the favorable endorsements were posted by affiliate marketers who received a commission from Legacy for sales they generated.

Regardless of the form of affiliate marketing – email campaigns or text message campaigns – there are a couple key take-aways here.

First, identify and disclose a material connection between a product user or endorser and any other party involved in promoting the product. A “material connection” is a relationship that affects the credibility of an endorsement and wouldn’t be reasonably expected by consumers. See our article about complying with the endorsement guides here.

Second, set up and maintain a system to monitor and review affiliates’ representations and disclosures to ensure compliance. For example, Legacy looked at its top 50 revenue-generating affiliates at least once a month, visiting their sites to review their representations and disclosures. It has to be done in a way designed not to disclose to the affiliates that they’re being monitored.

Third, understand he requirements for conducting legally-compliant text message marketing. The Telephone Consumer Protection Act (TCPA) makes it unlawful to make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system or an artificial or prerecorded voice … to any telephone number assigned to a . . . cellular telephone service … or any service for which the called party is charged for the call. The prohibition on calls to cell phones applies to text messaging.

Privacy Law Update: California “Do Not Track” 

Two California laws went into effect at the beginning of the year that  require additional notifications to consumers.  The California Online Privacy Protection Act (“CalOPPA”) requires that web sites, mobile apps and other online services available to California residents (in reality anyone with a web site that may be accessed by a CA resident) post a privacy policy that gives notice to consumers regarding behavioral or interest-based advertising practices (“OBA”).

Disclosures must explain:
1. If a web site operator allows other parties to use tracking technologies in connection with the site or service to collect certain user data over time and across sites and services; and
2. How it responds to browser “do not track” signals or other mechanisms designed to give consumers choice as to the collection of certain of their data over time and across sites and services

In addition, the “California Shine the Light Act” requires that companies (except non-profits and businesses with less than 20 employees) collecting broadly defined personal information from California consumers on or offline either: (a) give consumers a choice as to the sharing of that information with third parties (including affiliates) for direct marketing purposes; or (b) provide notice of, and maintain, a method by which consumers can annually obtain information on the categories of information disclosed the names and addresses of the recipients of that data, and a description of the recipients’ business.

If an e-commerce service offers tangible goods or services, or vouchers for them, to California consumers, it must give certain notices to consumers, including how they can file a complaint with the CA Department of Consumer Affairs.

Are you  concerned about how to disclose how your service responds to “Do Not Track” signals or similar tools and settings, and whether third parties are permitted to collect personally identifiable information about consumer online activities over time and across different websites when a consumer uses that online service? We may be able to help. We can review your policies, your information gathering and sharing practices, and advise on whether there is room for improvement.

Please contact us for a no-fee consultation.

At the end of August, the California passed an amendment to the California Online Privacy Protection Act that will require commercial websites and services that collect personal data to disclose how they respond to Do Not Track signals from Web browsers.

AB 370, as introduced by California Assemblyman Al Muratsuchi, requires a business that discloses a customer’s personal information to a third party for direct marketing purposes to provide the customer, within 30 days after the customer’s request, as specified, in writing or by e-mail the names and addresses of the recipients of that information and specified details regarding the information disclosed.

This bill, available here, would declare the intent of the Legislature to enact legislation that would regulate online behavioral tracking of consumers.


A presentation on what goes into creating original designs and how these differ from copycats.

WHERE: Decoration & Design Building, J. Robert Scott Showroom, Suite 220

WHEN: Wednesday, October 2,2013 !2 p.m.

WHAT: From film to fashion, creative industries are taking steps to protect and promote original work. Designers and manufacturers need to know what steps they can take to protect their designs, their businesses, and their profits. The discussion will address issues related to how to protect original design (copyright & design patent) and the manufacturers (trademark, unfair competition).

WHO:

INTERIORS Magazine Editorial Director Michael Wollaeger

J. Robert Scott Founder Sally Sirkin Lewis

Designer Laura Kirar [Web Site]

Intellectual Property lawyer David Adler

Showroom reception to follow.

 

Download the full Fall Decoration & Design Building Market Brochure Here.

I’m surprised at how often I receive commercial bulk email messages that are not compliant with the Federal CAN SPAM act.The two biggest mistakes I see are 1) no physical address and 2) no opt-out/unsubscribe mechanism.

Image representing Twitter as depicted in Crun...

Image via CrunchBase

Another common mistake is a “blind” bulk email address list like “Undisclosed-Recipients@email.com.”  Not only do I NOT know which address this received the offensive message, there usually isn’t even a proper return address for me to send an “Unsubscribe” message.

With the popularity of social media, you’ve  probably received a Twitter promotion for iPhones, special deals, free downloads, etc. While it’s easy to dismiss poorly-written tweets from obvious spammers, when someone replies to you on Twitter, says “must read, check it out” and the topic is clearly the kind of thing you read and share it’s more difficult to tell. Often, these are from legitimate accounts where a human has taken the time to compose and send the message.

In light of the growing use of electronic mail (“email”) messages for advertising, marketing, corporate communications and customer service, is essential to have some familiarity with the Federal “Controlling the Assault of Non-Solicited Pornography And Marketing Act of 2003” also known as the CAN SPAM Act (the “Act”) The Act provides the parameters of its application, explicit prohibitions, requirements for transmission of legally compliant email messages including the “Opt-Out” mechanism and vicarious liability.  Generally speaking, the Act was written to prohibit the fraudulent, deceptive, predatory and abusive practices that threaten to undermine the success and effectiveness of commercial email and email marketing.

Congress drafted the Act to impose limitations and penalties on the transmission of unsolicited commercial email messages. Unlike some state initiatives, the Act is an “opt-out” law. Put another way, for most purposes permission of the e-mail recipient is not required. However, once an email recipient has indicated a desire to opt-out or no longer receive such messages, failure to comply with the recipient’s request may subject both the sender and the person or entity on whose behalf the message was sent to severe penalties.

Frequently asked question about the Act include:

1)    To Whom Does The Act Apply? The Act applies to any person or entity that sends email.

2)    What Activities Are Prohibited By The Act? The Act is primarily concerned with explicitly  prohibiting certain predatory and abusive commercial email practices.

3)    What Are The Requirements For Sending Email Messages? Section 5(a) of the Act sets requires the inclusion non-misleading information regarding: (a) transmission, (b) subject, (c) email address, (d) Opt-out and physical address, and (e) clear and conspicuous language identifying sexually-oriented messages.

4)    Who Can Be Liable for Violations? The Act applies to both the party actually sending the commercial email messages and those who procure their services.

Discussion

The primary substantive provisions of the Act can be divided into three parts found in Section 4, Section 5 and Section 6. Section 4 of the Act addresses “predatory and abusive” practices prohibited by the Act. Section 5 details the requirements for transmission of messages that comply with the Act. Section 6 details the requirements for transmission and identification of sexually-oriented messages. Section 6 is not discussed in this article.

Section 4 of the Act lists specific “predatory and abusive” practices prohibited by the Act.  In short, the Act specifically prohibits: (i) accessing a computer without authorization for the purpose of initiating transmission of multiple commercial email messages, (ii) transmission of multiple commercial email messages with the intent to deceive or mislead recipients, (iii) transmission of multiple commercial email messages with materially false header information, (iv) registration of email accounts or domain names using information that materially falsifies the identity of the actual registrant, and (v) false representations regarding the registration of Internet Protocol addresses used to initiate multiple commercial email messages.

The second relevant part, set forth in Section 5 of the Act, details the requirements for transmission of messages that comply with the Act. Subject to certain limitations discussed below, the Act requires that email messages contain: (i) transmission information that is not materially false or misleading, (ii) subject information that is not materially false or misleading, (iii) a return address or comparable mechanism for opt-out purposes, (iv) identifier, Opt-out and physical address, and (v) clear and conspicuous language identifying sexually-oriented messages as such. (Note, this last requirement is not discussed. See above.) Lastly, the Act implicates both commercial email transmission service providers as well as those who procure their services.

To Whom Does The Act Apply?

The Act applies to any person or entity that sends email. The Act specifically regulates “commercial electronic mail messages,” defined as any email message “the primary purpose of which is the commercial advertisement or promotion of a commercial product or service (including content on an Internet website operated for a commercial purpose).” However, the Act specifically excludes from this definition “transactional or relationship messages.” A “transactional or relationship message” falls within one of five categories of messages:

  1. communications that facilitate, complete or confirm a commercial transaction previously agreed to by the recipient;
  2. communications that provide warranty or other product information with respect to a product or service previously used or purchased by the recipient;
  3. notifications with respect to a subscription, membership, account, loan, or comparable ongoing commercial relationship;
  4. information directly related to an employment relationship or related benefit plan in which the recipient is currently involved; and
  5. communications to deliver goods or services, including product updates or upgrades, under the terms of a transaction previously agreed to by the recipient.(Emphasis added.)

The purpose for the distinction between “commercial electronic mail messages” and “transactional or relationship messages” is to exempt certain types of communications from compliance with all the message transmission requirements of the Act. As should be clear from the list above, the Act distinguishes the types of communications based on the relationship between the sender and recipient rather than on the character of the message. Put another way, so long as the communication is related to some type of existing business relationship, it is not a “commercial electronic mail message.”

What Activities Are Prohibited By The Act?

Section 4 of the Act is primarily concerned with prohibiting certain predatory and abusive commercial email practices. Section 4(a) amends Chapter 47 of Title 18 of the United States Code by adding Section 1037 which specifies the offenses that constitute “fraud and related activity in connection with email.” An offense is committed by anyone who directly or indirectly, knowingly:

  1. accesses a protected computer without authorization, and intentionally initiates the transmission of multiple commercial electronic mail messages from or through such computer,
  2. uses a protected computer to relay or retransmit multiple commercial electronic mail messages, with the intent to deceive or mislead recipients, or any Internet access service, as to the origin of such messages,
  3. materially falsifies header information in multiple commercial electronic mail messages and intentionally initiates the transmission of such messages,
  4. registers, using information that materially falsifies the identity of the actual registrant, for five or more electronic mail accounts or online user accounts or two or more domain names, and intentionally initiates the transmission of multiple commercial electronic mail messages from any combination of such accounts or domain names, or
  5. falsely represents oneself to be the registrant or the legitimate successor in interest to the registrant of 5 or more Internet Protocol addresses, and intentionally initiates the transmission of multiple commercial electronic mail messages from such addresses.

Clearly, Section 4 is primarily concerned with preventing practices whereby the sender intentionally, either through outright fraud or other deception, conceals its true identity or the true commercial character of the message.

What Are The Requirements For Sending Email Messages?

            Section 5(a) of the Act sets forth certain other protections for the users of commercial email.

Accurate Transmission Information. Among the affirmative requirements of Section 5(a), Section 5(a)(1) prohibits sending either a commercial electronic mail message, or a transactional or relationship message, that contains, or is accompanied by, header information that is materially false or materially misleading. Unlike the general prohibition against sending messages with materially false header information under Section 4, in addition to having technically accurate transmission information, the sender is prohibited from having used false pretense or other deceptive means to acquire such information (e.g. email accounts, domain names and IP addresses). Furthermore, the “from” line must “accurately identify the person transmitting the message.” Lastly, the sender must accurately identify the computers used to originate, relay or retransmit the message.

Note, the following only apply to commercial electronic mail messages:

Accurate Subject Information. Messages must have accurate subject information. Subject information would not be accurate if a “person has actual knowledge, or knowledge fairly implied on the basis of objective circumstances, that a subject heading of the message would be likely to mislead a recipient, acting reasonably under the circumstances, about a material fact regarding the contents or subject matter of the message.”[8]

Inclusion of Opt-out Mechanism. Messages MUST contain a functioning return email address or other Internet-based mechanism (e.g. hyperlink), that is clearly and conspicuously displayed that enables a  recipient to submit a request to opt-out of future email messages from the sender whose email address was contained in the message. The opt-out mechanism (whether email address or hyperlink, etc.) must remain functional for at least thirty (30) days after the transmission of the original message.

            Removal After Objection. If a recipient makes a request using the opt-out mechanism, the sender shall not transmit any further messages to the recipient, more than ten (10) business days after the receipt of such request, if such message would fall within the scope of the request. A third-party acting on behalf of the sender shall not transmit or assist others to transmit, any further messages to the recipient, more than ten (10) business days after the receipt of such request, if such third party knows or should know of the recipient’s objection. Lastly, the sender and any third party who knows that the recipient has made such a request, shall not sell, lease, exchange, or otherwise transfer or release the electronic mail address of the recipient for any purpose other than compliance with the Act or other provision of law.

Inclusion of Identifier, Opt-out & Physical Address. Every message must clearly and conspicuously: (i) identify the message as an advertisement or solicitation; (ii) provide notice of the opportunity to opt-out of future communications; and (iii) provide a valid physical postal address of the sender. However, the notice that a message is an advertisement or solicitation does not apply where the recipient has given prior affirmative consent to receive the message.

Related Activities Proscribed.

Other prohibitions in the Act concern unethical or unscrupulous practices that tend to coincide with deceptive or abusive email. Several common methods for generating email distribution lists have also been proscribed. The Act prohibits certain unethical practices such as:

  • hijacking another email server to send or relay messages;
  • “harvesting” email addresses that appear on others’ Web sites;
  • randomly generating email addresses;
  • knowingly linking an email ad to a fraudulently registered domain; and
  • participating in other offenses such as fraud, identity theft, etc.

Who Can Be Liable for Violations?

The Act applies to both the party actually sending the commercial email messages and those who procure their services.[9] One cannot “outsource” its “spam” and thereby avoid liability under the Act. One may be held accountable if the email service employed isn’t actually using a legally-compiled or permission-based list. Under some parts of the Act one may be held liable for employing a third party to distribute the messages “with actual knowledge, or by consciously avoiding knowing, whether such [third party] is engaging or will engage, in a pattern or practice that violates this Act.”

CONCLUSION

The Act was written to prohibit the fraudulent, deceptive, predatory and abusive practices that threaten to undermine the success and effectiveness of commercial email and email marketing. Since Bacon’s uses email to communicate with employees, vendors, existing and prospective customers, Bacon’s is clearly subject to the Act. The Act focuses on enumerating proscribed activities rather than affirmative obligations to make it easier for legitimate, honest businesses to comply with the Act. The Act distinguishes communications based on a previously existing relationship between the sender and the recipient from those communications that are prospective in nature. Generally, email messages not based on a pre-existing relationship are subject to greater affirmative requirements.

Compliance Guidelines.

  1. Be Aware of the Requirements for Transmitting Messages.
  2. Require Compliance by Clients.
  3. Monitor Distribution by Affiliates.

The Future Of Social Is Moving From Mere Participation To Analysis & Strategic Initiatives

I had the opportunity to attend and participate in Converge 2012 run by the Institute for Social, Search & Mobile Marketing. The theme was mastering the Business of Social Media. The Conference had a great selection of speakers (yours truly included) and topics that really resonated with the audience. I hope to summarize here some of the take-aways I learned at this conference.

Business Is Now Social

The last few years have seen an unprecedented shift in the adoption of social platforms for businesses to reach and interact with customers. What started as a “dipping our toes into the water” excerise has now matured into jumping in with both feet. Not surprisingly, the first few presentations of the conference focused on the effect of so much participation: greater focus on ROI. The presentations covered a lot of ground, but here are the key take aways from Day 1:

  • Businesses that fail to integrate the social channels may not exist in five years
  • Analytics are maturing in terms of both measurement tools and metrics
  • Better analytics are driving innovation by putting companies ahead of emerging issues instead of simply reacting to them
  • Creating a Social Media culture must come from the top and flow down
  • The growth of mobile platforms Is blurring the line between online and in-store experiences because of anywhere/anytime andpersonalized access

Day 1 concluded with the panel presentation in which I participated “Social Media “Venture Heaven” Money is flooding into social media, It’s time to understand why.” Key take-aways from this panel include the followig Data about the growth in Mobile:

  • As of May, 2012, mobile comprises 10% of Internet traffic, up from just 4% less than a year and a half ago
  • Mobile = ~8% of ecommerce
  • Monetization growing rapidly 79% is Apps, 21% is from ads
  • There has been a rapid increase in time spent relative money spent on ads; TV is roughly at parity while Mobile ad spend is about 1/10 of that
  • Drivers of growth in Mobile:
    • Devices
    • Platforms
    • Improved user interfaces
    • Sharing
    • More emphasis on design aestheticS

In a world of ubiquitous fast Internet,  mass blogging and micro-blogging, minute-by-minute status updates and customer complaints and recommendations, businesses need to focus on tailoring their product for their customers desires, rather that merely tolerating customer requests. Whatever device/platform customers use most will get the most attention from developers, accessory makers and potential new customers.

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